Maiden Holdings Ltd
For the period ended Jun 30, 2024. Filed Aug 8, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 8, 2024
MHLA$9.10+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-09.
0001412100-24-000047
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0001412100-24-000067
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 329 previous paragraphs and 352 current paragraphs.
172 unchanged; 133 reworded; 38 added; 18 removed; 6 previous and 9 current paragraphs rearranged.
Tables are not compared: 48 previous and 49 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (38)
Current report
As noted, we are actively exploring fee-based and distribution opportunities which are non-risk bearing and capital efficient. As these strategic plans continue to develop, we may modify our approach to this aspect of our current strategy, including possibly reducing our investments and commitments to alternative investments.
Current report
Net loss
Current report
•an underwriting loss of $9.8 million for the three months ended June 30, 2024 compared to an underwriting loss of $9.3 million in the same period in 2023 largely due to:
Current report
•Our AmTrust Reinsurance segment had adverse PPD of $5.2 million in the second quarter of 2024 compared to adverse PPD of $3.2 million for the second quarter of 2023. Of the total adverse PPD experienced in this segment for the second quarter of 2024, $5.6 million is recoverable under the LPT/ADC Agreement and will be recognized as future GAAP income over time as recoveries are received under provisions of the LPT/ADC Agreement and the applicable GAAP accounting rules.
Current report
•Our Diversified Reinsurance segment had adverse PPD of $1.6 million in the second quarter of 2024 compared to adverse PPD of $1.3 million for the second quarter of 2023.
Current report
•interest in income of equity method investments of $1.5 million for the three months ended June 30, 2024 compared to an interest in income of $4.8 million for the same period in 2023.
Current report
•corporate general and administrative expenses increased to $4.8 million for the three months ended June 30, 2024 compared to $2.9 million for the same period in 2023; and partly offset by:
Current report
Net loss for the six months ended June 30, 2024 was $8.5 million compared to net loss of $14.3 million for the same period in 2023. The net increase in our financial results for the six months ended June 30, 2024 compared to 2023 was largely due to:
Current report
•underwriting loss of $17.3 million in the six months ended June 30, 2024 compared to an underwriting loss of $17.5 million for the same period in 2023 largely due to:
Current report
•adverse PPD of $13.4 million for the six months ended June 30, 2024 compared to adverse PPD of $8.2 million for the same period in 2023 detailed as follows:
Current report
•Our AmTrust Reinsurance segment had adverse PPD of $12.5 million in 2024, compared to adverse PPD of $6.1 million in 2023. Of the total adverse PPD experienced in this segment for 2024, $10.6 million is recoverable under the LPT/ADC Agreement and is expected to be recognized as future GAAP income over time as recoveries are received under provisions of the LPT/ADC Agreement and the applicable GAAP accounting rules.
Current report
•Our Diversified Reinsurance segment had adverse PPD of $0.9 million in 2024, compared to adverse PPD of $2.1 million for the same period in 2023.
Current report
•on a current accident year basis, an underwriting loss of $3.9 million for the six months ended June 30, 2024 compared to an underwriting loss of $9.4 million for the same period in 2023, primarily due to results in AmTrust Reinsurance segment as discussed further below in the segment analysis.
Current report
•total income from investment activities was $26.9 million for the six months ended June 30, 2024 compared to $27.0 million in 2023 which was comprised of:
Current report
•net investment income decreased to $14.7 million for the six months ended June 30, 2024 compared to $20.1 million that was earned for the same period in 2023;
Current report
•net realized and unrealized investment gains of $10.2 million for the six months ended June 30, 2024 compared to net investment gains of $2.2 million for the same period in 2023; and
Current report
•interest in income of equity method investments of $2.1 million for the six months ended June 30, 2024 compared to an interest in income of equity method investments of $4.8 million for the same period in 2023.
Current report
•corporate general and administrative expenses increased to $10.1 million for the six months ended June 30, 2024 compared to $9.9 million for the same period in 2023; and partly offset by:
Current report
•foreign exchange and other gains of $2.1 million for the six months ended June 30, 2024 compared to foreign exchange and other losses of $5.4 million earned for the same period in 2023.
Current report
Net investment income decreased by $3.6 million or 33.9% and $5.4 million or 27.0% for the three and six months ended June 30, 2024, respectively, compared to the same respective periods in 2023 largely due to lower interest income earned on our funds withheld balance with AmTrust as claim payments continued to be settled through the funds held receivable.
Current report
Net loss and LAE increased by $4.2 million or 19.9% during the six months ended June 30, 2024 compared to the same respective period in 2023 driven by higher net adverse PPD experienced in the AmTrust Reinsurance Segment. Net loss and LAE was impacted by net adverse PPD of $13.4 million in 2024 compared to net adverse PPD of $8.2 million during 2023.
Current report
Of the total adverse development in the AmTrust Reinsurance segment experienced to date in 2024, $10.6 million is recoverable under the LPT/ADC Agreement and is expected to be recognized as future GAAP income over time as recoveries are received under the provisions of the LPT/ADC Agreement and the applicable GAAP accounting rules.
Current report
Corporate expenses increased by $1.9 million and $0.2 million or the three and six months ended June 30, 2024 largely due to higher professional, audit and legal fees.
