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(Mark One)
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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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
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98-0570192
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Shares, par value $0.01 per share
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NASDAQ Global Select Market
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Series A Preference Shares, par value $0.01 per share
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New York Stock Exchange, Inc.
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Large Accelerated Filer
o
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Accelerated Filer
x
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Non-Accelerated Filer
o
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Smaller Reporting Company
o
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(Do not check if a smaller reporting company)
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Page
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PART I
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PART II
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PART III
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PART IV
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Ex-21.1
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Subsidiaries of the Registrant
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Ex-23.1
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Consent of BDO USA, LLP
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Ex-31.1
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Section 302 Certification of CEO
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Ex-31.2
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Section 302 Certification of CFO
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Ex-32.1
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Section 906 Certification of CEO
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Ex-32.2
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Section 906 Certification of CFO
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•
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Our results will fluctuate from period to period and may not be indicative of our long-term prospects;
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•
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The property and casualty reinsurance and insurance markets may be affected by cyclical trends;
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•
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Rating agencies may downgrade or withdraw our ratings;
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•
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Loss of key executives could adversely impact our ability to implement our business strategy;
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•
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Our use of reinsurance brokers in contract negotiations and production of business;
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•
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Our inability to achieve our investment objectives; and
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•
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Our controlling shareholders’ ability to determine the outcome of matters requiring shareholder approval.
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•
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Acquiring the majority of the reinsurance-related infrastructure, assets and liabilities of U.K. based GMAC International Insurance Services ("IIS") in November 2010 (the “IIS Acquisition”);
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•
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Completing a public debt offering of $107.5 million in June 2011 ("2011 Senior Notes") and repurchasing a like amount of our outstanding subordinated debenture (the "Junior Subordinated Debt") in July 2011. The 2011 Senior Notes trade on the New York Stock Exchange under the symbol "MHNA";
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•
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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. The 2011 Senior Notes and 2012 Senior Notes may also be referred to as the "2011 Senior Note Offering" or the "2012 Senior Note Offering", respectively, and may collectively be referred to as the "Senior Note Offerings"; and
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•
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Completing a public offering of $150.0 million Preference Shares - Series A (the “Preference Shares”). The Company received net proceeds of $145.0 million from the offering. The Preference Shares trade on the New York Stock Exchange under the symbol "MHPRA". The net proceeds from the offering are expected to be used for continued support and development of our reinsurance business and for other general corporate purposes, which may include repurchasing a portion of the Company's outstanding common shares and repurchasing the Company's outstanding 14% 30-year trust preferred securities ("TRUPS") issued in January 2009.
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•
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Dedication to Predictable and Stable Operating Segments
— we execute this strategy in two ways: (1) focusing on traditional, lower volatility insurance lines of business that are more predictable and thus produce more stable long-term operating results and which require less capital to achieve those goals; and (2) placing emphasis on working layer and pro rata reinsurance participations where data is more abundant and predictable;
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•
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Targeted Customer Focus
— we execute this strategy by developing significant and long term reinsurance relationships with targeted regional and specialty insurance companies for which reinsurance plays a critical element of their capital structure and supporting the long term needs of these companies by providing differentiated reinsurance products as well as an array of support services; and
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•
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Efficient Operating Platform
— recognizing the mature nature of the reinsurance market, we are focused on maintaining operating expense ratios within the top quartile of the industry. Efficiency is a critical component of maintaining a disciplined underwriting approach.
