AmTrust Reinsurance widens Maiden’s Q4 loss

The performance of Maiden’s AmTrust Reinsurance segment deteriorated in the fourth quarter 2017 and full year, impacting Maiden’s financial performance.

Bermuda-based Maiden Holdings reported a fourth quarter 2017 net loss of $133.6 million compared to a net loss of $74.7 million in the same period of 2016.

"While we are disappointed with our results for the fourth quarter, we believe we have taken significant steps to strengthen our reserves for losses which will help to accelerate a return to profitability in 2018 and beyond," said Maiden CEO Art Raschbaum. "Our reserve actions in the fourth quarter reflect a more aggressive response to observed development in the quarter and throughout the year on the AmTrust Reinsurance segment as well as our Diversified segment."

The combined ratio of the AmTrust Reinsurance segment deteriorated to 131.1 percent in the fourth quarter of 2017 from 108.1 percent in the same period of 2016. The segment experienced adverse loss development of $139.0 million due primarily to workers' compensation and general liability lines of business and, to a lesser extent, commercial auto liability.

AmTrust Reinsurance produced an underwriting loss of $142.6 million in the fourth quarter of 2017 compared to a negative $35.0 million in the same period of 2016.

Gross premiums written at AmTrust Reinsurance increased slightly by 0.7 percent year on year to $417.8 million in the fourth quarter of 2017. The lower growth is attributed to AmTrust underwriting actions. Net premiums written increased by 6.7 percent year on year to $458.8 million due to reduced usage of retrocession.

At the same time, Maiden’s Diversified Reinsurance Segment improved its combined ratio to 108.7 percent in the fourth quarter of 2017 from 128.3 percent in the same period of 2016. The underwriting loss shrank to $17.6 million from $53.3 million over the period. Gross premiums written shrank 11.5 percent year on year to $138.9 million over the period. Gross premiums written and net premiums written at the Diversified Reinsurance Segment decreased in the fourth quarter of 2017 primarily as a result of commutations and non-renewals earlier in the year. The segment experienced adverse loss development in 2017 of $31.9 million due to higher than expected loss emergence emanating largely from two commercial auto contracts.

In the full year of 2017, the AmTrust Reinsurance segment produced a combined ratio of 110.8 percent compared to 98.4 percent in 2016. At the same time, the Diversified Reinsurance Segment improved the combined ratio to 107.1 percent from 109.4 percent.

For the full year of 2017, Maiden reported a net loss of $199.1 million compared to a net income of $15.2 million in 2016. Gross premiums written totalled $2.8 billion, relatively unchanged compared to 2016. The combined ratio for 2017 was 111.3 percent, an increase from the 103.2 percent combined ratio reported for 2016.

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