Current report
Excluding expenses related to the Company’s IIS business, which is no longer writing new business and has entered into the AmTrust Renewal Rights Agreements, total general and administrative expenses increased 22.4% to $6.5 million and decreased 4.7% to $13.3 million for the three and six months ended June 30, 2024, respectively, compared to $5.3 million and $13.9 million for the same respective periods in 2023 primarily due to higher professional, audit and legal fees for the quarter-to-date period and lower incentive compensation costs for the year-to-date period.
Current report
During the three and six months ended June 30, 2023, the Company realized a gain of $39.9 thousand due to the partial repurchase of the 2013 Senior Notes which was offset against total interest and amortization expenses discussed above.
Current report
Gross premiums written increased by $1.8 million or 27.7% and $3.8 million, or 28.3% for the three and six months ended June 30, 2024, respectively, compared to the same respective periods in 2023. Net premiums written increased by $1.7 million or 26.0% and $3.8 million or 28.1% during the three and six months ended June 30, 2024, respectively, compared to the same respective periods in 2023. Net premiums earned increased by $1.0 million or 14.2% and $2.5 million or 17.3% during the three and six months ended June 30, 2024, respectively, compared to the same respective periods in 2023.
Current report
The tables below show other insurance revenue by source for the three and six months ended June 30, 2024 and 2023:
Current report
The netadverse development for the three and six months ended June 30, 2023 was primarily from an Australian Warranty program and a German Auto program in run-off from our International unit along with development from other runoff business lines and included the recognition of expected credit losses on reinsurance recoverable on unpaid losses.
Current report
Net adverse PPD was $5.2 million and $12.5 million during the three and six months ended June 30, 2024, respectively, compared to net adverse development of $3.2 million and $6.1 million for the same respective periods in 2023, incurred primarily within the AmTrust Quota Share and European Hospital Liability Quota Share.
Current report
The table below shows PPD for the AmTrust Reinsurance segment for the three and six months ended June 30, 2024 and 2023:
Current report
Total acquisition costs increased as a percentage of net premiums earned for both respective periods due to the amortization of deferred acquisition costs upon the recognition of a premium deficiency of $0.1 million in the AmTrust Reinsurance segment for the three and six months ended June 30, 2024.
Current report
•accumulated deficit increased by $8.5 million due to the net loss reported for the six months ended June 30, 2024; and
Current report
•treasury shares increased by $2.5 million due to $2.3 million of shares repurchased under our authorized common share repurchase plan and $0.2 million of common share repurchases due to tax withholding on vested shares.
Current report
On February 21, 2017, the Company's Board of Directors approved the repurchase of up to $100.0 million of the Company's common shares from time to time at market prices. The Company adopted a Rule 10b5-1(c)(1) trading arrangement as defined in Item 408 of Regulation S-K under the Securities Exchange Act of 1934, as amended. On March 20, 2024, an amendment was made to the agreement initially signed on September 29, 2023 between Maiden Holdings and a financial intermediary authorizing the intermediary to purchase common shares from October 30, 2023 until the close of business on September 29, 2024, subject to certain conditions set forth in the agreement. The Company has fulfilled the repurchases under its current Rule 10b5-1(c)(1) trading arrangement.
Current report
Non-GAAP operating loss was $15.6 million for the six months ended June 30, 2024, compared to non-GAAP operating loss of $3.4 million for the same period in 2023. The non-GAAP operating loss in both respective years were primarily driven by non-GAAP underwriting results in the AmTrust Reinsurance segment as discussed further below.
Current report
The non-GAAP underwriting loss of $7.5 million and $10.0 million for the three and six months ended June 30, 2024, respectively, was primarily driven by:
Current report
•favorable loss development on commuted Workers Compensation losses which are contractually covered by the LPT/ADC Agreement reduced the deferred gain liability on retroactive reinsurance by $3.2 million for the three and six months ended June 30, 2024; and
Current report
•underwriting loss of $2.8 million and $3.0 million in the Diversified Reinsurance segment for the three and six months ended June 30, 2024, respectively.
Removed paragraphs (18)
Previous report
Net income (loss)
Previous report
◦interest in income of equity method investments of $0.6 million for the three months ended March 31, 2024 compared to an interest in loss of $0.1 million for the same period in 2023; and
Previous report
◦net investment income decreased to $7.7 million for the three months ended March 31, 2024 compared to $9.5 million for the same period in 2023.
Previous report
•an underwriting loss of $7.5 million for the three months ended March 31, 2024 compared to an underwriting loss of $8.3 million in the same period in 2023 largely due to:
Previous report
Net investment income decreased by $1.8 million or 19.3% for the three months ended March 31, 2024 compared to the same period in 2023 largely due to lower interest income earned on our funds withheld balance with AmTrust, which decreased by $2.4 million due to a lower average balance of $94.7 million for the three months ended March 31, 2024 compared to an average balance of $384.2 million for the same period in 2023.
Previous report
Underwriting results in the Diversified Reinsurance segment improved for the three months ended March 31, 2024 compared to the same respective period in 2023 primarily due tofavorable prior year reserve development on GLS and other runoff lines as discussed further below under the net losses and LAE section.
