Bermudian-based Maiden Holdings has declared net income of $1.5 million for the first quarter to March 31, compared to a net loss of $11.3 million for the same period last year.

Net premiums written were $8.3 million compared to $0.8 million reported for the first quarter of 2023.

The company also saw improvements in net investment income, adjusted book value, net premiums earned and total revenues.

Maiden recently undertook a strategic review of its International Insurance Services business platform and began to divest the business, including a renewal rights transaction with AmTrust Nordic AB, a Swedish unit of AmTrust Financial Services, Inc.

The transaction is expected to cover the majority of its primary business written through its Swedish subsidiaries in the Nordic countries.

The company anticipates similar agreements for business in the United Kingdom and Ireland.

Commenting on the first quarter results, Patrick J. Haveron, Maiden’s CEO said: “The effects of our continued positive investment results and the stabilising effects of our [loss portfolio transfer/adverse development cover] agreement led to an increase in our adjusted book value, which we believe represents Maiden's true economic value, to $3.24 per share as of March 31, 2024.”

The LPT/ADC agreement is with Cavello Bay Reinsurance Ltd, a subsidiary of Enstar Group Limited.

He added: "The continued improvement in our investment performance was principally the result of higher net investment gains on our alternative asset portfolio, primarily in the private equity asset class where unrealised gains of $7.9 million were recognised across a series of investments. During the first quarter of 2024, our alternative asset portfolio produced a return of 3.4 per cent, which continues to be well above our benchmark cost of debt capital on an annualised basis.

“As these results continue to increasingly demonstrate, we believe our alternative investment portfolio remains well positioned to achieve its targeted longer-term returns.

“We continue to actively evaluate our strategies as we look to build a more consistent base of revenue and profits while leveraging our experience in insurance and reinsurance markets, including through fee-based and distribution channels in the insurance and reinsurance industry.

“Our active pursuit of these paths should further enable us to ultimately recognise and realise the significant deferred tax asset we have.

“Our recently announced IIS renewal rights transaction with AmTrust should serve to further simplify our balance sheet while ultimately reducing our operating expenses by up to $6 million over the next 12 to 24 months.

“As we evaluate these options and move forward, we have limited our commitments to new alternative investment opportunities.”

"While our GAAP income statement continues to be impacted by adverse loss development, it’s important to note that much of this volatility is expected to be temporary as significant shares of the loss development reported are expected to be covered by our LPT/ADC agreement with Cavello.

“During the first quarter ended March 31, 2024, nearly 76 per cent of the total reported prior year loss development is expected to be covered by the LPT/ADC agreement and is expected to ultimately return over time to Maiden as future GAAP income, subject to certain thresholds in the LPT/ADC agreement and the applicable GAAP accounting rules.

“We continue to expect to meet the thresholds to begin recoveries under the LPT/ADC agreement late in 2024.”

"As the benefits of the LPT/ADC agreement begin to be amortised though our GAAP income statement, it reinforces why adjusted book value, which includes the $75.9 million deferred gain presently on the balance sheet, is a key metric in evaluating Maiden’s value.

“It's also worth noting that under the provisions of the LPT/ADC agreement, we still have an additional $79.1 million in available limit to absorb subject loss development should it occur in the future."

“As noted, our consolidated balance sheet at March 31, 2024 does not reflect $117.3 million or $1.17 per common share in net US deferred tax assets which still maintains a full valuation allowance.

“It’s important to note that of $334 million in net operating loss carryforwards that we hold, approximately $151.2 million or 45.3 per cent of these loss carryforwards have no expiry date.

“Despite the recent adverse reserve development which has delayed the timing related to ultimately recognising this asset, we believe the factors that will enable us to ultimately recognise these tax assets in the future, including our current strategic initiatives, continues to accumulate, particularly with our asset portfolio producing more current income."

Mr Haveron concluded: “Finally, during both the first quarter and in the second quarter via a 10b-5 trading plan implemented prior to March 31, 2024, we continued our long-term capital management strategy and repurchased 590,995 common shares at an average price per share of $2.01 under our share repurchase plan.

“We expect to continue a disciplined and prudent approach to share repurchases as part of this programme, particularly in periods of share weakness relative to our book value.”