Bermuda-based Maiden Holdings reported net income of $ 26.8 million for the second quarter of 2021, up from $ 9.2 million for the same period last year.
Part of the reason is a return to technical profitability, as the company has gone from a technical loss of $ 17.0 million in the second quarter of 2020 to a profit of $ 8.5 million this year.
Underwriting was helped by a favorable development in losses of $ 12.8 million last year, compared to $ 0.1 million previously, primarily related to quota share reinsurance arrangements with AmTrust Financial Services, Inc. , or the AmTrust Reinsurance segment.
Maiden also benefited from an $ 18.7 million preferred share buyback for the three-month period.
Net premiums written for the second quarter were $ 3.3 million, down from $ 4.1 million previously, although net premiums written in the diversified reinsurance segment decreased by 3. $ 5 million or 41.3% due to reimbursement of unearned premiums written on a German quota share auto reinsurance contract that went into effect-off on January 1, 2021.
Net investment income decreased by $ 7.0 million or 49.1%, mainly due to the decrease in average invested assets of 22.6% caused by the cessation of active underwriting of reinsurance since 2018.
“Our sixth consecutive quarter of operating profitability was again characterized by modest favorable development in losses, lower operating expenses and additional returns from our expanded investing activities,” said Patrick J. Haveron and Lawrence F. Metz, co-CEOs of Maiden.
“The second quarter saw 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 prudently. strategy, ”they continued.
“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 day-to-day operations.