Previous report
Gross premiums written increased by $2.0 million or 28.9% for the three months ended March 31, 2024 compared to the same period in 2023.
Previous report
Net premiums written increased by $2.0 million or 30.2% during the three months ended March 31, 2024, compared to the same period in 2023.
Previous report
Net premiums earned increased by $1.5 million or 20.3% during the three months ended March 31, 2024 compared to the same period in 2023.
Previous report
Other insurance revenue (expense), net increased by $0.1 million for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to fair value changes in non-hedged underwriting-related derivatives on GLS contracts. The table below shows other insurance revenue by source for the three months ended March 31, 2024 and 2023:
Previous report
The table below shows prior year loss development for the AmTrust Reinsurance segment for the three months ended March 31, 2024 and 2023:
Previous report
Net adverse prior year loss development was $7.2 million during the three months ended March 31, 2024 compared to net adverse development of $2.9 million for the same period in 2023.
Previous report
Net adverse prior year loss development for the three months ended March 31, 2023 was driven by unfavorable movements in General Liability, Auto Liability and Specialty Risk & Extended Warranty partly offset by continued favorable development in Workers Compensation.
Previous report
Cash Flows used in Investing Activities
Previous report
Accrued expenses and other liabilities increased by 8.9% primarily due to an increase in reinsurance losses payable due to AmTrust. The Company's reserve for loss and LAE decreased by 6.2% primarily due to continued settlement of loss reserves for AmTrust Reinsurance contracts.
Previous report
•accumulated deficit decreased by $1.5 million due to net income of $1.5 million for the three months ended March 31, 2024; and
Previous report
•treasury shares increased by $0.9 million due to common shares repurchased under the Company's authorized common share repurchase plan as well as repurchases for tax withholding in respect of tax obligations on the vesting of non-performance-based restricted shares.
Previous report
•underwriting loss of $0.3 million in the Diversified Reinsurance segment for the three months ended March 31, 2024.
Reworded paragraphs (133)
Previous wording
On May 3, 2024, Maiden LF and Maiden GF entered into a renewal rights transaction with AmTrust Nordic AB ("AmTrust Nordic") a Swedish unit of AmTrust which is expected to cover the majority of Maiden LF and Maiden GF's primary business written in Sweden, Norway and other Nordic countries. The Company anticipates entering into additional renewal rights agreements with other AmTrust entities for certain business written by Maiden GF and Maiden LF in the United Kingdom and Ireland. Under these agreements, AmTrust Nordic in collaboration with existing Maiden LF and Maiden GF distribution partners, will offer renewals to select policyholders in exchange for a fee at standard market terms for business successfully renewed. AmTrust is expected to hire a limited number of related staff to support the transfer of the business.
Current wording
On May 3, 2024, Maiden LF and Maiden GF entered into a Renewal Rights and Asset Purchase Agreement with AmTrust Nordic AB, a Swedish unit of AmTrust Financial Services, Inc. ("AmTrust") which is expected to cover the majority of Maiden LF and Maiden GF's primary business written in Sweden, Norway and other Nordic countries. On June 20, 2024, Maiden LF and Maiden GF entered into an additional Renewal Rights and Asset Purchase Agreement with AmTrust Europe Limited ("AEL") and AmTrust International Underwriters DAC ("AIU DAC"), both wholly owned subsidiaries of AmTrust, which is expected to cover the majority of Maiden LF and Maiden GF's primary business written in the United Kingdom and Ireland. These agreements are collectively referred to as the "AmTrust Renewal Rights Agreements". Under these agreements, those AmTrust subsidiaries in collaboration with existing Maiden LF and Maiden GF distribution partners, will offer renewals to select policyholders in exchange for a fee at standard market terms for business successfully renewed.
Previous wording
These transactions are part of our broader plan to divest the IIS businesses as a result of our recently concluded strategic review of the IIS business platform. The purpose of that review was to evaluate the strategic value of Maiden LF and Maiden GF in relation to their ongoing growth and profitability prospects, regulatory capital requirements and ability to create shareholder value in excess of our target return on capital levels. As part of these conclusions, we expect to enter into additional transactions to either sell or wind-up Maiden GF and Maiden LF during 2024 and we are actively evaluating potential transactions currently.
Current wording
These transactions are part of our broader plan to divest the IIS businesses as a result of our recently concluded strategic review of the IIS business platform. The purpose of that review was to evaluate the strategic value of Maiden LF and Maiden GF in relation to their ongoing growth and profitability prospects, regulatory capital requirements and ability to create shareholder value in excess of our target return on capital levels. As part of these conclusions, Maiden LF and Maiden GF are no longer writing new business and we expect to enter into additional transactions to either sell or wind-up Maiden GF and Maiden LF during 2024 and we are actively evaluating potential transactions currently.
Previous wording
Our business currently consists of two reportable segments: Diversified Reinsurance and AmTrust Reinsurance. Our Diversified Reinsurance segment consists of a portfolio of predominantly property and casualty reinsurance business focusing on regional and specialty property and casualty insurance companies located primarily in Europe. This segment also includes transactions entered into by GLS since November 2020. Our AmTrust Reinsurance segment includes all business ceded to Maiden Reinsurance by AmTrust, primarily the quota share reinsurance agreement (“AmTrust Quota Share”) between Maiden Reinsurance and AmTrust’s wholly owned subsidiary, AmTrust International Insurance, Ltd. (“AII”) and the European hospital liability quota share reinsurance contract ("European Hospital Liability Quota Share") with AmTrust’s wholly owned subsidiaries, AmTrust Europe Limited ("AEL") and AmTrust International Underwriters DAC ("AIU DAC"), both of which are in run-off effective as of January 1, 2019.
