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Maiden Re(MHLD) - 2022 Q4 - Annual Report
2023-03-15 12:06
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File Number: 001-34042 MAIDEN HOLDINGS, LTD. (Exact Name of Registrant As Specified in Its Charter) (State or Other Jurisdiction of Incorporati ...
Maiden Re(MHLD) - 2022 Q2 - Earnings Call Presentation
2022-08-18 18:49
Maiden Holdings, Ltd. Investor Update August 2022 Investor Disclosures Forward Looking Statements This presentation contains "forward-looking statements" which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements are based on Maiden Holdings, Ltd.'s (the "Company") future developments and their potential effects on the Company. There can be no assurance that actual developments will be those anticipated by the Company. Actual ...
Maiden Re(MHLD) - 2022 Q2 - Quarterly Report
2022-08-09 12:43
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File No. 001-34042 MAIDEN HOLDINGS, LTD. (Exact name of registrant as specified in its charter) (State or other jurisdiction of ...
Maiden Re(MHLD) - 2022 Q1 - Earnings Call Presentation
2022-05-11 11:20
Maiden Holdings, Ltd. Investor Update May 2022 Investor Disclosures Forward Looking Statements This presentation contains "forward-looking statements" which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements are based on the Maiden Holdings, Ltd.'s (the "Company") concerning future developments and their potential effects on the Company. There can be no assurance that actual developments will be those anticipated by the Com ...
Maiden Re(MHLD) - 2022 Q1 - Quarterly Report
2022-05-10 12:04
```markdown [PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for Q1 2022 and 2021 are presented, covering balance sheets, income, comprehensive income, equity, cash flows, and detailed notes [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets, liabilities, and shareholders' equity decreased from December 31, 2021, to March 31, 2022, primarily due to reductions in fixed maturities and loss reserves Condensed Consolidated Balance Sheet Highlights (in thousands of U.S. dollars) | Metric (in thousands of U.S. dollars) | March 31, 2022 (Unaudited) | December 31, 2021 (Audited) | Change (YoY) | | :------------------------------------ | :------------------------- | :-------------------------- | :----------- | | Total assets | $2,215,972 | $2,322,610 | $(106,638) | | Total liabilities | $1,848,307 | $1,938,353 | $(90,046) | | Total shareholders' equity | $367,665 | $384,257 | $(16,592) | | Fixed maturities, available-for-sale | $471,230 | $597,145 | $(125,915) | | Reserve for loss and loss adjustment expenses | $1,386,023 | $1,489,373 | $(103,350) | [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net loss for Q1 2022 significantly declined from prior-year net income, driven by lower preference share repurchase gains and reduced total revenues Condensed Consolidated Statements of Income Highlights (in thousands of U.S. dollars, except per share data) | Metric (in thousands of U.S. dollars, except per share data) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Change (YoY) | | :--------------------------------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Total revenues | $10,049 | $29,975 | $(19,926) | | Total expenses | $12,014 | $23,587 | $(11,573) | | Net (loss) income | $(1,949) | $9,286 | $(11,235) | | Gain from repurchase of preference shares | $3,543 | $62,450 | $(58,907) | | Net income available to Maiden common shareholders | $1,594 | $71,736 | $(70,142) | | Basic and diluted earnings per share attributable to common shareholders | $0.02 | $0.83 | $(0.81) | [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive loss increased to **$14.5 million** in Q1 2022, primarily due to net unrealized holding losses on fixed maturity investments Condensed Consolidated Statements of Comprehensive Income Highlights (in thousands of U.S. dollars) | Metric (in thousands of U.S. dollars) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Change (YoY) | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :----------- | | Net (loss) income | $(1,949) | $9,286 | $(11,235) | | Other comprehensive loss, after tax | $(12,567) | $(14,606) | $2,039 |\ | Comprehensive loss | $(14,516) | $(5,320) | $(9,196) | [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Total shareholders' equity decreased to **$367.7 million** by March 31, 2022, mainly due to reduced preference shares, increased accumulated other comprehensive loss, and a net loss Condensed Consolidated Statements of Changes in Shareholders' Equity Highlights (in thousands of U.S. dollars) | Metric (in thousands of U.S. dollars) | March 31, 2022 | March 31, 2021 | Change (YoY) | | :------------------------------------ | :------------- | :------------- | :----------- | | Preference shares (ending balance) | $152,338 | $228,948 | $(76,610) | | Accumulated other comprehensive (deficit) income (ending balance) | $(24,782) | $9,251 | $(34,033) | | Accumulated deficit (ending balance) | $(496,701) | $(544,202) | $47,501 | | Total shareholders' equity | $367,665 | $426,611 | $(58,946) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities decreased to **$76.1 million** in Q1 2022, while investing cash flows declined and financing cash outflows significantly reduced Condensed Consolidated Statements of Cash Flows Highlights (in thousands of U.S. dollars) | Metric (in thousands of U.S. dollars) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Change (YoY) | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :----------- | | Net cash used in operating activities | $(76,078) | $(102,818) | $26,740 | | Net cash provided by investing activities | $86,125 | $199,170 | $(113,045) | | Net cash used in financing activities | $(3,893) | $(99,918) | $96,025 | | Net increase (decrease) in cash, restricted cash and cash equivalents | $5,799 | $(4,672) | $10,471 | | Cash, restricted cash and cash equivalents, end of period | $71,886 | $131,154 | $(59,268) | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide essential disclosures for the unaudited condensed consolidated financial statements, covering accounting policies, segment performance, investments, equity, debt, reinsurance, and contingencies [1. Basis of Presentation](index=8&type=section&id=1.%20Basis%20of%20Presentation) Unaudited Condensed Consolidated Financial Statements adhere to U.S. GAAP, with Maiden Holdings focusing on active asset and capital management and underwriting retroactive reinsurance via GLS - Maiden Holdings focuses on active asset and capital management, including ownership and management of businesses and assets in the insurance and related financial services industries[23](index=23&type=chunk) - The company is currently underwriting reinsurance risks on a retroactive basis through its indirect wholly owned subsidiary Genesis Legacy Solutions (GLS), which provides legacy services to small insurance companies, particularly those in run-off[23](index=23&type=chunk) - GLS completed its first transaction in October 2021 and additional transactions in Q1 2022, accumulating insurance-related liabilities of **$37.12 million** as of March 31, 2022[26](index=26&type=chunk) [2. Significant Accounting Policies](index=8&type=section&id=2.%20Significant%20Accounting%20Policies) No material changes occurred in significant accounting policies since the December 31, 2021 Annual Report on Form 10-K - No material changes to significant accounting policies since the December 31, 2021 Annual Report on Form 10-K[27](index=27&type=chunk) [3. Segment Information](index=9&type=section&id=3.%20Segment%20Information) The Company's Diversified Reinsurance segment reported **$1.5 million** underwriting income in Q1 2022, while AmTrust Reinsurance, in run-off, posted a **$3.2 million** underwriting loss - The Company has two reportable segments: Diversified Reinsurance (primarily European property and casualty reinsurance, including GLS) and AmTrust Reinsurance (business ceded by AmTrust, in run-off since January 1, 2019)[29](index=29&type=chunk) Underwriting Results by Segment (in thousands of U.S. dollars) | Underwriting Results (in thousands of U.S. dollars) | Q1 2022 | Q1 2021 | Change (YoY) | | :------------------------------------------------ | :------ | :------ | :----------- | | **Diversified Reinsurance:** | | | | | Gross premiums written | $4,736 | $72 | $4,664 | | Net premiums earned | $5,955 | $6,240 | $(285) | | Underwriting income (loss) | $1,497 | $(235) | $1,732 | | **AmTrust Reinsurance:** | | | | | Gross premiums written | $(14,906)| $(2,462)| $(12,444) | | Net premiums earned | $(4,833)| $5,524 | $(10,357) | | Underwriting (loss) income | $(3,152)| $1,790 | $(4,942) | | **Total Consolidated:** | | | | | Net loss | $(1,949)| $9,286 | $(11,235) | - AmTrust Reinsurance segment's negative gross and net premiums written in Q1 2022 were due to higher than expected adjustments related to Workers Compensation policy surcharges and premium reductions to AmTrust's inuring reinsurance for Specialty Risk and Extended Warranty[211](index=211&type=chunk) [4. Investments](index=12&type=section&id=4.%20Investments) The investment portfolio saw a significant decrease in fixed maturities and net unrealized losses in Q1 2022, while equity and other investments increased Investment Portfolio Composition (in thousands of U.S. dollars) | Investment Type (in thousands of U.S. dollars) | March 31, 2022 | December 31, 2021 | Change | | :--------------------------------------------- | :------------- | :---------------- | :----- | | Fixed maturities, available-for-sale | $471,230 | $597,145 | $(125,915) | | Equity securities | $48,932 | $44,062 | $4,870 | | Equity method investments | $93,317 | $83,742 | $9,575 | | Other investments | $108,161 | $97,663 | $10,498 | | Total investments | $721,640 | $822,612 | $(100,972) | - At March 31, 2022, fixed maturities had gross unrealized losses of **$22.7 million**, primarily due to changes in interest rates and foreign exchange rates, compared to **$11.5 million** at December 31, 2021[35](index=35&type=chunk) - Net investment income decreased to **$6.6 million** in Q1 2022 from **$9.8 million** in Q1 2021, mainly due to a **29.6%** decline in average fixed income assets[47](index=47&type=chunk)[190](index=190&type=chunk) - Net realized and unrealized gains on investment decreased to **$2.3 million** in Q1 2022 from **$8.1 million** in Q1 2021, with the prior year including **$4.5 million** in unrealized gains from an insurtech start-up IPO[49](index=49&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk) [5. Fair Value of Financial Instruments](index=17&type=section&id=5.