x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¬
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Bermuda
(State or other jurisdiction of
incorporation or organization)
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98-0570192
(IRS Employer
Identification No.)
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131 Front Street, Hamilton, Bermuda
(Address of principal executive offices)
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HM12
(Zip Code)
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Large accelerated filer
¬
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Accelerated filer
x
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Non-accelerated filer
¬
(Do not check if a smaller reporting
company)
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Smaller reporting company
¬
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Page
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PART I - Financial Information
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Item 1.
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Financial Statements
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Item 2.
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Item 3.
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Item 4.
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PART II - Other Information
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Item 4.
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Item 5.
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Item 6.
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June 30, 2012 (Unaudited)
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December 31, 2011 (Audited)
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||||
ASSETS
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||||
Investments:
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||||
Fixed maturities, available-for-sale, at fair value
(Amortized cost 2012: $2,299,444; 2011: $1,957,106)
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$
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2,393,035
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$
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2,020,661
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Other investments, at fair value
(Cost 2012: $2,408; 2011: $1,955)
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2,697
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2,192
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Total investments
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2,395,732
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2,022,853
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Cash and cash equivalents
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58,930
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188,082
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Restricted cash and cash equivalents
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84,417
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114,895
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Accrued investment income
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18,512
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13,215
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Reinsurance balances receivable, net (
includes $233,656 and $178,745 from related parties in 2012 and 2011, respectively
)
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495,714
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423,355
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Funds withheld
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42,815
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42,605
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Prepaid reinsurance premiums
(includes $2,853 and $7,265 from related parties in 2012 and 2011, respectively)
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44,437
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35,381
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Reinsurance recoverable on unpaid losses
(includes $9,512 and $7,207 from related parties in 2012 and 2011, respectively)
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46,659
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20,289
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Loan to related party
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167,975
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167,975
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Deferred commission and other acquisition costs
(includes $173,157 and $147,743 from related parties in 2012 and 2011, respectively)
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270,024
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248,436
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Goodwill and intangible assets, net
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96,574
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98,755
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Other assets
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30,930
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|
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19,270
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Total assets
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$
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3,752,719
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$
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3,395,111
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LIABILITIES
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||||
Reserve for loss and loss adjustment expenses
(includes $477,268 and $396,198 from related parties in 2012 and 2011, respectively)
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$
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1,522,770
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$
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1,398,438
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Unearned premiums (
includes $581,058 and $483,935 from related parties in 2012 and 2011, respectively)
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974,277
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832,047
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Accrued expenses and other liabilities
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97,165
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161,883
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Senior notes
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207,500
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107,500
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Junior subordinated debt
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126,289
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126,263
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Total liabilities
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2,928,001
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2,626,131
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Commitments and Contingencies
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EQUITY
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Common shares
($0.01 par value; 73,223,918 and 73,183,764 shares issued in 2012 and 2011, respectively; 72,261,582 and 72,221,428 shares outstanding in 2012 and 2011, respectively)
|
732
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732
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Additional paid-in capital
|
579,818
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579,004
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Accumulated other comprehensive income
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95,558
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64,059
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Retained earnings
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152,005
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128,648
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Treasury shares, at cost
(2012 and 2011: 962,336 shares)
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(3,801
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)
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(3,801
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)
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Total Maiden shareholders’ equity
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824,312
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768,642
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Noncontrolling interest in subsidiaries
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406
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338
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Total equity
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824,718
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768,980
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Total liabilities and equity
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$
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3,752,719
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$
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3,395,111
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For the Three Months Ended June 30,
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For the Six Months Ended June 30,
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||||||||||||
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2012
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2011
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2012
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2011
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||||||||
Revenues:
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Gross premiums written
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$
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445,228
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$
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462,395
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$
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1,058,440
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$
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933,172
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Net premiums written
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$
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411,960
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$
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436,966
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$
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1,002,793
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$
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886,466
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Change in unearned premiums
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25,156
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(69,183
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)
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(127,181
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)
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(172,148
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)
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||||
Net premiums earned
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437,116
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367,783
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875,612
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714,318
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Other insurance revenue
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2,274
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2,179
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7,028
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6,834
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Net investment income
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20,085
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19,818
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38,522
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38,959
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Net realized and unrealized (losses) gains on investment
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(2,939
|
)
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591
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(1,574
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)
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638
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Total revenues
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456,536
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390,371
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919,588
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760,749
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Expenses:
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Net loss and loss adjustment expenses
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300,435
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250,599
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588,352
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471,781
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Commission and other acquisition expenses
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114,663
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105,824
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246,921
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212,896
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General and administrative expenses
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15,208
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12,839
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29,039
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25,132
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|
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Interest and amortization expenses
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9,568
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9,292
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17,246
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18,410
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Accelerated amortization of junior subordinated debt discount and issuance cost
|
—
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20,313
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—
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20,313
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|
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Junior subordinated debt repurchase expense
|
—
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15,050
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—
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15,050
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|
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Amortization of intangible assets
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1,091
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1,259
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2,181
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|
|
2,517
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|
||||
Foreign exchange losses (gains)
|
874
|
|
|
(939
|
)
|
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(105
|
)
|
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(2,001
|
)
|
||||
Total expenses
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441,839
|
|
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414,237
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883,634
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764,098
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|
||||
Income (loss) before income taxes
|
14,697
|
|
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(23,866
|
)
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35,954
|
|
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(3,349
|
)
|
||||
Income taxes:
|
|
|
|
|
|
|
|
||||||||
Current tax (benefit) expense
|
(155
|
)
|
|
211
|
|
|
483
|
|
|
1,096
|
|
||||
Deferred tax expense
|
246
|
|
|
295
|
|
|
487
|
|
|
582
|
|
||||
Income tax expense
|
91
|
|
|
506
|
|
|
970
|
|
|
1,678
|
|
||||
Net income (loss)
|
14,606
|
|
|
(24,372
|
)
|
|
34,984
|
|
|
(5,027
|
)
|
||||
Less: (income) loss attributable to noncontrolling interest
|
(65
|
)
|
|
6
|
|
|
(66
|
)
|
|
3
|
|
||||
Net income (loss) attributable to Maiden shareholders
|
$
|
14,541
|
|
|
$
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(24,366
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)
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$
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34,918
