Maiden returns to profit in Q3 2020, commences tender offer to purchase preference shares
Maiden Holdings reported a third quarter of 2020 net profit of $2.2 million, compared to a net loss of $58.3 million in the third quarter of 2019.
In the first nine months of 2020 Maiden reported a net profit of $32.2 million, compared to a loss of $110.4 million for the first nine months of 2019.
Gross written premiums were $3.5 million for Q3 2020, compared to $35.8 million for the same period in 2019. For the first nine months of 2020 Maiden generated gross written premiums of $20.2 million, compared to negative 523.2 million for the first nine months of 2019.
Maiden does not report its combined ratio, arguing that “as the run-off of its reinsurance portfolios progresses, such ratios are increasingly not meaningful.”
Lawrence Metz, Maiden’s president and co-chief executive officer attributed Maiden’s return to profitability to increasing stability in its loss experience.
“On a net basis we reported net favorable loss development for the quarter, and these ongoing improvements have enabled us to continue to extend our strategic vision in both the asset and capital management pillars previously articulated,” said Metz.
Patrick Haveron, Maiden’s co-chief executive officer and chief financial officer, added: "Our active portfolio management enabled us to capture realised investment gains in conjunction with expected settlement of our run-off insurance liabilities. While there is no guarantee that recent loss development trends will persist, with multiple successive quarters of stabilisation, we are encouraged by them, although a prudent assessment dictates that the run-off portfolio still requires additional maturity to fully emerge."
Maiden said it will commence a cash tender offer to purchase via its subsidiary Maiden Reinsurance its 8.250 percent non-cumulative series A preference shares, its 7.125 percent non-cumulative series C preference shares and its 6.700 percent non-cumulative series D preference shares. The consideration for each series of preference share will equal $10.50.
Metz said the tender offer “will offer those shareholders a liquidity opportunity while enhancing Maiden's value to common shareholders. Over the long-term, we believe this blended approach will enable Maiden to build value while retaining options to participate in the re/insurance marketplace, though our present assessment remains that active re/insurance underwriting is likely to present more limited opportunities.”
