Capital management boosts Maiden’s book value – The Royal Gazette
Created: August 11, 2022 07:48
Bermuda-based Maiden Holdings Ltd reported second-quarter net income available to common shareholders of Maiden of $25.8 million.
That compares to a net profit of $26.8 million in the second quarter of 2021.
Non-GAAP operating profit was $16.6 million for the second quarter, compared to non-GAAP operating profit of $13.9 million for the same period in 2021.
Maiden’s book value per common share was $2.62 as of June 30, compared to $2.60 as of December 31, 2021.
Adjusted for the unamortized deferred gain on ceded retroactive reinsurance of $41.4 million as of June 30, the company’s adjusted book value per common share was $3.09 for the six-month period.
Patrick J Haveron and Lawrence F Metz, Co-Chief Executives of Maiden, said: “We were able to opportunistically execute additional capital management measures during the quarter which increased book value per common stock at $2.62 and more than offset the headwinds created by a rising interest rate environment.
“Capital management generated gains of $24.7 million during the period, bringing the total impact of our capital management initiatives to $1.81 per common share since the fourth quarter of 2020.
“Our alternative asset portfolio grew by 11.1% during the first half of 2022 and we continue to identify good opportunities despite more volatile conditions in the financial markets. These markets have resulted in more limited total returns from our portfolio. during the quarter, but aside from investments in hedge funds, our total returns in our alternative portfolio continue to exceed our benchmark cost of debt capital.
“The opportunity pipeline for Genesis Legacy Solutions continues to grow rapidly, which we believe sets the stage for a strong second half of 2022. Our balance sheet as of June 30, 2022 does not reflect $1.27 in tax assets net deferred, which always maintains a full valuation allowance. We believe the necessary performance that will allow us to recognize these tax assets in the future continues to accrue.”
They added: “Operating expenses were down 18.1% year over year as we maintain an efficient operating profile.
“Loss development trends in the quarter were broadly neutral but less favorable compared to the comparable period in 2021.
“The impact on underwriting losses from higher than expected negative premium adjustments in our AmTrust divestiture was significantly more limited during the second quarter, as expected.
“Our book value in the second quarter was also hurt by unrealized losses on our fixed income portfolio of $0.28 per common share as interest rates rose sharply in the second quarter. We were able to offset much of this book value impact through foreign exchange gains as the US dollar continued to appreciate, while maintaining net non-US dollar liabilities.
“With 25.4% of our fixed income investments in floating rate securities, this also helped to mitigate the impact of rising interest rates on our financial statements.”
Patrick Haveron, Co-Chief Executive of Maiden Holdings Ltd (Photograph provided)
Lawrence Metz, Co-Chief Executive of Maiden Holdings Ltd (Photograph provided)