Current wording
Our business currently consists of two reportable segments: Diversified Reinsurance and AmTrust Reinsurance. Our Diversified Reinsurance segment consists of a portfolio of predominantly property and casualty reinsurance business focusing on regional and specialty property and casualty insurance companies located primarily in Europe. This segment also includes transactions entered into by GLS since November 2020. Our AmTrust Reinsurance segment includes all business ceded to Maiden Reinsurance by AmTrust, primarily the quota share reinsurance agreement (“AmTrust Quota Share”) between Maiden Reinsurance and AmTrust’s wholly owned subsidiary, AmTrust International Insurance, Ltd. (“AII”) and the European hospital liability quota share reinsurance contract ("European Hospital Liability Quota Share") with AmTrust’s wholly owned subsidiaries, AEL and AIU DAC, both of which are in run-off effective as of January 1, 2019.
Previous wording
To date, we invested $12.7 million in insurance distribution platforms and these investments have achieved an internal rate of return of 21.7% and a multiple of capital of 1.53x on those investments.
Current wording
To date, we invested $9.5 million in insurance distribution platforms and these investments have achieved an internal rate of return of 24.7% and a multiple of capital of 1.69x on those investments.
Previous wording
As of March 31, 2024, we have invested approximately $327.0 million into alternative investments which include equity securities, other investments and equity method investments in a wide variety of asset classes, and we believe these activities will exceed that benchmark cost of capital with adjustments as necessary if those returns do not emerge. Please refer to the "Liquidity and Capital Resources" section on "Other Investments, Equity Investments and Equity Method Investments" for further information on our alternative asset classes and a detailed discussion of their investment returns.
Current wording
As of June 30, 2024, we have invested approximately $336.8 million into alternative investments which include equity securities, other investments and equity method investments in a wide variety of asset classes, and we believe these activities will exceed that benchmark cost of capital with adjustments as necessary if those returns do not emerge. Please refer to the "Liquidity and Capital Resources" section on "Other Investments, Equity Investments and Equity Method Investments" for further information on our alternative asset classes and a detailed discussion of their investment returns.
Previous wording
Please refer to "Notes to Condensed Consolidated Financial Statements (unaudited) Note 6. Shareholders' Equity" included under Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q for further information on the recent repurchases made by Maiden Reinsurance during the first quarter of 2024. There can be no assurance that we will continue to pursue such capital management initiatives, or that they will provide appropriate risk-adjusted returns. As we revised our strategy in recent years, we continuously evaluate the effectiveness of those strategies in achieving its goals and have been and continue to be prepared to adjust those strategies as our performance dictates.
Current wording
Please refer to "Notes to Condensed Consolidated Financial Statements (unaudited) Note 6. Shareholders' Equity" included under Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q for further information on the recent repurchases made by Maiden Reinsurance during the three and six months ended June 30, 2024. There can be no assurance that we will continue to pursue such capital management initiatives, or that they will provide appropriate risk-adjusted returns. As we revised our strategy in recent years, we continuously evaluate the effectiveness of those strategies in achieving its goals and have been and continue to be prepared to adjust those strategies as our performance dictates.
Previous wording
At March 31, 2024, GLS and its subsidiaries hold insurance related liabilities of $24.3 million which mainly consisted of total reserves of $18.1 million, an underwriting-related derivative liability of $4.0 million, and net deferred gains on retroactive reinsurance of $2.3 million.
Current wording
At June 30, 2024, GLS and its subsidiaries have total insurance related liabilities of $23.9 million which consisted of total loss reserves of $17.6 million, an underwriting-related derivative liability of $4.0 million, and net deferred gains on retroactive reinsurance of $2.3 million.
Previous wording
During the first quarter of 2024, while our book value remained stable at $2.48 per common share at March 31, 2024, our non-GAAP book value increased by 1.6% to $3.24 per common share at March 31, 2024. We also made additional progress in the capital management pillar of our business strategy, repurchasing 352,111 common shares during the first quarter of 2024.
Current wording
During the six months ended June 30, 2024, our book value decreased by 4.0% to $2.38 per common share at June 30, 2024, and our non-GAAP book value decreased by 0.6% to $3.17 per common share at June 30, 2024. We made additional progress in the capital management pillar of our business strategy, repurchasing 747,561 and 1,099,672 common shares during the three and six months ended June 30, 2024, respectively.
Previous wording
During the first quarter of 2024, our alternative investment portfolio increased by 5.8% and produced a positive net return of 3.4% on that portfolio during the first quarter of 2024 compared to 0.7% for the same period in 2023. The annualized return is now above our cost of capital despite numerous investments continuing to be carried at cost or net asset values that have yet to realize positive marks due to their only recent deployment. We believe our alternative investment portfolio remains well positioned to achieve its targeted longer-term returns. As interest rates have risen, we are increasingly focusing our investing activities on opportunities that will produce current income.
