Maiden Holdings has announced that its 2016 results were substantially down on the previous year after it was hit by a $120 million reserve charge.
The company reported net income for full year 2016 of $15.2 million, down 85 percent on the $100.1 million it made over the course of 2015.
The company blamed the fall on a reserve charge of $120.4 million in its fourth quarter 2016 results, which it says was primarily derived from the commercial auto line of business in both of its reported operating segments. The charge includes both a provision for adverse development realised during the fourth quarter, as well as a more conservative view of the ultimate exposures on commercial auto liability throughout the portfolio.
Maiden’s results were mixed ones in other areas. The company’s gross written premiums for the year came to $2.8 billion, an increase of 6.3 percent on the previous year, and the company also reported investment income of $145.9 million, an increase of 11.3 percent year on year. However, it also reported that its combined ratio had weakened from 99.3 percent in 2015 to 103.2 percent in 2016.
"Despite the significant challenges presented in the commercial auto business, we reported a modest profit for the year and have continued to grow our business and investable assets while strengthening investment income," said Art Raschbaum, Maiden’s CEO. "We remain focused on improving the profitability of our business and believe the fourth quarter reserve charge will help us to stabilise underwriting performance as we enter 2017. Importantly, our 2016 underwriting year expected loss ratios reflect solid profitability.
"While the market remains competitive, we were able to expand our business in 2016 by leveraging our strong franchise and value-added products and services. We believe our prospects for continued disciplined growth are strong. Additionally, we are in an excellent position to improve our cost of capital, and will explore opportunities to refinance our existing indebtedness in 2017 at an improved rate."
Maiden Holdings, Results 2016, Art Raschbaum, Bermuda