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|
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$
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(5,024
|
)
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Basic earnings (loss) per share attributable to Maiden shareholders
|
$
|
0.20
|
|
|
$
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(0.34
|
)
|
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$
|
0.48
|
|
|
$
|
(0.07
|
)
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Diluted earnings (loss) per share attributable to Maiden shareholders
|
$
|
0.20
|
|
|
$
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(0.34
|
)
|
|
$
|
0.48
|
|
|
$
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(0.07
|
)
|
Dividends declared per common share
|
$
|
0.08
|
|
|
$
|
0.07
|
|
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$
|
0.16
|
|
|
$
|
0.14
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
14,606
|
|
|
$
|
(24,372
|
)
|
|
$
|
34,984
|
|
|
$
|
(5,027
|
)
|
Other comprehensive income
|
|
|
|
|
|
|
|
||||||||
Net unrealized holding gains on available-for-sale securities arising during the period
|
803
|
|
|
18,216
|
|
|
30,112
|
|
|
21,762
|
|
||||
Adjustment for reclassification of net realized gains recognized in net income
|
(9
|
)
|
|
(93
|
)
|
|
(19
|
)
|
|
(140
|
)
|
||||
Foreign currency translation adjustment
|
3,909
|
|
|
528
|
|
|
1,408
|
|
|
1,915
|
|
||||
Other comprehensive income
|
4,703
|
|
|
18,651
|
|
|
31,501
|
|
|
23,537
|
|
||||
Comprehensive income (loss)
|
19,309
|
|
|
(5,721
|
)
|
|
66,485
|
|
|
18,510
|
|
||||
Net (income) loss attributable to noncontrolling interest
|
(65
|
)
|
|
6
|
|
|
(66
|
)
|
|
3
|
|
||||
Other comprehensive loss (income) attributable to noncontrolling interest
|
6
|
|
|
(7
|
)
|
|
(2
|
)
|
|
(23
|
)
|
||||
Comprehensive income attributable to noncontrolling interest
|
(59
|
)
|
|
(1
|
)
|
|
(68
|
)
|
|
(20
|
)
|
||||
Comprehensive income (loss) attributable to Maiden shareholders
|
$
|
19,250
|
|
|
$
|
(5,722
|
)
|
|
$
|
66,417
|
|
|
$
|
18,490
|
|
|
|
|
|
Maiden Shareholders’ Equity
|
|
|
||||||||||||||||||||||
For the Six Months Ended June 30, 2012
|
|
Total
equity |
|
Retained
earnings |
|
Treasury
shares |
|
Accumulated
other comprehensive income |
|
Common
shares |
|
Additional
paid-in capital |
|
Noncontrolling
interest in subsidiaries |
||||||||||||||
Beginning balance
|
|
$
|
768,980
|
|
|
$
|
128,648
|
|
|
$
|
(3,801
|
)
|
|
$
|
64,059
|
|
|
$
|
732
|
|
|
$
|
579,004
|
|
|
$
|
338
|
|
Exercise of options and issuance of shares
|
|
162
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
162
|
|
|
—
|
|
|||||||
Net income
|
|
34,984
|
|
|
34,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66
|
|
|||||||
Change in unrealized gains on investments, net
|
|
30,093
|
|
|
|
|
|
|
|
|
30,093
|
|
|
|
|
|
|
|
|
—
|
|
|||||||
Foreign currency translation adjustments
|
|
1,408
|
|
|
|
|
|
|
|
|
1,406
|
|
|
|
|
|
|
|
|
2
|
|
|||||||
Share-based compensation expense
|
|
652
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
652
|
|
|
—
|
|
|||||||
Dividends on common shares
|
|
(11,561
|
)
|
|
(11,561
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||
Ending balance
|
|
$
|
824,718
|
|
|
$
|
152,005
|
|
|
$
|
(3,801
|
)
|
|
$
|
95,558
|
|
|
$
|
732
|
|
|
$
|
579,818
|
|
|
$
|
406
|
|
|
|
|
|
Maiden Shareholders’ Equity
|
|
|
||||||||||||||||||||||
For the Six Months Ended June 30, 2011
|
|
Total
equity |
|
Retained
earnings |
|
Treasury
shares |
|
Accumulated
other comprehensive income |
|
Common
shares |
|
Additional
paid-in capital |
|
Noncontrolling
interest in subsidiaries |
||||||||||||||
Beginning balance
|
|
$
|
750,449
|
|
|
$
|
121,775
|
|
|
$
|
(3,801
|
)
|
|
$
|
54,334
|
|
|
$
|
731
|
|
|
$
|
577,135
|
|
|
$
|
275
|
|
Exercise of options and issuance of shares
|
|
91
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
91
|
|
|
—
|
|
|||||||
Net loss
|
|
(5,027
|
)
|
|
(5,024
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3
|
)
|
|||||||
Change in unrealized gains on investments, net
|
|
21,622
|
|
|
|
|
|
|
|
|
21,622
|
|
|
|
|
|
|
|
|
—
|
|
|||||||
Foreign currency translation adjustments
|
|
1,915
|
|
|
|
|
|
|
|
|
1,892
|
|
|
|
|
|
|
|
|
23
|
|
|||||||
Share-based compensation expense
|
|
678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
678
|
|
|
—
|
|
|||||||
Dividends on common shares
|
|
(10,097
|
)
|
|
(10,097
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||
Ending balance
|
|
$
|
759,631
|
|
|
$
|
106,654
|
|
|
$
|
(3,801
|
)
|
|
$
|
77,848
|
|
|
$
|
731
|
|
|
$
|
577,904
|
|
|
$
|
295
|
|
|
For the Six Months Ended June 30,
|
||||||
|
2012
|
|
2011
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
34,984
|
|
|
$
|
(5,027
|
)
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization of intangibles
|
3,244
|
|
|
5,213
|
|
||
Net realized and unrealized losses (gains) on investments
|
1,574
|
|
|
(638
|
)
|
||
Foreign exchange gains
|
(105
|
)
|
|
(2,001
|
)
|
||
Amortization of share-based compensation expense, bond premium and discount and subordinated debt discount, net
|
3,798
|
|
|
19,503
|
|
||
Changes in assets – (increase) decrease:
|
|
|
|
||||
Reinsurance balances receivable, net
|
(73,478
|
)
|
|
(169,041
|
)
|
||
Funds withheld
|
(932
|
)
|
|
16,111
|
|
||
Prepaid reinsurance premiums
|
(9,056
|
)
|
|
(8,563
|
)
|
||
Reinsurance recoverable on unpaid losses
|
(26,367
|
)
|
|
(8,931
|
)
|
||
Accrued investment income
|
(5,307
|
)
|
|
1,797
|
|
||
Deferred commission and other acquisition costs
|
(21,786
|
)
|
|
(41,037
|
)
|
||
Other assets
|
(10,154
|
)
|
|
(3,597
|
)
|
||
Changes in liabilities – increase (decrease):
|
|
|
|
|
|
||
Reserve for loss and loss adjustment expenses
|
126,981
|
|
|
45,244
|
|
||
Unearned premiums
|
144,080
|
|
|
181,181
|
|
||
Accrued expenses and other liabilities
|
(1,108
|
)
|
|
13,440
|
|
||
Net cash provided by operating activities
|
166,368
|
|
|
43,654
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of investments:
|
|
|
|
||||
Purchases of fixed-maturity securities – available-for-sale
|
(674,238
|
)
|
|
(257,268
|
)
|
||
Purchases of fixed-maturity securities – trading and short sale
|
(102,073
|
)
|
|
(152,844
|
)
|
||
Purchases of other investments
|
(594
|
)
|
|
(834
|
)
|
||
Sale of investments:
|
|
|
|
||||
Proceeds from sales of fixed-maturity securities – available-for-sale
|
104,125
|
|
|
76,569
|
|
||
Proceeds from sales of fixed-maturity securities – trading and short sales
|
49,883
|
|
|
103,482
|
|
||
Proceeds from maturities and calls of fixed maturity securities
|
211,807
|
|
|
243,891
|
|
||
Proceeds from redemption of other investments
|
160
|
|
|
4,242
|
|
||
Decrease in restricted cash and cash equivalents
|
30,478
|
|
|
22,549
|
|
||
Purchase of capital assets
|
(176
|
)
|
|
(830
|
)
|
||
Net cash (used in) provided by investing activities
|
(380,628
|
)
|
|
38,957
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Senior notes issuance, net of issuance costs
|
96,594
|
|
|
104,689
|
|
||
Repurchase agreements, net
|
—
|
|
|
(76,225
|
)
|
||
Common share issuance
|
162
|
|
|
91
|
|
||
Dividends paid to shareholders
|
(11,558
|
)
|
|
(10,095
|
)
|
||
Net cash provided by financing activities
|
85,198
|
|
|
18,460
|
|
||
Effect of exchange rate changes on foreign currency cash
|
(90
|
)
|
|
1,134
|
|
||
Net (decrease) increase in cash and cash equivalents
|
(129,152
|
)
|
|
102,205
|
|
||
Cash and cash equivalents, beginning of period
|
188,082
|
|
|
96,151
|
|
||
Cash and cash equivalents, end of period
|
$
|
58,930
|
|
|
$
|
198,356
|
|
June 30, 2012
|
|
Original or
amortized cost |
|
Gross
unrealized gains |
|
Gross
unrealized losses |
|
Fair value
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury bonds
|
|
$
|
42,725
|
|
|
$
|
1,538
|
|
|
$
|
—
|
|
|
$
|
44,263
|
|
U.S. agency bonds – mortgage-backed
|
|
1,009,921
|
|
|
39,721
|
|
|
(506
|
)
|
|
1,049,136
|
|
||||
U.S. agency bonds – other
|
|
16,689
|
|
|
1,620
|
|
|
—
|
|
|
18,309
|
|
||||
Non-U.S. government bonds
|
|
58,430
|
|
|
219
|
|
|
(847
|
)
|
|
57,802
|
|
||||
Other mortgage-backed bonds
|
|
23,199
|
|
|
157
|
|
|
—
|
|
|
23,356
|
|
||||
Corporate bonds
|
|
1,029,046
|
|
|
69,655
|
|
|
(18,855
|
)
|
|
1,079,846
|
|
||||
Municipal bonds
|
|
119,434
|
|
|
889
|
|
|
—
|
|
|
120,323
|
|
||||
Total available-for-sale fixed maturities
|
|
2,299,444
|
|
|
113,799
|
|
|
(20,208
|
)
|
|
2,393,035
|
|
||||
Other investments
|
|
2,408
|
|
|
364
|
|
|
(75
|
)
|
|
2,697
|
|
||||
Total investments
|
|
$
|
2,301,852
|
|
|
$
|
114,163
|
|
|
$
|
(20,283
|
)
|
|
$
|
2,395,732
|
|
December 31, 2011
|
|
Original or
amortized cost |
|
Gross
unrealized gains |
|
Gross
unrealized losses |
|
Fair value
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury bonds
|
|
$
|
44,175
|
|
|
$
|
1,774
|
|
|
$
|
—
|
|
|
$
|
45,949
|
|
U.S. agency bonds – mortgage-backed
|
|
928,944
|
|
|
43,230
|
|
|
(75
|
)
|
|
972,099
|
|
||||
U.S. agency bonds – other
|
|
10,374
|
|
|
622
|
|
|
—
|
|
|
10,996
|
|
||||
Non-U.S. government bonds
|
|
52,489
|
|
|
78
|
|
|
(293
|
)
|
|
52,274
|
|
||||
Other mortgage-backed bonds
|
|
9,919
|
|
|
1
|
|
|
—
|
|
|
9,920
|
|
||||
Corporate bonds
|
|
742,867
|
|
|
47,726
|
|
|
(30,236
|
)
|
|
760,357
|
|
||||
Municipal bonds
|
|
168,338
|
|
|
728
|
|
|
—
|
|
|
169,066
|
|
||||
Total available-for-sale fixed maturities
|
|
1,957,106
|
|
|
94,159
|
|
|
(30,604
|
)
|
|
2,020,661
|
|
||||
Other investments
|
|
1,955
|
|
|
318
|
|
|
(81
|
)
|
|
2,192
|
|
||||
Total investments
|
|
$
|
1,959,061
|
|
|
$
|
94,477
|
|
|
$
|
(30,685
|
)
|
|
$
|
2,022,853
|
|
June 30, 2012
|
|
Amortized cost
|
|
Fair
value |
|
% of Total fair value
|
|||||
Maturity
|
|
|
|
|
|
|
|||||
Due in one year or less
|
|
$
|
43,259
|
|
|
$
|
43,439
|
|
|
1.8
|
%
|
Due after one year through five years
|
|
362,178
|
|
|
359,825
|
|
|
15.0
|
%
|
||
Due after five years through ten years
|
|
711,615
|
|
|
764,575
|
|
|
32.0
|
%
|
||
Due after ten years
|
|
149,272
|
|
|
152,704
|
|
|
6.4
|
%
|
||
|
|
1,266,324
|
|
|
1,320,543
|
|
|
55.2
|
%
|
||
U.S. agency bonds – mortgage-backed
|
|
1,009,921
|
|
|
1,049,136
|
|
|
43.8
|
%
|
||
Other mortgage-backed bonds
|
|
23,199
|
|
|
23,356
|
|
|
1.0
|
%
|
||
Total
|
|
$
|
2,299,444
|
|
|
$
|
2,393,035
|
|
|
100.0
|
%
|
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||
June 30, 2012
|
|
Fair
value |
|
Unrealized
losses |
|
Fair
value |
|
Unrealized
losses |
|
Fair
value |
|
Unrealized
losses |
||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. agency bonds – mortgage-backed
|
|
$
|
65,901
|
|
|
$
|
(506
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
65,901
|
|
|
$
|
(506
|
)
|
Non – U.S. government bonds
|
|
47,696
|
|
|
(847
|
)
|
|
—
|
|
|
—
|
|
|
47,696
|
|
|
(847
|
)
|
||||||
Corporate bonds
|
|
201,251
|
|
|
(5,710
|
)
|
|
130,465
|
|
|
(13,145
|
)
|
|
331,716
|
|
|
(18,855
|
)
|
||||||
|
|
314,848
|
|
|
(7,063
|
)
|
|
130,465
|
|
|
(13,145
|
)
|
|
445,313
|
|
|
(20,208
|
)
|
||||||
Other investments
|
|
1,698
|
|
|
(75
|
)
|
|
—
|
|
|
—
|
|
|
1,698
|
|
|
(75
|
)
|
||||||
Total temporarily impaired available-for-sale securities and other investments
|
|
$
|
316,546
|
|
|
$
|
(7,138
|
)
|
|
$
|
130,465
|
|
|
$
|
(13,145
|
)
|
|
$
|
447,011
|
|
|
$
|
(20,283
|
)
|
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||
December 31, 2011
|
|
Fair
value |
|
Unrealized
losses |
|
Fair
value |
|
Unrealized
losses |
|
Fair
value |
|
Unrealized
losses |
||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. agency bonds – mortgage-backed
|
|
$
|
30,447
|
|
|
$
|
(75
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30,447
|
|
|
$
|
(75
|
)
|
Non – U.S. government bonds
|
|
43,629
|
|
|
(293
|
)
|
|
—
|
|
|
—
|
|
|
43,629
|
|
|
(293
|
)
|
||||||
Corporate bonds
|
|
227,367
|
|
|
(7,406
|
)
|
|
125,089
|
|
|
(22,830
|
)
|
|
352,456
|
|
|
(30,236
|
)
|
||||||
|
|
301,443
|
|
|
(7,774
|
)
|
|
125,089
|
|
|
(22,830
|
)
|
|
426,532
|
|
|
(30,604
|
)
|
||||||
Other investments
|
|
1,214
|
|
|
(81
|
)
|
|
—
|
|
|
—
|
|
|
1,214
|
|
|
(81
|
)
|
||||||
Total temporarily impaired available-for-sale securities and other investments
|
|
$
|
302,657
|
|
|
$
|
(7,855
|
)
|
|
$
|
125,089
|
|
|
$
|
(22,830
|
)
|
|
$
|
427,746
|
|
|
$
|
(30,685
|
)
|
Rating* as at June 30, 2012
|
|
Amortized
cost |
|
Fair
value |
|
% of Total
fair value |
|||||
U.S. treasury bonds
|
|
$
|
42,725
|
|
|
$
|
44,263
|
|
|
1.8
|
%
|
U.S. agency bonds
|
|
1,026,610
|
|
|
1,067,445
|
|
|
44.6
|
%
|
||
AAA
|
|
172,974
|
|
|
174,777
|
|
|
7.3
|
%
|
||
AA+, AA, AA-
|
|
182,715
|
|
|
190,412
|
|
|
8.0
|
%
|
||
A+, A, A-
|
|
409,313
|
|
|
421,664
|
|
|
17.6
|
%
|
||
BBB+, BBB, BBB-
|
|
446,782
|
|
|
476,569
|
|
|
19.9
|
%
|
||
BB+ or lower
|
|
18,325
|
|
|
17,905
|
|
|
0.8
|
%
|
||
Total
|
|
$
|
2,299,444
|
|
|
$
|
2,393,035
|
|
|
100.0
|
%
|
Rating* as at December 31, 2011
|
|
Amortized
cost |
|
Fair
value |
|
% of Total
fair value |
|||||
U.S. treasury bonds
|
|
$
|
44,175
|
|
|
$
|
45,949
|
|
|
2.3
|
%
|
U.S. agency bonds
|
|
939,318
|
|
|
983,095
|
|
|
48.6
|
%
|
||
AAA
|
|
160,319
|
|
|
161,945
|
|
|
8.0
|
%
|
||
AA+, AA, AA-
|
|
150,961
|
|
|
153,303
|
|
|
7.6
|
%
|
||
A+, A, A-
|
|
327,794
|
|
|
328,448
|
|
|
16.3
|
%
|
||
BBB+, BBB, BBB-
|
|
316,150
|
|
|
330,156
|
|
|
16.3
|
%
|
||
BB+ or lower
|
|
18,389
|
|
|
17,765
|
|
|
0.9
|
%
|
||
Total
|
|
$
|
1,957,106
|
|
|
$
|
2,020,661
|
|
|
100.0
|
%
|
|
|
June 30, 2012
|
|
December 31, 2011
|
||||||||||
Investments in limited partnerships
|
|
$
|
2,697
|
|
|
100.0
|
%
|
|
$
|
2,192
|
|
|
100.0
|
%
|
Total other investments
|
|
$
|
2,697
|
|
|
100.0
|
%
|
|
$
|
2,192
|
|
|
100.0
|
%
|
For the Three Months Ended June 30, 2012
|
|
Gross gains
|
|
Gross losses
|
|
Net
|
||||||
Short sales
|
|
$
|
—
|
|
|
$
|
(2,948
|
)
|
|
$
|
(2,948
|
)
|
Other investments
|
|
9
|
|
|
—
|
|
|
9
|
|
|||
Net realized losses on investment
|
|
$
|
9
|
|
|
$
|
(2,948
|
)
|
|
$
|
(2,939
|
)
|
For the Three Months Ended June 30, 2011
|
|
Gross gains
|
|
Gross losses
|
|
Net
|
||||||
Available-for-sale securities
|
|
$
|
211
|
|
|
$
|
(24
|
)
|
|
$
|
187
|
|
Trading securities
|
|
810
|
|
|
—
|
|
|
810
|
|
|||
Other investments
|
|
—
|
|
|
(94
|
)
|
|
(94
|
)
|
|||
Net realized gains
|
|
1,021
|
|
|
(118
|
)
|
|
903
|
|
|||
Unrealized losses on trading securities
|
|
—
|
|
|
(312
|
)
|
|
(312
|
)
|
|||
Net realized and unrealized gains on investment
|
|
$
|
1,021
|
|
|
$
|
(430
|
)
|
|
$
|
591
|
|
For the Six Months Ended June 30, 2012
|
|
Gross gains
|
|
Gross losses
|
|
Net
|
||||||
Short sales
|
|
—
|
|
|
(1,593
|
)
|
|
(1,593
|
)
|
|||
Other investments
|
|
20
|
|
|
(1
|
)
|
|
19
|
|
|||
Net realized losses on investment
|
|
$
|
20
|
|
|
$
|
(1,594
|
)
|
|
$
|
(1,574
|
)
|
For the Six Months Ended June 30, 2011
|
|
Gross gains
|
|
Gross losses
|
|
Net
|
||||||
Available-for-sale securities
|
|
$
|
274
|
|
|
$
|
(40
|
)
|
|
$
|
234
|
|
Trading securities
|
|
810
|
|
|
—
|
|
|
810
|
|
|||
Other investments
|
|
—
|
|
|
(94
|
)
|
|
(94
|
)
|
|||
Net realized gains
|
|
1,084
|
|
|
(134
|
)
|
|
950
|
|
|||
Unrealized losses on trading securities
|
|
—
|
|
|
(312
|
)
|
|
(312
|
)
|
|||
Net realized and unrealized gains on investment
|
|
$
|
1,084
|
|
|
$
|
(446
|
)
|
|
$
|
638
|
|
|
|
June 30, 2012
|
|
December 31, 2011
|
||||
Available-for-sale securities
|
|
$
|
93,591
|
|
|
$
|
63,555
|
|
Other investments
|
|
289
|
|
|
237
|
|
||
Total net unrealized gains
|
|
93,880
|
|
|
63,792
|
|
||
Deferred income tax expense
|
|
(50
|
)
|
|
(55
|
)
|
||
Net unrealized gains, net of deferred income tax
|
|
$
|
93,830
|
|
|
$
|
63,737
|
|
Change in net unrealized gains, net of deferred income tax
|
|
$
|
30,093
|
|
|
$
|
8,983
|
|
|
|
June 30, 2012
|
|
December 31, 2011
|
||||
Restricted cash – third party agreements
|
|
$
|
64,337
|
|
|
$
|
67,627
|
|
Restricted cash – related party agreements
|
|
19,425
|
|
|
46,729
|
|
||
Restricted cash – U.S. state regulatory authorities
|
|
655
|
|
|
539
|
|
||
Total restricted cash
|
|
84,417
|
|
|
114,895
|
|
||
Restricted investments – in trust for third party agreements at fair value (
Amortized cost: 2012 – $1,055,937; 2011 – $950,103
)
|
|
1,093,035
|
|
|
972,130
|
|
||
Restricted investments – in trust for related party agreements at fair value (
Amortized cost: 2012 – $708,824; 2011 – $458,105
)
|
|
757,622
|
|
|
485,468
|
|
||
Restricted investments – in trust for U.S. state regulatory authorities (
Amortized cost: 2012 – $12,751; 2011 – $12,862
)
|
|
13,567
|
|
|
13,750
|
|
||
Total restricted investments
|
|
1,864,224
|
|
|
1,471,348
|
|
||
Total restricted cash and investments
|
|
$
|
1,948,641
|
|
|
$
|
1,586,243
|
|
•
|
Level 1
— Valuations based on unadjusted quoted market prices for identical assets or liabilities that we have the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.
|
•
|
Level 2
— Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in inactive markets, or valuations based on models where the significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data.
|
•
|
Level 3
— Valuations based on models where significant inputs are not observable. The unobservable inputs reflect our own assumptions about assumptions that market participants would use.