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For the Year Ended December 31,
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2012
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2011
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2010
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|||||||||||||||
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Net
Premiums Written |
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% of Total
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Net
Premiums Written |
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% of Total
|
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Net
Premiums Written |
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% of Total
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|||||||||
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($ in Millions)
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($ in Millions)
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($ in Millions)
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|||||||||
Diversified Reinsurance
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$
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765.3
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40.3
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%
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$
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798.0
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46.3
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%
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$
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554.1
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45.1
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%
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AmTrust Quota Share Reinsurance
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840.3
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44.2
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%
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669.3
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38.8
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%
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468.0
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38.1
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%
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|||
ACAC Quota Share
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295.7
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15.5
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%
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256.2
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14.9
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%
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205.7
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16.8
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%
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|||
Total
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$
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1,901.3
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100.0
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%
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$
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1,723.5
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100.0
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%
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$
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1,227.8
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100.0
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%
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For the Year Ended December 31,
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2012
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2011
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2010
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|||||||||||||||
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Net
Premiums Earned |
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% of Total
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Net
Premiums Earned |
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% of Total
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Net
Premiums Earned |
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% of Total
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|||||||||
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($ in Millions)
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($ in Millions)
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($ in Millions)
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|||||||||
Diversified Reinsurance
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$
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795.3
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44.1
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%
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$
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748.4
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48.3
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%
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$
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601.2
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51.5
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%
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AmTrust Quota Share Reinsurance
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727.8
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40.3
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%
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558.2
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35.9
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%
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445.1
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38.0
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%
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|||
ACAC Quota Share
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280.7
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15.6
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%
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245.8
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15.8
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%
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123.5
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10.5
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%
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|||
Total
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$
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1,803.8
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100.0
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%
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$
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1,552.4
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100.0
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%
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$
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1,169.8
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100.0
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%
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For the Year Ended December 31, 2012
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For the Year Ended December 31, 2011
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For the Period from November 30 to December 31, 2010
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|||||||||||||||
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Net Premiums Written
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% of Total
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Net Premiums Written
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% of Total
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Net Premiums Written
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% of Total
|
|||||||||
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($ in Millions)
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($ in Millions)
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($ in Millions)
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Germany
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$
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45.9
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43.9
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%
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$
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53.4
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50.5
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%
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$
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10.6
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35.8
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%
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UK
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11.9
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11.4
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%
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4.2
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3.9
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%
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0.6
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2.2
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%
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|||
Sweden
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8.2
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7.9
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%
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8.5
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8.0
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%
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6.4
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21.6
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%
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|||
Mexico
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7.4
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7.1
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%
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5.5
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5.2
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%
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1.9
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6.4
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%
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|||
Colombia
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7.2
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6.8
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%
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2.3
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2.2
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%
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0.4
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1.3
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%
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|||
Chile
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7.0
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6.7
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%
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6.4
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6.0
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%
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2.2
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7.4
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%
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|||
All other
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17.0
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16.2
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%
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25.5
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24.2
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%
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7.5
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25.3
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%
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|||
Total
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$
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104.6
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|
|
100.0
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%
|
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$
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105.8
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|
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100.0
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%
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$
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29.6
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|
|
100.0
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%
|
|
|
For the Year Ended December 31, 2012
|
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For the Year Ended December 31, 2011
|
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For the Period from November 30 to December 31, 2010
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|||||||||||||||
|
|
Net Premiums Written
|
|
% of Total
|
|
Net Premiums Written
|
|
% of Total
|
|
Net Premiums Written
|
|
% of Total
|
|||||||||
|
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($ in Millions)
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|
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($ in Millions)
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|
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($ in Millions)
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|||||||||
Personal Auto
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$
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72.8
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69.6
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%
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$
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72.1
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|
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68.1
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%
|
|
$
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18.5
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|
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62.5
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%
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Credit Life
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31.8
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30.4
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%
|
|
33.7
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|
|
31.9
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%
|
|
11.1
|
|
|
37.5
|
%
|
|||
Total
|
|
$
|
104.6
|
|
|
100.0
|
%
|
|
$
|
105.8
|
|
|
100.0
|
%
|
|
$
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29.6
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|
|
100.0
|
%
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•
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Small commercial business insurance, which includes workers’ compensation, commercial package and other commercial lines produced by retail agents and brokers in the U.S.;
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•
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Specialty risk and extended warranty coverage for consumer and commercial goods and custom designed coverages, such as accidental damage plans and payment protection plans offered in connection with the sale of consumer and commercial goods, in the U.S., United Kingdom and certain other European countries; and
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•
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Specialty program property and casualty insurance for homogeneous, narrowly defined classes of insured’s, requiring an in-depth knowledge of the insured’s industry segment.
|
•
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Tracking portfolio volatility over time;
|
•
|
Identifying risk mitigation opportunities and implementing them as appropriate;
|
•
|
Understanding the capital required to support the underwriting portfolio and individual contracts;
|
•
|
Monitoring and managing exposure by line of business and geographic concentration;
|
•
|
Monitoring and limiting catastrophe aggregates and concentrations;
|
•
|
Monitoring and managing operational risks across the organization; and
|
•
|
Identifying, monitoring and managing emerging risks as they develop.
|
•
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we will underwrite and accept only those risks we know and understand;
|
•
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we will perform our own independent pricing or risk review on all risks we accept; and
|
•
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we will accept only those risks that are expected to earn a risk-adjusted return on capital commensurate with the risk they present.
