Specialty insurance and reinsurance firm Brit Ltd. has launched a new insurance-linked securities (ILS) fund strategy designed to allow investors direct access to the returns of its Lloyd’s underwriting business.
The company calls the Sussex Specialty Insurance Fund the first ILS structure of its kind to offer investors access to the returns of Lloyd’s business.
Through the Sussex Specialty Insurance Fund, Brit will enable institutional investors to have direct access to Lloyd’s-underwritten specialty insurance and reinsurance through an ILS fund structure.
Other Lloyd’s focused ILS strategies have more typically relied upon the special purpose syndicate, fund’s at Lloyd’s models, or other ways of enabling investors to back full syndicates operating in the Lloyd’s of London insurance and reinsurance market.
The Sussex Specialty Insurance Fund will effectively provide a similar capital vehicle for Brit, enabling investor funds to be channelled into its Syndicate 2988, to support the underwriting business it undertakes. The difference is in its structure and how it provides its capital, being an ILS fund dedicated to Lloyd’s business, rather than in what it provides.
Syndicate 2988 is Brit’s third-party capital backed syndicate and is moving into its fourth year of operation in 2020.
With nearly $200 million of stamp capacity for 2020, Syndicate 2988 underwrites business alongside Brit’s main syndicate.
In this way, the new Sussex Specialty ILS fund will almost act as a sidecar to a sidecar syndicate, enhancing Brit’s capacity while allowing investors to follow its track record and performance at Lloyd’s.
Brit has been targeting growth of its Sussex Capital collateralised reinsurance and insurance-linked securities (ILS) platform, with an ambition to reach around $250 million of assets under management before the end of 2019.
The launch of the Sussex Specialty Insurance Fund will help in lifting Brit’s third-party assets managed by Sussex Capital, while also adding to its range of ILS investment offerings.
The new Lloyd’s focused ILS fund will offer investors a way to invest in a diversified basket of risks from across the Lloyd’s market, underwritten by Brit’s global insurance and reinsurance platform.
Matthew Wilson, CEO, Brit, commented on the launch, “Brit has worked closely with Lloyd’s as part of its strategy for The Future at Lloyd’s and the launch of Sussex Specialty Insurance Fund is closely aligned to the objectives laid out in its recent blueprint, in particular around capital. We believe that we have designed a compelling proposition for institutional investors giving them access to Lloyd’s risks underwritten by our market leading teams that are closely aligned to our own book.”
John Neal, CEO, Lloyd’s, added, “This is exactly the type of initiative that Lloyd’s is eager to support. It is encouraging to see Brit working with us and playing an active part in The Future at Lloyd’s as we look to make it easier and simpler for new sources of capital to enter the market and attach to risk. It is the first time alternative capital will be able to access Lloyd’s in this way and is another demonstration of Brit’s commitment to being truly innovative.”
The new Lloyd’s ILS fund will sit as part of Brit’s Sussex Capital ILS platform, expanding the range of offerings available. The Sussex Capital platform already includes the property catastrophe reinsurance focused Diversified Fund and the Worldwide Property Cat Sidecar, which the company launched in 2018 and 2015 respectively.