|
June 30, 2012
|
|
Quoted Prices
in Active Markets for Identical Assets (Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Total Fair
Value |
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturities
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury bonds
|
|
$
|
44,263
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
44,263
|
|
U.S. agency bonds – mortgage-backed
|
|
—
|
|
|
1,049,136
|
|
|
—
|
|
|
1,049,136
|
|
||||
U.S. agency bonds – other
|
|
—
|
|
|
18,309
|
|
|
—
|
|
|
18,309
|
|
||||
Non-U.S.government bonds
|
|
—
|
|
|
57,802
|
|
|
—
|
|
|
57,802
|
|
||||
Other mortgage-backed bonds
|
|
—
|
|
|
23,356
|
|
|
—
|
|
|
23,356
|
|
||||
Corporate bonds
|
|
—
|
|
|
1,079,846
|
|
|
—
|
|
|
1,079,846
|
|
||||
Municipal bonds
|
|
—
|
|
|
120,323
|
|
|
—
|
|
|
120,323
|
|
||||
Other investments
|
|
—
|
|
|
—
|
|
|
2,697
|
|
|
2,697
|
|
||||
Total
|
|
$
|
44,263
|
|
|
$
|
2,348,772
|
|
|
$
|
2,697
|
|
|
$
|
2,395,732
|
|
As a percentage of total assets
|
|
1.2
|
%
|
|
62.5
|
%
|
|
0.1
|
%
|
|
63.8
|
%
|
December 31, 2011
|
|
Quoted Prices
in Active Markets for Identical Assets (Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Total Fair
Value |
||||||||
Assets
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturities
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury bonds
|
|
$
|
45,949
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
45,949
|
|
U.S. agency bonds – mortgage-backed
|
|
—
|
|
|
972,099
|
|
|
—
|
|
|
972,099
|
|
||||
U.S. agency bonds – other
|
|
—
|
|
|
10,996
|
|
|
—
|
|
|
10,996
|
|
||||
Non-U.S. government bonds
|
|
—
|
|
|
52,274
|
|
|
—
|
|
|
52,274
|
|
||||
Other mortgage-backed bonds
|
|
—
|
|
|
9,920
|
|
|
—
|
|
|
9,920
|
|
||||
Corporate bonds
|
|
—
|
|
|
760,357
|
|
|
—
|
|
|
760,357
|
|
||||
Municipal bonds
|
|
—
|
|
|
169,066
|
|
|
—
|
|
|
169,066
|
|
||||
Other investments
|
|
—
|
|
|
—
|
|
|
2,192
|
|
|
2,192
|
|
||||
Total
|
|
$
|
45,949
|
|
|
$
|
1,974,712
|
|
|
$
|
2,192
|
|
|
$
|
2,022,853
|
|
As a percentage of total assets
|
|
1.4
|
%
|
|
58.1
|
%
|
|
0.1
|
%
|
|
59.6
|
%
|
||||
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Securities sold but not yet purchased
|
|
$
|
—
|
|
|
$
|
55,830
|
|
|
$
|
—
|
|
|
$
|
55,830
|
|
As a percentage of total liabilities
|
|
—
|
%
|
|
2.1
|
%
|
|
—
|
%
|
|
2.1
|
%
|
|
|
For the Three Months Ended June 30,
|
||||||
Other investments:
|
|
2012
|
|
2011
|
||||
Balance at beginning of period
|
|
$
|
2,430
|
|
|
$
|
6,322
|
|
Net realized and unrealized gains – included in net income
|
|
9
|
|
|
—
|
|
||
Net realized and unrealized losses – included in net income
|
|
—
|
|
|
(94
|
)
|
||
Change in net unrealized gains – included in other comprehensive income
|
|
40
|
|
|
(151
|
)
|
||
Change in net unrealized losses – included in other comprehensive income
|
|
—
|
|
|
—
|
|
||
Purchases
|
|
286
|
|
|
593
|
|
||
Sales and redemptions
|
|
(68
|
)
|
|
(4,708
|
)
|
||
Transfers into Level 3
|
|
—
|
|
|
—
|
|
||
Transfers out of Level 3
|
|
—
|
|
|
—
|
|
||
Balance at end of period
|
|
$
|
2,697
|
|
|
$
|
1,962
|
|
Level 3 gains (losses) included in net income attributable to the change in unrealized gains (losses) relating to assets held at the reporting date
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
For the Six Months Ended June 30,
|
||||||
Other investments:
|
|
2012
|
|
2011
|
||||
Balance at beginning of period
|
|
$
|
2,192
|
|
|
$
|
5,847
|
|
Net realized and unrealized gains – included in net income
|
|
19
|
|
|
—
|
|
||
Net realized and unrealized losses – included in net income
|
|
—
|
|
|
(94
|
)
|
||
Change in net unrealized gains – included in other comprehensive income
|
|
52
|
|
|
83
|
|
||
Change in net unrealized losses – included in other comprehensive income
|
|
—
|
|
|
—
|
|
||
Purchases
|
|
594
|
|
|
834
|
|
||
Sales and redemptions
|
|
(160
|
)
|
|
(4,708
|
)
|
||
Transfers into Level 3
|
|
—
|
|
|
—
|
|
||
Transfers out of Level 3
|
|
—
|
|
|
—
|
|
||
Balance at end of period
|
|
$
|
2,697
|
|
|
$
|
1,962
|
|
Level 3 gains (losses) included in net income attributable to the change in unrealized gains (losses) relating to assets held at the reporting date
|
|
$
|
—
|
|
|
$
|
—
|
|
June 30, 2012
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Useful Life
|
||||||
Goodwill
|
|
$
|
58,312
|
|
|
$
|
—
|
|
|
$
|
58,312
|
|
|
Indefinite
|
State licenses
|
|
7,727
|
|
|
—
|
|
|
7,727
|
|
|
Indefinite
|
|||
Customer relationships
|
|
51,400
|
|
|
(20,865
|
)
|
|
30,535
|
|
|
15 years double declining
|
|||
Net balance
|
|
$
|
117,439
|
|
|
$
|
(20,865
|
)
|
|
$
|
96,574
|
|
|
|
December 31, 2011
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Useful Life
|
||||||
Goodwill
|
|
$
|
58,312
|
|
|
$
|
—
|
|
|
$
|
58,312
|
|
|
Indefinite
|
State licenses
|
|
7,727
|
|
|
—
|
|
|
7,727
|
|
|
Indefinite
|
|||
Customer relationships
|
|
51,400
|
|
|
(18,684
|
)
|
|
32,716
|
|
|
15 years double declining
|
|||
Net balance
|
|
$
|
117,439
|
|
|
$
|
(18,684
|
)
|
|
$
|
98,755
|
|
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Net income (loss) attributable to Maiden shareholders
|
$
|
14,541
|
|
|
$
|
(24,366
|
)
|
|
$
|
34,918
|
|
|
$
|
(5,024
|
)
|
Weighted average number of common shares outstanding – basic
|
72,258,550
|
|
|
72,118,315
|
|
|
72,242,440
|
|
|
72,112,785
|
|
||||
Potentially dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Share options and restricted share units
|
782,376
|
|
|
827,024
|
|
|
821,219
|
|
|
750,709
|
|
||||
Weighted average number of common shares outstanding – diluted
|
73,040,926
|
|
|
72,945,339
|
|
|
73,063,659
|
|
|
72,863,494
|
|
||||
Basic earnings (loss) per share attributable to Maiden shareholders:
|
$
|
0.20
|
|
|
$
|
(0.34
|
)
|
|
$
|
0.48
|
|
|
$
|
(0.07
|
)
|
Diluted earnings (loss) per share attributable to Maiden shareholders:
|
$
|
0.20
|
|
|
$
|
(0.34
|
)
|
|
$
|
0.48
|
|
|
$
|
(0.07
|
)
|
|
June 30, 2012
|
||
Assumptions:
|
|
|
|
Volatility
|
45.55 – 47.60
|
|
%
|
Risk-free interest rate
|
1.29 – 1.62
|
|
%
|
Weighted average expected lives in years
|
6.1 years
|
|
|
Forfeiture rate
|
—
|
|
%
|
Dividend yield rate
|
3.04 – 3.27
|
|
%
|
|
Number of
Share Options |
|
Weighted
Average Exercise Price |
|
Weighted
Average Remaining Contractual Term |
||||
Outstanding, March 31, 2012
|
2,849,601
|
|
|
$
|
6.55
|
|
|
7.35 years
|
|
Granted
|
27,000
|
|
|
$
|
8.24
|
|
|
9.88 years
|
|
Exercised
|
(4,770
|
)
|
|
$
|
3.77
|
|
|
—
|
|
Expired
|
—
|
|
|
$
|
—
|
|
|
—
|
|
Forfeited
|
(1,250
|
)
|
|
$
|
7.21
|
|
|
—
|
|
Outstanding, June 30, 2012
|
2,870,581
|
|
|
$
|
6.62
|
|
|
7.13 years
|
|
Number of
Share Options |
|
Weighted
Average Exercise Price |
|
Weighted
Average Remaining Contractual Term |
||||
Outstanding, March 31, 2011
|
2,906,065
|
|
|
$
|
6.41
|
|
|
8.13 years
|
|
Granted
|
29,000
|
|
|
$
|
9.09
|
|
|
9.90 years
|
|
Exercised
|
(42,532
|
)
|
|
$
|
3.80
|
|
|
—
|
|
Expired
|
—
|
|
|
$
|
—
|
|
|
—
|
|
Forfeited
|
—
|
|
|
$
|
—
|
|
|
—
|
|
Outstanding, June 30, 2011
|
2,892,533
|
|
|
$
|
6.47
|
|
|
7.96 years
|
|
Number of
Share Options |
|
Weighted
Average Exercise Price |
|
Weighted
Average Remaining Contractual Term |
||||
Outstanding, December 31, 2011
|
2,916,143
|
|
|
$
|
6.61
|
|
|
7.55 years
|
|
Granted
|
49,500
|
|
|
$
|
8.77
|
|
|
9.78 years
|
|
Exercised
|
(40,154
|
)
|
|
$
|
4.06
|
|
|
—
|
|
Expired
|
(51,033
|
)
|
|
$
|
9.86
|
|
|
—
|
|
Forfeited
|
(3,875
|
)
|
|
$
|
7.14
|
|
|
—
|
|
Outstanding, June 30, 2012
|
2,870,581
|
|
|
$
|
6.62
|
|
|
7.13 years
|
|
Number of
Share Options |
|
Weighted
Average Exercise Price |
|
Weighted
Average Remaining Contractual Term |
||||
Outstanding, December 31, 2010
|
2,940,876
|
|
|
$
|
6.41
|
|
|
8.40 years
|
|
Granted
|
36,500
|
|
|
$
|
8.81
|
|
|
9.86 years
|
|
Exercised
|
(43,530
|
)
|
|
$
|
3.79
|
|
|
—
|
|
Expired
|
(41,313
|
)
|
|
$
|
7.21
|
|
|
—
|
|
Forfeited
|
—
|
|
|
$
|
—
|
|
|
—
|
|
Outstanding, June 30, 2011
|
2,892,533
|
|
|
$
|
6.47
|
|
|
7.96 years
|
|
||||||||||||||||
For the Three Months Ended June 30, 2012
|
|
Diversified Reinsurance
|
|
AmTrust Quota Share Reinsurance
|
|
ACAC
Quota Share |
|
Total
|
||||||||
Net premiums written
|
|
$
|
143,981
|
|
|
$
|
195,629
|
|
|
$
|
72,350
|
|
|
$
|
411,960
|
|
Net premiums earned
|
|
$
|
199,130
|
|
|
$
|
167,816
|
|
|
$
|
70,170
|
|
|
$
|
437,116
|
|
Other insurance revenue
|
|
2,274
|
|
|
—
|
|
|
—
|
|
|
2,274
|
|
||||
Net loss and loss adjustment expenses
|
|
(138,420
|
)
|
|
(116,755
|
)
|
|
(45,260
|
)
|
|
(300,435
|
)
|
||||
Commission and other acquisition expenses
|
|
(47,945
|
)
|
|
(44,590
|
)
|
|
(22,128
|
)
|
|
(114,663
|
)
|
||||
General and administrative expenses
|
|
(12,145
|
)
|
|
(530
|
)
|
|
(194
|
)
|
|
(12,869
|
)
|
||||
Underwriting income
|
|
$
|
2,894
|
|
|
$
|
5,941
|
|
|
$
|
2,588
|
|
|
$
|
11,423
|
|
Reconciliation to net income attributable to Maiden shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net investment income and realized
losses on investment |
|
|
|
|
|
|
|
|
|
|
17,146
|
|
||||
Amortization of intangible assets
|
|
|
|
|
|
|
|
|
|
|
(1,091
|
)
|
||||
Foreign exchange losses
|
|
|
|
|
|
|
|
|
|
|
(874
|
)
|
||||
Interest and amortization expenses
|
|
|
|
|
|
|
|
|
|
|
(9,568
|
)
|
||||
Other general and administrative expenses
|
|
|
|
|
|
|
|
|
|
|
(2,339
|
)
|
||||
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
(91
|
)
|
||||
Income attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
(65
|
)
|
||||
Net income attributable to Maiden shareholders
|
|
|
|
|
|
|
|
|
|
|
$
|
14,541
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss and loss expense ratio*
|
|
68.7
|
%
|
|
69.6
|
%
|
|
64.5
|
%
|
|
68.4
|
%
|
||||
Acquisition cost ratio**
|
|
23.8
|
%
|
|
26.6
|
%
|
|
31.5
|
%
|
|
26.1
|
%
|
||||
General and administrative expense ratio***
|
|
6.1
|
%
|
|
0.3
|
%
|
|
0.3
|
%
|
|
3.4
|
%
|
||||
Combined ratio****
|
|
98.6
|
%
|
|
96.5
|
%
|
|
96.3
|
%
|
|
97.9
|
%
|
For the Three Months Ended June 30, 2011
|
|
Diversified Reinsurance
|
|
AmTrust Quota Share Reinsurance
|
|
ACAC
Quota Share |
|
Total
|
||||||||
Net premiums written
|
|
$
|
158,020
|
|
|
$
|
216,449
|
|
|
$
|
62,497
|
|
|
$
|
436,966
|
|
Net premiums earned
|
|
$
|
170,288
|
|
|
$
|
136,299
|
|
|
$
|
61,196
|
|
|
$
|
367,783
|
|
Other insurance revenue
|
|
2,179
|
|
|
—
|
|
|
—
|
|
|
2,179
|
|
||||
Net loss and loss adjustment expenses
|
|
(116,387
|
)
|
|
(94,740
|
)
|
|
(39,472
|
)
|
|
(250,599
|
)
|
||||
Commission and other acquisition expenses
|
|
(48,257
|
)
|
|
(38,116
|
)
|
|
(19,451
|
)
|
|
(105,824
|
)
|
||||
General and administrative expenses
|
|
(8,309
|
)
|
|
(596
|
)
|
|
(472
|
)
|
|
(9,377
|
)
|
||||
Underwriting (loss) income
|
|
$
|
(486
|
)
|
|
$
|
2,847
|
|
|
$
|
1,801
|
|
|
$
|
4,162
|
|
Reconciliation to net loss attributable to Maiden shareholders
|
|
|
|
|
|
|
|
|
||||||||
Net investment income and realized
and unrealized gains on investment |
|
|
|
|
|
|
|
20,409
|
|
|||||||
Amortization of intangible assets
|
|
|
|
|
|
|
|
(1,259
|
)
|
|||||||
Foreign exchange gains
|
|
|
|
|
|
|
|
939
|
|
|||||||
Interest and amortization expenses
|
|
|
|
|
|
|
|
(9,292
|
)
|
|||||||
Accelerated amortization of junior subordinated debt discount and issuance cost
|
|
|
|
|
|
|
|
|
|
|
(20,313
|
)
|
||||
Junior subordinated debt repurchase expense
|
|
|
|
|
|
|
|
|
|
|
(15,050
|
)
|
||||
Other general and administrative expenses
|
|
|
|
|
|
|
|
(3,462
|
)
|
|||||||
Income tax expense
|
|
|
|
|
|
|
|
(506
|
)
|
|||||||
Loss attributable to noncontrolling interest
|
|
|
|
|
|
|
|
6
|
|
|||||||
Net loss attributable to Maiden shareholders
|
|
|
|
|
|
|
|
$
|
(24,366
|
)
|
||||||
|
|
|
|
|
|
|
|
|
||||||||
Net loss and loss expense ratio*
|
|
67.5
|
%
|
|
69.5
|
%
|
|
64.5
|
%
|
|
67.7
|
%
|
||||
Acquisition cost ratio**
|
|
28.0
|
%
|
|
28.0
|
%
|
|
31.8
|
%
|
|
28.6
|
%
|
||||
General and administrative expense ratio***
|
|
4.8
|
%
|
|
0.4
|
%
|
|
0.8
|
%
|
|
3.5
|
%
|
||||
Combined ratio****
|
|
100.3
|
%
|
|
97.9
|
%
|
|
97.1
|
%
|
|
99.8
|
%
|
For the Six Months Ended June 30, 2012
|
|
Diversified Reinsurance
|
|
AmTrust Quota Share Reinsurance
|
|
ACAC
Quota Share |
|
Total
|
||||||||
Net premiums written
|
|
$
|
432,277
|
|
|
$
|
421,644
|
|
|
$
|
148,872
|
|
|
$
|
1,002,793
|
|
Net premiums earned
|
|
$
|
403,593
|
|
|
$
|
335,695
|
|
|
$
|
136,324
|
|
|
$
|
875,612
|
|
Other insurance revenue
|
|
7,028
|
|
|
—
|
|
|
—
|
|
|
7,028
|
|
||||
Net loss and loss adjustment expenses
|
|
(270,812
|
)
|
|
(229,611
|
)
|
|
(87,929
|
)
|
|
(588,352
|
)
|
||||
Commission and other acquisition expenses
|
|
(112,094
|
)
|
|
(91,759
|
)
|
|
(43,068
|
)
|
|
(246,921
|
)
|
||||
General and administrative expenses
|
|
(22,593
|
)
|
|
(909
|
)
|
|
(367
|
)
|
|
(23,869
|
)
|
||||
Underwriting income
|
|
$
|
5,122
|
|
|
$
|
13,416
|
|
|
$
|
4,960
|
|
|
$
|
23,498
|
|
Reconciliation to net income attributable to Maiden shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net investment income and realized
losses on investment |
|
|
|
|
|
|
|
|
|
|
36,948
|
|
||||
Amortization of intangible assets
|
|
|
|
|
|
|
|
|
|
|
(2,181
|
)
|
||||
Foreign exchange gains
|
|
|
|
|
|
|
|
|
|
|
105
|
|
||||
Interest and amortization expenses
|
|
|
|
|
|
|
|
|
|
|
(17,246
|
)
|
||||
Other general and administrative expenses
|
|
|
|
|
|
|
|
|
|
|
(5,170
|
)
|
||||
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
(970
|
)
|
||||
Income attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
(66
|
)
|
||||
Net income attributable to Maiden shareholders
|
|
|
|
|
|
|
|
|
|
|
$
|
34,918
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss and loss expense ratio*
|
|
66.0
|
%
|
|
68.4
|
%
|
|
64.5
|
%
|
|
66.7
|
%
|
||||
Acquisition cost ratio**
|
|
27.3
|
%
|
|
27.3
|
%
|
|
31.6
|
%
|
|
28.0
|
%
|
||||
General and administrative expense ratio***
|
|
5.5
|
%
|
|
0.3
|
%
|
|
0.3
|
%
|
|
3.2
|
%
|
||||
Combined ratio****
|
|
98.8
|
%
|
|
96.0
|
%
|
|
96.4
|
%
|
|
97.9
|
%
|
For the Six Months Ended June 30, 2011
|
|
Diversified Reinsurance
|
|
AmTrust Quota Share Reinsurance
|
|
ACAC
Quota Share |
|
Total
|
||||||||
Net premiums written
|
|
$
|
416,838
|
|
|
$
|
343,163
|
|
|
$
|
126,465
|
|
|
$
|
886,466
|
|
Net premiums earned
|
|
$
|
344,522
|
|
|
$
|
250,773
|
|
|
$
|
119,023
|
|
|
$
|
714,318
|
|
Other insurance revenue
|
|
6,834
|
|
|
—
|
|
|
—
|
|
|
6,834
|
|
||||
Net loss and loss adjustment expenses
|
|
(226,732
|
)
|
|
(168,279
|
)
|
|
(76,770
|
)
|
|
(471,781
|
)
|
||||
Commission and other acquisition expenses
|
|
(99,677
|
)
|
|
(75,353
|
)
|
|
(37,866
|
)
|
|
(212,896
|
)
|
||||
General and administrative expenses
|
|
(16,337
|
)
|
|
(1,264
|
)
|
|
(1,015
|
)
|
|
(18,616
|
)
|
||||
Underwriting income
|
|
$
|
8,610
|
|
|
$
|
5,877
|
|
|
$
|
3,372
|
|
|
$
|
17,859
|
|
Reconciliation to net loss attributable to Maiden shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net investment income and realized
and unrealized gains on investment |
|
|
|
|
|
|
|
|
|
|
39,597
|
|
||||
Amortization of intangible assets
|
|
|
|
|
|
|
|
|
|
|
(2,517
|
)
|
||||
Foreign exchange gains
|
|
|
|
|
|
|
|
|
|
|
2,001
|
|
||||
Interest and amortization expenses
|
|
|
|
|
|
|
|
|
|
|
(18,410
|
)
|
||||
Accelerated amortization of junior subordinated debt discount and issuance cost
|
|
|
|
|
|
|
|
|
|
|
(20,313
|
)
|
||||
Junior subordinated debt repurchase expense
|
|
|
|
|
|
|
|
|
|
|
(15,050
|
)
|
||||
Other general and administrative expenses
|
|
|
|
|
|
|
|
|
|
|
(6,516
|
)
|
||||
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
(1,678
|
)
|
||||
Loss attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
3
|
|
||||
Net loss attributable to Maiden shareholders
|
|
|
|
|
|
|
|
|
|
|
$
|
(5,024
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss and loss expense ratio*
|
|
64.5
|
%
|
|
67.1
|
%
|
|
64.5
|
%
|
|
65.4
|
%
|
||||
Acquisition cost ratio**
|
|
28.4
|
%
|
|
30.0
|
%
|
|
31.8
|
%
|
|
29.5
|
%
|
||||
General and administrative expense ratio***
|
|
4.6
|
%
|
|
0.6
|
%
|
|
0.9
|
%
|
|
3.5
|
%
|
||||
Combined ratio****
|
|
97.5
|
%
|
|
97.7
|
%
|
|
97.2
|
%
|
|
98.4
|
%
|
*
|
Calculated by dividing net loss and loss adjustment expenses by net premiums earned and other insurance revenue.