%20Fair%20Value%20of%20Financial%20Instruments) Financial instruments are categorized into a three-level fair value hierarchy, with significant Level 2 fixed maturities and Level 3 privately held equity investments - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[59](index=59&type=chunk) Fair Value Hierarchy of Financial Instruments (in thousands of U.S. dollars) | Fair Value Hierarchy (in thousands of U.S. dollars) | March 31, 2022 | December 31, 2021 | | :-------------------------------------------------- | :------------- | :---------------- | | Level 1 (Identical Assets) | $66,438 | $59,879 | | Level 2 (Observable Inputs) | $405,500 | $537,266 | | Level 3 (Unobservable Inputs) | $29,660 | $27,094 | | Fair Value Based on NAV Practical Expedient | $80,550 | $70,481 | | Total Fair Value | $582,148 | $695,894 | - Level 3 financial instruments, primarily privately held equity investments, totaled **$29.7 million** at March 31, 2022, valued using quarterly financial statements or recent private market transactions due to significant unobservable inputs[70](index=70&type=chunk) [6. Shareholders' Equity](index=21&type=section&id=6.%20Shareholders'%20Equity) Total shareholders' equity decreased to **$367.7 million** by March 31, 2022, impacted by preference share repurchases and increased accumulated other comprehensive loss Shareholders' Equity Highlights (in thousands of U.S. dollars, except share data) | Metric (in thousands of U.S. dollars, except share data) | March 31, 2022 | December 31, 2021 | | :------------------------------------------------------- | :------------- | :---------------- | | Preference shares (ending balance) | $152,338 | $159,210 | | Common shares outstanding | 87,058,833 | 86,467,242 | | Total shareholders' equity | $367,665 | $384,257 | Preference Share Repurchases (Q1) | Preference Share Repurchases (Q1) | 2022 (Number of shares) | 2022 (Average price) | 2021 (Number of shares) | 2021 (Average price) | | :-------------------------------- | :---------------------- | :------------------- | :---------------------- | :------------------- | | Series A | — | — | 2,561,636 | $14.88 | | Series C | 179,996 | $11.59 | 2,028,961 | $14.65 | | Series D | 94,865 | $10.67 | 2,023,896 | $14.60 | | Total | 274,861 | $11.27 | 6,614,493 | $14.72 | | Total price paid (in thousands) | $3,098 | | $97,393 | | | Gain on purchase (in thousands) | $3,543 | | $62,450 | | - Accumulated other comprehensive loss increased from **$(12.2) million** at the beginning of Q1 2022 to **$(24.8) million** at the end, driven by net unrealized investment losses and foreign currency translation adjustments[81](index=81&type=chunk) [7. Long-Term Debt](index=23&type=section&id=7.%20Long-Term%20Debt) Maiden Holdings maintains **$262.5 million** in outstanding Senior Notes with fixed coupon rates, and Q1 2022 interest expense remained consistent Senior Notes Details (in thousands of U.S. dollars) | Senior Notes (in thousands of U.S. dollars) | March 31, 2022 | December 31, 2021 | | :------------------------------------------ | :------------- | :---------------- | | Principal amount | $262,500 | $262,500 | | Less: unamortized issuance costs | $7,098 | $7,153 | | Carrying value | $255,402 | $255,347 | | 2016 Senior Notes Coupon rate | 6.625% | 6.625% | | 2013 Senior Notes Coupon rate | 7.75% | 7.75% | - Interest expense on Senior Notes was **$4.777 million** for both Q1 2022 and Q1 2021, with a weighted average effective interest rate of **7.6%**[83](index=83&type=chunk)[200](index=200&type=chunk) [8. Reinsurance](index=24&type=section&id=8.%20Reinsurance) Ceded reinsurance manages risk, significantly impacting net premiums, while the LPT/ADC Agreement with Cavello Bay Reinsurance Limited reduces AmTrust liabilities Reinsurance Impact on Financials (in thousands of U.S. dollars) | Reinsurance Impact (in thousands of U.S. dollars) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net premiums written | $(10,323) | $(2,696) | | Net premiums earned | $1,122 | $11,764 | | Net loss and LAE | $(2,283) | $2,359 | - Reinsurance recoverable on unpaid losses was **$558.3 million** at March 31, 2022, with no valuation allowance[88](index=88&type=chunk) - The LPT/ADC Agreement with Cavello provides **$155 million** in adverse development cover over AmTrust Quota Share loss reserves. As of March 31, 2022, the reinsurance recoverable was **$489.9 million**, and the deferred gain liability was **$44.9 million**[90](index=90&type=chunk) [9. Reserve for Loss and Loss Adjustment Expenses](index=25&type=section&id=9.%20Reserve%20for%20Loss%20and%20Loss%20Adjustment%20Expenses) Gross loss and LAE reserves decreased to **$1.39 billion** by March 31, 2022, driven by **$7.3 million** net favorable prior year loss development across segments Reserve for Loss and LAE (in thousands of U.S. dollars) | Reserve for Loss and LAE (in thousands of U.S. dollars) | March 31, 2022 | December 31, 2021 | | :------------------------------------------------------ | :------------- | :---------------- | | Reserve for reported loss and LAE | $804,771 | $851,950 | | Reserve for losses incurred but not reported ("IBNR") | $581,252 | $637,423 | | Total Reserve for loss and LAE | $1,386,023 | $1,489,373 | - Net favorable prior year loss development was **$7.285 million** for Q1 2022, compared to **$5.554 million** in Q1 2021[94](index=94&type=chunk) - Diversified Reinsurance segment had **$2.211 million** in net favorable prior year loss development in Q1 2022, mainly from German Auto Programs. AmTrust Reinsurance segment had **$5.074 million** in net favorable prior year loss development, primarily from Workers Compensation and Specialty Risk[95](index=95&type=chunk)[96](index=96&type=chunk) [10. Related Party Transactions](index=26&type=section&id=10.%20Related%20Party%20Transactions) Significant related party transactions exist with AmTrust Financial Services, Inc., involving run-off reinsurance agreements and substantial collateral arrangements - Key related parties include AmTrust Financial Services, Inc., with founding shareholders of Maiden Holdings also holding significant interests in AmTrust[98](index=98&type=chunk) - The AmTrust Quota Share and European Hospital Liability Quota Share reinsurance agreements were terminated on a run-off basis effective January 1, 2019[102](index=102&type=chunk)[108](index=108&type=chunk) Collateral Provided to AmTrust (in thousands of U.S. dollars) | Collateral Provided to AmTrust (in thousands of U.S. dollars) | March 31, 2022 | December 31, 2021 | | :---------------------------------------------------------- | :------------- | :---------------- | | Loan to related party | $167,975 | $167,975 | | Reinsurer Trust Assets Collateral | $138,810 | $246,874 | | Funds withheld balance | $575,000 | $575,000 | | European Hospital Liability Quota Share (AEL trust accounts) | $234,633 | $244,488 | | European Hospital Liability Quota Share (AIU DAC funds withheld) | $25,755 | $26,460 | [11. Commitments, Contingencies and Guarantees](index=29&type=section&id=11.%20Commitments,%20Contingencies%20and%20Guarantees) The Company faces credit risk, has unfunded commitments totaling **$85.1 million**, provides **$36.2 million** in real estate guarantees, and is involved in ongoing legal proceedings - Unfunded commitments on other investments were **$67.278 million** at March 31, 2022, and on equity method investments were **$17.790 million**[128](index=128&type=chunk) - Guarantees provided to lenders on behalf of real estate joint ventures totaled **$36.231 million** at March 31, 2022, with the likelihood of incurring losses determined to be remote[131](index=131&type=chunk) - The Company is vigorously defending against a Sarbanes-Oxley whistle-blower claim and a class action lawsuit alleging inadequate loss reserves related to AmTrust reinsurance[134](index=134&type=chunk)[135](index=135&type=chunk) [12. Earnings per Common Share](index=31&type=section&id=12.%20Earnings%20per%20Common%20Share) Basic and diluted earnings per common share significantly decreased to **$0.02** in Q1 2022, primarily due to lower preference share repurchase gains Earnings per Common Share (in thousands of U.S. dollars, except per share data) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :----- | :-------------------------------- | :-------------------------------- | | Net income allocated to Maiden common shareholders (in thousands) | $1,584 | $70,603 | | Basic and diluted earnings per share attributable to common shareholders | $0.02 | $0.83 | | Weighted average number of common shares - basic | 86,547,173 | 85,132,939 | [13. Income Taxes](index=31&type=section&id=13.