Current wording
During the six months ended June 30, 2024, our alternative investment portfolio increased by 9.0% and produced a positive net return of 4.6% on that portfolio during the six months ended June 30, 2024 compared to 3.7% for the same period in 2023. The annualized return is now above our average cost of capital despite numerous investments that continue to be carried at cost or net asset values that have yet to realize positive returns due to recent deployment. We believe our alternative investment portfolio remains well positioned to achieve its targeted longer-term returns. As interest rates have risen, we are increasingly focusing our investing activities on opportunities that will produce current income.
Previous wording
The run-off of our historic reinsurance programs produced an underwriting loss during the first quarter of 2024, and we experienced adverse prior year reserve development of $6.6 million which offset much of the positive progress made in our capital and asset management strategies. Of this adverse prior year development, $5.0 million or 76.2% of the total net adverse development for the three months ended March 31, 2024 was related to claims we expect to be covered by the LPT/ADC Agreement with Cavello and which will be recognized as future GAAP income when recovered from Cavello pursuant to both the agreement and GAAP accounting requirements.
Current wording
The run-off of our historic reinsurance programs produced an underwriting loss of $9.8 million and $17.3 million for the three and six months ended June 30, 2024, respectively. Much of this was driven by adverse prior year reserve development of $6.8 million and $13.4 million for three and six months ended June 30, 2024, respectively, which offset the positive progress made in our capital and asset management strategies. Approximately $5.6 million or 83.1% and $10.6 million or 79.7% of the total adverse prior year reserve development for the three and six months ended June 30, 2024, respectively, is recoverable under the LPT/ADC Agreement and is expected to be recognized as future GAAP income over time as recoveries are received, including recoveries on Workers Compensation paid commuted amounts, under the provisions of the LPT/ADC Agreement and the applicable GAAP accounting rules.
Previous wording
We believe Maiden NA’s investments, including its ownership of Maiden Reinsurance and its active asset management strategy, will create opportunities to utilize NOL carryforwards of $334.0 million at March 31, 2024. Approximately $182.8 million of these NOL carryforwards expire in various years beginning in 2029. As of March 31, 2024,$151.2 million or 45.3% of the Company's NOL carryforwards have no expiry date under the relevant U.S. tax law. The NOL carryforwards combined with additional net deferred tax assets ("DTA") primarily related to our insurance liabilities result in net U.S. DTA (before valuation allowance) of$117.3 million or $1.17 per common share at March 31, 2024.
Current wording
We believe Maiden NA’s investments, including its ownership of Maiden Reinsurance and its active asset management strategy, will create opportunities to utilize NOL carryforwards of $338.2 million at June 30, 2024. Approximately $186.2 million of these NOL carryforwards expire in various years beginning in 2029. As of June 30, 2024,$152.0 million or 44.9% of the Company's NOL carryforwards have no expiry date under the relevant U.S. tax law. The NOL carryforwards combined with additional net deferred tax assets ("DTA") primarily related to our insurance liabilities result in net U.S. DTA (before valuation allowance) of$119.2 million or $1.19 per common share at June 30, 2024.
Previous wording
Net U.S. DTA of $117.3 million is not presently recognized on the Company's condensed consolidated balance sheets as a full valuation allowance is carried against it. At this time, while positive evidence in support of reducing the valuation allowance is growing, the Company believes it is necessary to maintain a full valuation allowance against the net U.S. DTA as more evidence is needed regarding the utilization of these losses. As circumstances further develop, we will continuously evaluate the amount of the valuation allowance held against the net U.S. DTA.
Current wording
Net U.S. DTA of $119.2 million is not presently recognized on the Company's condensed consolidated balance sheets as a full valuation allowance is carried against it. At this time, while positive evidence in support of reducing the valuation allowance is growing, the Company believes it is necessary to maintain a full valuation allowance against the net U.S. DTA as more evidence is needed regarding the utilization of these losses. As circumstances further develop, we will continuously evaluate the amount of the valuation allowance held against the net U.S. DTA.
Previous wording
Three Months Ended March 31, 2024 and 2023 Financial Highlights
Current wording
Three and Six Months Ended June 30, 2024 and 2023 Financial Highlights
Previous wording
(1)Non-GAAP operating loss, non-GAAP operating loss per common share, and annualized non-GAAP operating return on average common shareholders' equity are non-GAAP financial measures. See "Key Financial Measures" for additional information.
Current wording
(1)Non-GAAP operating earnings (loss), non-GAAP operating earnings (loss) per common share, and annualized non-GAAP operating return on average common shareholders' equity are non-GAAP financial measures. See "Key Financial Measures" for additional information.
Previous wording
The Company no longer presents certain non-GAAP measures such as combined ratio and its related components in this Quarterly Report on Form 10-Q for the three months ended March 31, 2024, as it believes that as the run-off of our reinsurance portfolios progresses, such ratios are increasingly not meaningful and of less value to readers as they evaluate the financial results of the Company, particularly compared to historical data.
