Brit delivers more income to third-party capital as premiums rise

Specialty insurance and reinsurance player Brit Ltd. reported delivering more income to its third-party capital partners and investors in its ILS-style reinsurance structures through the first-half of the year in 2022.

Brit’s main third-party reinsurance capital vehicle sits under the Sussex Capital branded insurance-linked securities (ILS) fund type operations now, as the company underwrites collateralised reinsurance products on investor-supplied third-party capital.

Investors typically take a share of the income earned and for the first-half of 2022, the company reported delivering some $5.3 million of profits to third-party capital partners.

That’s a significant increase from the $0.1 million reported a year earlier.

It’s also an improvement on the full-year 2021, when Brit reported that income attributable to third party capital providers but earned by the company was $2.5 million, which suggested the investors had faced some losses during that period.

Making the first-half of 2022 look a more profitable one for the third-party reinsurance capital management activities of Brit.

Also supporting this theory is the growing underwriting of premiums in what Brit terms its “other” category, which is where premiums written by Brit’s special purpose vehicles, such as Sussex Capital, and premiums attributable to third party underwriting capital providers, all are reported.

For H1 2022, premiums in this “other” segment rose by an impressive almost 66%, to $84.5 million, reflecting growth in its strategies that fall into this bucket.

Fee income earned from managed capital underwriting dropped though, but this was largely due to the sale of MGA he sale of Scion Underwriting Services Inc. that has now reduced third-party capital fee income at Brit.

However, the company still earned $15.4 million of underwriting fee income in the first-half, although it’s not possible to work out what proportion of this came from ILS type capital management, such as from the Sussex Capital vehicles.