%20Income%20Taxes) Income tax expense increased to **$1.255 million** in Q1 2022, with a full valuation allowance maintained against net U.S. deferred tax assets Income Tax Expense (in thousands of U.S. dollars) | Metric (in thousands of U.S. dollars) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Income tax expense | $1,255 | $49 | - A valuation allowance has been established against net U.S. deferred tax assets, primarily from net operating losses and discounting of loss reserves, due to insufficient positive evidence regarding future utilization[138](index=138&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes Maiden Holdings' Q1 2022 financial condition and results, covering strategy, segment performance, liquidity, capital, investments, and non-GAAP measures, reporting a net loss [Overview](index=33&type=section&id=Overview) Maiden Holdings, a Bermuda-based holding company, focuses on active asset and capital management, underwriting retroactive reinsurance via GLS and managing run-off programs - Maiden Holdings creates shareholder value by actively managing and allocating assets and capital, primarily in the insurance and related financial services industries[143](index=143&type=chunk) - The company is actively underwriting risks on a retroactive basis through GLS, while its historic reinsurance programs, including those with AmTrust, are in run-off[145](index=145&type=chunk) - Maiden Holdings North America, Ltd. (Maiden NA) has net operating loss carry-forwards (NOL) of **$235.7 million** and net U.S. deferred tax assets (DTA) of **$94.3 million** (**$1.08** per common share) as of March 31, 2022, though a full valuation allowance is maintained[148](index=148&type=chunk)[149](index=149&type=chunk) [Business Strategy](index=33&type=section&id=Business%20Strategy) Maiden Holdings' 2022 strategy focuses on asset management, legacy underwriting, and capital management, aiming to maximize returns, build run-off portfolios, and enhance shareholder value - The business strategy has three principal areas of focus: asset management, legacy underwriting, and capital management, aiming to maximize risk-adjusted shareholder returns and increase book value[151](index=151&type=chunk) - The company has invested approximately **$250.4 million** into alternative investments (equity securities, other investments, and equity method investments) and expects these activities to exceed the benchmark cost of debt capital (**7.6%**)[152](index=152&type=chunk)[155](index=155&type=chunk) - GLS completed additional transactions in Q1 2022, with insurance-related liabilities totaling **$37.1 million**, and is expected to enhance asset and capital management while contributing to profitable growth[158](index=158&type=chunk) - Capital management initiatives include the repurchase of preference shares, with a remaining authorization of **$10.7 million** at March 31, 2022[160](index=160&type=chunk) [Three Months Ended March 31, 2022 and 2021 Financial Highlights](index=35&type=section&id=Three%20Months%20Ended%20March%2031,%202022%20and%202021%20Financial%20Highlights) Maiden Holdings reported a significant decrease in Q1 2022 net income, driven by lower preference share repurchase gains, underwriting losses, and declining investment income Financial Highlights (in thousands of U.S. dollars, except per share data) | Metric (in thousands of U.S. dollars, except per share data) | Q1 2022 | Q1 2021 | Change | | :--------------------------------------------------------- | :------ | :------ | :----- | | Net income attributable to Maiden common shareholders | $1,594 | $71,736 | $(70,142) | | Basic and diluted EPS attributable to common shareholders | $0.02 | $0.83 | $(0.81) | | Gross premiums written | $(10,170)| $(2,390)| $(7,780) | | Net premiums earned | $1,122 | $11,764 | $(10,642) | | Underwriting (loss) income | $(1,655)| $1,555 | $(3,210) | | Net investment income | $6,567 | $9,841 | $(3,274) | | Total assets | $2,215,972| $2,322,610| $(106,638) | | Shareholders' equity | $367,665| $384,257| $(16,592) | | Book value per common share | $2.47 | $2.60 | $(0.13) | - Non-GAAP operating loss was **$6.9 million** in Q1 2022, a significant decrease from **$47.3 million** in operating earnings in Q1 2021[163](index=163&type=chunk) - The ratio of debt to total capital resources increased from **40.6%** in December 2021 to **41.7%** in March 2022[163](index=163&type=chunk) [Key Financial Measures](index=36&type=section&id=Key%20Financial%20Measures) Management uses non-GAAP financial measures, including operating earnings and adjusted equity, to evaluate performance by excluding market-influenced items and retroactive reinsurance impacts - Non-GAAP operating (loss) earnings exclude net realized gains/losses on investment, foreign exchange and other gains/losses, ceded prior year reserve development under LPT/ADC, and interest in income of equity method investments to focus on underlying operational fundamentals[167](index=167&type=chunk) - Underwriting income (loss) is a non-GAAP measure calculated as net premiums earned plus other insurance revenue less net loss and LAE, commission, and general and administrative expenses directly related to underwriting activities[168](index=168&type=chunk) - Adjusted shareholders' equity and related metrics incorporate the unamortized deferred gain on ceded retroactive reinsurance under the LPT/ADC Agreement to reflect the ultimate economic benefit of this agreement[176](index=176&type=chunk)[177](index=177&type=chunk) [Critical Accounting Policies and Estimates](index=37&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting policies and estimates remain consistent with the December 31, 2021 Annual Report on Form 10-K, with no material changes in application - No material changes in the application of critical accounting estimates since the Annual Report on Form 10-K for the year ended December 31, 2021[180](index=180&type=chunk) [Results of Operations](index=38&type=section&id=Results%20of%20Operations) Maiden Holdings reported a **$1.9 million** net loss in Q1 2022, a significant decline from prior-year net income, driven by lower preference share repurchase gains and an underwriting loss Results of Operations Highlights (in thousands of U.S. dollars) | Metric (in thousands of U.S. dollars) | Q1 2022 | Q1 2021 | Change | | :------------------------------------ | :------ | :------ | :----- | | Net (loss) income | $(1,949)| $9,286 | $(11,235) | | Gain from repurchase of preference shares | $3,543 | $62,450 | $(58,907) | | Net income available to Maiden common shareholders | $1,594 | $71,736 | $(70,142) | | Total revenues | $10,049 | $29,975 | $(19,926) | | Underwriting (loss) income | $(1,655)| $1,555 | $(3,210) | - Excluding the gain on preference share repurchases, net loss for Q1 2022 was **$1.9 million**, compared to net income of **$9.3 million** in Q1 2021, mainly due to an underwriting loss and lower investment income[184](index=184&type=chunk) - Net premiums written decreased to **$(10.3) million** in Q1 2022 from **$(2.7) million** in Q1 2021, primarily due to AmTrust Cession Adjustments in the AmTrust Reinsurance segment[185](index=185&type=chunk)[189](index=189&type=chunk) - Net investment income decreased by **33.3%** to **$6.6 million** in Q1 2022, driven by a **29.6%** decline in average fixed income assets[190](index=190&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) Investable assets decreased to **$1.6 billion** by March 31, 2022, due to negative operating cash flows, while capital resources declined by **2.6%** to **$630.2 million** - Investable assets decreased from **$1.7 billion** at December 31, 2021, to **$1.6 billion** at March 31, 2022, primarily due to negative operating cash flows from the run-off of reinsurance liabilities[218](index=218&type=chunk) Cash Flow Activity (in thousands of U.S. dollars) | Cash Flow Activity (in thousands of U.S. dollars) | Q1 2022 | Q1 2021 | | :------------------------------------------------ | :------ | :------ | | Operating activities | $(76,078)| $(102,818)| | Investing activities | $86,125 | $199,170| | Financing activities | $(3,893)| $(99,918)| | Net increase (decrease) in cash, restricted cash and cash equivalents | $5,799 | $(4,672)| - Total capital resources decreased by **$16.6 million** (**2.6%**) to **$630.2 million** at March 31, 2022, mainly due to a **$16.6 million** decrease in total shareholders' equity[274](index=274&type=chunk) - Book value per common share decreased by **5.0%** to **$2.47**, and diluted book value per common share decreased by **5.0%** to **$2.46**, primarily due to a net loss and a net decrease in Accumulated Other Comprehensive Income (AOCI)[273](index=273&type=chunk) [Non-GAAP Measures](index=55&type=section&id=Non-GAAP%20Measures) Non-GAAP operating loss was **$6.9 million** in Q1 2022, a significant reduction from prior-year operating earnings, with adjusted equity and capital resources also decreasing Non-GAAP Operating Metrics (in thousands of U.S. dollars, except per share data) | Non-GAAP Operating Metrics (in thousands of U.S. dollars, except per share data) | Q1 2022 | Q1 2021 | | :------------------------------------------------------------------------------- | :------ | :------ | | Non-GAAP operating (loss) earnings | $(6,935)| $47,301 | | Non-GAAP diluted operating (loss) earnings per share available to common shareholders | $(0.08) | $0.55 | | Non-GAAP Operating ROACE | (10.5)% | 81.4% | - Non-GAAP underwriting loss was **$2.7 million** in Q1 2022, compared to **$8.3 million** in Q1 2021, after adjusting for prior year reserve development subject to the LPT/ADC Agreement[289](index=289&type=chunk)[290](index=290&type=chunk) Adjusted Capital Metrics (in thousands of U.S. dollars) | Adjusted Capital Metrics (in thousands of U.S. dollars) | March 31, 2022 | December 31, 2021 | | :------------------------------------------------------ | :------------- | :---------------- | | Adjusted shareholders' equity | $412,525 | $434,200 | | Adjusted total capital resources | $675,025 | $696,700 | | Adjusted book value per common share | $2.99 | $3.18 | | Ratio of debt to adjusted total capital resources | 38.9% | 37.7% | [Currency and Foreign Exchange](index=58&type=section&id=Currency%20and%20Foreign%20Exchange) Net foreign exchange gains of **$3.9 million** in Q1 2022 resulted from a strengthening U.S. dollar against euro and British pound denominated liabilities, with no hedging strategies in place - Net foreign exchange gains were **$3.9 million** in Q1 2022, up from **$3.4 million** in Q1 2021, primarily due to the strengthening U.S. dollar against euro and British pound denominated liabilities[201](index=201&type=chunk)[299](index=299&type=chunk) - At March 31, 2022, non-U.S. dollar denominated liabilities included **$382.6 million** in net loss reserves, while foreign currency asset exposures included **$252.5 million** in fixed maturity securities[203](index=203&type=chunk) - No hedging strategies were in force during Q1 2022 to manage foreign currency exchange risk[298](index=298&type=chunk) [Effects of Inflation](index=58&type=section&id=Effects%20of%20Inflation) Anticipated inflation effects are considered in pricing and loss reserves, but unforeseen changes in claim costs could necessitate reserve adjustments and impact earnings - Anticipated effects of inflation are considered in pricing and estimating loss and LAE reserves[300](index=300&type=chunk) - Unforeseen changes in claim costs due to inflation (e.g., medical treatments, litigation) could require reserve adjustments and impact earnings[300](index=300&type=chunk) [Off-Balance Sheet Arrangements](index=58&type=section&id=Off-Balance%20Sheet%20Arrangements) The Company had no off-balance sheet arrangements as defined by Regulation S-K Item 303(a)(4) as of March 31, 2022 - The Company had no off-balance sheet arrangements as of March 31, 2022[301](index=301&type=chunk) [Recent Accounting Pronouncements](index=58&type=section&id=Recent%20Accounting%20Pronouncements) Refer to Note 2, Significant Accounting Policies, for details on recent accounting pronouncements not yet adopted - Refer to Note 2 for details on recent accounting pronouncements not yet adopted[302](index=302&type=chunk) [Item 4. Controls and Procedures](index=58&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of March 31, 2022, with no material changes in internal controls over financial reporting during the quarter - Disclosure controls and procedures were evaluated and deemed effective as of March 31, 2022[303](index=303&type=chunk) - No material changes in internal controls over financial reporting occurred during the most recent fiscal quarter[304](index=304&type=chunk) [PART II - OTHER INFORMATION](index=59&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) No material changes to legal proceedings occurred since the December 31, 2021 Annual Report on Form 10-K - No material changes to legal proceedings since the December 31, 2021 Annual Report on Form 10-K[306](index=306&type=chunk) [Item 1A. Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors occurred since the December 31, 2021 Annual Report on Form 10-K - No material changes to risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2021[308](index=308&type=chunk) [Item 2. Unregistered Sales of Equity and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20and%20Use%20of%20Proceeds) No unregistered equity sales occurred; **274,861** preference shares were repurchased for **$3.1 million** in Q1 2022, with **$10.7 million** remaining authorization - No common shares were repurchased under the **$100 million** authorization during Q1 2022, with **$74.2 million** remaining[309](index=309&type=chunk) Preference Share Repurchases (in millions of U.S. dollars) | Preference Share Repurchases (Q1) | 2022 (Number of shares) | 2022 (Total price paid, in millions) | 2021 (Number of shares) | 2021 (Total price paid, in millions) | | :-------------------------------- | :---------------------- | :----------------------------------- | :---------------------- | :----------------------------------- | | Total | 274,861 | $3.1 | 6,614,493 | $97.4 | | Gain on purchase | $3.5 | | $62.5 | | - The Company has a remaining authorization of **$10.7 million** for preference share repurchases as of March 31, 2022[312](index=312&type=chunk) [Item 3. Defaults Upon Senior Securities](index=59&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities occurred during the period - No defaults upon senior securities[313](index=313&type=chunk) [Item 4. Mine Safety Disclosures](index=59&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Mine Safety Disclosures are not applicable to the Company - Mine Safety Disclosures are not applicable[314](index=314&type=chunk) [Item 5. Other Information](index=60&type=section&id=Item%205.%20Other%20Information) This section details executive ownership and sales, and reports the 2022 Annual General Meeting results, including director elections and advisory votes - Directors and executives may sell common shares for personal financial planning or liquidity, following Rule 10b5-1 trading plans and company policy[315](index=315&type=chunk) 2022 Annual General Meeting of Shareholders Voting Results | 2022 Annual General Meeting of Shareholders Voting Results | | :------------------------------------------------------- | | **Election of Directors:** | | - All nine nominated directors were elected. | | **Non-binding advisory vote on executive compensation:** | | - Votes For: 33,991,707 | | - Votes Against: 14,264,128 | | - Abstain: 3,613,797 | | **Appointment of Ernst & Young LLP as independent auditor:** | | - Votes For: 75,692,046 | | - Votes Against: 96,215 | | - Abstain: 19,016 | [Item 6. Exhibits](index=60&type=section&id=Item%206.%20Exhibits) Exhibits include Section 302 and 906 certifications from the CEO and CFO, and Inline XBRL formatted financial statements and notes - Exhibits include Section 302 and 906 certifications from the CEO and CFO, and Inline XBRL formatted financial statements and notes[317](index=317&type=chunk) ```
Maiden Re(MHLD) - 2021 Q4 - Annual Report
2022-03-14 21:30
[PART I](index=3&type=section&id=PART%20I) [Special Note About Forward-Looking Statements](index=3&type=section&id=Special%20Note%20About%20Forward-Looking%20Statements) This section cautions that the 10-K report contains forward-looking statements based on current plans and expectations, with actual results potentially differing due to risks detailed in 'Risk Factors', and the company undertakes no obligation to update them unless legally required - Forward-looking statements are identified by words like 'anticipate', 'believe', 'expect', 'predict', 'estimate', 'intend', 'plan', 'project', 'seek', 'potential', 'possible', 'could', 'might', 'may', 'should', 'will', 'would', 'will be', 'will continue', 'will likely result' and similar expressions[11](index=11&type=chunk) - Actual results may differ materially from projections due to risks and uncertainties, and readers should not place undue reliance on forward-looking statements[11](index=11&type=chunk)[12](index=12&type=chunk) [Risk Factor Summary](index=3&type=section&id=Risk%20Factor%20Summary) This section summarizes principal risks, including volatile operating results, strategy implementation challenges, potential for loss reserve shortfalls, reinsurer non-payment, investment volatility, and regulatory compliance costs, which could materially impact financial performance - The company has experienced **volatile operating results** and cannot assure future profitability or return to active underwriting[15](index=15&type=chunk) - Management's inability to successfully implement its business strategy could adversely affect financial condition and operations[15](index=15&type=chunk) - Actual losses may exceed **reserves for loss and loss adjustment expenses (LAE)**[15](index=15&type=chunk) - Reinsurers may fail to pay losses in a timely manner or at all[15](index=15&type=chunk) - Significant invested assets are subject to **interest rate changes and market volatility**, potentially affecting financial condition and results[16](index=16&type=chunk) - The company does not anticipate paying **cash dividends on common shares** for the foreseeable future, and preference share dividends may not resume[16](index=16&type=chunk) - The industry is highly regulated, and compliance is expensive; failure to comply could have a material adverse effect[16](index=16&type=chunk) [Business](index=5&type=section&id=Item%201.%20Business.) Maiden Holdings, a Bermuda-based holding company, focuses on asset and capital management, providing legacy services to small insurers and short-term income protection in Northern Europe, while actively underwriting retroactive risks via GLS [General Overview](index=5&type=section&id=General%20Overview) [Recent Developments](index=5&type=section&id=Recent%20Developments) [Business Strategy](index=5&type=section&id=Business%20Strategy) [Our Principal Operating Subsidiaries](index=5&type=section&id=Our%20Principal%20Operating%20Subsidiaries) [Our Reportable Segments](index=6&type=section&id=Our%20Reportable%20Segments) [Diversified Reinsurance Segment](index=6&type=section&id=Diversified%20Reinsurance%20Segment) [AmTrust Reinsurance Segment](index=7&type=section&id=AmTrust%20Reinsurance%20Segment) [Risk Management](index=7&type=section&id=Risk%20Management) [Reserve for Loss and LAE](index=8&type=section&id=Reserve%20for%20Loss%20and%20LAE) [Our Financial Strength Rating](index=9&type=section&id=Our%20Financial%20Strength%20Rating) [Our Employees](index=9&type=section&id=Our%20Employees) [Regulatory Matters](index=9&type=section&id=Regulatory%20Matters) [U.S. Insurance Regulation](index=9&type=section&id=U.S.%20Insurance%20Regulation) [Sweden Insurance Regulation](index=12&type=section&id=Sweden%20Insurance%20Regulation) [United Kingdom Insurance Regulation](index=12&type=section&id=United%20Kingdom%20Insurance%20Regulation) [Certain Bermuda Law Considerations](index=12&type=section&id=Certain%20Bermuda%20Law%20Considerations) [The Terrorism Risk Insurance Program Reauthorization Act of 2015](index=12&type=section&id=The%20Terrorism%20Risk%20Insurance%20Program%20Reauthorization%20Act%20of%202015) [Taxation of the Company and its Subsidiaries](index=12&type=section&id=Taxation%20of%20the%20Company%20and%20its%20Subsidiaries) [Bermuda](index=12&type=section&id=Bermuda) [Sweden](index=13&type=section&id=Sweden) [United Kingdom](index=13&type=section&id=United%20Kingdom) [United States of America](index=13&type=section&id=United%20States%20of%20America) [Where You Can Find More Information](index=13&type=section&id=Where%20You%20Can%20Find%20More%20Information) - Maiden Holdings is a Bermuda-based holding company that creates shareholder value by actively managing and allocating assets and capital, primarily in insurance and related financial services[17](index=17&type=chunk) - The company provides **legacy services to small insurance companies**, particularly those in run-off or with non-core reserve blocks, through Genesis Legacy Solutions (GLS)[17](index=17&type=chunk)[27](index=27&type=chunk) - Short-term income protection business is written on a primary basis by wholly-owned subsidiaries Maiden Life Försäkrings AB (Maiden LF) and Maiden General Försäkrings AB (Maiden GF) in Scandinavian and Northern European markets[18](index=18&type=chunk)[26](index=26&type=chunk) - The company ceased active reinsurance underwriting on new prospective risks but is actively underwriting risks on a retroactive basis through GLS[19](index=19&type=chunk) - Maiden Reinsurance, the principal operating subsidiary, re-domesticated from Bermuda to Vermont, U.S., on **March 16, 2020**, to better align capital and resources with U.S.