Mount Logan Capital Inc. reported financial results for the first quarter ended March 31, 2025, with a focus on its insurance operations through wholly owned subsidiary Ability Insurance Company.
Net investment income from the insurance segment was $19 million, down $2.8 million or 13% from the same quarter last year. The decrease was attributed to higher interest expense tied to an interest rate swap, lower bond yields and a smaller long-term investment portfolio.
Excluding funds withheld assets under reinsurance contracts and modified coinsurance (Modco) arrangements, net investment income rose to $14.5 million, up $400,000 or 3% year-over-year.
The company also reported a 6.9% yield on the insurance investment portfolio during the quarter. When excluding funds withheld under reinsurance and Modco arrangements, the yield was 8.8%
Assets managed by Mount Logan on behalf of Ability totalled $645.7 million as of March 31, up from $616.8 million in the prior-year period. The insurance segment’s total investment assets stood at $1.02 billion, a decrease of $23.0 million from March 2024. During the quarter, Mount Logan began managing a portion of Ability’s Modco assets through Vista.
The insurance segment’s book value rose to $85.9 million, up from $82.6 million a year earlier.
Spread Related Earnings (SRE) for the trailing twelve months ended March 31, 2025, were $7.8 million, down from $9.5 million in the prior-year period. The decline reflected a higher cost of funds, including a $1.8 million unfavorable in-force update on the Guardian block of long-term care business, partly offset by increased net investment income and lower operating expenses.
The company also reported that normalized first-quarter management fees for Ability were $1.6 million, excluding one-time expenses not expected to continue for the rest of the year.
Mount Logan also declared a cash distribution of C$0.02 per common share for the quarter, payable on June 2, 2025.
