Brit renews Versutus sidecar for 2019, lifts third-party capital to $440m

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Specialty insurance and reinsurance player Brit Ltd. has renewed its Versutus collateralised reinsurance sidecar for 2019 and increased its third-party capital managed to around $440 million as a result.

Brit Insurance logoBrit said this morning that it was pleased to announce the successful placement of the Versutus Ltd. 2019 Series of its reinsurance sidecar, the fifth annual renewal of this piece of its alternative capital activities.

The Versutus sidecar vehicle provides Brit with a way to support its underwriting franchise across two sub series of investment opportunities, one covering its Worldwide Property Catastrophe Reinsurance business and the other its North American Property Binders business.

As a result, Versutus offers third-party investors a way to access both reinsurance and primary insurance returns through Brit, while the re/insurer benefits from the capacity support and the fee income it earns.

GC Securities, the capital markets arm of reinsurance broker Guy Carpenter, acted as placement agent for the Versutus Series 2019 Notes.

Matthew Wilson, CEO, Brit, commented, “The renewal and expansion of our ILS capacity, alongside the growth in planned gross written premium for Syndicate 2988, continues our successful strategy of managing capital for third parties by offering access to Brit’s leading underwriting capabilities, deep client relationships and extensive distribution network. In addition, the launch of Sussex Capital UK has also provided an important new access point to the Property Catastrophe segment. Taken together, these initiatives represent excellent progress as we continue to develop and enhance our capital markets participation.”

Mark Allan, CFO, Brit, added, “Creating vehicles that attract a variety of capital providers ensures Brit can develop and bring to market the most appropriate capacity for our clients and their risk management needs.”

As a result of this sidecar renewal and also the continued growth of its third-party capital managed at its Lloyd’s syndicate which has a planned gross written premium of US$158.7 million for the 2019 year of account, up 12% over 2018, Brit now commands around $440 million of third-party reinsurance and ILS capital.

As we explained recently here, Brit had said during its recent earnings that it has grown its third-party capital base and added new institutional investors for 2019.

It’s likely that the firm will continue to grow its ILS capital by expanding its Sussex Capital unit for the mid-year renewals as well.

Brit disclosed the size of its Versutus reinsurance sidecar for 2019 to Artemis, telling us it is $190 million as of this renewal, across the reinsurance and binder insurance sections. A year ago it was $187 million in size.

Given the size of the other third-party capital ventures, we assume Versutus has been renewed at a similar size, perhaps even slightly smaller given the growth in Brit’s third-party backed syndicate at Lloyd’s.

For more details on reinsurance sidecar investments and transactions view our list of collateralized reinsurance sidecars.

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