Swiss Re Insurance-Linked Fund Management

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Brit hails “strong response” to first cat bond from ILS investor community


Specialty insurance and reinsurance player Brit Ltd. has hailed the “strong response” from ILS investors to its debut catastrophe bond issuance, which helped the Sussex Capital UK PCC Limited (Series 2020-1) transaction upsize to $300 million.

brit-logoBrit’s debut cat bond completed yesterday, securing the company a $300 million source of multi-year named storm and earthquake reinsurance protection to run across a risk period of four years to December 31st 2024.

Brit used its UK domiciled protected cell special purpose reinsurance structure, Sussex Capital UK PCC Limited, for the issuance and said this was an important effort to extend the use of the insurance-linked securities (ILS) structure and also a first for the UK.

The Sussex Capital 2020-1 catastrophe bond has now become the first time that a protected cell of a UK domiciled multi-arrangement risk transformation vehicle has issued a 144A cat bond, Brit explained.

The cat bond has been structured on an annual aggregate and state weighted industry loss trigger basis, with the proceeds to be used to collateralize a reinsurance agreement between Sussex Capital UK PCC Limited and Brit Syndicates Limited, acting on behalf of its Lloyd’s syndicate 2987.

Brit hailed the fact its first full cat bond attracted a strong response from the ILS investor community, helping the issuance to be upsized and build Brit to build a strong panel of investors.

The Sussex Capital 2020-1 cat bond was first marketed to investors back in November as just a $250 million issuance.

But this strong demand helped the deal to upsize to $300 million, while at the same time the coupon paid to investors dropped to the bottom-end of initial guidance, at 7.75%.

Matthew Wilson, Group CEO of Brit, commented on the firm’s first cat bond, “We are delighted to have had such a positive reception to our debut bond enabling us to upsize and bring a larger transaction to market. Issuing from the UK was important to us as we further develop our Sussex UK platform and I would like to thank the PRA for their responsiveness and proactive assistance.”

Mark Allan, Group CFO, added, “Broadening our ILS relationships through the issuance of this bond is a natural progression of Brit’s third party capital strategy and will further support our growth ambitions as we look to capitalise on the opportunities available in the current market environment.”

Now completed, Brit has added significantly to its capital markets backed sources of reinsurance capacity, which alongside its other activities with the Sussex Capital platform makes third-party capital an increasing source of risk funding for the company.

You can read all about this new Sussex Capital UK PCC Limited (Series 2020-1)  catastrophe bond from Brit and every other cat bond transaction since the market began in the Artemis Deal Directory.

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