Maiden reveals huge loss and Enstar deal

  • Restructuring: Maiden Holdings announced a loss portfolio transfer deal with Enstar

    Restructuring: Maiden Holdings announced a loss portfolio transfer deal with Enstar


Shares of Bermudian reinsurer Maiden Holdings plummeted 31.8 per cent yesterday, after the company announced a hefty third-quarter loss when analysts had forecast a profit.

The company also continued its ongoing restructuring by striking a loss portfolio transfer deal with fellow Bermudian company Enstar Group.

Maiden’s shares fell $1.12 to $2.41 on New York’s Nasdaq Stock Exchange after it announced a net loss of $308.8 million.

The operating loss was $235.1 million, or $2.83 per share, compared to analysts’ consensus expectation of an 18 cents per share operating profit.

Maiden’s combined ratio was 150.7 per cent, meaning that it paid out about $1.50 in claims and expenses for every $1 of premium it took in.

Under the deal with Enstar, which specialises in acquiring and managing businesses and portfolios in run-off, Enstar will assume loss reserves of approximately $2.675 billion associated with Maiden Re’s quota share reinsurance contracts with AmTrust Financial Services.

The retrocession will apply to losses arising and claims made on or prior to June 30, 2018; loss reserves assumed will be subject to adjustment for paid losses since such date.

The transaction is subject to regulatory approvals and other closing conditions.

In August, Maiden agreed to sell subsidiary Maiden Reinsurance North America to Enstar for $307.5 million.

This year, Maiden has also sold its US casualty facultative reinsurance team to Sompo International and struck a renewal rights agreement with Transatlantic Re for net proceeds of $7.5 million.

Lawrence Metz, Maiden’s chief executive officer, said: “While there is still work to do, we believe that much has been accomplished, and we remain committed to completing our strategic review process and to taking the actions necessary to further enhance value to all our shareholders.”

Patrick Haveron, Maiden’s chief financial officer, said: “During the third quarter, we also took the opportunity to materially strengthen our carried loss reserves and position Maiden for profitable future results.

“Our announcement today with Enstar brings additional certainty and finality to the steps we have taken. Upon completion of all of the strategic transactions announced since August, Maiden’s capital position will be dramatically stronger.

He added: “We anticipate an improved outlook for Maiden as 2018 heads to its final quarter and into 2019.”

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Published Nov 13, 2018 at 8:00 am (Updated Nov 13, 2018 at 12:02 am)

Maiden reveals huge loss and Enstar deal

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