Profits fall at Maiden but reinsurance grows
Profits at Maiden Holdings fell substantially in the first quarter thanks to a one-off charge for redeeming some subordinated debt but it otherwise posted a strong operating result and its reinsurance unit saw solid growth.
The company made a net profit of $2.1 million in the first quarter compared with $28.1 million a year earlier. This was because of a non-recurring non-cash charge of $28.2 million, representing the accelerated amortisation of an outstanding 14 percent coupon junior subordinated debt.
Its operating profit for the quarter was $25.6 million compared with $21.1 million a year earlier. Its combined ratio was 97.7 percent compared with 97.5 percent in the first quarter of 2013.
The company's net premiums written totalled $709.9 million in the quarter, an increase of 3 percent compared to the first quarter of 2013. Within this, its diversified reinsurance segment's net premiums written totalled $291.6 million, an increase of 9 percent versus the first quarter of 2013. It said this growth was the result of expanding existing client relationships as well as increased new business.
In its AmTrust Quota Share Reinsurance segment, net premiums written increased by 21.5 percent to $419 million. This was driven primarily by workers’ compensation, which, it said, continues to experience a strong rate environment and increased payrolls.
Art Raschbaum, chief executive of Maiden, said: "Maiden's record operating profit in the first quarter of 2014 clearly demonstrates the company's enhanced earnings power following the redemption of the 14 percent TRUPs in mid-January. Net investment income was also a quarterly record for Maiden as our invested asset base reflects continued growth.
“Written premium growth in our diversified and AmTrust segments for the quarter was strong and notwithstanding the elevated level of non-cat property losses in the first quarter from our US Diversified segment, underwriting results remain solidly profitable. On balance, we are pleased with business performance for the quarter. Importantly, we remain true to our specialist, lower volatility, non-catastrophe oriented reinsurance business model, which is uniquely designed to serve the reinsurance capital needs of small to mid-sized insurers.”
