Everest Re reports slight dip in Mt. Logan Re AuM to $877m

Everest Re, the globally active insurance and reinsurance company, has said that its Mt. Logan Re Ltd. collateralized reinsurance sidecar-like vehicle experienced a slight decline in assets in the last quarter.

Mt. Logan Re had begun last year with assets under management of around $818 million, which then fell to a low of just over $800 million as of the middle of 2020.

Some fresh capital raising was reported and then the Mt. Logan Re vehicle increased further in time for the all-important January renewal season, with its assets under management reaching $900 million as of January 1st 2021.

That was still slightly down on the peak size of Everest Re’s collateralized reinsurance structure, but represented a strong return to asset growth.

It’s possible that Mt. Logan Re has taken a share of Everest Re’s first-quarter catastrophe losses, as its AuM is reported as having declined slightly to $877 million as of April 1st 2021.

Everest Re reported pre-tax net catastrophe losses of $260 million, which were split as $212.5 million in the reinsurance segment and $47.5 million in the insurance segment.

The main drivers of these catastrophe losses were the US winter storms and freezing weather in February, as well as flooding in Australia.

Both of those catastrophe events could have hit Mt. Logan Re’s collateralized reinsurance portfolios, the US winter weather almost certainly did and this will at least be a contributor to the decline in AuM during the last quarter.

Despite the losses, Everest Re as a group reported net operating income of $260 million for the first-quarter of 2021, on a combined ratio of 98.1%.

This came alongside gross written premium growth of 14% and net written premium growth of 16%, as Everest Re continued to expand its global underwriting activities.

Everest Re Group President & CEO Juan C. Andrade commented, “Everest had a strong start to 2021 with robust growth, strong overall profitability, continued improvement in attritional underwriting margins, and excellent investment performance. Our first quarter results further illustrate the earnings power of Everest and our success in implementing our strategy to build a broadly diversified company with a relentless focus on strong operational performance and disciplined underwriting.”

The reinsurance segment grew fastest, with net written premiums up 18.6% in Q1, while the combined ratio was 97.5%.

In insurance, Everest Re reported net written premium growth of 8.9% and a combined ratio that reached 99.9%.

For a company with a significant exposure to global catastrophe loss events, Everest Re’s result was impressive for the first-quarter.

Mt. Logan Re continues to play an important role as well, in lifting Everest Re’s own underwriting firepower, while sharing in underwriting profits and losses with the third-party investors backing the vehicle.