Capital management is essential for Maiden Holdings – The Royal Gazette


Updated: Aug 10, 2021 3:53 PM

Bermuda-based Maiden Holdings Ltd reported second quarter net income available to common shareholders of $ 26.8 million, or 31 cents per diluted common share, compared to net income of $ 9.2 million dollars, or 11 cents per diluted common share, in the second quarter of 2020.

Non-GAAP operating income was $ 13.9 million or 16 cents per diluted common share for the second quarter, compared to non-GAAP operating income of $ 1.2 million or one cent per diluted ordinary share for the same period in 2020.

The book value per Maiden common share was $ 2.58 as of June 30, compared to $ 1.57 as of December 31, 2020.

On a non-GAAP basis, adjusted for the unamortized deferred gain on retroactive reinsurance recognized as of June 30 of $ 54.3 million, the adjusted book value per common share of the company was $ 3.21 as of June 30.

Patrick Haveron and Lawrence Metz, co-managing directors of Maiden, said: “Our sixth consecutive quarter of operating profitability again showed modest and favorable loss development, lower operating expenses and additional returns of our expanded investment activities.

“We have added $ 1.38 in book value per common share since the start of our capital management initiatives in the fourth quarter of 2020 and we now own the majority of each issue of our preferred shares.

“Genesis (Legacy Solutions, the company’s legacy specialist formed in December 2020) completes its first significant transaction in line with its business plan and we believe this platform will be a productive channel for Maiden to create more of long-term shareholder value. “

They added: “The second quarter has seen us continue to make productive use of our capital management strategy and create additional value for our shareholders and our Board of Directors believes that we have ample authority to continue. to use this strategy with caution.

“We continue to take advantage of attractive investment opportunities with exceptional partners in a range of asset classes, including private equity and credit, real estate and venture capital. We believe that the returns produced by these investments will exceed our cost of capital, in particular our cost of borrowing capital, and we believe this approach will create long-term shareholder value through market-adjusted income and investment gains. risk to allow Maiden to use its potential significant tax assets.

“While it may be a long period of time before we can determine whether actual returns will meet this target, we are confident this will be a successful path for us. The liquidation of our insurance liabilities remains in line with our expectations and we continue to make progress in expense management to a level appropriate for the scope of our current operations. “

Net premiums written for the quarter ended June 30 were $ 3.3 million, compared to net premiums written of $ 4.1 million for the second quarter of 2020.

Net earned premiums decreased $ 8 million or 37.5% for the quarter ended June 30, compared to the second quarter of 2020 due to the combined impact of terminated quota contracts within the AmTrust segment Reinsurance and the Diversified Reinsurance segment due to the exclusion of German automotive programs produced by Maiden’s IIS unit.

Net investment income decreased $ 7 million or 49.1 percent for the quarter ended June 30, compared to the second quarter of 2020, primarily due to lower average invested assets (which excludes equity method investments) by 22.6 per cent during these same periods.

Maiden said the decline in invested assets is largely due to the halt in active reinsurance underwriting since 2018, which is responsible for large negative operating cash flows as the company continues to liquidate its liabilities from existing reinsurance.

Total general and administrative expenses decreased by $ 400,000, or 3.8 percent for the quarter ended June 30, compared to the second quarter of 2020 due to lower personnel costs.

The company estimates that it incurred certain operating expenses of $ 2.2 million in the quarter ended June 30, which it believes will not recur in future periods.

Maiden said those costs include fees and write-offs related to the termination of its existing office lease in Bermuda, salaries and related costs associated with downsizing and certain regulatory costs in its international operations.

Maiden Holdings is a Bermuda-based holding company established in 2007. Maiden has stated that it creates shareholder value by actively managing and allocating its assets and capital, including through the ownership and management of businesses and companies. ‘assets, primarily in the insurance and related financial services sectors, where it can benefit from its in-depth knowledge of these markets. Maiden also provides a full range of legacy services to small insurance companies.

Maiden Holdings: reported second quarter net income available to Maiden common shareholders of $ 26.8 million


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