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% of Gross Premiums Written for the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
|||
Brokers
|
|
68.8
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%
|
|
66.1
|
%
|
|
73.0
|
%
|
Direct
|
|
31.2
|
%
|
|
33.9
|
%
|
|
27.0
|
%
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
% of Gross Premiums Written for the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
|||
Broker
|
|
|
|
|
|
|
|||
Marsh Inc. (including Guy Carpenter)
|
|
16.5
|
%
|
|
18.1
|
%
|
|
22.7
|
%
|
Aon Benfield Group, Ltd.
|
|
9.3
|
%
|
|
11.9
|
%
|
|
12.3
|
%
|
Beach & Associates Ltd.
|
|
8.3
|
%
|
|
9.4
|
%
|
|
6.1
|
%
|
Other Brokers
|
|
34.7
|
%
|
|
26.7
|
%
|
|
31.9
|
%
|
Total Broker
|
|
68.8
|
%
|
|
66.1
|
%
|
|
73.0
|
%
|
Direct
|
|
31.2
|
%
|
|
33.9
|
%
|
|
27.0
|
%
|
Total Diversified
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Underwriting Year*
|
|
Case
Reserves |
|
IBNR
Reserves |
|
Total
Reserves |
||||||
|
|
($ in Millions)
|
||||||||||
2000 & Prior
|
|
$
|
27.3
|
|
|
$
|
20.7
|
|
|
$
|
48.0
|
|
2001
|
|
10.4
|
|
|
10.8
|
|
|
21.2
|
|
|||
2002
|
|
20.1
|
|
|
28.3
|
|
|
48.4
|
|
|||
2003
|
|
15.0
|
|
|
28.3
|
|
|
43.3
|
|
|||
2004
|
|
16.5
|
|
|
32.6
|
|
|
49.1
|
|
|||
2005
|
|
27.8
|
|
|
51.5
|
|
|
79.3
|
|
|||
2006
|
|
59.4
|
|
|
93.0
|
|
|
152.4
|
|
|||
2007
|
|
60.2
|
|
|
112.0
|
|
|
172.2
|
|
|||
January 1 to October 31, 2008
|
|
48.3
|
|
|
93.4
|
|
|
141.7
|
|
|||
Total
|
|
$
|
285.0
|
|
|
$
|
470.6
|
|
|
$
|
755.6
|
|
*
|
Underwriting year comprises all policies written or renewed during the year and all losses relating to those same policies, whenever they may occur.
|
Underwriting Year*
|
|
Case
Reserves |
|
IBNR
Reserves |
|
Total
Reserves |
||||||
|
|
($ in Millions)
|
||||||||||
2000 & Prior
|
|
$
|
23.4
|
|
|
$
|
13.9
|
|
|
$
|
37.3
|
|
2001
|
|
9.1
|
|
|
7.9
|
|
|
17.0
|
|
|||
2002
|
|
16.3
|
|
|
12.7
|
|
|
29.0
|
|
|||
2003
|
|
12.7
|
|
|
11.8
|
|
|
24.5
|
|
|||
2004
|
|
9.5
|
|
|
8.6
|
|
|
18.1
|
|
|||
2005
|
|
10.3
|
|
|
12.8
|
|
|
23.1
|
|
|||
2006
|
|
15.1
|
|
|
17.0
|
|
|
32.1
|
|
|||
2007
|
|
19.3
|
|
|
12.4
|
|
|
31.7
|
|
|||
January 1 to October 31, 2008
|
|
12.3
|
|
|
0.4
|
|
|
12.7
|
|
|||
Total
|
|
$
|
128.0
|
|
|
$
|
97.5
|
|
|
$
|
225.5
|
|
*
|
Underwriting year comprises all policies written or renewed during the year and all losses relating to those same policies, whenever they may occur.
