Brit targets $100m Lapis 2025-1 cat bond coverage via London Bridge 2 PCC

Brit Limited, the specialty insurance and reinsurance player and part of the Fairfax group, has returned to the catastrophe bond market for the first time since 2020, seeking $100 million or more in protection from a Lapis Series 2025-1 arrangement that is being issued using the Lloyd’s ILS structure London Bridge 2 PCC, Artemis has learned.

Brit was last in the cat bond market back in 2020, when it secured $300 million of multi-peril collateralized U.S. catastrophe retrocessional reinsurance from the capital markets using its own UK domiciled protected cell company, Sussex Capital UK PCC Limited as the issuer.

This time, Brit has returned using another UK based vehicle, the Lloyd’s insurance-linked securities (ILS) structure London Bridge 2 PCC Limited.

London Bridge 2 PCC Limited will issue the Lapis Series 2025-1 catastrophe bond notes and these will be sold to capital markets investors, with the resulting funds used to collateralize retrocessional reinsurance agreements to protect Brit’s reinsurance underwriting entity Brit Re and its Lloyd’s Syndicate 2987, we understand from sources.

There are $100 million Lapis Series 2025-1 cat bond notes on offer initially with this issuance, designed to provide the Brit Re and Syndicate 2987 ceding entities with a multi-year source of weighted industry-loss trigger based annual aggregate catastrophe reinsurance protection.

The covered perils are said to be US named storms including DC, Puerto Rico and the US Virgin Islands, as well as earthquakes in the US, those same additional territories and Canada.

The retro reinsurance coverage will run from April 1st through until the end of 2028, so providing four hurricane seasons of coverage and three years eight months of earthquake protection, we are told.

The Lapis Series 2025-1 cat bond notes that London Bridge 2 PCC will issue come with an initial attachment probability of 4.2%, an initial expected loss of 3.58% and spread price guidance in a range from 7.75% to 8.5%, sources said.

It’s good to see Brit return to the catastrophe bond market after a more than four year period of absence.

The $300 million Sussex Capital UK PCC Limited (Series 2020-1) cat bond had been sponsored in December 2020, prior to which Brit’s only other entry in our Deal Directory was the Fremantle Ltd. securitized catastrophe swap transaction way back in 2007.

You can read all about this London Bridge 2 PCC Limited (Lapis 2025-1) catastrophe bond transaction in our Deal Directory, where you can analyse details of almost every cat bond ever issued.