|
**
|
Calculated by dividing commission and other acquisition expenses by net premiums earned and other insurance revenue.
|
***
|
Calculated by dividing general and administrative expenses by net premiums earned and other insurance revenue
|
****
|
Calculated by adding together net loss and loss expense ratio, acquisition cost ratio and general and administrative expense ratio.
|
June 30, 2012
|
Diversified
Reinsurance |
|
AmTrust
Quota Share Reinsurance |
|
ACAC
Quota Share |
|
Total
|
||||||||
Reinsurance balances receivable, net
|
$
|
262,587
|
|
|
$
|
143,666
|
|
|
$
|
89,461
|
|
|
$
|
495,714
|
|
Funds withheld
|
42,815
|
|
|
—
|
|
|
—
|
|
|
42,815
|
|
||||
Prepaid reinsurance premiums
|
44,437
|
|
|
—
|
|
|
—
|
|
|
44,437
|
|
||||
Reinsurance recoverable on unpaid losses
|
46,659
|
|
|
—
|
|
|
—
|
|
|
46,659
|
|
||||
Deferred commission and other acquisition expenses
|
96,231
|
|
|
140,611
|
|
|
33,182
|
|
|
270,024
|
|
||||
Loan to related party
|
—
|
|
|
167,975
|
|
|
—
|
|
|
167,975
|
|
||||
Goodwill and intangible assets, net
|
96,574
|
|
|
—
|
|
|
—
|
|
|
96,574
|
|
||||
Restricted investments and cash
|
1,177,613
|
|
|
695,158
|
|
|
75,870
|
|
|
1,948,641
|
|
||||
Corporate and other assets
|
1,911
|
|
|
—
|
|
|
—
|
|
|
639,880
|
|
||||
Total Assets
|
$
|
1,768,827
|
|
|
$
|
1,147,410
|
|
|
$
|
198,513
|
|
|
$
|
3,752,719
|
|
December 31, 2011
|
Diversified
Reinsurance |
|
AmTrust
Quota Share Reinsurance |
|
ACAC
Quota Share |
|
Total
|
||||||||
Reinsurance balances receivable, net
|
$
|
244,610
|
|
|
$
|
102,003
|
|
|
$
|
76,742
|
|
|
$
|
423,355
|
|
Funds withheld
|
42,605
|
|
|
—
|
|
|
—
|
|
|
42,605
|
|
||||
Prepaid reinsurance premiums
|
35,381
|
|
|
—
|
|
|
—
|
|
|
35,381
|
|
||||
Reinsurance recoverable on unpaid losses
|
20,289
|
|
|
—
|
|
|
—
|
|
|
20,289
|
|
||||
Deferred commission and other acquisition expenses
|
98,712
|
|
|
120,369
|
|
|
29,355
|
|
|
248,436
|
|
||||
Loan to related party
|
—
|
|
|
167,975
|
|
|
—
|
|
|
167,975
|
|
||||
Goodwill and intangible assets, net
|
98,755
|
|
|
—
|
|
|
—
|
|
|
98,755
|
|
||||
Restricted investments and cash
|
1,063,010
|
|
|
461,216
|
|
|
62,017
|
|
|
1,586,243
|
|
||||
Corporate and other assets
|
2,429
|
|
|
—
|
|
|
—
|
|
|
772,072
|
|
||||
Total Assets
|
$
|
1,605,791
|
|
|
$
|
851,563
|
|
|
$
|
168,114
|
|
|
$
|
3,395,111
|
|
|
For the Three Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
||||||||||
Net premiums written
|
Total
|
|
% of Total
|
|
Total
|
|
% of Total
|
||||||
Diversified Reinsurance
|
|
|
|
|
|
|
|
||||||
Property
|
$
|
35,855
|
|
|
8.7
|
%
|
|
$
|
49,441
|
|
|
11.3
|
%
|
Casualty
|
82,762
|
|
|
20.1
|
%
|
|
76,785
|
|
|
17.6
|
%
|
||
Accident and Health
|
5,838
|
|
|
1.4
|
%
|
|
5,834
|
|
|
1.3
|
%
|
||
International
|
19,526
|
|
|
4.7
|
%
|
|
25,960
|
|
|
6.0
|
%
|
||
Total Diversified Reinsurance
|
143,981
|
|
|
34.9
|
%
|
|
158,020
|
|
|
36.2
|
%
|
||
AmTrust Quota Share Reinsurance
|
|
|
|
|
|
|
|
||||||
Small Commercial Business
|
81,882
|
|
|
19.9
|
%
|
|
54,942
|
|
|
12.5
|
%
|
||
Specialty Program
|
26,758
|
|
|
6.5
|
%
|
|
26,961
|
|
|
6.2
|
%
|
||
Specialty Risk and Extended Warranty
|
86,989
|
|
|
21.1
|
%
|
|
134,546
|
|
|
30.8
|
%
|
||
Total AmTrust Quota Share Reinsurance
|
195,629
|
|
|
47.5
|
%
|
|
216,449
|
|
|
49.5
|
%
|
||
ACAC Quota Share
|
|
|
|
|
|
|
|
||||||
Automobile Liability
|
35,401
|
|
|
8.6
|
%
|
|
35,461
|
|
|
8.1
|
%
|
||
Automobile Physical Damage
|
36,949
|
|
|
9.0
|
%
|
|
27,036
|
|
|
6.2
|
%
|
||
Total ACAC Quota Share
|
72,350
|
|
|
17.6
|
%
|
|
62,497
|
|
|
14.3
|
%
|
||
|
$
|
411,960
|
|
|
100.0
|
%
|
|
$
|
436,966
|
|
|
100.0
|
%
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
||||||||||
Net premiums written
|
Total
|
|
% of Total
|
|
Total
|
|
% of Total
|
||||||
Diversified Reinsurance
|
|
|
|
|
|
|
|
||||||
Property
|
$
|
115,961
|
|
|
11.6
|
%
|
|
$
|
121,704
|
|
|
13.7
|
%
|
Casualty
|
234,701
|
|
|
23.4
|
%
|
|
207,803
|
|
|
23.4
|
%
|
||
Accident and Health
|
25,310
|
|
|
2.5
|
%
|
|
23,541
|
|
|
2.7
|
%
|
||
International
|
56,305
|
|
|
5.6
|
%
|
|
63,790
|
|
|
7.2
|
%
|
||
Total Diversified Reinsurance
|
432,277
|
|
|
43.1
|
%
|
|
416,838
|
|
|
47.0
|
%
|
||
AmTrust Quota Share Reinsurance
|
|
|
|
|
|
|
|
||||||
Small Commercial Business
|
172,174
|
|
|
17.2
|
%
|
|
116,612
|
|
|
13.1
|
%
|
||
Specialty Program
|
48,946
|
|
|
4.9
|
%
|
|
35,432
|
|
|
4.0
|
%
|
||
Specialty Risk and Extended Warranty
|
200,524
|
|
|
20.0
|
%
|
|
191,119
|
|
|
21.6
|
%
|
||
Total AmTrust Quota Share Reinsurance
|
421,644
|
|
|
42.1
|
%
|
|
343,163
|
|
|
38.7
|
%
|
||
ACAC Quota Share
|
|
|
|
|
|
|
|
||||||
Automobile Liability
|
79,269
|
|
|
7.9
|
%
|
|
72,208
|
|
|
8.2
|
%
|
||
Automobile Physical Damage
|
69,603
|
|
|
6.9
|
%
|
|
54,257
|
|
|
6.1
|
%
|
||
Total ACAC Quota Share
|
148,872
|
|
|
14.8
|
%
|
|
126,465
|
|
|
14.3
|
%
|
||
|
$
|
1,002,793
|
|
|
100.0
|
%
|
|
$
|
886,466
|
|
|
100.0
|
%
|
|
For the Three Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
||||||||||
Net premiums earned
|
Total
|
|
% of Total
|
|
Total
|
|
% of Total
|
||||||
Diversified Reinsurance
|
|
|
|
|
|
|
|
||||||
Property
|
$
|
55,903
|
|
|
12.8
|
%
|
|
$
|
43,944
|
|
|
11.9
|
%
|
Casualty
|
111,008
|
|
|
25.4
|
%
|
|
92,254
|
|
|
25.1
|
%
|
||
Accident and Health
|
10,727
|
|
|
2.5
|
%
|
|
11,448
|
|
|
3.1
|
%
|
||
International
|
21,492
|
|
|
4.9
|
%
|
|
22,642
|
|
|
6.2
|
%
|
||
Total Diversified Reinsurance
|
199,130
|
|
|
45.6
|
%
|
|
170,288
|
|
|
46.3
|
%
|
||
AmTrust Quota Share Reinsurance
|
|
|
|
|
|
|
|
||||||
Small Commercial Business
|
69,907
|
|
|
16.0
|
%
|
|
51,297
|
|
|
13.9
|
%
|
||
Specialty Program
|
22,948
|
|
|
5.2
|
%
|
|
20,108
|
|
|
5.5
|
%
|
||
Specialty Risk and Extended Warranty
|
74,961
|
|
|
17.1
|
%
|
|
64,894
|
|
|
17.7
|
%
|
||
Total AmTrust Quota Share Reinsurance
|
167,816
|
|
|
38.3
|
%
|
|
136,299
|
|
|
37.1
|
%
|
||
ACAC Quota Share
|
|
|
|
|
|
|
|
||||||
Automobile Liability
|
36,657
|
|
|
8.4
|
%
|
|
34,967
|
|
|
9.5
|
%
|
||
Automobile Physical Damage
|
33,513
|
|
|
7.7
|
%
|
|
26,229
|
|
|
7.1
|
%
|
||
Total ACAC Quota Share
|
70,170
|
|
|
16.1
|
%
|
|
61,196
|
|
|
16.6
|
%
|
||
|
$
|
437,116
|
|
|
100.0
|
%
|
|
$
|
367,783
|
|
|
100.0
|
%
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
||||||||||
Net premiums earned
|
Total
|
|
% of Total
|
|
Total
|
|
% of Total
|
||||||
Diversified Reinsurance
|
|
|
|
|
|
|
|
||||||
Property
|
$
|
114,051
|
|
|
13.0
|
%
|
|
$
|
89,396
|
|
|
12.5
|
%
|
Casualty
|
214,987
|
|
|
24.6
|
%
|
|
177,959
|
|
|
24.9
|
%
|
||
Accident and Health
|
21,371
|
|
|
2.4
|
%
|
|
23,099
|
|
|
3.2
|
%
|
||
International
|
53,184
|
|
|
6.1
|
%
|
|
54,068
|
|
|
7.6
|
%
|
||
Total Diversified Reinsurance
|
403,593
|
|
|
46.1
|
%
|
|
344,522
|
|
|
48.2
|
%
|
||
AmTrust Quota Share Reinsurance
|
|
|
|
|
|
|
|
||||||
Small Commercial Business
|
136,799
|
|
|
15.6
|
%
|
|
100,499
|
|
|
14.1
|
%
|
||
Specialty Program
|
50,586
|
|
|
5.8
|
%
|
|
36,513
|
|
|
5.1
|
%
|
||
Specialty Risk and Extended Warranty
|
148,310
|
|
|
16.9
|
%
|
|
113,761
|
|
|
15.9
|
%
|
||
Total AmTrust Quota Share Reinsurance
|
335,695
|
|
|
38.3
|
%
|
|
250,773
|
|
|
35.1
|
%
|
||
ACAC Quota Share
|
|
|
|
|
|
|
|
||||||
Automobile Liability
|
74,794
|
|
|
8.6
|
%
|
|
68,020
|
|
|
9.5
|
%
|
||
Automobile Physical Damage
|
61,530
|
|
|
7.0
|
%
|
|
51,003
|
|
|
7.2
|
%
|
||
Total ACAC Quota Share
|
136,324
|
|
|
15.6
|
%
|
|
119,023
|
|
|
16.7
|
%
|
||
|
$
|
875,612
|
|
|
100.0
|
%
|
|
$
|
714,318
|
|
|
100.0
|
%
|
•
|
Acquiring the majority of the reinsurance-related infrastructure, assets and liabilities of U.K.-based GMAC International Insurance Services, Ltd. ("IIS") in 2010 (the “IIS Acquisition”); and
|
•
|
Completing a public debt offering of
$107.5 million
in June 2011 ("2011 Senior Notes") and repurchasing a like amount of our outstanding junior subordinated debt in July 2011. The 2011 Senior Notes trade on the New York Stock Exchange under the symbol "MHNA."
|
•
|
Completing a public debt offering of $100.0 million in March 2012 ("2012 Senior Notes"). The 2012 Senior Notes trade on the New York Stock Exchange under the symbol "MHNB." The net proceeds of
$96.6 million
have been used for working capital and general corporate purposes.
|
•
|
A renewal rights agreement under which Maiden Bermuda underwrites certain assumed reinsurance business written by GMAC International Insurance Company, Ltd. ("GMAC IICL"), which covers primarily personal auto and credit life coverages offered by primary insurers in association with programs IIS designs and implements for original equipment automobile manufacturers;
|
•
|
The "IICL Agreement" under which Maiden Bermuda reinsures all of the existing contracts written by GMAC IICL pursuant to a loss portfolio transfer; under the purchase agreement, all future contracts are now underwritten by Maiden Bermuda;
|
•
|
The acquisition of GMAC VersicherungsService GmbH ("GMAC VS"), an insurance producer based in Germany which supports sales of primary personal auto insurance through participating automobile dealerships and original equipment automobile manufacturers; and
|
•
|
The acquisition of GMAC Life Försäkrings
AB ("GMAC LF"), a credit life insurer domiciled in Sweden which writes certain credit life insurance in association through automobile financings offered through participating automobile dealerships and original equipment automobile manufacturers and which has been renamed Maiden LF.
|
•
|
Net income attributable to Maiden shareholders of
$14.5 million
, or
$0.20
basic and diluted earnings per share for the three months ended
June 30, 2012
compared to a net loss of
$24.4 million
, or
$0.34
basic and diluted loss per share for the same period in
2011
.