-originating liabilities[24](index=24&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors.) This section details significant risks across business operations, liquidity, capital, regulatory compliance, governance, employee issues, international operations, key partner relationships, and taxation, which could materially impact the company's financial performance [Introduction](index=15&type=section&id=Introduction) [Business Risks](index=15&type=section&id=Business) [Liquidity, Capital Resources and Investments Risks](index=17&type=section&id=Liquidity,%20Capital%20Resources%20and%20Investments) [Regulation Risks](index=22&type=section&id=Regulation) [Corporate Governance and Risks Related to an Investment in our Securities](index=23&type=section&id=Corporate%20Governance%20and%20Risks%20Related%20to%20an%20Investment%20in%20our%20Securities) [Employee Issues](index=28&type=section&id=Employee%20Issues) [International Operations Risks](index=28&type=section&id=International%20Operations) [Relationship with AmTrust Risks](index=29&type=section&id=Relationship%20with%20AmTrust) [Insurance and Reinsurance Markets Risks](index=30&type=section&id=Insurance%20and%20Reinsurance%20Markets) [Taxation Risks](index=31&type=section&id=Taxation) [Clients, Brokers and Financial Institutions Risks](index=34&type=section&id=Clients,%20Brokers%20and%20Financial%20Institutions) - The company has experienced **volatile operating results** and cannot guarantee future operating profitability or a return to active underwriting of new prospective reinsurance risks[93](index=93&type=chunk) - The inability to successfully implement the new business strategy, including the growth of Genesis Legacy Solutions (GLS), could adversely affect capital and financial results[96](index=96&type=chunk) - Actual losses may exceed the established **reserves for loss and loss adjustment expenses (LAE)**, potentially by material amounts, despite reinsurance protection[100](index=100&type=chunk)[105](index=105&type=chunk) - The company relies on dividends and payments from subsidiaries for liquidity, which are subject to regulatory approvals and restrictions, potentially limiting its ability to meet obligations[127](index=127&type=chunk) - A significant portion of invested assets is subject to **interest rate changes and market volatility**, which could adversely affect financial condition and results if investment objectives are not met[130](index=130&type=chunk) - The company does not anticipate paying **cash dividends on common shares** for the foreseeable future, and there is no assurance that dividends on Preference Shares will resume[146](index=146&type=chunk)[147](index=147&type=chunk) - Significant changes in the reinsurance relationship with AmTrust have reduced current and future revenues and create uncertainty for future liquidity sources[208](index=208&type=chunk)[209](index=209&type=chunk) - The property and casualty insurance and reinsurance industry is cyclical, and negative developments in the U.S. workers' compensation sector could adversely affect financial performance[216](index=216&type=chunk)[219](index=219&type=chunk) - The company may become subject to U.S. federal income tax or increased U.K. taxes, which would have an adverse effect on its financial condition and operating results[228](index=228&type=chunk)[242](index=242&type=chunk) [Unresolved Staff Comments](index=35&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments.) The company reported no unresolved staff comments from the SEC - There are no unresolved staff comments[255](index=255&type=chunk) [Properties](index=35&type=section&id=Item%202.%20Properties.) The company leases office space in Bermuda (corporate headquarters), the U.K., and Germany, which it deems sufficient for foreseeable operations, with acquisition and maintenance costs not being material - The company leases office space in Pembroke, Bermuda (corporate headquarters), the U.K., and Germany[256](index=256&type=chunk) - The leased office space is considered sufficient for conducting operations for the foreseeable future[256](index=256&type=chunk) - The cost of acquiring and maintaining office space has not been material to the company as a whole[256](index=256&type=chunk) [Legal Proceedings](index=36&type=section&id=Item%203.%20Legal%20Proceedings.) The company is involved in routine legal proceedings, including arbitrations, not expected to materially affect its financial position, with specific ongoing cases including a whistleblower claim and a putative class action - The company is subject to routine legal proceedings, including arbitrations, in the ordinary course of business, which are not expected to have a material adverse effect on its financial condition or results of operations[258](index=258&type=chunk)[259](index=259&type=chunk) - A whistleblower claim by former COO Bentzion S. Turin, alleging retaliatory termination, was denied in full by an Administrative Law Judge in September 2021, but Mr. Turin filed a petition for review[260](index=260&type=chunk) - A putative class action complaint was filed in February 2019, alleging violations of Section 10(b) of the Exchange Act and Rule 10b-5 due to allegedly inadequate loss reserves and misrepresentations, with a motion to dismiss partially denied in August 2021[261](index=261&type=chunk) [Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This item is not applicable to the company - This item is not applicable[262](index=262&type=chunk) [PART II](index=37&type=section&id=PART%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=37&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) The company's common shares trade on NASDAQ, with no dividends since Q3 2018, and a remaining $74.2 million common share repurchase authorization currently precluded by unpaid preference share dividends, while 2021 saw significant preference share repurchases - Common shares trade on the NASDAQ Capital Market under the symbol '**MHLD**'[265](index=265&type=chunk) - No dividends have been declared on common shares since the **third quarter of 2018**[266](index=266&type=chunk) - The company has a remaining authorization of **$74.2 million** for common share repurchases but is currently precluded from repurchasing common shares due to its failure to pay dividends on Preference Shares[267](index=267&type=chunk)[476](index=476&type=chunk) Preference Share Repurchases (2021 vs. 2020) | For the Year Ended December 31, | 2021 | 2020 | | :------------------------------ | :--- | :--- | | Number of shares purchased | 9,404,012 | 2,827,595 | | Average price of shares purchased | $14.48 | $10.50 | | Total price paid | $136,155 | $29,690 | | Gain on purchase | $90,998 | $38,195 | - As of December 31, 2021, the company had a remaining authorization of **$13.8 million** for Preference Share repurchases[269](index=269&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operation](index=38&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation.) This section analyzes the company's 2021 and 2020 financial condition, operations, and liquidity, focusing on strategic shifts, AmTrust reinsurance run-off, COVID-19 impacts, key metrics, accounting policies, segment performance, and capital resources [Overview](index=38&type=section&id=Overview) [Recent Developments](index=38&type=section&id=Recent%20Developments) [Business Strategy](index=39&type=section&id=Business%20Strategy) [COVID-19 Pandemic](index=40&type=section&id=COVID-19%20Pandemic) [2021 and 2020 Financial Highlights](index=41&type=section&id=2021%20and%202020%20Financial%20Highlights) Summary Consolidated Statement of Income Data (2021 vs. 2020) | For the Year Ended December 31, | 2021 ($ in thousands) | 2020 ($ in thousands) | Change ($ in thousands) | | :------------------------------ | :-------------------- | :-------------------- | :---------------------- | | Net income | 26,645 | 41,762 | (15,117) | | Gain from repurchase of preference shares | 90,998 | 38,195 | 52,803 | | Net income attributable to Maiden common shareholders | 117,643 | 79,957 | 37,686 | | Basic and diluted earnings per common share | 1.35 | 0.93 | 0.42 | | Gross premiums written | 10,938 | 31,389 | (20,451) | | Net premiums earned | 52,993 | 106,081 | (53,088) | | Underwriting income | 11,572 | 17,274 | (5,702) | | Net investment income | 32,013 | 54,761 | (22,748) | | Combined ratio | 126.1 % | 111.4 % | 14.7 | Consolidated Financial Condition (2021 vs. 2020) | At December 31, | 2021 ($ in thousands) | 2020 ($ in thousands) | Change ($ in thousands) | | :------------------------------ | :-------------------- | :-------------------- | :---------------------- | | Total investments and cash and cash equivalents | 888,699 | 1,456,133 | (567,434) | | Total assets | 2,322,610 | 2,948,455 | (625,845) | | Reserve for loss and LAE | 1,489,373 | 1,893,299 | (403,926) | | Senior notes - principal amount | 262,500 | 262,500 | — | | Common shareholders' equity | 225,047 | 133,506 | 91,541 | | Shareholders' equity | 384,257 | 527,816 | (143,559) | | Total capital resources | 646,757 | 790,316 | (143,559) | | Ratio of debt to total capital resources | 40.6 % | 33.2 % | 7.4 | | Book value per common share | $2.60 | $1.57 | $1.03 | [Key Financial Measures](index=42&type=section&id=Key%20Financial%20Measures) [Revenues](index=42&type=section&id=Revenues) [Expenses](index=42&type=section&id=Expenses) [Non-GAAP Financial Measures](index=43&type=section&id=Non-GAAP%20Financial%20Measures) [Critical Accounting Policies and Estimates](index=45&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) [Reserve for Loss and LAE](index=45&type=section&id=Reserve%20for%20Loss%20and%20LAE) [Premiums and Commissions and Other Acquisition Expenses](index=48&type=section&id=Premiums%20and%20Commissions%20and%20Other%20Acquisition%20Expenses) [Retroactive Reinsurance](index=49&type=section&id=Retroactive%20Reinsurance) [Fair Value of Financial Instruments](index=49&type=section&id=Fair%20Value%20of%20Financial%20Instruments) [Other-Than-Temporary Impairment ("OTTI") of Investments](index=49&type=section&id=Other-Than-Temporary%20Impairment%20(%22OTTI%22)%20of%20Investments) [Results of Operations](index=50&type=section&id=Results%20of%20Operations) [Net Income](index=51&type=section&id=Net%20Income) [Net Premiums Written](index=51&type=section&id=Net%20Premiums%20Written) [Net Premiums Earned](index=52&type=section&id=Net%20Premiums%20Earned) [Other Insurance Revenue](index=52&type=section&id=Other%20Insurance%20Revenue) [Net Investment Income](index=52&type=section&id=Net%20Investment%20Income) [Net Realized and Unrealized Gains on Investment](index=52&type=section&id=Net%20Realized%20and%20Unrealized%20Gains%20on%20Investment) [Net Impairment Losses Recognized in Earnings](index=52&type=section&id=Net%20Impairment%20Losses%20Recognized%20in%20Earnings) [Interest in Income of Equity Method Investments](index=52&type=section&id=Interest%20in%20Income%20of%20Equity%20Method%20Investments) [Net Loss and Loss Adjustment Expenses](index=53&type=section&id=Net%20Loss%20and%20Loss%20Adjustment%20Expenses) [Commission and Other Acquisition Expenses](index=53&type=section&id=Commission%20and%20Other%20Acquisition%20Expenses) [General and Administrative Expenses](index=53&type=section&id=General%20and%20Administrative%20Expenses) [Interest and Amortization Expenses](index=53&type=section&id=Interest%20and%20Amortization%20Expenses) [Foreign Exchange and Other (Gains) Losses](index=53&type=section&id=Foreign%20Exchange%20and%20Other%20(Gains)%20Losses) [Income Tax Expense (Benefit)](index=53&type=section&id=Income%20Tax%20Expense%20(Benefit)) [Underwriting Results by Reportable Segment](index=54&type=section&id=Underwriting%20Results%20by%20Reportable%20Segment) [Diversified Reinsurance Segment](index=54&type=section&id=Diversified%20Reinsurance%20Segment) [AmTrust Reinsurance Segment](index=56&type=section&id=AmTrust%20Reinsurance%20Segment) [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) [Liquidity](index=58&type=section&id=Liquidity) [Operating, investing and financing cash flows](index=58&type=section&id=Operating,%20investing%20and%20financing%20cash%20flows) [Restrictions, Collateral and Specific Requirements](index=60&type=section&id=Restrictions,%20Collateral%20and%20Specific%20Requirements) [Cash and Investments](index=61&type=section&id=Cash%20and%20Investments) [Cash & Cash Equivalents](index=61&type=section&id=Cash%20%26%20Cash%20Equivalents) [Fixed Maturity Investments](index=62&type=section&id=Fixed%20Maturity%20Investments) [Other Investments and Equity Method Investments](index=65&type=section&id=Other%20Investments%20and%20Equity%20Method%20Investments) [Investment Results](index=67&type=section&id=Investment%20Results) [Other Balance Sheet Changes](index=68&type=section&id=Other%20Balance%20Sheet%20Changes) [Capital Resources](index=68&type=section&id=Capital%20Resources) [Common Shares](index=69&type=section&id=Common%20Shares) [Preference Shares](index=69&type=section&id=Preference%20Shares) [Senior Notes](index=70&type=section&id=Senior%20Notes) [Off-Balance Sheet Arrangements](index=70&type=section&id=Off-Balance%20Sheet%20Arrangements) [Non-GAAP Financial Measures](index=71&type=section&id=Non-GAAP%20Financial%20Measures) [Non-GAAP operating earnings and Non-GAAP diluted operating earnings per share attributable to common shareholders](index=71&type=section&id=Non-GAAP%20operating%20earnings%20and%20Non-GAAP%20diluted%20operating%20earnings%20per%20share%20attributable%20to%20common%20shareholders) [Non-GAAP Operating ROACE](index=72&type=section&id=Non-GAAP%20Operating%20ROACE) [Non-GAAP Underwriting Results and Combined Ratio](index=72&type=section&id=Non-GAAP%20Underwriting%20Results%20and%20Combined%20Ratio) [Non-GAAP Net Loss and LAE](index=73&type=section&id=Non-GAAP%20Net%20Loss%20and%20LAE) [Adjusted Shareholders' Equity, Adjusted Total Capital Resources, Adjusted Book Value per Common Share and Ratio of Debt to Total Adjusted Capital Resources](index=73&type=section&id=Adjusted%20Shareholders'%20Equity,%20Adjusted%20Total%20Capital%20Resources,%20Adjusted%20Book%20Value%20per%20Common%20Share%20and%20Ratio%20of%20Debt%20to%20Total%20Adjusted%20Capital%20Resources) [Currency and Foreign Exchange](index=74&type=section&id=Currency%20and%20Foreign%20Exchange) [Effects of Inflation](index=75&type=section&id=Effects%20of%20Inflation) [Recent Accounting Pronouncements](index=75&type=section&id=Recent%20Accounting%20Pronouncements) - Maiden Holdings is a Bermuda-based holding company focused on active asset and capital management, including ownership and management of businesses and assets primarily in the insurance and related financial services industries[273](index=273&type=chunk) - The company provides **legacy services to small insurance entities**, particularly those in run-off or with non-core reserve blocks, through Genesis Legacy Solutions (GLS), which commenced its first transaction in **October 2021**[273](index=273&type=chunk)[287](index=287&type=chunk)[289](index=289&type=chunk) - Maiden Reinsurance re-domesticated from Bermuda to Vermont, U.S., in **March 2020**, strengthening the company's capital position and solvency ratios and aligning resources with U.S.-originating liabilities[278](index=278&type=chunk) - The company's strategic focus is on **asset management, legacy underwriting, and capital management** to maximize risk-adjusted shareholder returns and increase book value[283](index=283&type=chunk) - The COVID-19 pandemic has caused significant disruption, but the company assesses its exposure to COVID-19 insurance and reinsurance claims as **limited and immaterial**, though investment portfolio impacts and liquidity reductions remain potential risks[293](index=293&type=chunk)[294](index=294&type=chunk)[295](index=295&type=chunk) [Financial Statements and Supplementary Data](index=76&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data.) This section incorporates the company's audited consolidated financial statements, including balance sheets, income statements, and cash flows for 2021 and 2020, along with the Report of Independent Registered Public Accounting Firm [Report of Independent Registered Public Accounting Firm](index=86&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) [Consolidated Balance Sheets](index=88&type=section&id=Consolidated%20Balance%20Sheets) [Consolidated Statements of Income](index=89&type=section&id=Consolidated%20Statements%20of%20Income) [Consolidated Statements of Comprehensive Income](index=90&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) [Consolidated Statements of Changes in Shareholders' Equity](index=91&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) [Consolidated Statements of Cash Flows](index=92&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) [Notes to Consolidated Financial Statements](index=93&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [Note 1 — Organization](index=93&type=section&id=Note%201%20%E2%80%94%20Organization) [Note 2 — Significant Accounting Policies](index=95&type=section&id=Note%202%20%E2%80%94%20Significant%20Accounting%20Policies) [Note 3 — Segment Information](index=100&type=section&id=Note%203%20%E2%80%94%20Segment%20Information) [Note 4 — Investments](index=104&type=section&id=Note%204%20%E2%80%94%20Investments) [Note 5 — Fair Value Measurements](index=109&type=section&id=Note%205%20%E2%80%94%20Fair%20Value%20Measurements) [Note 6 — Shareholders' Equity](index=112&type=section&id=Note%206%20%E2%80%94%20Shareholders'%20Equity) [Note 7 — Long-Term Debt](index=115&type=section&id=Note%207%20%E2%80%94%20Long-Term%20Debt) [Note 8 — Reinsurance](index=116&type=section&id=Note%208%20%E2%80%94%20Reinsurance) [Note 9 — Reserve for Loss and Loss Adjustment Expenses](index=117&type=section&id=Note%209%20%E2%80%94%20Reserve%20for%20Loss%20and%20Loss%20Adjustment%20Expenses) [Note 10 — Related Party Transactions](index=132&type=section&id=Note%2010%20%E2%80%94%20Related%20Party%20Transactions) [Note 11 — Commitments, Contingencies and Guarantees](index=136&type=section&id=Note%2011%20%E2%80%94%20Commitments,%20Contingencies%20and%20Guarantees) [Note 12 — Earnings Per Common Share](index=138&type=section&id=Note%2012%20%E2%80%94%20Earnings%20Per%20Common%20Share) [Note 13 — Income Taxes](index=139&type=section&id=Note%2013%20%E2%80%94%20Income%20Taxes) [Note 14 — Share Compensation and Pension Plans](index=141&type=section&id=Note%2014%20%E2%80%94%20Share%20Compensation%20and%20Pension%20Plans) [Note 15 — Statutory Requirements and Dividend Restrictions](index=143&type=section&id=Note%2015%20%E2%80%94%20Statutory%20Requirements%20and%20Dividend%20Restrictions) [Note 16 - Subsequent Events](index=144&type=section&id=Note%2016%20-%20Subsequent%20Events) - The consolidated financial statements for the years ended **December 31, 2021 and 2020** are included, presenting the financial position, results of operations, and cash flows in conformity with U.S. GAAP[513](index=513&type=chunk)[563](index=563&type=chunk) - The Report of Independent Registered Public Accounting Firm (Ernst & Young LLP) expressed an **unqualified opinion** on the consolidated financial statements and the effectiveness of internal control over financial reporting as of **December 31, 2021**[527](index=527&type=chunk)[564](index=564&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=76&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure.) The company reported no changes in or disagreements with accountants on accounting and financial disclosure - There were no changes in and disagreements with accountants on accounting and financial disclosure[514](index=514&type=chunk) [Controls and Procedures](index=77&type=section&id=Item%209A.