Maiden posts $36.6m net loss in Q1 following termination of AmTrust deals

13-05-2019

Bermuda reinsurer Maiden Holdings had a challenging start to 2019 following the termination of quota share contracts with AmTrust Reinsurance and the non-renewal of certain large European deals.

Maiden reported a first quarter 2019 net loss of $36.6 million, compared with a net income of $13.7 million for the same period in 2018.

The Bermuda reinsurer’s combined ratio in the first quarter was 129.6 percent compared with 102.9 percent year-on-year.

Gross written premiums in the quarter were a negative $561.1 million, compared with $623.3 million in Q1 2018, due to the termination of two quota share contracts in its AmTrust Reinsurance segment and the return of unearned premiums on certain lines covered by its Partial Termination Agreement with AmTrust. Both terminations were effective January 1, 2019.

Maiden initiated a strategic review of its operations in 2018 to de-risk its balance sheet, improve liquidity and create lasting shareholder value. 

In 2018, the company divested its US reinsurance treaty operations to Transatlantic Holdings; and sold its US facultative business including its team of specialists to Japan-based Sompo Group.

In addition, Maiden sold its North America reinsurance business to Enstar Group for initial net consideration of $272.4 million. At closing, Enstar assumed approximately $1.3 billion of net loss and loss adjustment expense reserves and unearned premium reserves.

Earlier in March 2018, the company announced that Enstar has terminated its $2.68 billion loss portfolio transfer (LPT) deal with Maiden, and replaced it with a new $675 million adverse development cover (ADC). Under the new deal, an Enstar subsidiary will enter into an adverse development cover reinsurance agreement with respect to Maiden Re’s quota share reinsurance contracts with AmTrust Financial Services and its subsidiaries, for losses incurred on or prior to December 31, 2018 in excess of a $2.44 billion retention.

At the end of 2018, Maiden Re terminated its existing quota share agreement with AmTrust covering small commercial business in favour of a new deal with Swiss Reinsurance America.

Maiden Holdings, AmTrust, Results, Bermuda

Bermuda Re