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Maiden Holdings (MHLD) Posts Narrower-than-Expected Q4 Loss
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Maiden Holdings, Ltd. (MHLD - Free Report) reported fourth-quarter 2016 loss per share of 81 cents that was narrower than the Zacks Consensus Estimate of a loss of 99 cents. The quarterly loss compared unfavorably with earnings of 34 cents per share in the year-ago quarter.
Though the top line improved, escalating expenses offset the upside and induced the loss in the quarter.
Behind the Headlines
Gross premiums written increased 8.8% year over year to $572.1 million on higher premiums written in Diversified Reinsurance and AmTrust Reinsurance segment.
Net investment income grew nearly 10.9% to $38.6 million.
Total revenue of $629 million climbed 6.2% year over year on higher net premiums earned, and net investment income.
Total expense escalated 24% year over year to $726 million as net loss and loss adjustment expense, commission and other acquisition expenses and general and administrative expenses increased in the quarter.
Maiden Holdings’ underwriting loss of $99.8 million compared unfavorably with an operating profit of $6.2 million in the year-ago quarter. Combined ratio deteriorated 1750 basis points (bps) year over year to 117.4%.
2016 Highlights
The company delivered operating earnings of 22 cents on revenues of $2.7 billion. The top line improved 8%, whereas the bottom line deteriorated 84% on higher expenses.
Maiden Holdings, Ltd. Price, Consensus and EPS Surprise
Diversified Reinsurance: Net premiums earned increased 6.9% to $186 million.
Underwriting loss of $53.3 million was wider than a loss of $6.5 million incurred in the year-ago quarter. Combined ratio deteriorated 2440 bps to 128.3%.
AmTrust Reinsurance: Net premiums earned increased 6.9% to $186 million.
Underwriting loss of $35 million compared unfavorably with $17.2 million earned in the year-ago quarter. Combined ratio deteriorated 1230 bps year over year to 108.1%.
Other: Net premiums earned were $0.4 million in the quarter.
Underwriting loss of $11.5 million was wider than a loss of $4.5 million increased in the year-ago quarter. Combined ratio deteriorated 1750 bps year over year to 117.4%.
Financial Update
Maiden Holdings exited 2016 with total investment of $4.7 billion as against $4.1 billion at year-end 2015. Cash and cash equivalents were $45.7 million as against $89.6 million at year-end 2015.
The company’s senior notes totaled $351.4 million compared with $349.9 million at year-end 2015.
Total equity of $1.4 billion at year-end 2016 increased from $1.3 billion at year-end 2015.
As of Dec 31, 2016, diluted book value per share was $12.12, up 3% year over year.
Operating return on equity was 1.9% in 2016 compared with 12% in 2015.
Among the other players from the same space that have reported their fourth-quarter earnings so far, the bottom line at Progressive Corp. (PGR - Free Report) and The Travelers Companies Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) beat their respective Zacks Consensus Estimate.
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Maiden Holdings (MHLD) Posts Narrower-than-Expected Q4 Loss
Maiden Holdings, Ltd. (MHLD - Free Report) reported fourth-quarter 2016 loss per share of 81 cents that was narrower than the Zacks Consensus Estimate of a loss of 99 cents. The quarterly loss compared unfavorably with earnings of 34 cents per share in the year-ago quarter.
Though the top line improved, escalating expenses offset the upside and induced the loss in the quarter.
Behind the Headlines
Gross premiums written increased 8.8% year over year to $572.1 million on higher premiums written in Diversified Reinsurance and AmTrust Reinsurance segment.
Net investment income grew nearly 10.9% to $38.6 million.
Total revenue of $629 million climbed 6.2% year over year on higher net premiums earned, and net investment income.
Total expense escalated 24% year over year to $726 million as net loss and loss adjustment expense, commission and other acquisition expenses and general and administrative expenses increased in the quarter.
Maiden Holdings’ underwriting loss of $99.8 million compared unfavorably with an operating profit of $6.2 million in the year-ago quarter. Combined ratio deteriorated 1750 basis points (bps) year over year to 117.4%.
2016 Highlights
The company delivered operating earnings of 22 cents on revenues of $2.7 billion. The top line improved 8%, whereas the bottom line deteriorated 84% on higher expenses.
Maiden Holdings, Ltd. Price, Consensus and EPS Surprise
Maiden Holdings, Ltd. Price, Consensus and EPS Surprise | Maiden Holdings, Ltd. Quote
Segment Result
Diversified Reinsurance: Net premiums earned increased 6.9% to $186 million.
Underwriting loss of $53.3 million was wider than a loss of $6.5 million incurred in the year-ago quarter. Combined ratio deteriorated 2440 bps to 128.3%.
AmTrust Reinsurance: Net premiums earned increased 6.9% to $186 million.
Underwriting loss of $35 million compared unfavorably with $17.2 million earned in the year-ago quarter. Combined ratio deteriorated 1230 bps year over year to 108.1%.
Other: Net premiums earned were $0.4 million in the quarter.
Underwriting loss of $11.5 million was wider than a loss of $4.5 million increased in the year-ago quarter. Combined ratio deteriorated 1750 bps year over year to 117.4%.
Financial Update
Maiden Holdings exited 2016 with total investment of $4.7 billion as against $4.1 billion at year-end 2015. Cash and cash equivalents were $45.7 million as against $89.6 million at year-end 2015.
The company’s senior notes totaled $351.4 million compared with $349.9 million at year-end 2015.
Total equity of $1.4 billion at year-end 2016 increased from $1.3 billion at year-end 2015.
As of Dec 31, 2016, diluted book value per share was $12.12, up 3% year over year.
Operating return on equity was 1.9% in 2016 compared with 12% in 2015.
Zacks Rank
Maiden Holdings presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other P&C Insurers
Among the other players from the same space that have reported their fourth-quarter earnings so far, the bottom line at Progressive Corp. (PGR - Free Report) and The Travelers Companies Inc. (TRV - Free Report) and RLI Corp. (RLI - Free Report) beat their respective Zacks Consensus Estimate.
A Full-Blown Technological Breakthrough in the Making
Zacks’ Aggressive Growth Strategist Brian Bolan explores autonomous cars in our latest Special Report, Driverless Cars: Your Roadmap to Mega-Profits Today. In addition to who will be selling them and how the auto industry will be impacted, Brian reveals 8 stocks with tremendous gain potential to feed off this phenomenon. Click to see the stocks right now >>