%20Controls%20and%20Procedures.) Management concluded the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2021, with an unqualified audit opinion from Ernst & Young LLP - The company's disclosure controls and procedures were **effective as of December 31, 2021**[516](index=516&type=chunk) - Management concluded that the internal control over financial reporting was **effective as of December 31, 2021**, based on criteria established in the COSO 2013 framework[520](index=520&type=chunk) - Ernst & Young LLP issued an **unqualified audit opinion** on the company's internal control over financial reporting as of **December 31, 2021**[521](index=521&type=chunk)[526](index=526&type=chunk) - No material changes were made in internal controls over financial reporting during the **fourth quarter ended December 31, 2021**[522](index=522&type=chunk) [Other Information](index=79&type=section&id=Item%209B.%20Other%20Information.) The company reported no other information required by this item - No other information is reported[534](index=534&type=chunk) [PART III](index=79&type=section&id=PART%20III) [Directors, Executive Officers and Corporate Governance](index=79&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance.) This section incorporates by reference information regarding the company's directors, executive officers, corporate governance, and Section 16(a) compliance from its definitive proxy statement - Information on directors, executive officers, corporate governance, and Section 16(a) compliance is incorporated by reference from the definitive proxy statement for the annual general meeting on **May 4, 2022**[536](index=536&type=chunk) - The company has adopted a **Code of Business Conduct and Ethics** for all employees, available on its website[537](index=537&type=chunk) [Executive Compensation](index=79&type=section&id=Item%2011.%20Executive%20Compensation.) This section incorporates by reference information on executive compensation, director compensation, compensation committee interlocks, and the compensation committee report from the company's definitive proxy statement - Information on executive compensation, director compensation, compensation committee interlocks, and the compensation committee report is incorporated by reference from the definitive proxy statement[538](index=538&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=79&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters.) This section incorporates by reference information regarding security ownership of certain beneficial owners and management, as well as equity compensation plan information, from the company's definitive proxy statement - Information on security ownership of certain beneficial owners and management, and equity compensation plan information, is incorporated by reference from the definitive proxy statement[539](index=539&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=79&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence.) This section incorporates by reference information on certain relationships and related transactions, as well as director independence, from the company's definitive proxy statement - Information on certain relationships and related transactions, and director independence, is incorporated by reference from the definitive proxy statement[540](index=540&type=chunk) [Principal Accounting Fees and Services](index=79&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services.) This section incorporates by reference information regarding principal accounting fees and services from the company's definitive proxy statement - Information on principal accounting fees and services is incorporated by reference from the definitive proxy statement[541](index=541&type=chunk) [PART IV](index=79&type=section&id=PART%20IV) [Exhibits, Financial Statement Schedules](index=79&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules.) This section lists financial statements and schedules filed as part of the Annual Report on Form 10-K, along with an index of exhibits, confirming other required schedules are omitted as inapplicable - Financial statements listed in the accompanying index to Consolidated Financial Statements are filed as part of this Annual Report on Form 10-K[543](index=543&type=chunk) - The exhibit index lists exhibits filed herewith or incorporated by reference[544](index=544&type=chunk) - All other schedules for which provision is made in applicable SEC regulation are omitted as not required or inapplicable[544](index=544&type=chunk) [Form 10-K Summary](index=79&type=section&id=Item%2016.%20Form%2010-K%20Summary.) The company reported no Form 10-K summary - No Form 10-K Summary is provided[545](index=545&type=chunk)
Maiden Re(MHLD) - 2021 Q3 - Quarterly Report
2021-11-09 21:06
PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements detail the company's financial position and performance [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets and shareholders' equity declined significantly, driven by reduced investments and cash Condensed Consolidated Balance Sheet Highlights (in thousands of U.S. dollars) | Metric | Sep 30, 2021 (Unaudited) | Dec 31, 2020 (Audited) | Change | | :----------------------------------- | :----------------------- | :--------------------- | :------- | | Total Assets | $2,455,018 | $2,948,455 | $(493,437) | | Total Liabilities | $2,071,844 | $2,420,639 | $(348,795) | | Total Shareholders' Equity | $383,174 | $527,816 | $(144,642) | | Investments (Total) | $953,268 | $1,320,307 | $(367,039) | | Reserve for loss and LAE | $1,567,526 | $1,893,299 | $(325,773) | - The decrease in total assets was primarily due to a reduction in **investments and cash**, reflecting the company's run-off strategy and negative operating cash flows[11](index=11&type=chunk)[263](index=263&type=chunk) [Condensed Consolidated Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Net income decreased despite a significant gain from preference share repurchases, as total revenues fell by nearly 50% Condensed Consolidated Statements of Income Highlights (in thousands of U.S. dollars, except per share data) | Metric | 9M Ended Sep 30, 2021 | 9M Ended Sep 30, 2020 | Change | Change (%) | | :------------------------------------------ | :-------------------- | :-------------------- | :------- | :--------- | | Net (Loss) Income | $14,258 | $32,235 | $(17,977) | (55.8)% | | Gain from repurchase of preference shares | $87,168 | — | $87,168 | NM | | Net Income Available to Common Shareholders | $101,426 | $32,235 | $69,191 | 214.6% | | Total Revenues | $73,661 | $144,438 | $(70,777) | (49.0)% | | Net Premiums Earned | $40,106 | $76,828 | $(36,722) | (47.8)% | | Net Investment Income | $24,596 | $44,959 | $(20,363) | (45.3)% | | Basic and Diluted EPS | $1.17 | $0.38 | $0.79 | 207.9% | - The significant increase in **Net Income Available to Common Shareholders and EPS** for 9M 2021 was primarily driven by the **$87.2 million gain** from the repurchase of preference shares[13](index=13&type=chunk)[210](index=210&type=chunk) [Condensed Consolidated Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) The company reported a comprehensive loss due to substantial unrealized holding losses on investments Condensed Consolidated Statements of Comprehensive Income Highlights (in thousands of U.S. dollars) | Metric | 9M Ended Sep 30, 2021 | 9M Ended Sep 30, 2020 | Change | | :---------------------------------------------------------------- | :-------------------- | :-------------------- | :------- | | Net (Loss) Income | $14,258 | $32,235 | $(17,977) | | Other comprehensive (loss) income, after tax | $(28,716) | $(3,879) | $(24,837) | | Comprehensive (Loss) Income | $(14,458) | $28,356 | $(42,814) | - **Net unrealized holdings losses** on fixed maturity investments and equity method investments were significant contributors to the comprehensive loss in 9M 2021[15](index=15&type=chunk) [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Total shareholders' equity decreased primarily due to significant repurchases of preference shares Condensed Consolidated Statements of Changes in Shareholders' Equity Highlights (in thousands of U.S. dollars) | Metric | 9M Ended Sep 30, 2021 | 9M Ended Sep 30, 2020 | Change | | :------------------------------------------------ | :-------------------- | :-------------------- | :------- | | Preference shares (Ending balance) | $167,418 | $465,000 | $(297,582) | | Repurchase of Preference Shares (Total) | $(226,892) | — | $(226,892) | | Accumulated other comprehensive (loss) income (Ending balance) | $(4,859) | $13,957 | $(18,816) | | Accumulated deficit (Ending balance) | $(514,512) | $(663,559) | $149,047 | | Total Shareholders' Equity (Ending balance) | $383,174 | $538,086 | $(154,912) | - The substantial decrease in preference shares is a direct result of the company's **2021 Preference Share Repurchase Program**[17](index=17&type=chunk)[89](index=89&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Significant cash outflows from operating and financing activities led to a net decrease in cash Condensed Consolidated Statements of Cash Flows Highlights (in thousands of U.S. dollars) | Metric | 9M Ended Sep 30, 2021 | 9M Ended Sep 30, 2020 | Change | | :------------------------------------------ | :-------------------- | :-------------------- | :------- | | Net cash used in operating activities | $(299,750) | $(447,664) | $147,914 | | Net cash provided by investing activities | $344,206 | $528,677 | $(184,471) | | Net cash used in financing activities | $(128,988) | $(1) | $(128,987) | | Net (decrease) increase in cash, restricted cash and cash equivalents | $(84,865) | $82,617 | $(167,482) | | Cash, restricted cash and cash equivalents, end of period | $50,961 | $189,895 | $(138,934) | - Cash flows used in financing activities were primarily driven by the **repurchase of preference shares ($132.2 million)** in 9M 2021[19](index=19&type=chunk)[278](index=278&type=chunk) - Operating cash outflows are a result of **claims payments** from terminated reinsurance contracts as the company runs off its liabilities[268](index=268&type=chunk)[275](index=275&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, segment data, and key developments including share repurchases and run-off activities - Maiden Reinsurance **re-domesticated from Bermuda to Vermont** in March 2020 to better align capital and resources with U.S.