|
•
|
Net income attributable to Maiden shareholders of
$34.9 million
, or
$0.48
basic and diluted earnings per share for the six months ended
June 30, 2012
compared to a net loss of
$5.0 million
, or
$0.07
basic and diluted loss per share for the same period in
2011
.
|
•
|
Operating earnings
(1)
of
$19.7 million
, or
$0.27
basic and diluted operating earnings per share
(1)
for the three months ended
June 30, 2012
compared to
$11.2 million
, or
$0.16
basic and
$0.15
diluted earnings per share for the same period in
2011
.
|
•
|
Operating earnings
(1)
of
$39.1 million
, or
$0.54
basic and
$0.53
diluted operating earnings per share
(1)
for the six months ended
June 30, 2012
compared to
$31.0 million
, or
$0.43
basic and diluted earnings per share for the same period in
2011
.
|
•
|
Gross premiums written of
$445.2 million
and
$1,058.4 million
for the three and six months ended
June 30, 2012
, a
3.7%
decrease
and
13.4%
increase
over the same periods in
2011
, respectively.
|
•
|
Net premiums earned of
$437.1 million
and
$875.6 million
for the three and six months ended
June 30, 2012
, a
18.9%
and
22.6%
increase
over the same periods in
2011
, respectively.
|
•
|
Underwriting income
(2)
of
$11.4 million
and
$23.5 million
and a combined ratio
(2)
of
97.9%
for the three and six months ended
June 30, 2012
compared to
$4.2 million
and
$17.9 million
and
99.8%
and
98.4%
, respectively for the same periods in
2011
.
|
•
|
Net investment income of
$20.1 million
and
$38.5 million
for the three and six months ended
June 30, 2012
, a
1.3%
increase
and
1.1%
decrease
over the same periods in
2011
, respectively.
|
•
|
Annualized operating return on equity
(1)
of
9.9%
for the six months ended
June 30, 2012
compared to
8.3%
for the same period in
2011
.
|
•
|
Common shareholders’ equity of
$824.3 million
; book value per common share of
$11.41
.
|
•
|
Total cash and investments of
$2.5 billion
; fixed maturities comprise
94.2%
of total invested assets, of which
54.6%
have a credit rating of AA+ or better and an overall average credit rating of AA-.
|
•
|
Total assets of
$3.8 billion
.
|
•
|
Reserve for loss and loss adjustment expenses of
$1.5 billion
.
|
•
|
Total debt of
$333.8 million
and a debt to total capitalization ratio of
28.8%
.
|
(1)
|
Operating earnings, operating earnings per share and operating return on equity are non-GAAP financial measures. See “
Non-GAAP Financial Measures
” for additional information and a reconciliation to the nearest U.S. GAAP financial measure (net income).
|
(2)
|
Underwriting income and combined ratio are operating metrics. See “
Non-GAAP Financial Measures
” for additional information.
|
•
|
Net realized and unrealized gains or losses on investment;
|
•
|
Foreign exchange and other gains or losses;
|
•
|
Amortization of intangible assets; and
|
•
|
Non-cash deferred tax expenses;
|
•
|
For 2011, we exclude transaction expenses related to the IIS Acquisition, as these are non-recurring; and
|
•
|
In 2011, we exclude the junior subordinated debt repurchase expense and the accelerated amortization of junior subordinated debt discount and issuance costs resulting from the 2011 Senior Notes offering.
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
($ in Millions)
|
|
($ in Millions)
|
||||||||||||
Net income (loss) attributable to Maiden shareholders
|
$
|
14.5
|
|
|
$
|
(24.4
|
)
|
|
$
|
34.9
|
|
|
$
|
(5.0
|
)
|
Add (subtract):
|
|
|
|
|
|
|
|
|
|
||||||
Net realized and unrealized losses (gains) on investment
|
2.9
|
|
|
(0.6
|
)
|
|
1.5
|
|
|
(0.6
|
)
|
||||
Foreign exchange losses (gains)
|
0.9
|
|
|
(0.9
|
)
|
|
(0.1
|
)
|
|
(2.0
|
)
|
||||
Amortization of intangible assets
|
1.1
|
|
|
1.3
|
|
|
2.2
|
|
|
2.5
|
|
||||
Junior subordinated debt repurchase expense
|
—
|
|
|
15.1
|
|
|
—
|
|
|
15.1
|
|
||||
Accelerated amortization of junior subordinated debt discount and issuance cost
|
—
|
|
|
20.3
|
|
|
—
|
|
|
20.3
|
|
||||
Non-recurring general and administrative expenses relating to IIS Acquisition
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.1
|
|
||||
Non-cash deferred tax expense
|
0.3
|
|
|
0.3
|
|
|
0.6
|
|
|
0.6
|
|
||||
Operating earnings attributable to Maiden shareholders
|
$
|
19.7
|
|
|
$
|
11.2
|
|
|
$
|
39.1
|
|
|
$
|
31.0
|
|
Operating earnings per common share:
|
|
|
|
|
|
|
|
||||||||
Basic operating earnings per share
|
$
|
0.27
|
|
|
$
|
0.16
|
|
|
$
|
0.54
|
|
|
$
|
0.43
|
|
Diluted operating earnings per share
|
$
|
0.27
|
|
|
$
|
0.15
|
|
|
$
|
0.53
|
|
|
$
|
0.43
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
($ in Millions)
|
|
($ in Millions)
|
||||||||||||
Operating earnings attributable to Maiden shareholders
|
$
|
19.7
|
|
|
$
|
11.2
|
|
|
$
|
39.1
|
|
|
$
|
31.0
|
|
|
|
|
|
|
|
|
|
||||||||
Opening Maiden shareholders’ equity
|
$
|
810.4
|
|
|
$
|
769.7
|
|
|
$
|
768.6
|
|
|
$
|
750.2
|
|
Ending Maiden shareholders’ equity
|
$
|
824.3
|
|
|
$
|
759.3
|
|
|
$
|
824.3
|
|
|
$
|
759.3
|
|
Average Maiden shareholders’ equity
|
$
|
817.4
|
|
|
$
|
764.5
|
|
|
$
|
796.5
|
|
|
$
|
754.8
|
|
|
|
|
|
|
|
|
|
||||||||
Operating return on equity
|
2.4
|
%
|
|
1.5
|
%
|
|
4.9
|
%
|
|
4.1
|
%
|
||||
Annualized operating return on equity
|
9.7
|
%
|
|
5.9
|
%
|
|
9.9
|
%
|
|
8.3
|
%
|
|
June 30, 2012
|
|
December 31, 2011
|
||||
|
($ in Millions)
|
||||||
Ending Maiden shareholders’ equity
|
$
|
824.3
|
|
|
$
|
768.6
|
|
Common shares outstanding
|
72,261,582
|
|
|
72,221,428
|
|
||
Book value per share
|
$
|
11.41
|
|
|
$
|
10.64
|
|
•
|
losses paid, which are actual cash payments to insureds, net of recoveries from reinsurers;
|
•
|
change in outstanding loss or case reserves, which represent management’s best estimate of the likely settlement amount for known claims, less the portion that can be recovered from reinsurers; and
|
•
|
change in IBNR reserves, which are reserves established by us for changes in the values of claims that have been reported to us but are not yet settled, as well as claims that have occurred but have not yet been reported. The portion recoverable from reinsurers is deducted from the gross estimated loss.
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
($ in Millions)
|
|
($ in Millions)
|
||||||||||||
Gross premiums written
|
$
|
445.2
|
|
|
$
|
462.4
|
|
|
$
|
1,058.4
|
|
|
$
|
933.2
|
|
Net premiums written
|
$
|
412.0
|
|
|
$
|
437.0
|
|
|
$
|
1,002.8
|
|
|
$
|
886.5
|
|
Net premiums earned
|
$
|
437.1
|
|
|
$
|
367.8
|
|
|
$
|
875.6
|
|
|
$
|
714.3
|
|
Other insurance revenue
|
2.3
|
|
|
2.2
|
|
|
7.0
|
|
|
6.8
|
|
||||
Net loss and loss adjustment expenses
|
(300.4
|
)
|
|
(250.6
|
)
|
|
(588.3
|
)
|
|
(471.7
|
)
|
||||
Commission and other acquisition expenses
|
(114.7
|
)
|
|
(105.8
|
)
|
|
(247.0
|
)
|
|
(212.9
|
)
|
||||
General and administrative expenses
|
(12.9
|
)
|
|
(9.4
|
)
|
|
(23.8
|
)
|
|
(18.6
|
)
|
||||
Total underwriting income
|
11.4
|
|
|
4.2
|
|
|
23.5
|
|
|
17.9
|
|
||||
Other general and administrative expenses
|
(2.3
|
)
|
|
(3.4
|
)
|
|
(5.2
|
)
|
|
(6.5
|
)
|
||||
Net investment income
|
20.1
|
|
|
19.8
|
|
|
38.5
|
|
|
39.0
|
|
||||
Net realized and unrealized (losses) gains on investment
|
(2.9
|
)
|
|
0.6
|
|
|
(1.5
|
)
|
|
0.6
|
|
||||
Junior subordinated debt repurchase expense
|
—
|
|
|
(15.1
|
)
|
|
—
|
|
|
(15.1
|
)
|
||||
Accelerated amortization of junior subordinated debt discount and issuance cost
|
—
|
|
|
(20.3
|
)
|
|
—
|
|
|
(20.3
|
)
|
||||
Amortization of intangible assets
|
(1.1
|
)
|
|
(1.3
|
)
|
|
(2.2
|
)
|
|
(2.5
|
)
|
||||
Foreign exchange (losses) gains
|
(0.9
|
)
|
|
0.9
|
|
|
0.1
|
|
|
2.0
|
|
||||
Interest and amortization expenses
|
(9.6
|
)
|
|
(9.3
|
)
|
|
(17.2
|
)
|
|
(18.4
|
)
|
||||
Income tax expense
|
(0.1
|
)
|
|
(0.5
|
)
|
|
(1.0
|
)
|
|
(1.7
|
)
|
||||
Income attributable to noncontrolling interest
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
||||
Net income (loss) attributable to Maiden shareholders
|
$
|
14.5
|
|
|
$
|
(24.4
|
)
|
|
$
|
34.9
|
|
|
$
|
(5.0
|
)
|
Ratios
|
|
|
|
|
|
|
|
||||||||
Net loss and loss expense ratio
|
68.4
|
%
|
|
67.7
|
%
|
|
66.7
|
%
|
|
65.4
|
%
|
||||
Acquisition cost ratio
|
26.1
|
%
|
|
28.6
|
%
|
|
28.0
|
%
|
|
29.5
|
%
|
||||
General and administrative expense ratio
|
3.4
|
%
|
|
3.5
|
%
|
|
3.2
|
%
|
|
3.5
|
%
|
||||
Expense ratio
|
29.5
|
%
|
|
32.1
|
%
|
|
31.2
|
%
|
|
33.0
|
%
|
||||
Combined ratio
|
97.9
|
%
|
|
99.8
|
%
|
|
97.9
|
%
|
|
98.4
|
%
|
|
For the Three Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
Net Premiums Written
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Diversified Reinsurance
|
$
|
144.0
|
|
|
34.9
|
%
|
|
$
|
158.0
|
|
|
36.2
|
%
|
|
$
|
(14.0
|
)
|
|
(8.9
|
)%
|
AmTrust Quota Share Reinsurance
|
195.6
|
|
|
47.5
|
%
|
|
216.5
|
|
|
49.5
|
%
|
|
(20.9
|
)
|
|
(9.6
|
)%
|
|||
ACAC Quota Share
|
72.4
|
|
|
17.6
|
%
|
|
62.5
|
|
|
14.3
|
%
|
|
9.9
|
|
|
15.8
|
%
|
|||
Total
|
$
|
412.0
|
|
|
100.0
|
%
|
|
$
|
437.0
|
|
|
100.0
|
%
|
|
$
|
(25.0
|
)
|
|
(5.7
|
)%
|
|
For the Six Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
Net Premiums Written
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Diversified Reinsurance
|
$
|
432.3
|
|
|
43.1
|
%
|
|
$
|
416.8
|
|
|
47.0
|
%
|
|
$
|
15.5
|
|
|
3.7
|
%
|
AmTrust Quota Share Reinsurance
|
421.6
|
|
|
42.1
|
%
|
|
343.2
|
|
|
38.7
|
%
|
|
78.4
|
|
|
22.9
|
%
|
|||
ACAC Quota Share
|
148.9
|
|
|
14.8
|
%
|
|
126.5
|
|
|
14.3
|
%
|
|
22.4
|
|
|
17.7
|
%
|
|||
Total
|
$
|
1,002.8
|
|
|
100.0
|
%
|
|
$
|
886.5
|
|
|
100.0
|
%
|
|
$
|
116.3
|
|
|
13.1
|
%
|
•
|
Continued underwriting discipline by Maiden US -
Maiden US continues to maintain its underwriting discipline in the face of ongoing significant market competition and Maiden US wrote fewer new accounts during the second quarter
2012
although it did continue to increase its participation on certain existing accounts. As a result, there was a smaller increase in premiums written for the three months ended
June 30, 2012
of $0.2 million or 0.2% compared to the same period in
2011
. This compares with faster growth of $38.8 million, or 11.8% for the six months ended
June 30, 2012
, compared to the same period in
2011
. In both the three and six months ended
June 30, 2012
, the increased writings by Maiden US were offset by reduced writings by Maiden Bermuda and the Company's international operations, as certain accounts were reduced in size or were non-renewed.
|
•
|
Growth on recurring business in the AmTrust Quota Share Reinsurance segment -
The results for both periods in
2011
include the $45.9 million in force and unearned premium assumed at the commencement of the European Hospital Liability Quota Share on April 1, 2011. Excluding that non-recurring item, net premiums written increased by $25.0 million or 14.7% and $124.4 million or 41.9% for the three and six months ended
June 30, 2012
compared to the same periods in
2011
, respectively. This increase reflects AmTrust's continuing expansion through acquisition and ongoing organic growth, both of which are benefiting from improved rate levels.
|
•
|
Growth in the ACAC Quota Share segment -
For the three and six months ended
June 30, 2012
, net premiums written increased by
$9.9 million
and
$22.4 million
, or
15.8%
and
17.7%
, respectively, compared to the same periods in
2011
.
|
|
For the Three Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
Net Premiums Earned
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Diversified Reinsurance
|
$
|
199.1
|
|
|
45.6
|
%
|
|
$
|
170.3
|
|
|
46.3
|
%
|
|
$
|
28.8
|
|
|
16.9
|
%
|
AmTrust Quota Share Reinsurance
|
167.8
|
|
|
38.3
|
%
|
|
136.3
|
|
|
37.1
|
%
|
|
31.5
|
|
|
23.1
|
%
|
|||
ACAC Quota Share
|
70.2
|
|
|
16.1
|
%
|
|
61.2
|
|
|
16.6
|
%
|
|
9.0
|
|
|
14.7
|
%
|
|||
Total
|
$
|
437.1
|
|
|
100.0
|
%
|
|
$
|
367.8
|
|
|
100.0
|
%
|
|
$
|
69.3
|
|
|
18.9
|
%
|
|
For the Six Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
Net Premiums Earned
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Diversified Reinsurance
|
$
|
403.6
|
|
|
46.1
|
%
|
|
$
|
344.5
|
|
|
48.2
|
%
|
|
$
|
59.1
|
|
|
17.1
|
%
|
AmTrust Quota Share Reinsurance
|
335.7
|
|
|
38.3
|
%
|
|
250.8
|
|
|
35.1
|
%
|
|
84.9
|
|
|
33.9
|
%
|
|||
ACAC Quota Share
|
136.3
|
|
|
15.6
|
%
|
|
119.0
|
|
|
16.7
|
%
|
|
17.3
|
|
|
14.5
|
%
|
|||
Total
|
$
|
875.6
|
|
|
100.0
|
%
|
|
$
|
714.3
|
|
|
100.0
|
%
|
|
$
|
161.3
|
|
|
22.6
|
%
|
•
|
Growth in Maiden US business
- Continued underwriting discipline and strong organic premium written growth in
2011
and 2012 resulted in increased earned premiums by Maiden US of $35.0 million or 25.0% and $66.8 million or 24.3% during the three and six months ended
June 30, 2012
, respectively compared to the same periods in
2011
. This growth in Maiden US was partially offset in both periods by reduced writings by Maiden Bermuda and the Company's international operations, as certain accounts reduced in size or were non-renewed.
|
•
|
Growth in the AmTrust Quota Share Reinsurance segment -
The commencement of the European Hospital Liability Quota Share on April 1, 2011 increased premiums earned by $5.3 million and $29.2 million for the three and six months ended
June 30, 2012
, respectively, while the business assumed under the Master Agreement increased $26.2 million or 22.4% and $55.7 million or 24.1% for the three and six months ended
June 30, 2012
, respectively, compared to the same periods in
2011
.
|
•
|
Growth in the ACAC Quota Share segment -
For the three and six months ended
June 30, 2012
net premiums earned increased by
$9.0 million
or
14.7%
and
$17.3 million
or
14.5%
, respectively, compared to the same periods in
2011
.
