Brit, the global specialty insurer and reinsurer with a large presence at Lloyd’s, has launched a Bermuda domiciled special purpose reinsurer named Versutus which has been fully collateralized with $75m of funds from third-party investors.
Brit has joined the group of insurance and reinsurance firms that are leveraging third-party capital from institutional investors to provide them with additional capacity in the currently challenging market environment. By sharing a portion of its risks with investors Brit gains access to a source of lower-cost capital while the investors benefit from a way to share in Brit’s underwriting fortunes.
The Bermuda registered special purpose vehicle, Versutus Ltd., has entered into a quota-share reinsurance agreement with Brit. The agreement sees Versutus reinsuring a portion of the re/insurers worldwide property catastrophe excess of loss business.
Capital has been raised from a number of third-party investors and the vehicle has been established for the renewal, coming on risk on the 1st January 2015.
Brit’s book of worldwide property cat business is said to have been profitable for a 14 year period, which no doubt makes this sidecar an attractive one to be in for investors for whom the track-record will matter. Brit has been looking to build on its use of capital markets capacity and a sidecar style reinsurance vehicle is the ideal way for it to benefit from third-party capital, while also building relationships with new investors.
Jon Sullivan, Head of Short Tail Reinsurance at Brit commented on the launch of the Versutus sidecar; “At Brit we have a well-established book of diversified worldwide excess of loss catastrophe reinsurance business which has a highly profitable 14 year track record. We are pleased to be able to develop new reinsurance relationships with capital market partners whilst providing them with access to Brit’s strong underwriting capabilities, diversified distribution reach via both our London and Bermudan platforms as well as all the benefits the Group experiences as one of the largest of the Lloyd’s syndicates.”
Matthew Wilson, CEO of Brit Global Specialty, added; “This is an important step for Brit as we look to broaden and enhance our capabilities within the capital markets arena and to maximise the efficiencies of our reinsurance programs for 2015. We are delighted to have secured funding for Versutus from a range of new partners whom we look forward to working with closely in the future”.
GC Securities acted as the placement agent for the launch of Versutus Ltd.
For more details on reinsurance sidecar vehicles and investments view our list of collateralized reinsurance sidecars.