-originated liabilities, strengthening capital position and solvency ratios[28](index=28&type=chunk) - The company's exposure to **COVID-19 insurance and reinsurance claims is assessed as limited and immaterial** due to its run-off strategy, though market conditions could impact the investment portfolio[31](index=31&type=chunk)[32](index=32&type=chunk) Preference Share Repurchases (9M Ended Sep 30, 2021) | Series | Number of Shares Purchased | Average Price per Share | | :------- | :------------------------- | :---------------------- | | Series A | 3,519,093 | $14.74 | | Series C | 2,917,244 | $14.44 | | Series D | 2,639,336 | $14.45 | | Total | 9,075,673 | $14.56 | - **Net favorable prior year loss development of $23,713 thousand** was recognized for the nine months ended September 30, 2021, primarily within the AmTrust Reinsurance segment[106](index=106&type=chunk)[108](index=108&type=chunk) - The LPT/ADC Agreement with Cavello Bay Reinsurance Limited provides **$155,000 thousand in adverse development cover** over AmTrust Quota Share loss reserves, with amortization of deferred gain expected to begin in 2024[102](index=102&type=chunk) - The company has **unfunded commitments of $101,431 thousand** on other investments and **$26,949 thousand** on equity method investments, and has provided **$33,191 thousand in guarantees** for real estate joint ventures, with a remote likelihood of loss[144](index=144&type=chunk)[147](index=147&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company's strategy focuses on asset management and legacy solutions while running off its reinsurance liabilities - Maiden Holdings' strategy focuses on active **asset and capital management**, including ownership and management of businesses/assets in insurance and financial services, and providing legacy services to small insurance companies, particularly those in run-off[164](index=164&type=chunk)[176](index=176&type=chunk) - The company is **not actively underwriting new reinsurance business**; its historic reinsurance programs, including those with AmTrust, are in run-off[166](index=166&type=chunk)[176](index=176&type=chunk) Summary Consolidated Statement of Income Data (9M Ended Sep 30, 2021 vs 2020) | Metric | 9M Ended Sep 30, 2021 | 9M Ended Sep 30, 2020 | Change | Change (%) | | :------------------------------------------ | :-------------------- | :-------------------- | :------- | :--------- | | Net income attributable to common shareholders | $101,426 | $32,235 | $69,191 | 214.6% | | Basic and diluted EPS | $1.17 | $0.38 | $0.79 | 207.9% | | Gross premiums written | $7,865 | $20,233 | $(12,368) | (61.1)% | | Net premiums earned | $40,106 | $76,828 | $(36,722) | (47.8)% | | Underwriting income (loss) | $6,377 | $(308) | $6,685 | NM | | Net investment income | $24,596 | $44,959 | $(20,363) | (45.3)% | | Combined ratio | 137.0% | 124.6% | 12.4 pts | 9.9% | Consolidated Financial Condition (Sep 30, 2021 vs Dec 31, 2020) | Metric | Sep 30, 2021 | Dec 31, 2020 | Change | Change (%) | | :------------------------------------ | :----------- | :----------- | :------- | :--------- | | Total investments and cash equivalents | $1,004,229 | $1,456,133 | $(451,904) | (31.0)% | | Total assets | $2,455,018 | $2,948,455 | $(493,437) | (16.7)% | | Reserve for loss and LAE | $1,567,526 | $1,893,299 | $(325,773) | (17.2)% | | Common shareholders' equity | $215,756 | $133,506 | $82,250 | 61.6% | | Total shareholders' equity | $383,174 | $527,816 | $(144,642) | (27.4)% | | Book value per common share | $2.50 | $1.57 | $0.93 | 59.2% | - Net premiums written for the nine months ended September 30, 2021, **decreased by 57.0% to $7.5 million**, primarily due to the run-off of German Auto Programs and the termination of AmTrust reinsurance contracts[213](index=213&type=chunk) - Net investment income **decreased by 45.3%** for the nine months ended September 30, 2021, due to a **25.8% decline in average fixed income assets** and lower annualized average book yields (1.9% vs 2.4%)[218](index=218&type=chunk)[219](index=219&type=chunk) - Net cash used in operating activities for the nine months ended September 30, 2021, was **$299.8 million**, primarily due to claims payments from terminated AmTrust contracts[275](index=275&type=chunk) - The company utilized **$132.2 million for the repurchase of 9,075,673 preference shares** during the nine months ended September 30, 2021, under the 2021 Preference Share Repurchase Program[278](index=278&type=chunk)[324](index=324&type=chunk) - The ratio of **debt to total capital resources increased to 40.7%** at September 30, 2021, from 33.2% at December 31, 2020[329](index=329&type=chunk) [Item 4. Controls and Procedures](index=69&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes in internal controls - Disclosure controls and procedures were **effective as of September 30, 2021**[358](index=358&type=chunk) - **No material changes** in internal controls over financial reporting occurred during the most recent fiscal quarter[359](index=359&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=70&type=section&id=Item%201.%20Legal%20Proceedings) The company is defending itself against a whistle-blower claim and a class action complaint regarding loss reserves - An administrative law judge denied a whistle-blower complaint, but the former COO filed a **petition for review** with the Administrative Review Board[151](index=151&type=chunk) - A motion to dismiss a class action complaint alleging inadequate loss reserves and misrepresentations was partially denied, and **limited discovery is proceeding**[152](index=152&type=chunk) [Item 1A. Risk Factors](index=70&type=section&id=Item%201A.%20Risk%20Factors) No material changes were reported to the risk factors previously disclosed in the 2020 Annual Report - **No material changes** from the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2020[363](index=363&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=70&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company continued its preference share repurchase program in Q3 2021 while making no common share repurchases - Remaining authorization for common share repurchases was **$74,245 thousand** at September 30, 2021, with no repurchases made in Q3 2021[364](index=364&type=chunk) Preference Share Repurchases (3M and 9M Ended Sep 30, 2021) | Metric | 3M Ended Sep 30, 2021 | 9M Ended Sep 30, 2021 | | :-------------------------------- | :-------------------- | :-------------------- | | Total shares purchased | 558,636 | 9,075,673 | | Total price paid (in millions) | $7.5 | $132.2 | | Gain on purchase (in millions) | $6.0 | $87.2 | - Remaining authorization for preference share repurchases was **$17,847 thousand** at September 30, 2021, with additional repurchases of **$544 thousand** made subsequent to quarter-end[368](index=368&type=chunk)[369](index=369&type=chunk)[370](index=370&type=chunk) [Item 3. Defaults Upon Senior Securities](index=71&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - **No defaults** upon senior securities[371](index=371&type=chunk) [Item 4. Mine Safety Disclosures](index=71&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - **Not applicable**[372](index=372&type=chunk) [Item 5. Other Information](index=71&type=section&id=Item%205.%20Other%20Information) Directors and executives may sell common shares under pre-arranged Rule 10b5-1 trading plans - Directors and executives may sell common shares under **Rule 10b5-1 plans** for diversification or liquidity, without reducing ownership below applicable guidelines[373](index=373&type=chunk) [Item 6. Exhibits](index=71&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including CEO/CFO certifications and XBRL data - Includes **Section 302 and 906 Certifications** of CEO and CFO[374](index=374&type=chunk) - Includes **Inline XBRL formatted** Condensed Consolidated Financial Statements[374](index=374&type=chunk) [Signatures](index=72&type=section&id=Signatures) The report is duly signed by the company's Co-Chief Executive Officers - Report signed by **Lawrence F. Metz** (President and Co-Chief Executive Officer) and **Patrick J. Haveron** (Co-Chief Executive Officer and Chief Financial Officer)[378](index=378&type=chunk)
Maiden Re(MHLD) - 2021 Q2 - Quarterly Report
2021-08-09 20:07
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File No. 001-34042 MAIDEN HOLDINGS, LTD. (Exact name of registrant as specified in its charter) (State or other jurisdiction of ...
Maiden Re(MHLD) - 2021 Q1 - Quarterly Report
2021-05-10 20:05
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File No. 001-34042 MAIDEN HOLDINGS, LTD. (Exact name of registrant as specified in its charter) (State or other jurisdiction of ...
Maiden Re(MHLD) - 2020 Q4 - Annual Report
2021-03-15 20:17
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2020 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File Number: 001-34042 MAIDEN HOLDINGS, LTD. (Exact Name of Registrant As Specified in Its Charter) Bermuda 98-0570192 (State or Oth ...