Everest gets $23.5m of Mt. Logan Re income and dividends in 2023

Reflecting the much improved conditions for investments into reinsurance and retrocession, global insurance and reinsurance player Everest Group has received both positive income and dividends from its Mt. Logan Re Ltd. third-party capitalised sidecar-like structure in 2023.

As we reported last year, the Mt. Logan Re Ltd. third-party capital vehicle was known to be having a strong year for parent Everest, with more than $250 million of new capital raised and its assets under management approaching $1.1 billion.

With increased capital available to deploy, the Mt. Logan Re management team were able to put more to work over the course of last year, driving an increase in the premiums it received via cessions from Everest.

For the full-year 2023, Everest ceded $249 million in written premiums to Mt. Logan Re, up from the $201 million ceded to the vehicle in 2022.

Signalling stronger performance and returns for the investors in the Mt. Logan Re sidecar like vehicle and Everest’s own stake in its strategies, the losses ceded to the structure declined significantly last year.

Everest only ceded $64 million in losses and loss adjustment expenses to Mt. Logan Re across full-year 2023, down significantly from the $191 million ceded to the sidecar investors in the prior year.

All of which suggests a significant improvement in performance of Mt. Logan Re in 2023, delivering much stronger returns, while at the same time increasing its stature as a third-party capitalised source of underwriting capacity for its parent through the growth in assets under management (AUM).

Mt. Logan Re’s performance improvement is of course reflected across the insurance-linked securities (ILS) and reinsurance-linked investments space, with the structure benefiting from higher reinsurance pricing and greatly improved contract terms.

But where the improved performance becomes particularly apparent, is in the fact Everest earned $23.5 million in positive income and dividends from Mt. Logan Re last year, a significant improvement over the last few periods.

Everest Group’s investments in Mt. Logan Re segregated accounts were valued at $46 million at the end of December 2023, which was down on the $65 million stake it held at the end of 2022.

But income earned from these investments reached $8.5 million in 2023, far better than the negative $-0.9 million for 2022 and $-1.3 million for 2021.

That wasn’t all of the earnings in 2023, as Mt. Logan Re also paid cash dividends to Everest Group of $15 million for 2023, compared to the zero dividends earned for the 2022 investment year.

All of which indicates much better investment returns generated by the Mt. Logan Re strategies over the course of 2023, enabling the parent to recognise a strong profit from the structure.

Alongside this, Mt. Logan Re continues to be the largest source of reinsurance recoverables for Everest, which is another key lever for the group in how it utilises third-party capital.

At the end of 2023, $413 million, or 18.3% of the $2.3 billion in total reinsurance recoverables reported by Everest, was attributable to Mt. Logan Re collateralized segregated accounts.