According to the quarterly financial supplement of Bermuda based reinsurance firm Everest Re, the reinsurer has raised approximately $91.3m of external capital for its Mt. Logan Re sidecar which it launched at the start of 2013.
Everest Re launched Mt. Logan Re in January, injecting the sidecar with $50m of its own funds and giving itself a target to raise third-party capital from investors to bring the sidecars total capitalisation to $300m.
President of Everest Re, Dominic Adesso, said on the firms second-half earnings call; “We had initially targeted by the end of the year to raise approximately $250 million in outside capital.”
According to the financial supplement, published yesterday, Mt. Logan Re had non-controlling interests at the end of the third-quarter of $91.268m, which represents third-party capital within the sidecar structure.
With the $50m of seed capital that Everest Re put into the Mt. Logan Re sidecar, this would bring its capitalisation to around $141.3m in total, which reflects the level that Adesso revealed in August when he said; “We are about half-way there, we have some capital already deployed at Mt. Logan which would be reflected in the third quarter.”
For the nine months ended the 30th September 2013, Everest Re reports that the Mt. Logan Re sidecar wrote gross premiums of $13.152m as well as seeing earned premiums of $9.279m, suggesting that some of the business in the sidecar will have been ceded in by Everest itself at the start of the year helping it to build a track-record.
The Mt. Logan Re sidecar saw a combined ratio of 46.6% for the first nine months, with incurred losses of $1.915m, $1.866m of which were attritional with the rest from catastrophes.
The data suggests that Everest Re has some way to go if it is to reach its initial target of raising $250m of third-party capital in the first year of Mt. Logan Re’s operations. It will be interesting to see how much it can raise in advance of the January reinsurance renewals when it will be targeting its first full deployment of capital into new underwriting business.
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