Current wording
The Company no longer presents certain non-GAAP measures such as combined ratio and its related components in this Quarterly Report on Form 10-Q for the three and six months ended June 30, 2024, as it believes that as the run-off of our reinsurance portfolios progresses, such ratios are increasingly not meaningful and of less value to readers as they evaluate the financial results of the Company, particularly compared to historical data.
Previous wording
The following table sets forth our selected unaudited Condensed Consolidated Statement of Income data for the three months ended March 31, 2024 and 2023:
Current wording
The following table sets forth our selected unaudited Condensed Consolidated Statement of Income data for the three and six months ended June 30, 2024 and 2023:
Previous wording
Net income for the three months ended March 31, 2024 was $1.5 million compared to net loss of $11.3 million for the same respective period in 2023. The increase in our financial results for the first quarter of 2024 compared to the first quarter of 2023 was primarily due to:
Current wording
Net loss for the three months ended June 30, 2024 was $10.0 million compared to net loss of $2.9 million for the same respective period in 2023. The decrease in our financial results for the second quarter of 2024 compared to the second quarter of 2023 was primarily due to:
Previous wording
◦adverse prior year loss development ("PPD") of $6.6 million in the first quarter of 2024 compared to adverse PPD of $3.7 million during the same period in 2023; and
Current wording
•adverse prior year loss development ("PPD") of $6.8 million in the second quarter of 2024 compared to adverse PPD of $4.5 million during the same period in 2023, detailed as follows;
Previous wording
◦on a current accident year basis, underwriting loss was $1.0 million for the three months ended March 31, 2024 compared to an underwriting loss of $4.6 million for the same period in 2023.
Current wording
•On a current accident year basis, underwriting loss was $3.0 million for the three months ended June 30, 2024 compared to an underwriting loss of $4.8 million for the same period in 2023.
Previous wording
•total income from investment activities of $17.1 million for the three months ended March 31, 2024 compared to $10.5 million for the same period in 2023 which was comprised of:
Current wording
•lower total income from investment activities of $9.9 million for the three months ended June 30, 2024 compared to $16.5 million for the same period in 2023 which was comprised of:
Previous wording
•corporate general and administrative expenses decreased to $5.3 million for the three months ended March 31, 2024 compared to $7.0 million for the same period in 2023; and
Current wording
•net investment income decreased to $7.0 million for the three months ended June 30, 2024 compared to $10.5 million for the same period in 2023;
Previous wording
◦realized and unrealized investment gains increased to $8.8 million for the three months ended March 31, 2024 compared to gains of $1.0 million for the same period in 2023;
Current wording
•realized and unrealized investment gains increased to $1.5 million for the three months ended June 30, 2024 compared to investment gains of $1.1 million for the same period in 2023; and
Previous wording
•foreign exchange and other gains increased to $2.1 million for the three months ended March 31, 2024, compared to foreign exchange and other losses of $2.8 million for the same period in 2023.
Current wording
•nominal foreign exchange and other gains for the three months ended June 30, 2024, compared to foreign exchange and other losses of $2.6 million for the same period in 2023.
Previous wording
The table below compares net premiums written by our reportable segments, reconciled to the total consolidated net premiums written for the three months ended March 31, 2024 and 2023:
Current wording
The tables below compare net premiums written by our reportable segments, reconciled to the total consolidated net premiums written for the three and six months ended June 30, 2024 and 2023:
Previous wording
Net premiums written for the three months ended March 31, 2024 increased to $8.3 million compared to net premiums written of $0.8 million for the same period in 2023:
Current wording
Net premiums written for the three and six months ended June 30, 2024 increased to $8.3 million and $16.7 million, respectively, compared to net premiums written of $6.9 million and $7.6 million for the same respective periods in 2023:
Previous wording
•Premiums written in the Diversified Reinsurance segment increased by $2.0 million for the three months ended March 31, 2024 compared to the same period in 2023 due to growth in direct premiums for Credit Life programs written by Maiden LF and Maiden GF.
Current wording
•Premiums written in the Diversified Reinsurance segment increased by $1.7 million and $3.8 million for the three and six months ended June 30, 2024 compared to the same respective periods in 2023 due to growth in direct premiums for Credit Life programs written by Maiden LF and Maiden GF.
Previous wording
•Premiums written in the AmTrust Reinsurance segment increased by $5.5 million for the three months ended March 31, 2024 compared to the same period in 2023. The negative written premiums in the prior year period reflect cession adjustments of $6.1 million due to the cancellation of cases in one specific program within Specialty Risk and Extended Warranty for the three months ended March 31, 2023.
Current wording
•Premiums written in the AmTrust Reinsurance segment decreased by $0.3 million and increased by $5.2 million for the three and six months ended June 30, 2024 compared to the same respective periods in 2023. The negative written premiums in the prior year six month period reflect cession adjustments of $6.1 million due to the cancellation of cases in one specific program within Specialty Risk and Extended Warranty.
