Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

Mt. Logan Re premiums written up 50% in Q1


Mt. Logan Re Ltd., the collateralized reinsurance, sidecar-like investment vehicle of Everest Re which constitutes the reinsurers main third-party capital management strategy, underwrote 50% more premiums in the first-quarter of 2018 compared to the prior year.

Mt. Logan Re began 2018 with $1.028 billion of assets under management in time for the key January 1st renewal season.

That collateral was put to work in underwriting $81 million of premiums, which were ceded to it from parent reinsurance firm Everest Re, a 50% increase on the $54.2 million ceded in Q1 of 2017.

Ceded earned premiums also rose to $61.4 million, up from $40.6 million in the prior year quarter, a 51% increase.

Losses and loss adjustment expenses ceded to Mt. Logan Re by Everest Re were only slight up, at $21 million in Q1 2018 compared to $19.6 million in the prior year.

The increase in premiums ceded to the collateralized reinsurance vehicle reflects the increasing asset pool managed by the Mt. Logan Re team, with total collateral posted to support reinsurance contracts now amounting to almost $1.08 billion across all the segregated accounts within the Mt. Logan Re structure.

Of that, Everest Re has a small investment of roughly $51.6 million, slightly up from the $50.4 million reported for the prior year quarter, but still reflecting a roughly 5% stake.

Income earned by parent Everest Re from its third-party capital activities appears to have also risen in the last quarter, as the firm recorded other income of $12.1 milliom for Q1 2018, part of which is related to Mt. Logan Re, compared to an expense of $5.1 million in the prior year.

So the growth of the Mt. Logan Re vehicle for the start of 2018 appears to have been put to good use, taking on more premiums from the parent, which in time and if catastrophe losses remain at a more normal level should put Mt. Logan Re on a good footing to deliver investor returns this year.

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