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.
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.
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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.
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.
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Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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