Maiden Holdings Ltd (MHLD, Financial) has released its earnings report for the third quarter of 2023, revealing a mixed financial performance with challenges in underwriting offset by stronger investment results. The filing date for the report was November 8, 2023.
Financial Performance Overview
The company reported an adjusted book value of $3.16 per share as of September 30, 2023, which represents a decrease of $0.06 per common share, primarily due to a net loss available to Maiden common shareholders of $3.5 million in Q3 2023. The reported book value per common share was $2.60 as of the same date. The GAAP net loss available to common shareholders was $3.5 million or $0.03 per share, with stronger investment results being offset by a higher underwriting loss.
Investment and Underwriting Results
Investment results were notably higher, with a 145% increase in Q3 2023 compared to Q3 2022, mainly due to increases in interest income from higher yielding floating rate investments. Income from equity method investments of the alternative asset portfolio was $2.2 million in Q3 2023. However, underwriting losses remained a concern, with a $10.9 million loss in Q3 2023, and adverse prior year loss development of $7.8 million from both segments in the same quarter. The bulk of this adverse development for Q3 2023 came from AmTrust Hospital Liability, which is not covered by Enstar LPT/ADC.
Strategic Focus and Asset Management
Maiden Holdings Ltd (MHLD, Financial) continues to focus on asset management, legacy underwriting, and capital management as part of its business strategy. The company's alternative portfolio increased by 8.4% during Q3 2023, reflecting a focus on assets producing current income. Despite market volatility, alternative assets remain on track to exceed benchmark returns, although it is still early to assess performance for many fund investments.
Capital Management and Share Repurchases
In terms of capital management, Maiden Holdings Ltd (MHLD, Financial) has continued to be active and disciplined. The company's subsidiary, Maiden Reinsurance Ltd. ("MRL"), repurchased 520,475 common shares in the open market at an average price of $1.86 per share during Q3 2023. Following the end of the quarter, an additional 226,250 common shares were repurchased at an average price of $1.67 per share.
Looking Ahead
While the company maintains a full valuation allowance on the U.S. deferred tax asset of $1.20 per share as of September 30, 2023, the focus on current income-producing assets aims to offset continuing reserve development. Maiden Holdings Ltd (MHLD, Financial) is also exploring expanding activities in insurance distribution, supplemented by deploying limited reinsurance capacity, as part of its strategy to develop more predictable areas of revenue and profit.
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Explore the complete 8-K earnings release (here) from Maiden Holdings Ltd for further details.
