Global insurance and reinsurance company Everest Re ceded more written premiums to its Mt. Logan Re Ltd. collateralized reinsurance sidecar-like vehicle in the second-quarter of 2021, while at the same time a more benign catastrophe quarter appears to have resulted in fewer losses being ceded.
Written premiums ceded to the Mt. Logan Re collateralized reinsurance vehicle in Q2 2021 reached almost $56.2 million, up by almost 16% on the prior years $48.5 million.
For the first-half of 2021, Everest Re ceded slightly fewer written premiums to Mt. Logan Re than the prior year, at $155.3 million, compared to $158.7 million.
This suggests a continued shift towards second-quarter renewals for the assumed business ceded to Mt. Logan Re, perhaps as a result of increased writings at April or June reinsurance renewals by the vehicle.
On an earned premium basis, cessions to Mt. Logan Re remained relatively flat in the second-quarter of the year.
The higher premiums ceded in Q2 could also suggest that Mt. Logan Re had some fresh capital to deploy around the June renewals.
As we previously reported, Everest Re is targeting significant growth for its Mt. Logan Re third-party reinsurance capital vehicle, which is seen as a key strategic opportunity for the company.
Positively for investors in Mt. Logan Re, parent company Everest Re ceded fewer losses and loss adjustment expenses to the structure during the second-quarter of the year.
Losses ceded to Mt. Logan Re were only $31 million during the quarter, some 24% lower than the previous year’s $41 million of losses ceded.
That reflects the more benign nature of global catastrophe loss activity during Q2 2021, we assume.
For the first-half, ceded losses are up though, as the first-quarter saw a higher level ceded through to the third-party capital vehicle.
It’s likely that a key driver of that will have been the US winter storm and polar vortex weather event that has so far become the most impactful insured catastrophe event of 2021.