Swiss Re Insurance-Linked Fund Management

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Versutus sidecar hits $187m, third-party capital reaches $400m for Brit


Global specialty insurance and reinsurance company Brit Ltd. has increased the size of its fully-collateralized reinsurance sidecar Versutus Ltd. to $187 million for 2018, which alongside its other capital markets activities takes third-party capital managed at the firm to $400 million.

This is the fourth renewal and expansion of the Versutus reinsurance sidecar for Brit, as it becomes an increasingly important source of capacity for its property catastrophe and property binders underwriting business.

A year ago, the Versutus sidecar renewed at $150 million, which was 33% growth from the prior year. The growth allowed Brit to include some of its U.S. property binder insurance risks in the vehicle for the first time.

Another 25% has been added for 2018, taking Versutus to its $187 million size, with third-party investors accessing Brit’s underwriting franchise through two sub series within the sidecar, one covering Worldwide Property Catastrophe Reinsurance business and the other covering the U.S. Property Binder business.

Alongside Versutus, Brit now manages around $400 million of capital market backed capacity through a variety of third-party capital underwriting vehicles.

These include the Sussex Capital collateralized reinsurance fund vehicle, which it launched in late 2017.

Sussex Capital is an open-ended fund and will underwrite through reinsurance SPI Sussex Re, providing both direct collateralised reinsurance to third-party cedents as well as collateralised reinsurance for Brit’s reinsurance portfolio at its syndicate. Industry veteran Jay Nichols sits on the board of Sussex Capital.

As well as the two fully collateralised reinsurance vehicles, Versutus and Sussex Capital, Brit also has a syndicate at Lloyd’s which is funded by capital markets investors.

Syndicate 2988, which launched last year, has now been expanded to have stamp capacity of £98.5 million (approximately $138 million) for 2018. The syndicate originally underwrote a focused selection of Brit syndicate 2987’s core product lines, but Syndicate 2988 has now been expanded to provide broader access to Brit’s underwriting book, covering more than 20 lines of business for 2018.

Matthew Wilson, CEO, Brit, commented on the news, “The renewal and expansion of the Versutus sidecar, alongside the growth of Syndicate 2988 for 2018, continues our successful strategy of managing capital for third parties by offering access to Brit’s leading underwriting capabilities, deep client relationships and extensive distribution network. In addition, the launch of Sussex Re has also provided an important new product offering to our Property Catastrophe segment. Taken together, these initiatives represent excellent progress as we continue to develop and enhance our capital markets participation.”

Mark Allan, CFO, Brit, added, “Creating vehicles that attract a variety of capital providers ensures Brit can develop and bring to market the most appropriate capacity for our clients and their risk management needs.”

GC Securities acted as placement agent for the Versutus 2018 notes.

For more details on reinsurance sidecar investments and transactions view our list of collateralized reinsurance sidecars.

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