Maiden Re(US:MHLD)2025-05-12 20:10Investment Performance - As of March 31, 2025, Maiden Holdings has invested $254.2 million into alternative investments, including equity securities and other asset classes, aiming to exceed the benchmark cost of capital [219]. - The alternative investments portfolio increased by 1.1% during the three months ended March 31, 2025, primarily due to net purchases of private equity funds, but produced a lower positive net return of 0.3% compared to 3.4% for the same period in 2024 [230]. - The investment portfolio generated net unrealized gains of $0.7 million during the three months ended March 31, 2025, increasing the book value per common share by $0.01 [336]. - The company’s investment performance is subject to various risks, including market volatility and interest rate fluctuations, which could impact the value of its investment portfolio [327]. - Total investment return, including other comprehensive income, was $4,369,000 in Q1 2025, compared to $18,074,000 in Q1 2024 [358]. - The internal rate of return for the alternative investment portfolio was 4.9% as of March 31, 2025, with a multiple on invested capital of 1.12 [364]. - Private equity investments produced a total investment return of $2.4 million in Q1 2025, with an internal rate of return of 10.5% and a multiple on invested capital of 1.36 [366]. - The company realized total gains of $4.8 million from the sale of its stake in Betterview Marketplace, Inc., achieving an IRR of 25.8% and a MOIC of 1.74 [369]. Financial Performance - Net loss for the three months ended March 31, 2025, was $(8,645) thousand, compared to net income of $1,459 thousand for the same period in 2024, representing a change of $(10,104) thousand [237]. - The company's book value per common share decreased by 17.4% to $0.38 as of March 31, 2025, while non-GAAP book value decreased by 6.6% to $1.42 [237]. - Non-GAAP operating loss for the three months ended March 31, 2025, was $(2,807) thousand, an improvement from $(4,950) thousand in 2024 [237]. - The company's total capital resources decreased by $7.6 million to $299.9 million, primarily due to a net loss of $8.6 million [379]. - The ratio of debt to total capital resources increased to 87.5% as of March 31, 2025, compared to 85.3% at December 31, 2024 [237]. Underwriting and Premiums - Underwriting income for the three months ended March 31, 2025, was $7.5 million, driven by favorable prior year reserve development of $12.4 million [233]. - Gross premiums written decreased by 51.1% to $4,074 thousand for the three months ended March 31, 2025, down from $8,323 thousand in 2024 [237]. - Net premiums earned decreased by 37.9% to $7,684 thousand for the three months ended March 31, 2025, compared to $12,408 thousand in 2024 [237]. - Non-GAAP underwriting income for the three months ended March 31, 2025, was $6.467 million, compared to a loss of $2.524 million in the same period of 2024 [396]. Strategic Initiatives - Maiden Holdings is undergoing a strategic transformation, including divesting its IIS business to enhance shareholder value, with transactions including Renewal Rights and Asset Purchase Agreements with AmTrust Nordic AB and a Stock Purchase Agreement for Maiden LF and Maiden GF [211]. - The company has suspended its common share repurchase program in connection with the combination agreement with Kestrel Group LLC, which was approved by shareholders on April 29, 2025 [222]. - The combination with Kestrel is expected to close in the second quarter of 2025, representing a transformative milestone for Maiden Holdings [228][229]. - The company has ceased new commitments to alternative investments in the foreseeable future as part of its strategic initiatives [325]. Loss Development and Liabilities - Maiden Holdings' total insurance-related liabilities at March 31, 2025, amounted to $24.5 million, consisting of total loss reserves of $18.2 million, an underwriting-related derivative liability of $4.0 million, and net deferred gains on retroactive reinsurance of $2.3 million [223]. - The company has experienced significant adverse loss development in its AmTrust Reinsurance segment, prompting a reassessment of its business strategy [224][225]. - Maiden Holdings aims to resolve AmTrust liabilities not covered by the LPT/ADC Agreement through finality solutions, which may involve significant costs [232]. Cash Flow and Assets - Cash flows used in operating activities for the three months ended March 31, 2025, were $21.1 million, compared to cash flows provided of $8.0 million for the same period in 2024 [314]. - The company's total assets decreased by 6.2% to $1,234,584 thousand as of March 31, 2025, down from $1,316,006 thousand at December 31, 2024 [237]. - Unrestricted cash, cash equivalents, and fixed maturity investments decreased to $42.5 million as of March 31, 2025, from $75.0 million at December 31, 2024 [312]. Investment Portfolio Composition - As of March 31, 2025, investable assets were $641.7 million, down from $699.4 million as of December 31, 2024, a decrease of $57.7 million [302]. - The company holds 44,750,678 common shares owned by Maiden Reinsurance, with a market value of $25.5 million at March 31, 2025 [332]. - As of March 31, 2025, 100% of the fixed maturity investments consisted of investment grade securities [342]. - The alternative investments portfolio increased to $254,249,000 as of March 31, 2025, representing 50.8% of total cash and investments, up from 48.5% at December 31, 2024 [348].