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
($ in Millions)
|
|
($ in Millions)
|
||||||||||||
Average invested assets
|
$
|
2,664.8
|
|
|
$
|
2,238.3
|
|
|
$
|
2,590.5
|
|
|
$
|
2,209.6
|
|
Average book yield*
|
3.0
|
%
|
|
3.5
|
%
|
|
3.0
|
%
|
|
3.5
|
%
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
($ in Millions)
|
|
($ in Millions)
|
||||||||||||
General & administrative expenses – segments
|
$
|
12.9
|
|
|
$
|
9.4
|
|
|
$
|
23.8
|
|
|
$
|
18.6
|
|
General & administrative expenses – corporate
|
2.3
|
|
|
3.4
|
|
|
5.2
|
|
|
6.5
|
|
||||
Total general & administrative expenses
|
$
|
15.2
|
|
|
$
|
12.8
|
|
|
$
|
29.0
|
|
|
$
|
25.1
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
($ in Millions)
|
|
($ in Millions)
|
||||||||||||
Junior Subordinated Debt
|
$
|
5.4
|
|
|
$
|
9.1
|
|
|
$
|
10.7
|
|
|
$
|
18.2
|
|
Senior Notes
|
4.2
|
|
|
0.2
|
|
|
6.5
|
|
|
0.2
|
|
||||
Total
|
$
|
9.6
|
|
|
$
|
9.3
|
|
|
$
|
17.2
|
|
|
$
|
18.4
|
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
($ in Millions)
|
|
($ in Millions)
|
||||||||||||
Net premiums written
|
$
|
144.0
|
|
|
$
|
158.0
|
|
|
$
|
432.3
|
|
|
$
|
416.8
|
|
Net premiums earned
|
$
|
199.1
|
|
|
$
|
170.3
|
|
|
$
|
403.6
|
|
|
$
|
344.5
|
|
Other insurance revenue
|
2.3
|
|
|
2.2
|
|
|
7.0
|
|
|
6.8
|
|
||||
Net loss and loss adjustment expenses
|
(138.4
|
)
|
|
(116.4
|
)
|
|
(270.8
|
)
|
|
(226.7
|
)
|
||||
Commission and other acquisition expenses
|
(47.9
|
)
|
|
(48.3
|
)
|
|
(112.1
|
)
|
|
(99.7
|
)
|
||||
General and administrative expenses
|
(12.2
|
)
|
|
(8.3
|
)
|
|
(22.6
|
)
|
|
(16.3
|
)
|
||||
Underwriting income (loss)
|
$
|
2.9
|
|
|
$
|
(0.5
|
)
|
|
$
|
5.1
|
|
|
$
|
8.6
|
|
Ratios
|
|
|
|
|
|
|
|
||||||||
Net loss and loss expense ratio
|
68.7
|
%
|
|
67.5
|
%
|
|
66.0
|
%
|
|
64.5
|
%
|
||||
Acquisition cost ratio
|
23.8
|
%
|
|
28.0
|
%
|
|
27.3
|
%
|
|
28.4
|
%
|
||||
General and administrative expense ratio
|
6.1
|
%
|
|
4.8
|
%
|
|
5.5
|
%
|
|
4.6
|
%
|
||||
Expense ratio
|
29.9
|
%
|
|
32.8
|
%
|
|
32.8
|
%
|
|
33.0
|
%
|
||||
Combined ratio
|
98.6
|
%
|
|
100.3
|
%
|
|
98.8
|
%
|
|
97.5
|
%
|
|
For the Three Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
Net Premiums Written
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Property
|
$
|
35.9
|
|
|
24.8
|
%
|
|
$
|
49.4
|
|
|
31.3
|
%
|
|
$
|
(13.5
|
)
|
|
(27.5
|
)%
|
Casualty
|
82.8
|
|
|
57.5
|
%
|
|
76.8
|
|
|
48.6
|
%
|
|
6.0
|
|
|
7.8
|
%
|
|||
Accident and Health
|
5.8
|
|
|
4.1
|
%
|
|
5.8
|
|
|
3.7
|
%
|
|
—
|
|
|
0.1
|
%
|
|||
International
|
19.5
|
|
|
13.6
|
%
|
|
26.0
|
|
|
16.4
|
%
|
|
(6.5
|
)
|
|
(24.8
|
)%
|
|||
Total Diversified Reinsurance
|
$
|
144.0
|
|
|
100.0
|
%
|
|
$
|
158.0
|
|
|
100.0
|
%
|
|
$
|
(14.0
|
)
|
|
(8.9
|
)%
|
|
For the Six Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
Net Premiums Written
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Property
|
$
|
116.0
|
|
|
26.8
|
%
|
|
$
|
121.7
|
|
|
29.2
|
%
|
|
$
|
(5.7
|
)
|
|
(4.7
|
)%
|
Casualty
|
234.7
|
|
|
54.3
|
%
|
|
207.8
|
|
|
49.9
|
%
|
|
26.9
|
|
|
12.9
|
%
|
|||
Accident and Health
|
25.3
|
|
|
5.9
|
%
|
|
23.5
|
|
|
5.6
|
%
|
|
1.8
|
|
|
7.5
|
%
|
|||
International
|
56.3
|
|
|
13.0
|
%
|
|
63.8
|
|
|
15.3
|
%
|
|
(7.5
|
)
|
|
(11.7
|
)%
|
|||
Total Diversified Reinsurance
|
$
|
432.3
|
|
|
100.0
|
%
|
|
$
|
416.8
|
|
|
100.0
|
%
|
|
$
|
15.5
|
|
|
3.7
|
%
|
|
For the Three Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
Net Premiums Earned
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Property
|
$
|
55.9
|
|
|
28.1
|
%
|
|
$
|
43.9
|
|
|
25.8
|
%
|
|
$
|
12.0
|
|
|
27.2
|
%
|
Casualty
|
111.0
|
|
|
55.7
|
%
|
|
92.3
|
|
|
54.2
|
%
|
|
18.7
|
|
|
20.3
|
%
|
|||
Accident and Health
|
10.7
|
|
|
5.4
|
%
|
|
11.5
|
|
|
6.7
|
%
|
|
(0.8
|
)
|
|
(6.3
|
)%
|
|||
International
|
21.5
|
|
|
10.8
|
%
|
|
22.6
|
|
|
13.3
|
%
|
|
(1.1
|
)
|
|
(5.1
|
)%
|
|||
Total Diversified Reinsurance
|
$
|
199.1
|
|
|
100.0
|
%
|
|
$
|
170.3
|
|
|
100.0
|
%
|
|
$
|
28.8
|
|
|
16.9
|
%
|
|
For the Six Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
Net Premiums Earned
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Property
|
$
|
114.0
|
|
|
28.2
|
%
|
|
$
|
89.4
|
|
|
25.9
|
%
|
|
$
|
24.6
|
|
|
27.6
|
%
|
Casualty
|
215.0
|
|
|
53.3
|
%
|
|
177.9
|
|
|
51.7
|
%
|
|
37.1
|
|
|
20.8
|
%
|
|||
Accident and Health
|
21.4
|
|
|
5.3
|
%
|
|
23.1
|
|
|
6.7
|
%
|
|
(1.7
|
)
|
|
(7.5
|
)%
|
|||
International
|
53.2
|
|
|
13.2
|
%
|
|
54.1
|
|
|
15.7
|
%
|
|
(0.9
|
)
|
|
(1.6
|
)%
|
|||
Total Diversified Reinsurance
|
$
|
403.6
|
|
|
100.0
|
%
|
|
$
|
344.5
|
|
|
100.0
|
%
|
|
$
|
59.1
|
|
|
17.1
|
%
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
($ in Millions)
|
|
($ in Millions)
|
||||||||||||
Net premiums written
|
$
|
195.6
|
|
|
$
|
216.5
|
|
|
$
|
421.6
|
|
|
$
|
343.2
|
|
Net premiums earned
|
$
|
167.8
|
|
|
$
|
136.3
|
|
|
$
|
335.7
|
|
|
$
|
250.8
|
|
Net loss and loss adjustment expenses
|
(116.7
|
)
|
|
(94.7
|
)
|
|
(229.6
|
)
|
|
(168.3
|
)
|
||||
Commission and other acquisition expenses
|
(44.7
|
)
|
|
(38.1
|
)
|
|
(91.8
|
)
|
|
(75.3
|
)
|
||||
General and administrative expenses
|
(0.5
|
)
|
|
(0.6
|
)
|
|
(0.9
|
)
|
|
(1.3
|
)
|
||||
Underwriting income
|
$
|
5.9
|
|
|
$
|
2.9
|
|
|
$
|
13.4
|
|
|
$
|
5.9
|
|
Ratios
|
|
|
|
|
|
|
|
||||||||
Net loss and loss expense ratio
|
69.6
|
%
|
|
69.5
|
%
|
|
68.4
|
%
|
|
67.1
|
%
|
||||
Acquisition cost ratio
|
26.6
|
%
|
|
28.0
|
%
|
|
27.3
|
%
|
|
30.0
|
%
|
||||
General and administrative expense ratio
|
0.3
|
%
|
|
0.4
|
%
|
|
0.3
|
%
|
|
0.6
|
%
|
||||
Expense ratio
|
26.9
|
%
|
|
28.4
|
%
|
|
27.6
|
%
|
|
30.6
|
%
|
||||
Combined ratio
|
96.5
|
%
|
|
97.9
|
%
|
|
96.0
|
%
|
|
97.7
|
%
|
|
For the Three Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
Net Premiums Written
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Small Commercial Business
|
$
|
81.9
|
|
|
41.8
|
%
|
|
$
|
54.9
|
|
|
25.4
|
%
|
|
$
|
27.0
|
|
|
49.0
|
%
|
Specialty Program
|
26.7
|
|
|
13.7
|
%
|
|
27.0
|
|
|
12.5
|
%
|
|
(0.3
|
)
|
|
(0.8
|
)%
|
|||
Specialty Risk and Extended Warranty
|
87.0
|
|
|
44.5
|
%
|
|
134.6
|
|
|
62.1
|
%
|
|
(47.6
|
)
|
|
(35.3
|
)%
|
|||
Total AmTrust Quota Share Reinsurance
|
$
|
195.6
|
|
|
100.0
|
%
|
|
$
|
216.5
|
|
|
100.0
|
%
|
|
$
|
(20.9
|
)
|
|
(9.6
|
)%
|
|
For the Six Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
Net Premiums Written
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Small Commercial Business
|
$
|
172.2
|
|
|
40.8
|
%
|
|
$
|
116.6
|
|
|
34.0
|
%
|
|
$
|
55.6
|
|
|
47.6
|
%
|
Specialty Program
|
48.9
|
|
|
11.6
|
%
|
|
35.5
|
|
|
10.3
|
%
|
|
13.4
|
|
|
38.1
|
%
|
|||
Specialty Risk and Extended Warranty
|
200.5
|
|
|
47.6
|
%
|
|
191.1
|
|
|
55.7
|
%
|
|
9.4
|
|
|
4.9
|
%
|
|||
Total AmTrust Quota Share Reinsurance
|
$
|
421.6
|
|
|
100.0
|
%
|
|
$
|
343.2
|
|
|
100.0
|
%
|
|
$
|
78.4
|
|
|
22.9
|
%
|
|
For the Three Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
Net Premiums Earned
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Small Commercial Business
|
$
|
69.9
|
|
|
41.6
|
%
|
|
$
|
51.3
|
|
|
37.6
|
%
|
|
$
|
18.6
|
|
|
36.3
|
%
|
Specialty Program
|
22.9
|
|
|
13.7
|
%
|
|
20.1
|
|
|
14.8
|
%
|
|
2.8
|
|
|
14.1
|
%
|
|||
Specialty Risk and Extended Warranty
|
75.0
|
|
|
44.7
|
%
|
|
64.9
|
|
|
47.6
|
%
|
|
10.1
|
|
|
15.5
|
%
|
|||
Total AmTrust Quota Share Reinsurance
|
$
|
167.8
|
|
|
100.0
|
%
|
|
$
|
136.3
|
|
|
100.0
|
%
|
|
$
|
31.5
|
|
|
23.1
|
%
|
|
For the Six Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
Net Premiums Earned
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Small Commercial Business
|
$
|
136.8
|
|
|
40.7
|
%
|
|
$
|
100.5
|
|
|
40.1
|
%
|
|
$
|
36.3
|
|
|
36.1
|
%
|
Specialty Program
|
50.6
|
|
|
15.1
|
%
|
|
36.5
|
|
|
14.5
|
%
|
|
14.1
|
|
|
38.5
|
%
|
|||
Specialty Risk and Extended Warranty
|
148.3
|
|
|
44.2
|
%
|
|
113.8
|
|
|
45.4
|
%
|
|
34.5
|
|
|
30.4
|
%
|
|||
Total AmTrust Quota Share Reinsurance
|
$
|
335.7
|
|
|
100.0
|
%
|
|
$
|
250.8
|
|
|
100.0
|
%
|
|
$
|
84.9
|
|
|
33.9
|
%
|
|
For the Three Months Ended June 30,
|
|
For the Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
|
($ in Millions)
|
|
($ in Millions)
|
||||||||||||
Net premiums written
|
$
|
72.4
|
|
|
$
|
62.5
|
|
|
$
|
148.9
|
|
|
$
|
126.5
|
|
Net premiums earned
|
$
|
70.2
|
|
|
$
|
61.2
|
|
|
$
|
136.3
|
|
|
$
|
119.0
|
|
Net loss and loss adjustment expenses
|
(45.3
|
)
|
|
(39.5
|
)
|
|
(87.9
|
)
|
|
(76.7
|
)
|
||||
Commission and other acquisition expenses
|
(22.1
|
)
|
|
(19.4
|
)
|
|
(43.1
|
)
|
|
(37.9
|
)
|
||||
General and administrative expenses
|
(0.2
|
)
|
|
(0.5
|
)
|
|
(0.3
|
)
|
|
(1.0
|
)
|
||||
Underwriting income
|
$
|
2.6
|
|
|
$
|
1.8
|
|
|
$
|
5.0
|
|
|
$
|
3.4
|
|
Ratios
|
|
|
|
|
|
|
|
||||||||
Net loss and loss expense ratio
|
64.5
|
%
|
|
64.5
|
%
|
|
64.5
|
%
|
|
64.5
|
%
|
||||
Acquisition cost ratio
|
31.5
|
%
|
|
31.8
|
%
|
|
31.6
|
%
|
|
31.8
|
%
|
||||
General and administrative expense ratio
|
0.3
|
%
|
|
0.8
|
%
|
|
0.3
|
%
|
|
0.9
|
%
|
||||
Expense ratio
|
31.8
|
%
|
|
32.6
|
%
|
|
31.9
|
%
|
|
32.7
|
%
|
||||
Combined ratio
|
96.3
|
%
|
|
97.1
|
%
|
|
96.4
|
%
|
|
97.2
|
%
|
|
For the Three Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
Net Premiums Written
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Automobile liability
|
$
|
35.4
|
|
|
48.9
|
%
|
|
$
|
35.5
|
|
|
56.7
|
%
|
|
$
|
(0.1
|
)
|
|
(0.2
|
)%
|
Automobile physical damage
|
37.0
|
|
|
51.1
|
%
|
|
27.0
|
|
|
43.3
|
%
|
|
10.0
|
|
|
36.7
|
%
|
|||
Total ACAC Quota Share
|
$
|
72.4
|
|
|
100.0
|
%
|
|
$
|
62.5
|
|
|
100.0
|
%
|
|
$
|
9.9
|
|
|
15.8
|
%
|
|
For the Six Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
Net Premiums Written
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Automobile liability
|
$
|
79.3
|
|
|
53.2
|
%
|
|
$
|
72.2
|
|
|
57.1
|
%
|
|
$
|
7.1
|
|
|
9.8
|
%
|
Automobile physical damage
|
69.6
|
|
|
46.8
|
%
|
|
54.3
|
|
|
42.9
|
%
|
|
15.3
|
|
|
28.3
|
%
|
|||
Total ACAC Quota Share
|
$
|
148.9
|
|
|
100.0
|
%
|
|
$
|
126.5
|
|
|
100.0
|
%
|
|
$
|
22.4
|
|
|
17.7
|
%
|
|
For the Three Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
Net Premiums Earned
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Automobile liability
|
$
|
36.7
|
|
|
52.2
|
%
|
|
$
|
35.0
|
|
|
57.1
|
%
|
|
$
|
1.7
|
|
|
4.8
|
%
|
Automobile physical damage
|
33.5
|
|
|
47.8
|
%
|
|
26.2
|
|
|
42.9
|
%
|
|
7.3
|
|
|
27.8
|
%
|
|||
Total ACAC Quota Share
|
$
|
70.2
|
|
|
100.0
|
%
|
|
$
|
61.2
|
|
|
100.0
|
%
|
|
$
|
9.0
|
|
|
14.7
|
%
|
|
For the Six Months Ended June 30,
|
|
|
|
|
|||||||||||||||
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
Net Premiums Earned
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Automobile liability
|
$
|
74.8
|
|
|
54.9
