Brit has ambitious plans for its ILS vehicles: Deputy CUO, Jon Sullivan

Specialty insurer and reinsurer Brit has plans to increase its managed capacity and has ambitious growth plans for its range of insurance-linked securities (ILS) vehicles, according to Jon Sullivan, the firm’s Deputy Global Chief Underwriting Officer (CUO).

In recent times and despite a more difficult environment, global specialty re/insurer Brit has continued to expand and develop its third-party reinsurance capital operations.

Towards the end of last month, Brit announced the renewal of its Versutus sidecar vehicle for 2019, taking its managed capacity under its ILS vehicles closer to $450 million, with further growth expected.

“We will continue to grow our managed capacity. We have a strong brand and a great franchise that is attractive to investors, and our third-party capital vehicles enhance the scope of what Brit can offer its clients by offering larger share and broader capacity,” Sullivan told Artemis.

The renewal of Versutus followed the launch of Sussex Capital UK PCC Limited, the first registered and licenced multi-use collateralised reinsurance PCC vehicle in the UK.

The launch of its latest alternative capital vehicle enables Brit and its Sussex Capital ILS unit to underwrite reinsurance and retro on a fully-collateralised basis for numerous cedants within a single UK domiciled company structure.

“We recently announced total managed capacity across our vehicles – Versutus, Sussex Capital Syndicate 2988 – is approaching $450 million and we would like this to continue to grow over time. We are pleased with the platform Brit has created in this area, and think it gives us a compelling offering for both investors and clients alike,” said Sullivan.

Over the last decade the ILS market has grown substantially, and especially over the last three or four years.

Third-party, or alternative reinsurance capital now accounts for a meaningful slice of the overall base of global reinsurance capital, and continues to show a willingness to expand its remit in spite of recent loss experience.

Sullivan notes that certain losses have been somewhat of a reality check in terms of how modelled results compare to actual results, “in the same way we see disparities in traditional reinsurance losses, we are now seeing this with ILS funds,” he added.

“The question is how well the difference in results has been explained before and after the losses to those investors. While some are challenged, others will see it as an opportunity for growth.

“At Brit”, he said, “we have been clear about our ambitions to continue to increase the scale of our ILS vehicles.”