Brit eyes Sussex Capital expansion, seeing good support ahead of 1/1: Sullivan, Allan

Specialty re/insurer Brit’s collateralised reinsurance fund platform, Sussex Capital, is receiving good support and increased allocations ahead of the January 1st renewals, with the firm dedicated to building and expanding on the Diversified Fund, according to Jon Sullivan and Mark Allan.

The Sussex Capital platform has become an increasingly meaningful player in the marketplace and has increased its contribution to the growth of its parent.

Within the platform, the Sussex Capital Diversified Fund is the main strategy and targets open market property catastrophe risk, as well as writing a quota share of business from Brit’s syndicate 2987.

In an interview with Artemis, Jon Sullivan, Group Deputy Chief Underwriting Officer (CUO) and Mark Allan, Chief Financial Officer (CFO) at Brit, discussed the Sussex Capital arm of the re/insurer’s insurance-linked securities (ILS) operations.

“We started Sussex Capital in 2018 and raised our target AuM for the launch. The 2018 and 2019 years have been testing in terms of market losses, returns and the challenges presented to the ILS industry for all participants whether investor, underwriter or broker.

“Despite this, we have maintained our AuM and are entering our third year of operation, which represents a proving point for many investors,” explained Sullivan.

As shown by the Artemis ILS managers and funds directory, Sussex Capital has current assets under management (AuM) of $102.5 million.

“In these early stages of the renewals we are receiving good support and increased allocations from existing investors and expect more to be looking at the market post 1.1.20 when market conditions are likely a little more predictable. Key to our success and patience in building Sussex is the aligned model and the services and client relationships we can deliver by virtue of the Brit platform,” added Allan.

The pair continued to explain that the primary goal is to build and expand on the Diversified Fund, adding that “the benefit of the aligned model is being able to explore ILS possibilities for the almost 100 products we sell through the Brit Syndicate platform.

“We continue to explore these possibilities and would expect to launch other ILS propositions in 2020,” said Sullivan.

Towards the end of last year, Brit became the first to successfully register and get licensed a multi-use collateralised reinsurance PCC vehicle in the UK, with the launch of Sussex Capital UK PCC Limited.

In light of this, Sullivan and Allan explained that since the launch, the UK regulators have been responsive and committed to the success of the vehicle, just as they were throughout the application process.

“We continue to be ambitious for the future of the ILS regime in the London Market. As the first vehicle of its type to be given permission by the PRA, under the new UK ILS regime, all parties certainly learned a lot from the process of setting up,” said Sullivan.

“From a Brit perspective we have been encouraged by the experience and at are excited to continue working with the regulators and Lloyd’s on new initiatives to remain at the forefront of innovation in this area and bring new capital to the London market,” added Allan.

It’s since been revealed that Brit has launched an ILS fund strategy designed to allow investors direct access to the returns of its Lloyd’s underwriting business, called the Sussex Specialty Insurance Fund.

This first of its kind ILS structure offers investors access to the returns of Lloyd’s business, whereas other Lloyd’s focused ILS strategies have tended to rely upon the special purpose syndicate and fund’s at Lloyd’s models.