Alternative asset management and insurance solutions company Mount Logan Capital Inc. has completed its previously announced acquisition of Ability Insurance Company for $20 million.
The purchase price was comprised of the issuance of an unsecured promissory note in the amount of $15 million and $5 million of common shares of Mount Logan.
Mount Logan’s subsidiary, Mount Logan Management LLC (ML Management) has now been engaged as an investment adviser for a meaningful portion of Ability’s assets, thereby increasing ML Management’s assets under management.
The transaction has been approved by both the Nebraska Department of Insurance as well as the Neo Exchange Inc.
Ability is a Nebraska domiciled insurer and reinsurer of long-term care policies with approximately $900 million of invested statutory assets as of June 30, 2021.
Ability is unique in the insurance industry in that its long-term care portfolio’s morbidity risk has been largely re-insured to third parties, and Ability is no longer insuring or re-insuring new long-term care risk.
As part of the Transaction, Mount Logan has invested $10 million of capital into Ability to strengthen its balance sheet and launch a platform for the reinsurance of annuities, which is expected to reinsure $150 million of fixed annuities within six to twelve months.
Anna Elliott and David Charsky, current members of the Ability management team, will continue to lead the business following the closing of the transaction, as President and Vice President of Finance & Treasurer, respectively.
“The completion of our transaction with Ability represents a monumental step in scaling Mount Logan, expanding the asset management side of our business, and diversifying into insurance solutions,” said Ted Goldthorpe, Chief Executive Officer and Chairman of Mount Logan.
“We look forward to continuing to grow our AUM in the fast-growing area of insurance, and more specifically, the reinsurance of annuities. In addition, we are pleased to welcome Anna Elliott and David Charsky to the Mount Logan family. The transaction is beneficial for Ability’s policyholders, is highly strategic for Mount Logan, and will be used as a growth platform.”