Previous wording
Net premiums earned increased by $3.4 million for the three months ended March 31, 2024 compared to the same period in 2023. The table below compares net premiums earned by our reportable segments, reconciled to the total consolidated net premiums earned, for the three months ended March 31, 2024 and 2023:
Current wording
Net premiums earned increased by $1.0 million and $4.4 million for the three and six months ended June 30, 2024, respectively, compared to the same respective periods in 2023 due to higher earned premiums in our Diversified Reinsurance segment driven by growth in Credit Life programs written by Maiden LF and Maiden GF. The tables below compare net premiums earned by our reportable segments, reconciled to the total consolidated net premiums earned, for the three and six months ended June 30, 2024 and 2023:
Previous wording
Net premiums earned in the Diversified Reinsurance segment for the three months ended March 31, 2024 increased by $1.5 million or 20.3% compared to the same period in 2023 mainly due to growth in Credit Life programs written by Maiden LF and Maiden GF. Please refer to the analysis of our Diversified Reinsurance segment for further discussion.
Current wording
Net premiums earned in the Diversified Reinsurance segment for the three and six months ended June 30, 2024 increased by $1.0 million or 14.2% and $2.5 million or 17.3%, respectively, compared to the same respective periods in 2023 mainly due to growth in Credit Life programs written by Maiden LF and Maiden GF. Please refer to the analysis of our Diversified Reinsurance segment for further discussion.
Previous wording
Net premiums earned in the AmTrust Reinsurance segment for the three months ended March 31, 2024 increased by $1.9 million compared to the same period in 2023 primarily due to negative earned premium adjustments made in 2023. Please refer to the analysis of our AmTrust Reinsurance segment for further discussion.
Current wording
Net premiums earned in the AmTrust Reinsurance segment for the three and six months ended June 30, 2024 increased by $13.0 thousand or 0.3% and $1.9 million or 35.4%, respectively, compared to the same respective periods in 2023 primarily due to negative earned premium adjustments made during the first quarter of 2023. Please refer to the analysis of our AmTrust Reinsurance segment for further discussion.
Previous wording
Annualized average book yields increased to 4.6% for the three months ended March 31, 2024 compared to 3.7% for the same period in 2023 due to the following factors:
Current wording
Annualized average book yields increased to 4.8% and 4.7% for the three and six months ended June 30, 2024, respectively, compared to 4.2% and 4.0% for the same respective periods in 2023 due to the following factors:
Previous wording
•Floating rate investments comprise 43.2% of our fixed income investments as of March 31, 2024 which enabled the portfolio to respond to the higher interest rate environment more quickly;
Current wording
•Floating rate investments comprise 50.5% of our fixed income investments as of June 30, 2024 which enabled the portfolio to respond to the higher interest rate environment more quickly;
Previous wording
•Loan to related party carried a higher weighted average interest rate on a balance of $168.0 million which increased to 7.3% for the three months ended March 31, 2024 compared to 6.4% for the same period in 2023; partly offset by:
Current wording
•Loan to related party carried a higher weighted average interest rate on a balance of $168.0 million which increased to 7.3% for the three and six months ended June 30, 2024, respectively, compared to 7.0% and 6.7% for the same respective periods in 2023; partly offset by:
Previous wording
•Funds withheld receivable earned an annual interest rate of 3.5% for the three months ended March 31, 2024 and 2023 however there was lower interest income on the funds withheld receivable of $0.9 million for the three months ended March 31, 2024 compared to $3.3 million for the same period in 2023 driven by a lower average funds held balance of $94.7 million.
Current wording
•Interest income on our funds withheld receivable decreased by $2.7 million and $5.2 million for the three and six months ended June 30, 2024, respectively, compared to the same respective periods in 2023. This was the result of a lower average funds withheld balance with AmTrust of $69.1 million in the first half of 2024 compared to $351.8 million for the first half of 2023. Funds withheld receivable from AmTrust earned an annual interest rate of 3.5% for both the three and six months ended June 30, 2024 and 2023, respectively.
Previous wording
Average aggregate fixed income assets at March 31, 2024 decreased by 39.0% compared to March 31, 2023 due to continued run-off of our reinsurance liabilities previously written on prospective risks primarily through the funds withheld receivable. For the three months ended March 31, 2024, we experienced positive operating cash flows due to excess collateral of $15.3 million released by AmTrust through the funds withheld receivable as we run-off our existing reinsurance liabilities in the AmTrust Reinsurance segment.
Current wording
Average aggregate fixed income assets for the three and six months ended June 30, 2024 decreased by 41.2% and 39.8%, respectively, compared to the same respective periods for June 30, 2023 due to continued run-off of our reinsurance liabilities previously written on prospective risks primarily through the funds withheld receivable. For the three and six months ended June 30, 2024, we experienced negative operating cash flows due to settlement of claim payments to AmTrust as we run-off our existing reinsurance liabilities in the AmTrust Reinsurance segment.
Previous wording
The following table details our average aggregate fixed income assets (at cost) and annualized investment book yield for the three months ended March 31, 2024 and 2023:
Current wording
The following table details our average aggregate fixed income assets (at cost) and annualized investment book yield for the three and six months ended June 30, 2024 and 2023:
Previous wording
Net realized and unrealized investment gains of $8.8 million were recognized for the three months ended March 31, 2024 compared to net realized and unrealized investment gains of $1.0 million for the same period in 2023. Total net realized and unrealized investment gains for the three months ended March 31, 2024 and 2023 are summarized in the table below by investment category:
Current wording
Net realized and unrealized investment gains of $1.5 million and $10.2 million were recognized for the three and six months ended June 30, 2024, respectively, compared to net realized and unrealized investment gains of $1.1 million and $2.2 million for the same respective periods in 2023. Total net realized and unrealized investment gains for the three and six months ended June 30, 2024 and 2023 are summarized in the table below by investment category:
Previous wording
Total net realized and unrealized investment gains increased by $7.7 million for the three months ended March 31, 2024 compared to the same period in 2023 primarily due to unrealized gains in the private equity asset class of $7.9 million during the current year period.
