Maiden posts Q1 net profit of $1.6m

11-05-2022

Maiden posts Q1 net profit of $1.6m

Lawrence Metz and Patrick Haveron, Maiden Holding’s co-CEOs

Maiden Holdings has reported net income available to common shareholders of $1.6 million for the three months ended 31 March 2022 compared with $71.7 million in the first quarter of 2021, which is a 98% decrease.

The most significant items affecting its financial performance during the first quarter included a gain from the repurchase of preference shares of $3.5 million compared to $62.5 million a year earlier. Excluding this gain, the company recorded a net loss of $1.9 million for Q1 2022, compared to a net profit of $9.3 million in Q1 2021. This was largely due to an underwriting loss of $1.7 million in the first quarter of 2022 compared to underwriting income of $1.6 million in the same period of 2021.

Gross written premium in Q1 2022 decreased to a loss of just over $10 million from a loss in Q1 2021 of $2.4 million.

"Positive progress was made during the first quarter across our strategic pillars despite a modest decrease in our book value which was largely the result of the rising interest rate environment. Genesis Legacy Solutions completed multiple transactions during the quarter, growing its base of insurance liabilities to $37.1 million,” Patrick Haveron and Lawrence Metz, Maiden’s co-chief executive officers, said in a statement to accompany the financial results.

“Our alternative asset portfolio grew by an additional 11.1% during the first quarter and produced returns solidly above our benchmark cost of debt capital, and we expect further growth from that portfolio in coming quarters. Capital management had a more limited impact on our first quarter 2022 results but still contributed $3.5 million in gains during the period, bringing the total impact of our capital management initiatives to $1.52 per common share since the fourth quarter of 2020.

“The net favourable trends in the run-off of our former reinsurance liabilities continued but were more than offset by the $5.1 million of underwriting loss impact from higher-than-expected negative premium adjustments in our AmTrust cession. Our first quarter earnings were also hindered by unrealized losses on our fixed income portfolio of $0.26 per common share as interest rates rose sharply during the first quarter. Recurring expenses, while typically higher in the first quarter for discretionary compensation expenses, were 21.0% lower on a year-over-year basis and continue to reflect the positive trends we have experienced as we maintain an efficient operating profile.

"Our balance sheet at March 31, 2022 does not reflect the $1.08 in net deferred tax assets which still maintain a full valuation allowance. We believe the necessary performance that will enable us to recognise these tax assets in the future continues to accumulate."

The Company no longer presents certain non-GAAP measures such as combined ratio and its related components in its news release or its quarterly reports, as it believes that as the run-off of its reinsurance portfolios progresses, such ratios are increasingly not meaningful and of less value to readers as they evaluate our financial results.

Maiden Holdings, financial results

Bermuda Re