Maiden returns to profitability in 2020
Maiden Group returned to profit in 2020 as its joint CEOs praised its efforts in turning the business around and commitment to using both its pillars of asset and capital management strategy.
Its net income for 2020 was $80 million compared to a net loss of $131.9 million for 2019.
It said the improvement in its results was mainly due to an improvement in its underwriting, which made a $17 million profit compared with a $184 million loss in 2019, and favorable prior year loss development of $16.5 million compared to adverse prior year loss development of $112.5 million during 2019 incurred primarily within the AmTrust Reinsurance segment. These positive factors were partly offset but lower investment income and lower realised gains on investments.
Its net premiums written for the year ended December 31, 2020 were $28.4 million compared to negative written premiums of $(531.9) million for 2019. Premiums written in the Diversified Reinsurance segment decreased by $11.9 million or 24.2 percent for the year ended December 31, 2020 compared to 2019 due to lower premiums written in German Auto programs in the IIS business. There were no new written premiums in its AmTrust Reinsurance segment due to the termination of the AmTrust quota share agreements effective January 1, 2019.
For the fourth quarter alone, it posted a net income of $47.7 million compared to a net loss of $21.5 million in the fourth quarter of 2019.
Lawrence Metz, Maiden's president and co-CEO said, "We are pleased to report the completion of a full year of profitability in 2020 with our fourth quarter results, with continued modestly favorable loss development during the quarter and positive investment results from our evolving alternative investment portfolio. We are grateful for our dedicated team's contributions to our 2020 results.
“We also continue to experience immaterial effects from the COVID-19 pandemic. The results of the partial tender of our preference shares during the fourth quarter contributed to the increase in book value at December 31, 2020, which has more than tripled in the last year. Our newly formed Genesis Legacy Solutions platform is beginning to build its pipeline and we look forward to seeing its contributions to Maiden's results in 2021 and beyond."
Patrick Haveron, Maiden's co-CEO and chief financial officer, added: "Maiden finished 2020 fully utilizing both pillars of our asset and capital management strategy. The fourth quarter tender for our preference shares achieved its goals by creating value for both common and preference shareholders. We also continued to find productive opportunities in our asset management pillar across private equity and other investments that we believe will produce both current income and gains in future periods, and we continue to see additional opportunities in the early part of 2021.
“The run-off of our insurance liabilities continues in line with our expectations and 2020 produced overall favorable development. These positive indicators are tempered by the knowledge that certain longer-tail segments still require further seasoning. As our run-off continues, it is critical to continue to build risk-adjusted investment income and gains to enable Maiden to utilize the potentially significant tax assets it has available. While we enter 2021 focused on both pillars, we remain careful to approach these strategies in a deliberate fashion, as we build Maiden's value for the future. During the first quarter of 2021 we opportunistically advanced our capital management pillar in a meaningful way as these strategies are delivering increasing value to Maiden's shareholders, and we believe they will continue to do so over the longer-term."
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