Maiden Holdings, Ltd. has posted a $34.5 million net loss for the third quarter of 2024, compared to a net loss of $3.5 million for the third quarter of 2023.
The firm attributes the net loss towards an underwriting loss of $18.8 million in Q3 2024, a higher loss in comparison to the $10.9 million loss that the company posted during the same respective period in 2023.
Meanwhile, net premiums written (NPW) for the quarter sat at $8.8 million, a slight increase from last year’s $8.6 million.
NPW in the firm’s Diversified Reinsurance segment increased by $2.3 million or 34.3% for Q3 2024 compared to the same period in 2023 due to growth in direct premiums for Credit Life programs written by wholly owned Swedish subsidiaries Maiden Life Försäkrings AB (Maiden LF) and Maiden General Försäkrings AB (Maiden GF).
Additionally, NPW in the AmTrust Reinsurance segment decreased by $2.1 million for the quarter, compared to the same period in 2023 in connection with the termination of the reinsurance agreements with AmTrust.
Maiden Holdings also saw a $0.9 million increase in net premiums earned during Q3 2024, which the firm attributed towards higher earned premiums within its Diversified Reinsurance segment driven by growth in Credit Life programs written by both Maiden LF and Maiden GF.
In terms of investment, Maiden Holdings’ net investment income fell by $4.2 million or 46.1% in the quarter, which the firm attributed towards lower interest income earned on their funds withheld receivable.
Switching attention towards 9M 2024, Maiden Holdings reported a $43.0 million net loss for the period, compared to a net loss of $17.8 million for 9M 2023.
Maiden Holdings attributed the loss towards an underwriting loss of $36.0 million during the period, which compares to the $28.4 million underwriting loss that was posted in the prior year period.
NPW for 9M 2024 was $25.5 million, a solid increase compared to $16.3 million for the same period in 2023, while net premiums earned increased by $5.4 million for 9M 2024, compared to the same period in 2023 largely due to higher earned premiums of $4.9 million or 22.5% within the Diversified Reinsurance segment.
Furthermore, Maiden Holdings’ net investment income decreased by $9.6 million or 32.9% for 9M 2024, compared to the same period in 2023.
Patrick J. Haveron, Maiden’s Chief Executive Officer commented: “During the third quarter, as we continue to pursue strategic paths to build fee-based businesses, we began to reposition our balance sheet, reducing our alternative investment portfolio by 24.8%. These sales, which also strengthened our liquidity position, temporarily reduced the gains on that portfolio during the third quarter, although we remain confident this portfolio will continue to deliver the returns we set out to achieve. We have also not made any new commitments to alternative investment opportunities and continue to evaluate additional paths to further reducing this portfolio as we advance our strategic plans. These asset sales, along with certain expenses incurred in the third quarter related to our strategic initiatives, contributed a significant amount of non-recurring impacts to our results.”
He continued: “As part of our continuing efforts to reposition the balance sheet, during the third quarter of 2024 and currently, we are pursuing finality solutions to resolve the AmTrust liabilities not covered by the Enstar LPT/ADC Agreement, including through third parties. These solutions could involve significant charges to execute, and we are actively evaluating the potential costs and benefits of such solutions, to the extent they are available to the Company. We have also retained third-party specialists and subject matter experts as part of our evaluation of the claims and actuarial impact of these exposures. It’s important to note there can be no assurance that we will identify and execute acceptable finality solutions. To the extent these solutions are not available or do not occur, we may incur significant additional reserve charges based on the final analysis of this process.”
Adding: “While adverse loss development continues to significantly impact our GAAP income statement, it’s important to reinforce that much of this volatility is expected to be temporary as a significant portion is expected to be covered by our LPT/ADC Agreement. Approximately $11.8 million or 101% and $22.5 million or 90% of the total reported adverse PPD for the three and nine months ended September 30, 2024, respectively, is expected to be covered by the LPT/ADC Agreement and ultimately return over time to Maiden as future GAAP income, subject to certain thresholds in the LPT/ADC Agreement and the applicable GAAP accounting rules. We expect to begin recoveries under the LPT/ADC Agreement in the fourth quarter of 2024 as well to begin amortizing the deferred gain on our balance sheet back into GAAP income.
“As the benefits of the LPT/ADC Agreement begin to be amortized though our GAAP income statement, it reinforces why adjusted book value, which includes the $88.0 million deferred gain presently on the balance sheet, is a key metric in evaluating Maiden’s value, and we still have an additional $67.0 million in available limit to absorb development on potential future covered losses should it occur in the future.”
Haveron concluded: “Finally, during the third quarter, we continued our long-term capital management strategy and repurchased 388,728 common shares at an average price per share of $1.65 under our share repurchase plan. We expect to continue a disciplined and prudent approach to share repurchases as part of this program, particularly in periods of share weakness relative to our book value.”
