Reinsurance News

Maiden sees $12.6m underwriting loss in Q3

9th November 2022 - Author: Jack Willard

Maiden Holdings Ltd has reported a net loss of $8.2 million for the third quarter of 2022 compared to a net income of $2.9 million from the prior year quarter.

maiden-holdings-logoNon-GAAP operating loss was $21.1 million for the quarter, compared to a Non-GAAP operating loss of $3.1 million from the same period in 2021.

Additionally, Maiden Holdings reported an underwriting loss of $12.6 million in the quarter, compared to an underwriting loss of $3.6 million in 2021.

The company specified that the decrease was largely due to an adverse prior year loss development of $0.8 million in the third quarter of 2022 compared to a favourable prior year loss development of $5.4 million during the same period in 2021.

Net premiums written were $5.2 million for the quarter, compared to $7 million in 2021.

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At the same time, net premiums written in the company’s Diversified Reinsurance segment increased by $0.2 million compared to the same period in 2021.

Maiden Holdings stated that this was largely due to direct gross premiums written by wholly owned Swedish subsidiaries Maiden Life Försäkrings AB (Maiden LF) and Maiden General Försäkrings AB (Maiden GF) which increased by 14.9% during the quarter, compared to the same period in 2021.

Patrick J. Haveron and Lawrence F. Metz, Maiden’s Co-Chief Executive Officers, commented: “This morning’s announcement of the planned exchange of our outstanding preference shares for our common shares not only creates value and liquidity for our preference shareholders, it will also be significantly accretive to our book value per common share. The exchange simplifies Maiden’s balance sheet, increases the liquidity in our common shares and expands the capital flexibility for the Company on a longer-term basis.

“We estimate that completion of the planned exchange will increase our book value by approximately $0.82 per common share in the fourth quarter of 2022, and when factoring in our prior repurchases, our capital management measures over the last two years have added approximately $2.63 in book value per common share. We look forward to completing this transaction in the coming weeks.”

Haveron and Metz continued: “Third quarter results were mixed as underwriting losses in our AmTrust Reinsurance segment, including the $3.7 million charge we took to commute our French Hospital Liability reserves with AmTrust, and continued rising interest rates impacted book value per share. Loss development trends during the quarter were less favorable compared to the comparable period in 2021 and our third quarter book value was also hindered by unrealized losses on our fixed income portfolio of $0.17 per common share as interest rates rose sharply during the third quarter.

“Our alternative asset portfolio has grown by 16.9% during 2022 to date, and while results in this portfolio were less productive than expected in this quarter, we remain comfortable that these will achieve their target returns. Excluding unrealized losses in our hedge fund investments, year-to-date returns in our alternative portfolio stand at 4.7%. We were also able to offset much of this impact on book value through foreign currency gains as the US dollar continued to strengthen, as we maintained net non-US dollar liabilities. In addition, we continued our efficient operating profile and operating expenses were 2.4% lower on a year-over-year basis for the third quarter.”

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