Maiden Re(MHLD) - 2024 Q4 - Annual Report

Financial Performance - Non-GAAP book value decreased by 52.4% to $1.52 per common share, while GAAP book value decreased by 81.5% to $0.46 per common share as of December 31, 2024[40]. - The alternative investment portfolio decreased by 18.6% during 2024, producing a positive net return of 3.5% compared to 8.0% in 2023[41][42]. - An underwriting loss of $197.4 million was reported for 2024, primarily due to adverse prior year reserve development of $154.4 million from the AmTrust Reinsurance segment[43]. - Net premiums earned for Diversified Reinsurance segment increased to $35.787 million (72.3% of total) in 2024 from $29.039 million (66.0% of total) in 2023[52]. - Net premiums written by the Diversified Reinsurance segment totaled $34.749 million in 2024, up from $27.104 million in 2023[53]. Shareholder Actions - Maiden Reinsurance repurchased 1,871,755 common shares during 2024, owning 31.1% of the total outstanding common shares as of December 31, 2024[44]. - The company has suspended its share repurchase program in connection with the pending transaction with Kestrel[44]. Regulatory and Compliance - The company is subject to regulatory oversight and must file detailed financial statements with the Vermont Department of Financial Regulation (DFR)[78]. - The company believes it is in compliance with all applicable laws and regulations that could materially affect its financial position[102]. - Regulatory scrutiny may increase due to potential federal initiatives impacting the insurance industry[98]. - The company is not actively underwriting reinsurance on new prospective risks, focusing on compliance with existing regulations[95]. Risk Management - The company’s Enterprise Risk Management framework includes a three lines of defense approach to manage risks effectively[62][63]. - The company must establish a risk governance structure with clearly defined roles and responsibilities to manage risks within its risk appetite[66]. - The loss reserves on the balance sheet represent management's best estimate of outstanding liabilities associated with earned premiums, with reserves established based on internal and external actuarial analyses[69]. - The company is required to establish loss reserves to cover estimated liabilities for loss and loss adjustment expenses (LAE) incurred with respect to premiums earned[69]. - The Audit Committee meets at least quarterly to assess whether management is addressing risk issues in a timely manner, receiving updates on capital and risk management[68]. Employment and Operations - The company has approximately 42 full-time and part-time employees across multiple countries, with a transition of 15 employees expected upon the sale of Swedish subsidiaries[76]. - The company entered into an agreement to sell its Swedish subsidiaries, Maiden LF and Maiden GF, awaiting regulatory approval[55]. - No new premium was written in the AmTrust Reinsurance segment during 2024, following the termination of active reinsurance contracts effective January 1, 2019[56]. Taxation and Financial Regulations - Maiden Holdings has received assurance from Bermuda's Minister of Finance that no new taxes will apply until March 31, 2035[109]. - The Corporate Income Tax Act 2023 in Bermuda imposes a 15% tax on multi-national groups with consolidated revenues of at least €750 million, effective from January 1, 2025[110]. - Maiden LF and Maiden GF are subject to a 20.6% tax rate on net profits in Sweden[111]. - Maiden Global, Maiden LF U.K. Branch, and Maiden GF U.K. Branch are subject to a U.K. corporation tax rate of 25% on their trading and taxable profits[112]. - The U.S. corporate tax rate was reduced to 21% under the Tax Cuts and Jobs Act, impacting the taxation of U.S. property/casualty insurance companies[113]. - The maximum effective federal tax rate for U.S. branches of foreign corporations can reach 44.7% on net income connected with a U.S. trade or business[114]. - Foreign corporations not engaged in a U.S. trade are subject to U.S. income tax through withholding on certain income, such as dividends and interest[115]. - An excise tax of 1% applies to reinsurance premiums paid to foreign insurers for risks associated with U.S. persons[115]. - Maiden Reinsurance is subject to U.S. taxation since its re-domestication, while other subsidiaries operate to avoid being treated as engaged in U.S. trade[114]. - The company anticipates no requirement to pay U.S. corporate income taxes, aside from withholding and excise taxes[114]. - The 2017 Act introduced provisions that could affect the economic feasibility of affiliate reinsurance between U.S. and non-U.S. members[113]. - The company is monitoring potential future legislation that could adversely impact its operations[113]. - The U.S. Treasury Department has issued regulations clarifying the classification of non-U.S. insurers as passive foreign investment companies (PFICs)[113]. Capital Management - Maiden Reinsurance's RBC levels exceed Vermont's RBC requirements, indicating adequate capital management[90]. - The company is able to take credit for all reinsurance purchased, enhancing its financial stability[91]. - Maiden Reinsurance's re-domestication to Vermont in 2020 may result in unusual NAIC ratios due to the lack of prior year statutory data[93]. Legislative Updates - The Terrorism Risk Insurance Program Reauthorization Act of 2019 extends the federal terrorism risk insurance program through December 31, 2027[107].