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Maiden Holdings (MHLD) Q1 Earnings Rise Y/Y, Revenues Fall

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Maiden Holdings, Ltd. reported operating income of 4 cents per share for the first quarter of 2020 against loss of 32 cents per share incurred in the year-ago quarter.

Operating revenues were $50 million, down 76.9% year over year due to lower net premiums earned, other insurance revenues and net investment income.

Though the quarter witnessed lower premiums and net investment income, loss experience continues to moderate and the company remaining focused on lowering operating expenses. This led the company to record profit after two years of loss.

Maiden Holdings, Ltd. Price, Consensus and EPS Surprise

Quarter in Detail    

Net premiums written were $10.4 million compared to net premiums written of ($561.5) million in the year-ago quarter.

Net premiums earned decreased 83%, attributable to the combined impact of the terminated quota share contracts within AmTrust Reinsurance segment, non-renewals in Maiden Reinsurance's European Capital Solutions business and a reduction in the German Auto programs produced by the IIS unit within its Diversified Reinsurance segment.

Net investment income decreased 43.9% to $18 million, attributable to 34.4% decline in average investable assets.

Total expenses declined about 83% year over year to $41.7 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 loss adjustment expenses were $131.6 million, flat year over year, largely attributable to the termination of the AmTrust Reinsurance quota share agreements effective Jan 1, 2019.

The company incurred an underwriting loss of $3.7 million, narrower than year-ago quarterly net loss of $42.7 million.

Segment Result

Diversified Reinsurance
: Net premiums earned dropped 50.5% to $12.5 million. Underwriting loss of $0.7 million was narrower than loss of $0.6 million in the prior-year quarter.

AmTrust Reinsurance: Net premiums earned decreased 88.2% to $18.7 million. Underwriting loss was $3 million, narrower than loss of $41.9 million in the year-ago quarter.

Financial Update

Maiden Holdings exited the first quarter with total investment of $1.5 billion, down from $1.7 billion at the end of 2019. Cash and cash equivalents, as of Mar 31, 2020, were $0.2 million, up from $0.1 billion 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 $597.9 million as of Mar 31, 2020, down from $620.7 million as of Dec 31, 2019, reflecting the unamortized deferred gain on retroactive reinsurance of $113.0 million.

As of Mar 31, 2020, book value per share was $1.59, down 53% from 2019-end level.

Operating return on equity was negative 267.6% versus negative 142.5% in the year-ago quarter.

Performance of Other P&C Insurers

Bottom line of Cincinnati Financial (CINF - Free Report) and Allstate Corporation (ALL - Free Report) beat the Zacks Consensus Estimate while that of Travelers Companies (TRV - Free Report) missed the same.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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