Maiden Holdings reports $158m Q4’24 net loss

Maiden Holdings, Ltd. has released its financial results for the fourth quarter of 2024, revealing a net loss of $158.0 million, a stark contrast to the $20.8 million net loss reported for the same period in 2023.

The substantial increase in losses is primarily attributed to a higher underwriting loss of $161.3 million in Q4 2024, compared to $21.1 million in Q4 2023.

This surge is largely due to adverse prior year loss development (PPD) of $129.4 million, up significantly from $22.2 million in the same quarter of the previous year.

Specifically, the AmTrust Reinsurance segment experienced adverse PPD of $123.3 million, while the Diversified Reinsurance segment reported $6.0 million.

Maiden reported in January that it anticipated that it would incur reserve charges of up to $150 million in the fourth quarter of 2024.

Net premiums written for the quarter increased slightly to $7.6 million, driven by growth in the Diversified Reinsurance segment, particularly within its Credit Life programs in Sweden.

However, net premiums written in the AmTrust Reinsurance segment decreased by $0.9 million due to the termination of reinsurance agreements with AmTrust.

Other significant factors contributing to the loss include $24.3 million in charges related to the resolution of disputed uncollected ceded premium balances with AmTrust.

Maiden also reported an adjusted non-GAAP operating loss of $151.9 million in Q4 2024. “which was adjusted to include net realized and unrealized investment losses and an interest in loss of equity method investments which are recurring parts of investment results with the Company’s underwriting activities in run-of.”

Other key highlights reported for Q4 2024 include: the Loss Portfolio Transfer and Adverse Development Cover Agreement (LPT/ADC Agreement).

The firm stated that a portion of the adverse PPD, approximately $42.0 million, is recoverable under the LPT/ADC Agreement with Cavello Bay Reinsurance Limited. The deferred gain on this agreement increased to $105.0 million.

Regarding AmTrust Liabilities, Maiden stated that it is actively pursuing solutions to resolve AmTrust liabilities not covered by the LPT/ADC Agreement, including exploring options with third parties.

Maiden also provided an update regarding its upcoming combination with Kestrel, highlighting its goal to transition to a fee-based insurance platform. The company also announced the divestiture of its IIS platform.

On December 2024, Maiden entered into a combination agreement with the Kestrel Group to form a new, publicly listed specialty program group.

Additionally, Maiden also announced it is reducing its alternative investment portfolio, with completed investments to date achieving an internal rate of return of 8.7%.

As well as the 383,355 common shares repurchase that took place prior to the Kestrel announcement. This program has now been suspended.

Patrick J. Haveron, Maiden’s Chief Executive Officer, acknowledged the challenging year and the impact of the fourth-quarter charges. He emphasised the company’s efforts to stabilise its balance sheet and expressed confidence in the future partnership with Kestrel.

“As 2024 closed, Maiden took decisive steps to set a new path forward while completing a comprehensive review of our reserves and taking additional steps to increase confidence in our balance sheet as we look forward to our combination with Kestrel,” Haveron stated.

Adding: “We believe that Kestrel’s balance sheet light, fee revenue model will enable Maiden to realize our vision of delivering a strong fee-based insurance platform while selectively deploying underwriting capacity to optimize returns for shareholders. Along with our earlier announcement to divest our IIS platform, this transaction provides additional support to the strategic pivot we communicated to our shareholders and the market in 2024.”

He also highlighted the expected recovery of a portion of the PPD through the LPT/ADC Agreement, which will contribute to future GAAP income.

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