Maiden Holdings stresses discipline as Q1 results slide
Maiden Holdings has reported a first quarter 2018 profit of $13.7 million, down on the $20.5 million it made in the first quarter of 2017.
Non-GAAP operating earnings were $16.8 million, compared with a non-GAAP operating earnings of $22.6 million in the first quarter of 2017.
Despite the fall in profits president and chief executive officer, Art Raschbaum said, “We are pleased to start the year with a profitable first quarter. Underwriting results primarily reflect the impact of higher initial current year loss ratios, a modest level of adverse development and higher G&A expenses. Revenue in the quarter was influenced by a continued moderation of premium from our largest client, AmTrust, and in the Diversified segment from several accounts terminated over the last 12 months.
“Business development in the quarter was strong across the diversified segment which should favourably impact future quarters. We remain committed to maintaining disciplined underwriting and enhancing profitability. As previously announced, our board of directors has retained BoA Merrill Lynch to assist the company in evaluating strategic alternatives to enhance value and the company continues to be actively engaged in this process but has no further update at this time.”
The company said that gross premiums written in the first three months of 2018 decreased from $923.4 million in 2017 to $852.6 million primarily due to non-renewals and re-underwriting of certain diversified contracts conducted in both 2017 and in early 2018. Net premiums written totalled $849.3 million in the first quarter of 2018, a decrease of 5.7 percent compared to $900.5 million in the first quarter of 2017. Net premiums earned were $685.4 million in the first quarter of 2018 compared to $709.5 million in the first quarter of 2017, representing a decrease of 3.4 percent.
Net loss and loss adjustment expenses of $473.3 million compared to $480.6 million in the first quarter of 2017. The loss ratio in the first quarter of 2018 was 68.6 percent compared to 67.4 percent reported in the first quarter of 2017.
Commission and other acquisition expenses decreased six percent to $208.6 million in the first quarter of 2018, compared to $222 million in the first quarter of 2017, reducing the commission and other acquisition expense ratio to 30.3 percent from 31.1 percent, respectively. General and administrative expenses for the first quarter of 2018 totalled $20.0 million compared with $17.4 million in the first quarter of 2017 primarily due to higher audit, legal and other professional fees and technology-related expenses. The general and administrative expense ratio in the first quarter of 2018 increased to 2.9 percent compared to 2.4 percent in the first quarter of 2017, while the expense ratio was 33.2 percent in the first quarter of 2018 compared with 33.5 percent in the same quarter last year.
Net investment income was $42.9 million in the first quarter of 2018 compared to $42.2 million in the first quarter of 2017. As of March 31, 2018, the average yield on the fixed income portfolio was 3.18 percent while the average duration of investable assets was 4.7 years.