|
Underwriting Year*
|
|
Case
Reserves |
|
IBNR
Reserves |
|
Total
Reserves |
||||||
|
|
($ in Millions)
|
||||||||||
2000 & Prior
|
|
$
|
17.8
|
|
|
$
|
0.9
|
|
|
$
|
18.7
|
|
2001
|
|
2.0
|
|
|
—
|
|
|
2.0
|
|
|||
2002
|
|
1.6
|
|
|
—
|
|
|
1.6
|
|
|||
2003
|
|
2.8
|
|
|
0.2
|
|
|
3.0
|
|
|||
2004
|
|
2.7
|
|
|
0.4
|
|
|
3.1
|
|
|||
2005
|
|
3.4
|
|
|
0.5
|
|
|
3.9
|
|
|||
2006
|
|
4.3
|
|
|
0.4
|
|
|
4.7
|
|
|||
2007
|
|
5.3
|
|
|
1.4
|
|
|
6.7
|
|
|||
2008
|
|
7.5
|
|
|
1.5
|
|
|
9.0
|
|
|||
2009
|
|
9.1
|
|
|
2.6
|
|
|
11.7
|
|
|||
January 1 to November 30, 2010
|
|
12.8
|
|
|
21.6
|
|
|
34.4
|
|
|||
Total
|
|
$
|
69.3
|
|
|
$
|
29.5
|
|
|
$
|
98.8
|
|
*
|
Underwriting year comprises all policies written or renewed during the year and all losses relating to those same policies, whenever they may occur.
|
Underwriting Year*
|
|
Case
Reserves |
|
IBNR
Reserves |
|
Total
Reserves |
||||||
|
|
($ in Millions)
|
||||||||||
2000 & Prior
|
|
$
|
16.5
|
|
|
$
|
0.3
|
|
|
$
|
16.8
|
|
2001
|
|
1.4
|
|
|
0.1
|
|
|
1.5
|
|
|||
2002
|
|
1.2
|
|
|
0.1
|
|
|
1.3
|
|
|||
2003
|
|
2.6
|
|
|
(0.3
|
)
|
|
2.3
|
|
|||
2004
|
|
2.8
|
|
|
(0.6
|
)
|
|
2.2
|
|
|||
2005
|
|
2.5
|
|
|
(0.7
|
)
|
|
1.8
|
|
|||
2006
|
|
2.8
|
|
|
(0.6
|
)
|
|
2.2
|
|
|||
2007
|
|
4.9
|
|
|
(1.4
|
)
|
|
3.5
|
|
|||
2008
|
|
5.0
|
|
|
(1.2
|
)
|
|
3.8
|
|
|||
2009
|
|
2.9
|
|
|
(0.8
|
)
|
|
2.1
|
|
|||
January 1 to November 30, 2010
|
|
4.6
|
|
|
(0.6
|
)
|
|
4.0
|
|
|||
Total
|
|
$
|
47.2
|
|
|
$
|
(5.7
|
)
|
|
$
|
41.5
|
|
*
|
Underwriting year comprises all policies written or renewed during the year and all losses relating to those same policies, whenever they may occur.
