Mt. Logan Re premiums rising, with far fewer losses ceded to it by Everest

In what looks to be a positive sign for its third-party investors, the Mt. Logan Re collateralized sidecar vehicle has been accepting increased levels of reinsurance premiums in 2023, while losses ceded to it by parent Everest Group are down considerably.

As we recently reported, the Mt. Logan Re Ltd. third-party capital vehicle is 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 more capital available, it appears the Mt. Logan Re management team have been deploying more, resulting in an increase in the premiums it receives via cessions from Everest.

For the third-quarter of 2023, Everest ceded $89 million in premiums to Mt. Logan Re, up from the $68 million ceded to the vehicle a year earlier.

For the first nine months of 2023, Everest has now ceded $187 million in premiums to Mt. Logan Re, again an increase on the previous years $150 million.

Signalling higher returns for investors in the Mt. Logan Re sidecar like vehicle, the losses their capital will be paying for have declined significantly this year.

Everest has only ceded $26 million in losses and loss adjustment expenses to Mt. Logan Re in the third-quarter, down from the $99 million ceded to the sidecar investors a year earlier.

For the year to end of September, the amount of losses and LAE ceded to Mt. Logan Re came in at $79 million, again well down on the 2022 figure of $161 million for the first nine months.

This suggests a significant improvement in performance of Mt. Logan Re this year, while it has also increased its position as a third-party capitalised source of underwriting capacity for its parent at the same time.

This also means that Everest’s fee income from Mt. Logan Re’s activities should be on the rise as well.

Mt. Logan Re collateralized segregated accounts remain the largest source of retrocession capital for Everest, with $461 million of reinsurance recoverables for both paid and unpaid losses attributed to the structure.