Maiden posts Q2 net profit of $25.8m

11-08-2022

Maiden posts Q2 net profit of $25.8m

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Maiden Holdings recorded a net profit available to common shareholders of $25.8 million in the second quarter, slightly down on the $26.8 million for Q2 2021. The first-half profit was $27.3 million, compared with a profit of $98.6 million in the prior year period.

Gross written premium (GWP) for Q2 was more than $3.3 billion, which comprised a profit of $6.1 billion for Diversified Reinsurance and a loss of $2.8 billion for AM Trust Reinsurance.

For comparison, the GWP figures for Q2 2021 were $3.4 billion, comprising a profit of $5.2 billion for Diversified Reinsurance and a loss of $1.8 billion for AM Trust Reinsurance.

The company no longer presents certain non-GAAP measures such as combined ratio 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 its financial results.

The most significant items affecting Maiden’s financial performance during the second quarter of 2022 on a comparative basis to the second quarter of 2021 included: a gain from the repurchase of preference shares of $24.7 million for the three months ended 30 June, 2022 compared to $18.7 million in the same period in 2021; and, excluding the gain from the repurchase of its preference shares, net income was $1.1 million for Q2 2022 compared to a net income of $8.1 million for the same period in 2021.

The decrease in its results was partially offset by: corporate general and administrative expenses decreasing to $3 million for Q2 2022, compared to $5.1 million for the same period in 2021, due to lower salary compensation associated with headcount reductions; and by foreign exchange and other gains that increased to $6.6 million during the second quarter, compared to foreign exchange and other losses of $1.6 million for the same period in 2021.

Patrick Haveron and Lawrence Metz, Maiden’s co-chief executive officers said: "Operating expenses were 18.1% lower on a year-over-year basis as we maintain an efficient operating profile. Loss development trends during the quarter were largely neutral but were less favourable versus the comparable period in 2021.

“The underwriting loss impact from higher-than-expected negative premium adjustments in our AmTrust cession was significantly more limited during the second quarter, as anticipated.

“Our second quarter book value was also hindered by unrealised losses on our fixed income portfolio of $0.28 per common share as interest rates rose sharply during the second quarter.

"We were able to offset much of this impact on book value through foreign currency gains as the US dollar continued to strengthen, as we maintain net non-US dollar liabilities. With 25.4% of our fixed income investments in floating rate securities, this has also helped mitigate the impact of the rise in interest rates on our financial statements."

Maiden Holdings, earnings

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