Maiden CEO 'pleased' to return to quarterly profit after two years despite COVID-19

Re/insurer Maiden Holdings revealed its first profit since the first quarter of 2018, driven by investment gains and reduced operating expenses after the re-domestication of Maiden Reinsurance from Bermuda to Vermont. The company's chief executive is "pleased" to have completed the first quarter of 2020 on a strong note despite the ongoing COVID-19 pandemic.

Maiden reported a net profit of $20.9 million in Q1 2020, compared with a net loss of $36.6 million in the first quarter of 2019.

The gross written premiums were $11.7 million in the period. In Q1 2019, it reported a loss of $561.1 million due to its partial termination amendment which resulted in Maiden Reinsurance returning approximately $648 million in unearned premium to AmTrust International Insurance.

The company said that it was no longer publishing its combined ratio as it believes that "such ratios are increasingly not meaningful and of less value" as the run-off of its reinsurance portfolios progresses.

Maiden's book value on both a GAAP and non-GAAP basis was adversely affected by $44.1 million in unrealized losses on fixed income investments during the first quarter 2020, largely the result of elevated volatility in the financial markets brought about by the global COVID-19 pandemic.

"We are pleased to report our first quarterly profit in two years," said Lawrence Metz, Maiden’s president and co-chief executive officer. "As our loss experience continues to moderate and we continue to reduce our operating expenses, we remain focused on sustaining and increasing Maiden’s profitability.

"We are fortunate in these turbulent times that the application of government restrictions in the United States, Bermuda and Europe have not substantially affected our operations. We believe that we have immaterial exposure to claims from the COVID-19 pandemic, and we have taken all necessary actions to ensure the safety and security of our employees as our contingency plans have allowed us to operate effectively in a virtual environment."

Patrick Haveron, Maiden’s co-chief executive officer and chief financial officer, added: "We are pleased to have completed our first quarter on a strong note after the re-domestication of Maiden Reinsurance Ltd. from Bermuda to Vermont. We were able to capture realized investment gains ahead of the market volatility in March which both contributed to the strong quarterly result and reduced the impact to book value from COVID-19 related market volatility.

"Prior year loss experience was benign during the first quarter and while the loss development of our run-off portfolio will require further maturity to fully emerge, recent trends have been less adverse, although there is no guarantee these trends will persist. We remain comfortable that the amount of limit available in our LPT/ADC with Enstar is sufficient and with nearly $2.6 billion in investable assets and a strong capital position now restored, we are working to identify strategies to deploy those assets and capital to create value for our shareholders.”