Capital management lifts Maiden’s book value
Bermudian-based Maiden Holdings Ltd has reported second quarter net income available to Maiden common shareholders of $25.8 million.
That compares with net income of $26.8 million in the second quarter of 2021.
Non-GAAP operating earnings were $16.6 million for the second quarter compared with non-GAAP operating earnings of $13.9 million for the same period in 2021.
Maiden's book value per common share was $2.62 at June 30, compared with $2.60 at December 31, 2021.
Adjusted for the unamortised deferred gain on ceded retroactive reinsurance of $41.4 million at June 30, the company's adjusted book value per common share was $3.09 at the half-year mark.
Patrick J Haveron and Lawrence F Metz, Maiden’s co-chief executive officers, said: "We were able to opportunistically execute additional capital management measures during the quarter, which lifted book value per common share to $2.62 and more than offset the headwinds created by a rising interest rate environment.
“Capital management contributed $24.7 million in gains 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 per cent during the first half of 2022 and we continue to identify good opportunities despite more volatile conditions in financial markets. Those markets did result 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 pipeline of opportunities for Genesis Legacy Solutions continues to grow briskly, which we believe sets the stage for a strong second half of 2022. Our balance sheet at June 30, 2022 does not reflect $1.27 in net deferred tax assets, which still maintains a full valuation allowance. We believe the necessary performance that will enable us to recognise these tax assets in the future continues to accumulate."
They added: "Operating expenses were 18.1 per cent lower on a year-over-year basis as we maintain an efficient operating profile.
“Loss development trends during the quarter were largely neutral but were less favourable versus the comparable period in 2021.
“The underwriting loss impact from higher-than-expected negative premium adjustments in our AmTrust cession was significantly more limited during the second quarter, as anticipated.
“Our second quarter book value was also hindered by unrealised losses on our fixed- income portfolio of $0.28 per common share as interest rates rose sharply during the second quarter. We were able to offset much of this impact on book value through foreign currency gains as the US dollar continued to strengthen, as we maintain net non-US dollar liabilities.
“With 25.4 per cent of our fixed-income investments in floating rate securities, this has also helped mitigate the impact of the rise in interest rates on our financial statements."