Maiden Holdings reports $8.1m net income for Q2
Bermuda-based Maiden Holdings has reported net income of $8.1m during the second quarter of the year, what the group described as its “sixth consecutive quarter of operating profitability”.
The Q2 results were down year-on-year from $9.2m in Q2 2020. However, its $18.7m repurchase of preference shares during the current period boosted net income available to common shareholders to $26.8m. It’s non-GAAP operating earnings for the second quarter were $13.9m compared with $1.2m for the same period in 2020.
Net income was helped by a significant year-on-year rise in underwriting income during the quarter of $8.5m, up from a loss of $17,000 in Q2 2020. This was due to favourable prior-year loss development of $12.8m compared with $100,000 for Q2 2020, primarily related to quota share reinsurance agreements with AmTrust and partially offset by a $4.3m underwriting loss caused by higher loss ratios and higher general and administrative expenses.
Profits were also helped by interest in income of equity method investments of $2.8m for the three months to 30 June. This improvement was partially offset by a fall in net investment income from $14.3m to $7.3m and lower realised gains on investments of $800,000, down from $8.9m in Q2 2020.
In addition, Genesis Legacy Solutions – the group’s legacy services specialist established in December – is completing “its first significant transaction” since launch and should be a productive channel to create further shareholder value over the long term.
Maiden’s co-chief executive officers Patrick J. Haveron and Lawrence F. Metz said capital management initiatives during the fourth quarter of 2020.
Haveron and Metz added: “The second quarter saw us continue to make productive use of our capital management strategy and create additional value for our shareholders and our board believes we have ample authorisation to continue to prudently employ this strategy.
“We are continuing to take advantage of attractive investment opportunities with outstanding partners across a range of asset classes, including private equity and credit, real estate and venture capital.
“The returns produced by these investments will exceed our cost of capital, in particular our cost of debt capital, and this approach will build long-term shareholder value via risk-adjusted investment income and gains to enable Maiden to utilise its potentially significant tax assets.”
They continued: “While it may be an extended period of time before we can determine if the actual returns will achieve this objective, we are confident that this will be a fruitful path forward for us.
“The run-off of our insurance liabilities remains consistent with our expectations, and we continue to make progress in managing expenses down to an appropriate level for the scope of our ongoing operations.”
