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Maiden Holdings (MHLD) Reports Q2 Earnings, Revenues Fall Y/Y

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Maiden Holdings, Ltd. (MHLD - Free Report) reported operating income of 1 cent per share for the second quarter of 2020 against loss of 26 cents per share incurred in the year-ago quarter.

The quarter marked the second consecutive quarter of profit as the loss experience continued to stabilize. The company remains focused on expense management to ensure improved profitability.

Revenues were $44.7 million, down 76.4% year over year due to lower net premiums earned, other insurance revenues and net investment income.

Maiden Holdings, Ltd. Price, Consensus and EPS Surprise

Maiden Holdings, Ltd. Price, Consensus and EPS Surprise

Maiden Holdings, Ltd. price-consensus-eps-surprise-chart | Maiden Holdings, Ltd. Quote

Quarter in Detail   

Net premiums written were $4.1 million compared with net premiums written of ($0.4 million) in the year-ago quarter.

Net premiums earned decreased 84%, attributable to combined impact of the terminated quota share contracts within the AmTrust Reinsurance segment, non-renewals in Maiden Reinsurance's European Capital Solutions business and a reduction in the German Auto programs produced by IIS business.

Net investment income decreased 54% to $14.3 million, attributable to 38% decline in average investable assets.

Total expenses declined about 84.5% year over year to $28.4 million, driven by lower net loss and loss adjustment expenses, commission costs, and other acquisition costs as well as general and administrative expenses.

Net loss and LAE decreased $110.6 million during the quarter, largely due to the termination of the AmTrust Reinsurance quota share agreements effective Jan 1, 2019.

The company incurred an underwriting loss of $0.2 million, narrower than year-ago quarterly net loss of $39.1 million.

Segment Result

Diversified Reinsurance: Net premiums earned plunged 84.1% to $11.5 million attributable to lower premiums written in German Auto programs within IIS business. Underwriting loss of $0.4 million was narrower than loss of $0.5 million in the prior-year quarter.

AmTrust Reinsurance: Net premiums earned were $9.8 million, down from $111.5 million in the year-ago quarter. Underwriting income was $0.4 million, marking a rebound from the year-ago quarter loss of $39.6 million.

Financial Update

Maiden Holdings exited the second quarter with total investment of $1.5 billion, down from $1.9 billion at the end of 2019. Cash and cash equivalents, as of Jun 30, 2020, were $56.6 million, up from $48.2 million from the end of 2019.

The company’s net senior notes totaled $255 million, which remained almost flat compared with the 2019 level.

Adjusted shareholders' equity was $530.7 million as of Jun 30, 2020, down from $507.7 million as of Dec 31, 2019.

As of Jun 30, 2020, book value per share was $2.09, up 11.8% from 2019-end level.

Operating return on equity was 86.4% versus negative 50.5% in the year-ago quarter.

Q2 Performance of Other P&C Insurers

The bottom line at Cincinnati Financial (CINF - Free Report) , Progressive Corporation (PGR - Free Report) and Allstate Corporation (ALL - Free Report) beat the respective Zacks Consensus Estimate.

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