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
($ in Millions)
|
||||||||||
Gross unpaid loss and loss adjustment expenses reserves at beginning of period
|
|
$
|
1,398.4
|
|
|
$
|
1,226.8
|
|
|
$
|
1,002.7
|
|
Less: reinsurance recoverable at beginning of period
|
|
20.3
|
|
|
6.7
|
|
|
8.4
|
|
|||
Net loss and loss adjustment expense reserves at beginning of period
|
|
1,378.1
|
|
|
1,220.1
|
|
|
994.3
|
|
|||
Net incurred losses related to:
|
|
|
|
|
|
|
||||||
Current year
|
|
1,239.0
|
|
|
1,028.9
|
|
|
788.0
|
|
|||
Prior years
|
|
23.3
|
|
|
14.2
|
|
|
(32.9
|
)
|
|||
|
|
1,262.3
|
|
|
1,043.1
|
|
|
755.1
|
|
|||
Net paid losses related to:
|
|
|
|
|
|
|
||||||
Current year
|
|
(485.0
|
)
|
|
(456.1
|
)
|
|
(365.3
|
)
|
|||
Prior years
|
|
(530.3
|
)
|
|
(423.9
|
)
|
|
(266.0
|
)
|
|||
|
|
(1,015.3
|
)
|
|
(880.0
|
)
|
|
(631.3
|
)
|
|||
Acquired loss and loss expense reserve
|
|
—
|
|
|
0.4
|
|
|
102.0
|
|
|||
Effect of foreign exchange movement
|
|
4.3
|
|
|
(5.5
|
)
|
|
—
|
|
|||
Net loss and loss adjustment expense reserves at end of period
|
|
1,629.4
|
|
|
1,378.1
|
|
|
1,220.1
|
|
|||
Reinsurance recoverable at end of period
|
|
110.9
|
|
|
20.3
|
|
|
6.7
|
|
|||
Gross unpaid loss and loss adjustment expenses reserves at end of period
|
|
$
|
1,740.3
|
|
|
$
|
1,398.4
|
|
|
$
|
1,226.8
|
|
For the Year Ended December 31,
|
|
2007
|
|
2008
(1)
|
|
|
2009
|
|
2010
(2)
|
|
|
2011
|
|
2012
|
||||||||||
|
|
($ in Millions)
|
|
|
||||||||||||||||||||
Gross
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
As Originally Estimated
|
|
$
|
38.5
|
|
|
$897.7
|
|
$1,002.7
|
|
$1,226.8
|
|
$1,398.4
|
|
$
|
1,740.3
|
|
||||||||
Liability Re-estimated as of:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One Year later
|
|
$
|
36.7
|
|
|
$
|
886.3
|
|
|
$
|
959.7
|
|
|
$1,232.7
|
|
$
|
1,418.8
|
|
|
|
||||
Two Years later
|
|
37.3
|
|
|
869.8
|
|
|
963.8
|
|
|
1,224.1
|
|
|
|
|
|
||||||||
Three Years later
|
|
37.9
|
|
|
848.6
|
|
|
972.5
|
|
|
|
|
|
|
|
|||||||||
Four Years later
|
|
39.5
|
|
|
842.6
|
|
|
|
|
|
|
|
|
|
||||||||||
Five Years later
|
|
38.8
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cumulative deficiency (redundancy)
|
|
$
|
0.3
|
|
|
$
|
(55.1
|
)
|
|
$
|
(30.2
|
)
|
|
$
|
(2.7
|
)
|
|
$
|
20.4
|
|
|
|
||
Cumulative claims paid as of:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One Year later
|
|
$
|
16.6
|
|
|
$
|
303.2
|
|
|
$
|
266.0
|
|
|
$
|
452.7
|
|
|
$
|
592.8
|
|
|
|
||
Two Years later
|
|
33.7
|
|
|
402.4
|
|
|
457.8
|
|
|
746.1
|
|
|
|
|
|
||||||||
Three Years later
|
|
34.1
|
|
|
542.2
|
|
|
607.0
|
|
|
|
|
|
|
|
|||||||||
Four Years later
|
|
37.6
|
|
|
665.0
|
|
|
|
|
|
|
|
|
|
||||||||||
Five Years later
|
|
38.0
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liability Re-estimated as of:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One Year later
|
|
95.4
|
%
|
|
98.7
|
%
|
|
95.7
|
%
|
|
100.5
|
%
|
|
101.5
|
%
|
|
|
|||||||
Two Years later
|
|
96.8
|
%
|
|
96.9
|
%
|
|
96.1
|
%
|
|
99.8
|
|
|
|
|
|
||||||||
Three Years later
|
|
98.5
|
%
|
|
94.5
|
%
|
|
97.0
|
%
|
|
|
|
|
|
|
|||||||||
Four Years later
|
|
102.5
|
%
|
|
93.9
|
%
|
|
|
|
|
|
|
|
|
||||||||||
Five Years later
|
|
100.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cumulative deficiency (redundancy) on gross reserve
|
|
0.9
|
%
|
|
(6.1
|
)%
|
|
(3.0
|
)%
|
|
(0.2
|
)%
|
|
1.5
|
%
|