|
%
|
|
$
|
68.0
|
|
|
57.1
|
%
|
|
$
|
6.8
|
|
|
10.0
|
%
|
Automobile physical damage
|
61.5
|
|
|
45.1
|
%
|
|
51.0
|
|
|
42.9
|
%
|
|
10.5
|
|
|
20.6
|
%
|
|||
Total ACAC Quota Share
|
$
|
136.3
|
|
|
100.0
|
%
|
|
$
|
119.0
|
|
|
100.0
|
%
|
|
$
|
17.3
|
|
|
14.5
|
%
|
|
For the Six Months Ended June 30,
|
||||||
|
2012
|
|
2011
|
||||
|
($ in Millions)
|
||||||
Operating activities
|
$
|
166.4
|
|
|
$
|
43.6
|
|
Investing activities
|
(380.6
|
)
|
|
39.0
|
|
||
Financing activities
|
85.2
|
|
|
18.5
|
|
||
Effect of exchange rate changes on foreign currency cash
|
(0.1
|
)
|
|
1.1
|
|
||
Total (decrease) increase in cash and cash equivalents
|
$
|
(129.1
|
)
|
|
$
|
102.2
|
|
|
June 30, 2012
|
|
December 31, 2011
|
||||||||||||||||||||
|
Cash &
Equivalents |
|
Fixed
Maturities |
|
Total
|
|
Cash &
Equivalents |
|
Fixed
Maturities |
|
Total
|
||||||||||||
|
($ in Millions)
|
|
($ in Millions)
|
||||||||||||||||||||
Maiden US
|
$
|
18.3
|
|
|
$
|
727.3
|
|
|
$
|
745.6
|
|
|
$
|
19.4
|
|
|
$
|
624.4
|
|
|
$
|
643.8
|
|
Maiden Bermuda
|
49.8
|
|
|
382.2
|
|
|
432.0
|
|
|
50.8
|
|
|
368.4
|
|
|
419.2
|
|
||||||
Diversified Reinsurance
|
68.1
|
|
|
1,109.5
|
|
|
1,177.6
|
|
|
70.2
|
|
|
992.8
|
|
|
1,063.0
|
|
||||||
Maiden Bermuda
|
16.0
|
|
|
679.2
|
|
|
695.2
|
|
|
41.7
|
|
|
419.5
|
|
|
461.2
|
|
||||||
AmTrust Quota Share Reinsurance
|
16.0
|
|
|
679.2
|
|
|
695.2
|
|
|
41.7
|
|
|
419.5
|
|
|
461.2
|
|
||||||
Maiden Bermuda
|
0.3
|
|
|
75.5
|
|
|
75.8
|
|
|
3.0
|
|
|
59.0
|
|
|
62.0
|
|
||||||
ACAC Quota Share
|
0.3
|
|
|
75.5
|
|
|
75.8
|
|
|
3.0
|
|
|
59.0
|
|
|
62.0
|
|
||||||
Total
|
$
|
84.4
|
|
|
$
|
1,864.2
|
|
|
$
|
1,948.6
|
|
|
$
|
114.9
|
|
|
$
|
1,471.3
|
|
|
$
|
1,586.2
|
|
|
June 30, 2012
|
|
December 31, 2011
|
||||||||||
|
Fair Value
|
|
% of Total
|
|
Fair Value
|
|
% of Total
|
||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
||||||
Fixed maturities, at fair value
|
$
|
25.7
|
|
|
109.7
|
%
|
|
$
|
27.3
|
|
|
112.2
|
%
|
Cash and cash equivalents
|
3.3
|
|
|
13.9
|
%
|
|
2.4
|
|
|
10.1
|
%
|
||
Funds held on underlying business
|
0.6
|
|
|
2.6
|
%
|
|
0.6
|
|
|
2.5
|
%
|
||
Insurance balances receivable and other
|
(6.2
|
)
|
|
(26.2
|
)%
|
|
(6.0
|
)
|
|
(24.8
|
)%
|
||
Total
|
$
|
23.4
|
|
|
100.0
|
%
|
|
$
|
24.3
|
|
|
100.0
|
%
|
|
June 30, 2012
|
|
December 31, 2011
|
||||||||||
|
Fair Value
|
|
% of Total
|
|
Fair Value
|
|
% of Total
|
||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
||||||
United Kingdom government bonds
|
$
|
19.6
|
|
|
76.5
|
%
|
|
$
|
27.3
|
|
|
100.0
|
%
|
Corporate bonds
|
6.1
|
|
|
23.5
|
%
|
|
—
|
|
|
—
|
%
|
||
Total
|
$
|
25.7
|
|
|
100.0
|
%
|
|
$
|
27.3
|
|
|
100.0
|
%
|
June 30, 2012
|
|
Original or
amortized cost |
|
Gross
unrealized gains |
|
Gross
unrealized losses |
|
Fair value
|
|
Average yield*
|
|
Average duration
|
|||||||||
Available-for-sale securities:
|
|
($ in Millions)
|
|
|
|
|
|||||||||||||||
U.S. treasury bonds
|
|
$
|
42.7
|
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
44.2
|
|
|
1.9
|
%
|
|
1.7 years
|
U.S. agency bonds – mortgage-backed
|
|
1,009.9
|
|
|
39.7
|
|
|
(0.5
|
)
|
|
1,049.1
|
|
|
3.1
|
%
|
|
2.7 years
|
||||
U.S. agency bonds – other
|
|
16.7
|
|
|
1.6
|
|
|
—
|
|
|
18.3
|
|
|
3.6
|
%
|
|
0.1 years
|
||||
Non-U.S. government bonds
|
|
58.4
|
|
|
0.2
|
|
|
(0.8
|
)
|
|
57.8
|
|
|
1.6
|
%
|
|
2.7 years
|
||||
Other mortgage-backed bonds
|
|
23.2
|
|
|
0.2
|
|
|
—
|
|
|
23.4
|
|
|
2.8
|
%
|
|
4.1 years
|
||||
Corporate bonds
|
|
1,029.1
|
|
|
69.7
|
|
|
(18.9
|
)
|
|
1,079.9
|
|
|
4.9
|
%
|
|
4.6 years
|
||||
Municipal bonds
|
|
119.4
|
|
|
0.9
|
|
|
—
|
|
|
120.3
|
|
|
0.8
|
%
|
|
0.6 years
|
||||
Total available-for-sale fixed maturities
|
|
2,299.4
|
|
|
113.8
|
|
|
(20.2
|
)
|
|
2,393.0
|
|
|
3.7
|
%
|
|
3.4 years
|
||||
Other investments
|
|
2.4
|
|
|
0.4
|
|
|
(0.1
|
)
|
|
2.7
|
|
|
|
|
|
|||||
Total investments
|
|
$
|
2,301.8
|
|
|
$
|
114.2
|
|
|
$
|
(20.3
|
)
|
|
$
|
2,395.7
|
|
|
|
|
|
December 31, 2011
|
|
Original or
amortized cost |
|
Gross
unrealized gains |
|
Gross
unrealized losses |
|
Fair value
|
|
Average yield*
|
|
Average duration
|
|||||||||
Available-for-sale securities:
|
|
($ in Millions)
|
|
|
|
|
|||||||||||||||
U.S. treasury bonds
|
|
$
|
44.2
|
|
|
$
|
1.8
|
|
|
$
|
—
|
|
|
$
|
46.0
|
|
|
1.8
|
%
|
|
2.1 years
|
U.S. agency bonds – mortgage-backed
|
|
928.9
|
|
|
43.3
|
|
|
(0.1
|
)
|
|
972.1
|
|
|
3.4
|
%
|
|
2.7 years
|
||||
U.S. agency bonds – other
|
|
10.4
|
|
|
0.6
|
|
|
—
|
|
|
11.0
|
|
|
2.6
|
%
|
|
1.6 years
|
||||
Non-U.S. government bonds
|
|
52.5
|
|
|
0.1
|
|
|
(0.3
|
)
|
|
52.3
|
|
|
1.1
|
%
|
|
2.7 years
|
||||
Other mortgage-backed bonds
|
|
9.9
|
|
|
—
|
|
|
—
|
|
|
9.9
|
|
|
2.7
|
%
|
|
1.6 years
|
||||
Corporate bonds
|
|
742.9
|
|
|
47.7
|
|
|
(30.2
|
)
|
|
760.4
|
|
|
4.8
|
%
|
|
3.5 years
|
||||
Municipal bonds
|
|
168.3
|
|
|
0.7
|
|
|
—
|
|
|
169.0
|
|
|
0.7
|
%
|
|
0.5 years
|
||||
Total available-for-sale fixed maturities
|
|
1,957.1
|
|
|
94.2
|
|
|
(30.6
|
)
|
|
2,020.7
|
|
|
3.6
|
%
|
|
2.8 years
|
||||
Other investments
|
|
2.0
|
|
|
0.3
|
|
|
(0.1
|
)
|
|
2.2
|
|
|
|
|
|
|||||
Total investments
|
|
$
|
1,959.1
|
|
|
$
|
94.5
|
|
|
$
|
(30.7
|
)
|
|
$
|
2,022.9
|
|
|
|
|
|
•
|
Historic and implied volatility of the security;
|
•
|
Length of time and extent to which the fair value has been less than amortized cost;
|
•
|
Adverse conditions specifically related to the security or to specific conditions in an industry or geographic area;
|
•
|
Failure, if any, of the issuer of the security to make scheduled payments; and
|
•
|
Recoveries or additional declines in fair value subsequent to the balance sheet date.
|
|
|
Less Than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||
June 30, 2012
|
|
Fair
Value |
|
Unrealized
Losses |
|
Fair
Value |
|
Unrealized
Losses |
|
Fair
Value |
|
Unrealized
Losses |
||||||||||||
Available-for-sale securities:
|
|
($ in Millions)
|
||||||||||||||||||||||
U.S. agency bonds – mortgage-backed
|
|
$
|
65.9
|
|
|
$
|
(0.5
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
65.9
|
|
|
$
|
(0.5
|
)
|
Non-U.S. government bonds
|
|
47.7
|
|
|
(0.8
|
)
|
|
—
|
|
|
$
|
—
|
|
|
47.7
|
|
|
(0.8
|
)
|
|||||
Corporate bonds
|
|
201.2
|
|
|
(5.7
|
)
|
|
130.5
|
|
|
(13.2
|
)
|
|
331.7
|
|
|
(18.9
|
)
|
||||||
Total available-for-sale fixed maturities
|
|
314.8
|
|
|
(7.0
|
)
|
|
130.5
|
|
|
(13.2
|
)
|
|
445.3
|
|
|
(20.2
|
)
|
||||||
Other investments
|
|
1.7
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
1.7
|
|
|
(0.1
|
)
|
||||||
Total temporarily impaired available-for-sale securities and other investments
|
|
$
|
316.5
|
|
|
$
|
(7.1
|
)
|
|
$
|
130.5
|
|
|
$
|
(13.2
|
)
|
|
$
|
447.0
|
|
|
$
|
(20.3
|
)
|
|
|
Less Than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||
December 31, 2011
|
|
Fair
Value |
|
Unrealized
Losses |
|
Fair
Value |
|
Unrealized
Losses |
|
Fair
Value |
|
Unrealized
Losses |
||||||||||||
Available-for-sale securities:
|
|
($ in Millions)
|
||||||||||||||||||||||
U.S. agency bonds – mortgage-backed
|
|
$
|
30.4
|
|
|
$
|
(0.1
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30.4
|
|
|
$
|
(0.1
|
)
|
Non-U.S. government bonds
|
|
43.6
|
|
|
(0.3
|
)
|
|
—
|
|
|
$
|
—
|
|
|
43.6
|
|
|
(0.3
|
)
|
|||||
Corporate bonds
|
|
227.4
|
|
|
(7.4
|
)
|
|
125.1
|
|
|
(22.8
|
)
|
|
352.5
|
|
|
(30.2
|
)
|
||||||
Total available-for-sale fixed maturities
|
|
301.4
|
|
|
(7.8
|
)
|
|
125.1
|
|
|
(22.8
|
)
|
|
426.5
|
|
|
(30.6
|
)
|
||||||
Other investments
|
|
1.2
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
1.2
|
|
|
(0.1
|
)
|
||||||
Total temporarily impaired available-for-sale securities and other investments
|
|
$
|
302.6
|
|
|
$
|
(7.9
|
)
|
|
$
|
125.1
|
|
|
$
|
(22.8
|
)
|
|
$
|
427.7
|
|
|
$
|
(30.7
|
)
|
|
|
June 30, 2012
|
|
December 31, 2011
|
||||||||||
|
|
($ in Millions)
|
|
% of
Total |
|
($ in Millions)
|
|
% of
Total |
||||||
Due in one year or less
|
|
$
|
43.4
|
|
|
1.8
|
%
|
|
$
|
54.3
|
|
|
2.7
|
%
|
Due after one year through five years
|
|
359.8
|
|
|
15.0
|
%
|
|
299.9
|
|
|
14.8
|
%
|
||
Due after five years through ten years
|
|
764.6
|
|
|
32.0
|
%
|
|
502.9
|
|
|
24.9
|
%
|
||
Due after ten years
|
|
152.7
|
|
|
6.4
|
%
|
|
181.6
|
|
|
9.0
|
%
|
||
|
|
1,320.5
|
|
|
55.2
|
%
|
|
1,038.7
|
|
|
51.4
|
%
|
||
U.S. agency bonds – mortgage-backed
|
|
1,049.1
|
|
|
43.8
|
%
|
|
972.1
|
|
|
48.1
|
%
|
||
Other mortgage-backed bonds
|
|
23.4
|
|
|
1.0
|
%
|
|
9.9
|
|
|
0.5
|
%
|
||
Total
|
|
$
|
2,393.0
|
|
|
100.0
|
%
|
|
$
|
2,020.7
|
|
|
100.0
|
%
|
June 30, 2012
|
|
Amortized
Cost |
|
Fair
Value |
|
% of Total Fair Value
|
|||||
Ratings
|
|
($ in Millions)
|
|
|
|||||||
U.S. treasury bonds
|
|
$
|
42.7
|
|
|
$
|
44.2
|
|
|
1.8
|
%
|
U.S. agency bonds
|
|
1,026.6
|
|
|
1,067.4
|
|
|
44.6
|
%
|
||
AAA
|
|
173.0
|
|
|
174.8
|
|
|
7.3
|
%
|
||
AA+, AA, AA-
|
|
182.7
|
|
|
190.4
|
|
|
8.0
|
%
|
||
A+, A, A-
|
|
409.3
|
|
|
421.7
|
|
|
17.6
|
%
|
||
BBB+, BBB, BBB-
|
|
446.8
|
|
|
476.6
|
|
|
19.9
|
%
|
||
BB+ or lower
|
|
18.3
|
|
|
17.9
|
|
|
0.8
|
%
|
||
Total
|
|
$
|
2,299.4
|
|
|
$
|
2,393.0
|
|
|
100.0
|
%
|
December 31, 2011
|
|
Amortized
Cost |
|
Fair
Value |
|
% of Total Fair Value
|
|||||
Ratings
|
|
($ in Millions)
|
|
|
|||||||
U.S. treasury bonds
|
|
$
|
44.2
|
|
|
$
|
46.0
|
|
|
2.3
|
%
|
U.S. agency bonds
|
|
939.3
|
|
|
983.1
|
|
|
48.6
|
%
|
||
AAA
|
|
160.3
|
|
|
161.9
|
|
|
8.0
|
%
|
||
AA+, AA, AA-
|
|
151.0
|
|
|
153.3
|
|
|
7.6
|
%
|
||
A+, A, A-
|
|
327.8
|
|
|
328.4
|
|
|
16.3
|
%
|
||
BBB+, BBB, BBB-
|
|
316.1
|
|
|
330.2
|
|
|
16.3
|
%
|
||
BB+ or lower
|
|
18.4
|
|
|
17.8
|
|
|
0.9
|
%
|
||
Total
|
|
$
|
1,957.1
|
|
|
$
|
2,020.7
|
|
|
100.0
|
%
|
|
June 30, 2012
|
|
December 31, 2011
|
||||||||||
|
Fair Value
|
|
% of Total
|
|
Fair Value
|
|
% of Total
|
||||||
Mortgage-backed bonds
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
||||||
Residential mortgage-backed (RMBS)
|
|
|
|
|
|
|
|
||||||
GNMA – fixed rate
|
$
|
148.9
|
|
|
13.9
|
%
|
|
$
|
185.3
|
|
|
18.8
|
%
|
FNMA – fixed rate
|
538.5
|
|
|
50.5
|
%
|
|
487.3
|
|
|
49.6
|
%
|
||
FNMA – variable rate
|
54.2
|
|
|
5.1
|
%
|
|
77.8
|
|
|
7.9
|
%
|
||
FHLMC – fixed rate
|
291.6
|
|
|
27.3
|
%
|
|
221.7
|
|
|
22.6
|
%
|
||
FHLMC – variable rate
|
15.9
|
|
|
1.5
|
%
|
|
—
|
|
|
—
|
%
|
||
Total RMBS
|
1,049.1
|
|
|
98.3
|
%
|
|
972.1
|
|
|
98.9
|
%
|
||
Total U.S. agency mortgage-backed bonds
|
1,049.1
|
|
|
98.3
|
%
|
|
972.1
|
|
|
98.9
|
%
|
||
Non-MBS fixed rate agency bonds
|
18.3
|
|
|
1.7
|
%
|
|
11.0
|
|
|
1.1
|
%
|
||
Total U.S. agency bonds
|
$
|
1,067.4
|
|
|
100.0
|
%
|
|
$
|
983.1
|
|
|
100.0
|
%
|
|
|
For the Three Months Ended June 30,
|
||||||
|
|
2012
|
|
2011
|
||||
U.S. agency mortgage-backed bonds
|
|
($ in Millions)
|
||||||
Beginning balance
|
|
$
|
1,109.5
