Maiden sells off some US renewal rights
Maiden Holdings Ltd has sold the renewal rights for its US treaty reinsurance business to American reinsurer Transatlantic Re.
The Bermudian reinsurer said it was also in advanced talks to sell its US subsidiary Maiden Reinsurance North America.
Maiden, whose head office is in Ideation House on Pitts Bay Road, has been undergoing a strategic review of operations in recent months.
“The transaction, which has now closed, does not include any of the Bermuda underwriting elements of Maiden’s portfolio including its AmTrust Business or its International Insurance Services and Capital Solutions businesses in Europe, which forms the significant majority of Maiden’s existing business and will remain as part of its ongoing business,” the company stated.
Maiden added that the sale of the renewal rights “begins the process of simplifying Maiden’s operations”. The company said anticipated restructuring and related expense reductions are expected to improve its business performance and profitability, as well as significantly reducing the amount of capital that Maiden needs for its operations.
As part of the transaction, TransRe said it was taking on a team from Maiden Reinsurance North America, including Tom Highet, previously the company’s president, as well as underwriters, actuaries and claims personnel. The team will operate from new offices in Mt Laurel, New Jersey.
Mr Highet, who was with Maiden Re and its predecessor GMAC Re for 30 years, has been appointed executive vice-president.
TransRe said the renewal rights focused on regional property and casualty, accident and health, and personal auto insurers.
Maiden added that it is “in advanced discussions regarding the sale of its wholly-owned subsidiary, Maiden Reinsurance North America, Inc to a third party”. The transaction would cover about $1.1 billion of loss and loss-adjustment expense reserves as of June 30, 2018.
Earlier this month, the company’s shares fell more than 40 per cent in a single day, after Maiden announced an unexpected second-quarter loss and the retirement of its longstanding chief executive officer Art Raschbaum.
Lawrence Metz, who succeeded Mr Raschbaum as CEO, said: “The announcement of this transaction represents an important step in Maiden’s continuing strategic review process and we believe this transaction will increase our financial flexibility, improve our operating efficiency and profitability and broaden our ability to allocate capital to future strategies, which in turn will create value for our shareholders.
“We are deeply grateful to the Maiden team for their continued efforts in this challenging environment and, prospectively, we will coordinate closely with clients to ensure a smooth transition.”
Maiden’s shares closed at $3.95, down by ten cents or 2.5 per cent, in Nasdaq Stock Exchange trading today.
Burt: we can’t sweep racism under the rug
Flood of inquiries about pension withdrawals
Finding a new life away from abuse
Crisis in Hong Kong could be to our benefit
Somersfield projects messages of hope
I can’t breathe ...
A friendship that has stood the test of time
Law change could save businesses and jobs
Trump appointee sparks US Consulate protest
Digicel opens doors in new location
Prolonged failure to fix pension problems
Electricity consumption level plummets
Putting fun into the coronavirus fight
Take Our Poll
- "Views on schools reopening for 2019-20 year during coronavirus pandemic"
- All schools to reopen once cleared
- Older students only
- Older students but for exams only
- Remote learning only
- Total Votes: 4058
- Poll Archive