|
|
|||||||
Gross Loss and Loss Expense Cumulative Paid as a Percentage of Originally Estimated Liability
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One Year later
|
|
43.1
|
%
|
|
31.9
|
%
|
|
26.5
|
%
|
|
36.9
|
%
|
|
42.4
|
%
|
|
|
|||||||
Two Years later
|
|
87.6
|
%
|
|
44.8
|
%
|
|
45.7
|
%
|
|
60.8
|
%
|
|
|
|
|
||||||||
Three Years later
|
|
88.6
|
%
|
|
60.4
|
%
|
|
60.5
|
%
|
|
|
|
|
|
|
|||||||||
Four Years later
|
|
97.7
|
%
|
|
74.1
|
%
|
|
|
|
|
|
|
|
|
||||||||||
Five Years later
|
|
98.8
|
%
|
|
|
|
|
|
|
|
|
|
|
For the Year Ended December 31,
|
|
2007
|
|
2008
(1)
|
|
2009
|
|
2010
(2)
|
|
2011
|
|
2012
|
||||||||||||
|
|
($ in Millions)
|
|
|
||||||||||||||||||||
Losses Net of Reinsurance
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
As Originally Estimated
|
|
$
|
38.5
|
|
|
$
|
897.7
|
|
|
$
|
994.3
|
|
|
$
|
1,220.1
|
|
|
$
|
1,378.1
|
|
|
$
|
1,629.4
|
|
Liability Re-estimated as of:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One Year later
|
|
$
|
36.7
|
|
|
$
|
886.3
|
|
|
$
|
961.4
|
|
|
$
|
1,234.3
|
|
|
$
|
1,401.4
|
|
|
|
||
Two Years later
|
|
37.3
|
|
|
869.8
|
|
|
969.5
|
|
|
1,229.6
|
|
|
|
|
|
||||||||
Three Years later
|
|
37.9
|
|
|
852.9
|
|
|
967.8
|
|
|
|
|
|
|
|
|||||||||
Four Years later
|
|
39.5
|
|
|
842.6
|
|
|
|
|
|
|
|
|
|
||||||||||
Five Years later
|
|
38.8
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cumulative deficiency (redundancy)
|
|
$
|
0.3
|
|
|
$
|
(55.1
|
)
|
|
$
|
(26.5
|
)
|
|
$
|
9.5
|
|
|
$
|
23.3
|
|
|
|
||
Cumulative claims paid as of:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One Year later
|
|
$
|
16.6
|
|
|
$
|
303.2
|
|
|
$
|
266.0
|
|
|
$
|
423.9
|
|
|
$
|
530.3
|
|
|
|
||
Two Years later
|
|
33.7
|
|
|
402.4
|
|
|
444.3
|
|
|
682.9
|
|
|
|
|
|
||||||||
Three Years later
|
|
34.1
|
|
|
542.2
|
|
|
575.1
|
|
|
|
|
|
|
|
|||||||||
Four Years later
|
|
37.6
|
|
|
665.0
|
|
|
|
|
|
|
|
|
|
||||||||||
Five Years later
|
|
38.0
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liability Re-estimated as of:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One Year later
|
|
95.4
|
%
|
|
98.7
|
%
|
|
96.7
|
%
|
|
101.2
|
%
|
|
101.7
|
%
|
|
|
|||||||
Two Years later
|
|
96.8
|
%
|
|
96.9
|
%
|
|
97.5
|
%
|
|
100.8
|
%
|
|
|
|
|
||||||||
Three Years later
|
|
98.5
|
%
|
|
95.0
|
%
|
|
97.3
|
%
|
|
|
|
|
|
|
|||||||||
Four Years later
|
|
102.5
|
%
|
|
93.9
|
%
|
|
|
|
|
|
|
|
|
||||||||||
Five Years later
|
|
100.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cumulative deficiency (redundancy) on net reserve
|
|
0.9
|
%
|
|
(6.1
|
)%
|
|
(2.7
|
)%
|
|
0.8
|
%
|
|
1.7
|
%
|
|
|
|||||||
Net Loss and Loss Expense Cumulative Paid as a Percentage of Originally Estimated Liability
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
One Year later
|
|
43.1
|
%
|
|
33.8
|
%
|
|
26.7
|
%
|
|
34.7
|
%
|
|
38.5
|
%
|
|
|
|||||||
Two Years later
|
|
87.6
|
%
|
|
44.8
|
%
|
|
44.7
|
%
|
|
56.0
|
%
|
|
|
|
|
||||||||
Three Years later
|
|
88.6
|
%
|
|
60.4
|
%
|
|
57.8
|
%
|
|
|
|
|
|
|
|||||||||
Four Years later
|
|
97.7
|
%
|
|
74.1
|
%
|
|
|
|
|
|
|
|
|
||||||||||
Five Years later
|
|
98.8
|
%
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Reserve for loss and loss adjustment expenses include the reserves for loss and loss adjustment expenses of $755.6 million, from the GMAC Acquisition, which we acquired in October 2008.