|
|
|
$
|
972.7
|
|
Purchases
|
|
29.8
|
|
|
72.3
|
|
||
Sales and paydowns
|
|
(88.1
|
)
|
|
(35.5
|
)
|
||
Net realized gains on sales – included in net income
|
|
—
|
|
|
—
|
|
||
Change in net unrealized losses – included in other comprehensive income
|
|
0.3
|
|
|
14.4
|
|
||
Amortization of bond premium and discount
|
|
(2.4
|
)
|
|
(0.8
|
)
|
||
Ending balance
|
|
$
|
1,049.1
|
|
|
$
|
1,023.1
|
|
|
|
For the Six Months Ended June 30,
|
||||||
|
|
2012
|
|
2011
|
||||
U.S. agency mortgage-backed bonds
|
|
($ in Millions)
|
||||||
Beginning balance
|
|
$
|
972.1
|
|
|
$
|
969.5
|
|
Purchases
|
|
255.6
|
|
|
135.7
|
|
||
Sales and paydowns
|
|
(171.3
|
)
|
|
(91.0
|
)
|
||
Net realized gains on sales – included in net income
|
|
—
|
|
|
0.3
|
|
||
Change in net unrealized losses – included in other comprehensive income
|
|
(3.7
|
)
|
|
10.5
|
|
||
Amortization of bond premium and discount
|
|
(3.6
|
)
|
|
(1.9
|
)
|
||
Ending balance
|
|
$
|
1,049.1
|
|
|
$
|
1,023.1
|
|
|
Ratings*
|
|
|
|
|
||||||||||||||||
June 30, 2012
|
AAA
|
|
AA
|
|
A
|
|
BBB
|
|
BB+ or lower
|
|
% of Total
|
|
Fair Value
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in Millions)
|
||||||||
Corporate bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Institutions
|
8.2
|
%
|
|
7.0
|
%
|
|
34.9
|
%
|
|
16.7
|
%
|
|
0.6
|
%
|
|
67.4
|
%
|
|
$
|
728.6
|
|
Industrials
|
—
|
%
|
|
1.5
|
%
|
|
2.6
|
%
|
|
25.7
|
%
|
|
—
|
%
|
|
29.8
|
%
|
|
320.9
|
|
|
Utilities/Other
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
1.7
|
%
|
|
1.1
|
%
|
|
2.8
|
%
|
|
30.4
|
|
|
Total corporate bonds
|
8.2
|
%
|
|
8.5
|
%
|
|
37.5
|
%
|
|
44.1
|
%
|
|
1.7
|
%
|
|
100.0
|
%
|
|
$
|
1,079.9
|
|
|
Ratings*
|
|
|
|
|
||||||||||||||||
December 31, 2011
|
AAA
|
|
AA
|
|
A
|
|
BBB
|
|
BB+ or lower
|
|
% of Total
|
|
Fair Value
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in Millions)
|
||||||||
Corporate bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Institutions
|
7.5
|
%
|
|
2.6
|
%
|
|
36.8
|
%
|
|
22.1
|
%
|
|
0.8
|
%
|
|
69.8
|
%
|
|
$
|
531.1
|
|
Industrials
|
—
|
%
|
|
3.1
|
%
|
|
4.3
|
%
|
|
19.0
|
%
|
|
—
|
%
|
|
26.4
|
%
|
|
199.9
|
|
|
Utilities/Other
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
2.3
|
%
|
|
1.5
|
%
|
|
3.8
|
%
|
|
29.4
|
|
|
Total corporate bonds
|
7.5
|
%
|
|
5.7
|
%
|
|
41.1
|
%
|
|
43.4
|
%
|
|
2.3
|
%
|
|
100.0
|
%
|
|
$
|
760.4
|
|
June 30, 2012
|
Fair Value
|
|
% of Holdings
Based on Fair Value of All Fixed Income Securities |
|
Rating*
|
|||
|
($ in Millions)
|
|
|
|
|
|||
Morgan Stanley FLT, Due 10/18/2016
|
$
|
34.9
|
|
|
1.5
|
%
|
|
A-
|
Citigroup FLT, Due 6/9/2016
|
23.4
|
|
|
1.0
|
%
|
|
BBB+
|
|
Northern Rock Asset Mgt., 3.875% Due 11/16/2020
|
22.1
|
|
|
0.9
|
%
|
|
AAA
|
|
Rabobank Nederland UTREC, 3.875% Due 2/8/2022
|
20.3
|
|
|
0.8
|
%
|
|
AA
|
|
SLM Corp FLT, Due 1/27/2014
|
19.1
|
|
|
0.8
|
%
|
|
BBB-
|
|
Bear Stearns FLT, Due 11/21/2016
|
19.1
|
|
|
0.8
|
%
|
|
A
|
|
Barclays Bank PLC NY FLT, Due 2/24/2020
|
18.7
|
|
|
0.8
|
%
|
|
A+
|
|
JPMorgan Chase & Co FLT, Due 6/13/2016
|
18.6
|
|
|
0.8
|
%
|
|
A
|
|
HSBC Financial FLT, Due 6/1/2016
|
18.3
|
|
|
0.7
|
%
|
|
A
|
|
PartnerRe Finance LLC, 5.5% Due 6/1/2020
|
15.8
|
|
|
0.7
|
%
|
|
A-
|
|
Total
|
$
|
210.3
|
|
|
8.8
|
%
|
|
|
|
June 30, 2012
|
|
December 31, 2011
|
||||||||||
|
Fair Value
|
|
% of Total
|
|
Fair Value
|
|
% of Total
|
||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
||||||
Corporate bonds
|
$
|
131.3
|
|
|
69.4
|
%
|
|
$
|
65.7
|
|
|
55.7
|
%
|
Non-U.S. government bonds
|
57.8
|
|
|
30.6
|
%
|
|
52.3
|
|
|
44.3
|
%
|
||
Total
|
$
|
189.1
|
|
|
100.0
|
%
|
|
$
|
118.0
|
|
|
100.0
|
%
|
|
June 30, 2012
|
|
December 31, 2011
|
||||||||||
|
Fair Value
|
|
% of Total
|
|
Fair Value
|
|
% of Total
|
||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
||||||
Euro
|
$
|
171.3
|
|
|
90.6
|
%
|
|
$
|
107.2
|
|
|
90.8
|
%
|
Swedish krona
|
9.6
|
|
|
5.1
|
%
|
|
9.9
|
|
|
8.4
|
%
|
||
Australian dollar
|
7.3
|
|
|
3.8
|
%
|
|
—
|
|
|
—
|
%
|
||
British pound
|
0.9
|
|
|
0.5
|
%
|
|
0.9
|
|
|
0.8
|
%
|
||
Total
|
$
|
189.1
|
|
|
100.0
|
%
|
|
$
|
118.0
|
|
|
100.0
|
%
|
|
June 30, 2012
|
|
December 31, 2011
|
||||||||||
|
Fair Value
|
|
% of Total
|
|
Fair Value
|
|
% of Total
|
||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
||||||
Germany
|
$
|
27.5
|
|
|
47.6
|
%
|
|
$
|
28.6
|
|
|
54.6
|
%
|
Sweden
|
8.5
|
|
14.8
|
%
|
|
8.8
|
|
16.8
|
%
|
||||
Netherlands
|
5.8
|
|
|
10.0
|
%
|
|
6.4
|
|
|
12.2
|
%
|
||
All other
|
16.0
|
|
|
27.6
|
%
|
|
8.5
|
|
|
16.4
|
%
|
||
Total Non-U.S. government bonds
|
$
|
57.8
|
|
|
100.0
|
%
|
|
$
|
52.3
|
|
|
100.0
|
%
|
|
June 30, 2012
|
|
December 31, 2011
|
||||||||||
|
Fair Value
|
|
% of Total
|
|
Fair Value
|
|
% of Total
|
||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
||||||
AAA
|
$
|
54.6
|
|
|
41.6
|
%
|
|
$
|
22.7
|
|
|
34.5
|
%
|
AA+ , AA, AA-
|
6.9
|
|
|
5.2
|
%
|
|
13.1
|
|
|
20.0
|
%
|
||
A+, A, A-
|
39.6
|
|
|
30.2
|
%
|
|
7.8
|
|
|
11.9
|
%
|
||
BBB+, BBB, BBB-
|
30.2
|
|
|
23.0
|
%
|
|
22.1
|
|
|
33.6
|
%
|
||
Total Euro-denominated corporate bonds
|
$
|
131.3
|
|
|
100.0
|
%
|
|
$
|
65.7
|
|
|
100.0
|
%
|
|
June 30, 2012
|
|
December 31, 2011
|
||||
|
($ in Millions)
|
||||||
Reinsurance balances receivable, net
|
$
|
495.7
|
|
|
$
|
423.4
|
|
Prepaid reinsurance premiums
|
44.4
|
|
|
35.4
|
|
||
Deferred commission and other acquisition expenses
|
270.0
|
|
|
248.4
|
|
||
Reserve for loss and loss adjustment expenses
|
(1,522.8
|
)
|
|
(1,398.4
|
)
|
||
Unearned premiums
|
(974.3
|
)
|
|
(832.0
|
)
|
|
June 30, 2012
|
|
December 31, 2011
|
||||
|
($ in Millions)
|
||||||
Senior notes
|
$
|
207.5
|
|
|
$
|
107.5
|
|
Junior subordinated debt
|
126.3
|
|
|
126.3
|
|
||
Maiden shareholders’ equity
|
824.3
|
|
|
768.6
|
|
||
Total capital resources
|
$
|
1,158.1
|
|
|
$
|
1,002.4
|
|
Ratio of debt to total capital resources
|
28.8
|
%
|
|
23.3
|
%
|
Hypothetical Change in Interest Rates
|
|
Fair Value
|
|
Estimated
Change in Fair Value |
|
Hypothetical %
(Decrease) Increase in Shareholders’ Equity |
|||||
|
|
($ in Millions)
|
|
|
|||||||
200 basis point increase
|
|
$
|
2,218.1
|
|
|
$
|
(174.9
|
)
|
|
(21.2
|
)%
|
100 basis point increase
|
|
2,302.0
|
|
|
(91.0
|
)
|
|
(11.0
|
)%
|
||
No change
|
|
2,393.0
|
|
|
—
|
|
|
—
|
%
|
||
100 basis point decrease
|
|
2,487.7
|
|
|
94.7
|
|
|
11.5
|
%
|
||
200 basis point decrease
|
|
2,590.6
|
|
|
197.6
|
|
|
24.0
|
%
|
Exhibit
No.
|
|
Description
|
10.1
|
|
Endorsement No. 2 to the Quota Share Reinsurance Contract by and between Maiden Insurance Company Ltd. and AmTrust Europe Limited and/or AmTrust International Underwriters Limited dated as of August 7, 2012
|
31.1
|
|
Section 302 Certification of CEO
|
31.2
|
|
Section 302 Certification of CFO
|
32.1
|
|
Section 906 Certification of CEO
|
32.2
|
|
Section 906 Certification of CFO
|
101.1
|
|
The following materials from Maiden Holdings, Ltd. Quarterly Report on Form 10-Q, formatted in XBRL (eXtensive Business Reporting Language): (i) the unaudited Condensed Balance Sheets, (ii) the unaudited Condensed Consolidated Statements of Income, (iii) the unaudited Condensed Consolidated Statements of Comprehensive Income, (iv) the unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity, (v) the unaudited Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements.**
|
|
MAIDEN HOLDINGS, LTD.
|
|
|
By:
|
|
Date: August 9, 2012
|
|
/s/ Arturo M. Raschbaum
|
|
|
Name: Arturo M. Raschbaum
Title: President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ John M. Marshaleck
|
|
|
Name: John M. Marshaleck
Title: Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
1.
|
The section of the Contract entitled “Treaty Detail” shall be deleted and the following substituted therefor:
|
2.
|
The Reinsurer hereby confirms its acceptance of the risks set forth on Schedule A hereto.
|
3.
|
The section of the Contract entitled “Territorial Scope” shall be deleted and the following substituted therefor:
|
Policy
|
Risk
|
Year of Account
|
Policy Inception
|
Policy Renewal
|
Policy Expiry
|
Country
|
GN Total Premium
|
Retroactive Date
|
Policy Limit Per Claim
|
Policy Annual Aggregate
|
|||
ITPMM1101031
|
Ospedale Valduce di Como
|
2,011
|
|
19-Nov-11
|
19-Nov-12
|
19-Nov-14
|
Italy
|
1,100,000
|
30-Sep-01
|
10,000,000
|
|
20,000,000
|
|
ITOMM1100430
|
AOU MDM DSC CSC Friuli
|
2,011
|
|
31-Dec-11
|
31-Dec-12
|
31-Dec-13
|
Italy
|
3,200,000
|
Various
|
7,500,000
|
|
20,000,000
|
|
ITOMM1100711
|
AO Treviglio Caravaggio
|
2,011
|
|
30-Jun-11
|
30-Jun-12
|
30-Jun-14
|
Italy
|
1,344,160
|
30-Jun-00
|
6,000,000
|
|
15,000,000
|
|
ITOMM1100718
|
ASP di Ragusa
|
2,011
|
|
31-Jul-11
|
31-Jul-12
|
31-Jul-14
|
Italy
|
1,500,000
|
1-Jan-06
|
5,200,000
|
|
30,000,000
|
|
|
|
|
|
|
|
|
|
|
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1.
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I have reviewed this quarterly report on Form 10-Q of Maiden Holdings, Ltd.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including any consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: August 9, 2012
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/s/ ARTURO M. RASCHBAUM
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Arturo M. Raschbaum
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President and Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this quarterly report on Form 10-Q of Maiden Holdings, Ltd.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including any consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
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(c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: August 9, 2012
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/s/ JOHN M. MARSHALECK
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John M. Marshaleck
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Chief Financial Officer
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(Principal Financial and Accounting Officer)
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Date: August 9, 2012
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By:
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/s/ ARTURO M. RASCHBAUM
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Name: Arturo M. Raschbaum
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Title: President and Chief Executive Officer
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Date: August 9, 2012
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By:
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/s/ JOHN M. MARSHALECK
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Name: John M. Marshaleck
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Title: Chief Financial Officer
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