IFC Helps Establish Peak Reinsurance to Improve Access to Insurance Services in Asia Pacific
Hong Kong SAR — IFC, a member of the World Bank Group, is making a $82 million equity investment in Peak Reinsurance Company Limited, a newly established non-life reinsurer in Hong Kong, to expand and improve access to quality insurance services in Asia Pacific.
IFC has worked with Fosun International (Fosun), one of the largest Chinese private investors and our long-term strategic partner, over the past two years to support the establishment of Peak Re. Fosun is investing about $468 million in the company as its majority founding shareholder.
With Fosun and IFC’s support, Peak Re will insure the risks of primary insurers across Asia to help expand their operations. The company aims to reach around 100 insurance clients in seven emerging Asian markets such as China, India, and Indonesia in the next five years.
“Increased insurance coverage is important to sustainable business growth and private sector development,” said IFC’s Asia Financial Markets Director Serge Devieux. “Supporting the emergence of strong regional reinsurers such as Peak Re will enable local insurers to expand their products and services and reach more clients.”
Asia Pacific has been underinsured in general. According to a study by Swiss Re, people in emerging Asian countries spent an average of $27 on non-life insurance policies in 2010, compared to about $50 in global emerging markets and $1,500 for developed markets.
Franz Josef Hahn, chief executive officer of Peak Re, said: “The strong financial and technical backing of Fosun and IFC has been critical in making Peak Re a reality. As top-quality founding shareholders, they provide a superb blend of support that enables Peak Re to develop in a competitive and sustainable manner.”
The investment in Peak Re also strengthens the cooperation between IFC and Fosun International, whose subsidiaries, Fosun Pharma and Fosun Development, have obtained two loans of more than 600 million yuan (or $87 million) from IFC’s local currency program.
“The project marks a new chapter in our strategic partnership with Fosun International,” Devieux said. “We are committed to supporting our key Chinese clients to expand in the region and globally.”
IFC also invested $25 million in Fosun Pharma as part of the company’s initial public offering on the Hong Kong Stock Exchange in October 2012.
“Together with Fosun’s other insurance projects, our investment in Peak Re will create an anchor revenue stream from the insurance business to support our investment activities and transform our business into a world-class investment group in five to 10 years’ time,” said Guo Guangchang, chairman of Fosun and director of Peak Re.
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit www.ifc.org.
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