|
(2)
|
Reserve for loss and loss adjustment expenses include the reserves for loss and loss adjustment expenses of $98.8 million from the IIS Acquisition, which we acquired in November 2010.
|
•
|
ensure that operational and oversight responsibilities of the group are clearly defined and documented and that the reporting of material deficiencies and fraudulent activities are transparent and devoid of conflicts of interest;
|
•
|
establish systems for identifying on a risk sensitive basis those policies and procedures that must be reviewed annually and those policies and procedures that must be reviewed at other regular intervals;
|
•
|
establish a risk management and internal controls framework and ensure that it is assessed regularly and such assessment is reported to the Parent Board and the chief and senior executives;
|
•
|
establish and maintain sound accounting and financial reporting procedures and practices for the group; and
|
•
|
establish and keep under review group functions relating to actuarial, compliance, internal audit and risk management functions which must address certain specific requirements as set out in the Group Rules.
|
•
|
the issue and transfer of Maiden Holdings' common shares, up to the amount of its authorized capital from time to time, to and among persons that are non-residents of Bermuda for exchange control purposes; and
|
•
|
the issue and transfer of up to 20% of Maiden Holdings' common shares in issue from time to time to and among persons resident in Bermuda for exchange control purposes.
|
•
|
trends in claim frequency and severity;
|
•
|
changes in operations;
|
•
|
emerging economic and social trends;
|
•
|
inflation; and
|
•
|
changes in the regulatory and litigation environments.
|
•
|
limiting our ability to pay dividends to our common shareholders;
|
•
|
increasing our vulnerability to changing economic, regulatory and industry conditions;
|
•
|
limiting our ability to compete and our flexibility in planning for, or reacting to, changes in our business and the industry;
|
•
|
limiting our ability to borrow additional funds;
|
•
|
requiring us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for working capital, capital expenditures, acquisitions and other purposes; and
|
•
|
impacting rating agencies and regulators assessment of our capital position, adequacy and flexibility and therefore, the financial strength ratings of rating agencies and regulators assessment of our solvency.
|
•
|
fluctuations in interest rates, inflationary pressures and other changes in the investment environment that affect returns on invested assets;
|
•
|
changes in the frequency or severity of claims;
|
•
|
volatile and unpredictable developments, including man-made, weather-related and other natural catastrophes or terrorist attacks;
|
•
|
price competition;
|
•
|
inadequate loss and loss adjustment expense reserves;
|
•
|
cyclical nature of the property and casualty insurance market;
|
•
|
negative developments in the specialty property and casualty reinsurance sectors in which we operate; and
|
•
|
reduction in the business activities of AmTrust, ACAC or any of our ceding insurers.
|
•
|
enhance the roles and duties of our board of directors, our board committees and management;
|
•
|
supplement our internal accounting function, including hiring staff with expertise in accounting and financial reporting for a public company, as well as implement appropriate and sufficient accounting and reporting systems, and enhance and formalize closing procedures at the end of our accounting periods;
|
•
|
prepare and distribute periodic public reports in compliance with our obligations under the U.S. federal securities laws;
|
•
|
involve and retain to a greater degree outside counsel and accountants in the activities listed above;
|
•
|
establish or outsource an internal audit function;
|
•
|
enhance our investor relations function; and
|
•
|
establish new control policies, such as those relating to disclosure controls and procedures, segregation of duties and procedures and insider trading.
|
•
|
our board of directors may reduce the total voting power of any shareholder in order to avoid adverse tax, legal or regulatory consequences to us or any direct or indirect holder of our shares or its affiliates; and
|
•
|
our directors may, in their discretion, decline to record the transfer of any common shares on our share register, if they are not satisfied that all required regulatory approvals for such transfer have been obtained or if they determine such transfer may result in a non-de minimis adverse tax, legal or regulatory consequence to us or any direct or indirect holder of shares or its affiliates.
