Hong Kong-headquartered reinsurer Peak Re is expanding its third-party capital offerings as interest in insurance-linked securities (ILS) continues to gain momentum in Hong Kong, according to the company’s Head of Third-Party Capital, Iain Reynolds.Artemis spoke to Reynolds around this year’s Rendez-Vous de Septembre (RVS) in Monte Carlo about a range of topics, discussing subjects such as the role of third-party investor capacity in the company’s strategy and the prospects for Hong Kong’s development as an ILS hub Reynolds emphasised that third-party capital continues to be very important for Peak Re “We see strong opportunities to grow our business, and partnering with external investors is an essential part of supporting that growth,” Reynolds said.“At the same time, diversifying the sources of capital behind our underwriting helps make us more resilient.Third-party capital therefore plays a complementary role alongside traditional rated balance sheet capacity in reinforcing the region’s economic stability.” When asked whether Peak Re plans to develop additional ways to access third-party capital and share risk with investors, Reynolds said: “We are committed to developing our offering in the third-party capital space.

We are unusual in that our cost of capital is driven by Asia-Pacific (APAC), so there is strong alignment of interest between Peak Re and investors seeking to access APAC risk.“We also believe asset managers in APAC, particularly those in Hong Kong, will value both our proximity and our ability to structure ILS investments tailored for them,” he added.The discussion then turned towards the catastrophe bond market, in which Peak Re made its return to the for its second time earlier this year.

the Hong Kong headquartered reinsurer successfully priced its Black Kite Re Limited (Series 2025-1) issuance, to provide the company with $50 million of retrocession across Japanese typhoon and earthquake risks on an industry-loss basis, as well as China and India earthquakes using a parametric trigger.This built on the success of Peak Re’s debut catastrophe bond from 2022, where the company managed to secure $150 million of Japanese typhoon retrocession on an industry-loss trigger basis from the deal.Reynolds shared that Peak Re is very pleased with the performance of both its Black Kite Re cat bond transactions.

“They have proven effective and efficient for both risk management and solvency purposes,” Reynolds said.Moreover, the outlook for ILS in Hong Kong remains positive, with strong momentum around catastrophe bond issuance.“We are optimistic about the future of ILS in Hong Kong.

It has proven itself to be effective for the issuance of cat bonds.We now look forward to the development of other ILS structures, particularly sidecars, in Hong Kong,” Reynolds said.Reynolds also expects ILS to play a critical role towards closing protection gaps across Asia.

“ILS will play an important role in addressing protection gaps in Asia.That said, we believe ILS works best at scale.Rated reinsurers like Peak Re are the most effective transformers of emerging risk into the ILS market,” Reynolds told Artemis.

Beyond natural catastrophe risks, there is broad potential for ILS capital to expand into other lines in Asia, according to Reynolds.“We expect demand for other lines to increase over time.At the same time, there is no reason why ILS instruments could not also be structured for risks outside the Asia Pacific region,” Reynolds added.

To close, Reynolds explained to Artemis what Peak Re has been hearing from investors in the Asian region, regarding their appetite for ILS and reinsurance-linked investments.“Investor interest in ILS remains strong globally.However, it is fair to say that Asian asset allocators are still underrepresented in the market.

We are keen to support the many initiatives that raise awareness and broaden participation across the region.“With the right structures, we believe Asian investors will increasingly participate in ILS, helping to match capital with the region’s evolving risk landscape,” Reynolds concluded...

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