Current wording
Total net realized and unrealized investment gains increased by $0.3 million and $8.1 million for the three and six months ended June 30, 2024, respectively, compared to the same respective periods in 2023 primarily due to unrealized gains in the private equity asset class of $8.1 million during the current year period.
Previous wording
Total interest in income of equity method investments of $0.6 million were recognized for the three months ended March 31, 2024 compared to an interest in the loss of equity method investments of $0.1 million for the same period in 2023. Equity method investments consist of real estate investments of $52.6 million and other investments of $29.5 million as of March 31, 2024. Interest in income (loss) of equity method investments for the three months ended March 31, 2024 and 2023 is detailed by investment category in the following table:
Current wording
Total interest in income of equity method investments of $1.5 million and $2.1 million were recognized for the three and six months ended June 30, 2024, respectively, compared to an interest in the income of equity method investments of $4.8 million and $4.8 million for the same respective periods in 2023. Equity method investments consist of real estate investments of $54.3 million and other investments of $29.4 million as of June 30, 2024. Interest in income of equity method investments for the three and six months ended June 30, 2024 and 2023 is detailed by investment category in the following table:
Previous wording
Net loss and LAE increased by $1.8 million for the first quarter of 2024 compared to the same period in 2023 driven by an increase in net premiums earned in the AmTrust Reinsurance segment. Net losses were impacted by net adverse prior year loss development of $6.6 million for the first quarter of 2024 compared to net adverse prior year loss development of $3.7 million for the same period in 2023. Excluding adverse development, the current year losses were $5.1 million for the first quarter of 2024 compared to $6.2 million for the first quarter of 2023.
Current wording
Net loss and LAE increased by $2.4 million for the second quarter of 2024 compared to the same period in 2023. Net losses were impacted by net adverse PPD of $6.8 million for the second quarter of 2024 compared to net adverse PPD of $4.5 million for the same period in 2023. Excluding adverse development, the current year losses were $7.2 million for the second quarter of 2024 compared to $7.0 million for the second quarter of 2023.
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Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
Net Realized and Unrealized Investment Gains
Current report — wording carried from elsewhere
Interest in Income of Equity Method Investments
Current report — wording carried from elsewhere
Total interest and amortization expenses related to outstanding senior notes issued by Maiden Holdings in 2016 and Maiden NA in 2013 ("Senior Notes") were $4.8 million and $9.6 million for the three and six months ended June 30, 2024, respectively, compared to $4.8 million and $8.6 million for the same respective periods in 2023. This included interest expense incurred on the Senior Notes for the three and six months ended June 30, 2024 and 2023 of $4.8 million and $9.6 million, respectively.
Current report — wording carried from elsewhere
Net foreign exchange losses of $2.6 million and $4.7 million for the three and six months ended June 30, 2023 respectively, were attributable to the weakening of the U.S. dollar on the re-measurement of net loss reserves and insurance related liabilities denominated in British pound and euro.
Current report — wording carried from elsewhere
The negative gross and net premiums written for the six months ended June 30, 2023 reflect cession adjustments of $6.1 million due to the cancellation of cases in a certain program within Specialty Risk and Extended Warranty.
Current report — wording carried from elsewhere
Cash Flows used in Operating Activities
Current report — wording carried from elsewhere
Reinsurance under the Company's authorized repurchase plan to date. The market value of our common shares held by Maiden Reinsurance due to the Exchange and common share repurchases was $90.6 million at June 30, 2024.
Current report — wording carried from elsewhere
The following table summarizes our investment results for the three and six months ended June 30, 2024 and 2023:
Current report — wording carried from elsewhere
During the three and six months ended June 30, 2023, Maiden Reinsurance repurchased 299,630 common shares at an average price per share of $2.07 under the Company's share repurchase plan. The Company's remaining authorization is $69.4 million for common share repurchases at June 30, 2024.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
Net Realized and Unrealized Investment Gains (Losses)
Previous report — wording carried elsewhere
Interest in Income (Loss) of Equity Method Investments
Previous report — wording carried elsewhere
Net foreign exchange and other gains of $2.1 million were realized during the three months ended March 31, 2024 compared to net foreign exchange and other losses of $2.8 million for the same period in 2023.
Previous report — wording carried elsewhere
At March 31, 2024, unrestricted cash, cash equivalents and fixed maturity investments were $62.9 million compared to $73.4 million held at December 31, 2023, an decrease of $10.5 million during the three months ended March 31, 2024.
Previous report — wording carried elsewhere
Capital resources consist of funds deployed in support of our operations. The following table shows the movement in our capital resources at March 31, 2024 and December 31, 2023:
Previous report — wording carried elsewhere
The non-GAAP underwriting loss of $2.5 million for the three months ended March 31, 2024 was primarily driven by: