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Maiden Holdings (MHLD) Q1 Earnings Rise, Revenues Drop Y/Y

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Maiden Holdings, Ltd. MHLD reported operating income of 55 cents per share for the first quarter of 2021, which increased nearly 14-fold from the year-ago earnings of 4 cents per share.

The quarter witnessed underwriting profit, rebounding from the year-ago loss as well as decline in expenses. However, premiums as well as investment income decreased in the reported quarter.

Revenues were $22 million, down 56% year over year due to lower net premiums earned, other insurance revenues and net investment income.

Quarter in Detail 

Net premiums written were negative $2.7 million compared with net premiums written of $10.4 million in the year-ago quarter.

Net premiums earned decreased 62.3%, attributable to the combined impact of the terminated quota share contracts within the AmTrust Reinsurance segment and the Diversified Reinsurance segment due to run-off of the German Auto programs produced by itsIIS unit.

Net investment income decreased 45.2% to $9.8 million, attributable to 21.4% decline in average investable assets.

Total expenses declined 46.4% year over year to $22.3 million, driven by lower net loss and loss adjustment expenses, commission costs, and other acquisition costs.

Net loss and LAE decreased $18.7 million during the reported quarter, largely due to net favorable prior year reserve development of $5.6 million in the reported quarter compared to net favorable prior year reserve development of $0.5 million during the year-ago quarter.

The company incurred an underwriting income of $1.6 million, rebounding from the year-ago loss of $3.7 million.

Segment Result

Diversified Reinsurance: Net premiums earned plunged 50.2% to $6.2 million attributable to return of unearned premiums written in its German Auto quota share reinsurance contract, which went into run-off on Jan 1, 2021. Underwriting loss of $0.2 million was narrower than loss of $0.7 million in the prior-year quarter.

AmTrust Reinsurance: Net premiums earned were $5.5 million, down 70.4%  year over year attributable to premium adjustments. Underwriting income was $1.8 million, marking a rebound from the year-ago quarter loss of $3 million.

Financial Update

Maiden Holdings exited the first quarter with total investment of $1.1 billion, down from $1.3 billion at the end of 2020. Cash and cash equivalents, as of Mar 31, 2021, were $78.1 million, up from $74 million at the end of 2020.

The company’s net senior notes, net, totaled $255.2 million, which remained almost flat compared with the 2020 level.

Adjusted shareholders' equity was $491.7 million as of Mar 31, 2021, down from $602.8 million as of Dec 31, 2020.

As of Mar 31, 2021, book value per share was $2.29, up 45.9% from 2020-end level.

Annualized return on equity was 175.7%, down from 267.6% in the year-ago quarter.

Q1 Performance of Other P&C Insurers

Of the insurance industry players that have reported first-quarter results so far, The Travelers Companies TRV, W.R. Berkley Corporation WRB and RLI Corporation’s RLI earnings beat the Zacks Consensus Estimate.

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