Maiden Holdings has reported a $10.0 million net loss for the second quarter of 2024, compared to a net loss of $2.9 million from the second quarter of 2023.
At the same time, the firm posted an underwriting loss of $9.8 million for Q2’24, compared to a $9.3 million underwriting loss during the same quarter in 2023.
Maiden Holdings explained that this quarter’s underwriting loss was influenced by an adverse PPD of $6.8 million, compared to an adverse PPD of $4.5 million seen during Q2’23.
Meanwhile, net premiums written (NPW) sat at $8.3 million for the quarter, an increase from $6.9 million from last year, while NPW in the firm’s Diversified Reinsurance segment increased by $1.7 million or 26.0% for Q2’24, compared to Q2’23, which Maiden Holdings noted was due to growth seen in direct premiums for Credit Life programs written by wholly owned Swedish subsidiaries Maiden LF and Maiden GF.
Maiden Holdings also confirmed that net premiums earned increased by $1.0 million to reach $12.0 million for Q2’24, which the company noted was due to higher earned premiums within its Diversified Reinsurance segment driven by growth in Credit Life programs written by both Maiden LF and Maiden GF.
The company’s net investment income fell $3.6 million, or 33.9% to $6.9 million for the quarter, compared to the $10.5 million figure the firm posted in the prior year quarter.
Patrick J. Haveron, Maiden’s Chief Executive Officer commented: “Despite the contributions of continuing positive investment results which moderated somewhat during the second quarter, and the stabilizing effects of our LPT/ADC Agreement, adjusted book value, which we believe represents Maiden’s true economic value, fell slightly during the quarter.
“Our active pursuit to strategically build a more consistent base of revenue and profits through fee-based income and distribution channels in the insurance and reinsurance industry remains a high priority for Maiden. Leveraging our
experience in insurance and reinsurance markets, these paths should further enable us to ultimately recognize and realize the significant deferred tax asset we have. As a result, we have not made any new commitments to alternative investment opportunities.”
He continued: “While our GAAP income statement continues to be impacted by adverse loss development, it’s important to reinforce the point that much of this volatility is expected to be temporary as a significant portion is expected to be covered by our LPT/ADC Agreement with Cavello. Approximately $5.6 million or 83% and $10.6 million or 80% of the total reported adverse PPD for the three and six months ended June 30, 2024, respectively, is expected to be covered by the LPT/ADC Agreement and is expected to ultimately return over time to Maiden as future GAAP income, subject to certain thresholds in the LPT/ADC Agreement and the applicable GAAP accounting rules. Our expectation that we will meet the thresholds to begin recoveries under the LPT/ADC Agreement in the fourth quarter of 2024 remains unchanged.
“As the benefits of the LPT/ADC Agreement begin to be amortized though our GAAP income statement, it reinforces why adjusted book value, which includes the $78.2 million deferred gain presently on the balance sheet, is a key metric in evaluating Maiden’s value. It’s also worth noting that under the provisions of the LPT/ADC Agreement, we still have an additional $76.8 million in available limit to absorb subject loss development should it occur in the future.”
He concluded: “As noted, Maiden’s consolidated balance sheet at June 30, 2024 does not reflect $119.2 million or $1.19 per common share in net U.S. deferred tax assets which still maintains a full valuation allowance. Of the $338.2 million in net operating loss carryforwards that we hold, approximately $152.0 million or 44.9% of these loss carryforwards have no expiry date. Despite the recent adverse reserve development which has delayed the timing related to ultimately recognizing this asset, we believe the factors that will enable us to ultimately recognize these tax assets in the future, including our current strategic initiatives, continues to accumulate, particularly with our asset portfolio producing more current income.
“Finally, during the second quarter via a 10b-5 trading plan implemented prior to June 30, 2024, we continued our long-term capital management strategy and repurchased 747,561 common shares at an average price per share of $2.13 under our share repurchase plan. We expect to continue a disciplined and prudent approach to share repurchases as part of this program, particularly in periods of share weakness relative to our book value.”
