Mount Logan Capital Inc. has announced impressive financial results for the second quarter of 2024, showcasing significant growth across its asset management and insurance operations.
The company's insurance division delivered a robust performance, reporting a net investment income of $23.5 million, a 10% rise from the second quarter of 2023. This $2.1 million increase is attributed to an expanded insurance investment portfolio and improved yields due to strategic capital deployment in a favourable higher-rate environment.
By the end of Q2 2024, the assets managed by Mount Logan for its subsidiary Ability Insurance reached $636.2 million, a significant jump from $437.3 million the previous year. The book value of the insurance segment rose to $88.8 million, bolstered by increased net income from insurance operations.
Mount Logan also reported a yield of 8.2% on its insurance investment portfolio as of June 30, 2024, with an even higher yield of 8.5% when excluding funds withheld under reinsurance contracts and Modified Coinsurance (Modco) arrangements.
Its asset management division recorded revenues of $3.4 million, reflecting a 13% increase compared to the same period in 2023. This uptick of $0.4 million was largely driven by a rise in various fees, including SOFIX, CLO, and sub-advisory fees, along with gains in Ovation management and incentive fees.
These results do not account for an additional $1.5 million in management fees linked to its subsidiary, Ability Insurance Company, which saw a remarkable 58% year-over-year increase.
In a move to further enhance shareholder value, Mount Logan declared a quarterly dividend of C$0.02 per common share. This marks the fifth consecutive year of quarterly distributions, with the dividend eligible for favourable tax treatment under the Income Tax Act (Canada).
Ted Goldthorpe, CEO and Chairman of Mount Logan, expressed satisfaction with the company's strong performance, emphasizing the substantial year-over-year growth in Fee Related Earnings (FRE) from the asset management segment and solid Spread Related Earnings (SRE) from the insurance operations. He credited the company’s strategic integration and focus on profitability for driving these positive results.
For the first half of 2024, Mount Logan reported a consolidated net income before taxes of $3.9 million, a significant turnaround from a loss in the previous year. This improvement was driven by revenue growth in both asset management and insurance segments, despite some cost increases related to new Multi-Year Guaranteed Annuity (MYGA) liabilities and administrative expenses.
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