|
•
|
have the effect of delaying, deferring or preventing a change in control of us;
|
•
|
discourage bids for our securities at a premium over the market price;
|
•
|
adversely affect the price of, and the voting and other rights of the holders of our securities; or
|
•
|
impede the ability of the holders of our securities to change our management.
|
•
|
the material facts as to such interested director’s relationship or interests are disclosed or are known to the board of directors and the board in good faith authorizes the transaction by the affirmative vote of a majority of the disinterested directors;
|
•
|
such material facts are disclosed or are known to the shareholders entitled;
|
•
|
to vote on such transaction and the transaction is specifically approved in good faith by vote of the majority of shares entitled to vote thereon; or
|
•
|
the transaction is fair as to the corporation as of the time it is authorized, approved or ratified.
|
•
|
by lending funds (which may include cash or investments) on an unsecured basis to AII pursuant to a loan agreement between Maiden Bermuda and AII with such funds being deposited by AII into the trust accounts established or to be established by AII for the sole benefit of AmTrust’s U.S. insurance subsidiaries pursuant to the reinsurance agreements between AII and those AmTrust subsidiaries;
|
•
|
by transferring to AII assets for deposit into those trust accounts;
|
•
|
by delivering letters of credit to the applicable U.S. AmTrust insurance subsidiaries on behalf of AII; or
|
•
|
by requesting that AII cause such AmTrust insurance subsidiary to withhold premiums in lieu of remitting such premiums to AII.
|
|
High
|
|
Low
|
||||
2011
|
|
|
|
||||
First quarter
|
$
|
8.48
|
|
|
$
|
7.10
|
|
Second quarter
|
$
|
9.75
|
|
|
$
|
7.14
|
|
Third quarter
|
$
|
9.88
|
|
|
$
|
7.32
|
|
Fourth quarter
|
$
|
8.95
|
|
|
$
|
6.99
|
|
2012
|
|
|
|
||||
First quarter
|
$
|
9.73
|
|
|
$
|
8.25
|
|
Second quarter
|
$
|
8.79
|
|
|
$
|
7.84
|
|
Third quarter
|
$
|
9.52
|
|
|
$
|
8.16
|
|
Fourth quarter
|
$
|
9.21
|
|
|
$
|
8.10
|
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
($ in Millions, Except per Share
Amounts and Ratios) |
||||||||||
Summary Consolidated Statement of Income Data:
|
|
|
|
|
|
|
||||||
Gross premiums written
|
|
$
|
2,001.0
|
|
|
$
|
1,812.6
|
|
|
$
|
1,298.1
|
|
Net premiums written
|
|
$
|
1,901.3
|
|
|
$
|
1,723.5
|
|
|
$
|
1,227.8
|
|
Net premiums earned
|
|
$
|
1,803.8
|
|
|
$
|
1,552.4
|
|
|
$
|
1,169.8
|
|
Other insurance revenue
|
|
12.9
|
|
|
12.6
|
|
|
—
|
|
|||
Net investment income
|
|
81.2
|
|
|
74.9
|
|
|
71.6
|
|
|||
Net realized and unrealized gains on investments
|
|
1.9
|
|
|
0.5
|
|
|
6.6
|
|
|||
Total revenues
|
|
1,899.8
|
|
|
1,640.4
|
|
|
1,248.0
|
|
|||
Net loss and loss adjustment expenses
|
|
1,262.3
|
|
|
1,043.1
|
|
|
755.1
|
|
|||
Commissions and other acquisition expenses
|
|
492.1
|
|
|
438.8
|
|
|
336.7
|
|
|||
General and administrative expenses
|
|
53.8
|
|
|
53.9
|
|
|
42.2
|
|
|||
Interest and amortization expenses
|
|
36.4
|
|
|
34.1
|
|
|
36.5
|
|
|||
Accelerated amortization of junior subordinated debt discount and issuance cost
|
|
—
|
|
|
20.3
|
|
|
—
|
|
|||
Junior subordinated debt repurchase expense
|
|
—
|
|
|
15.1
|
|
|
—
|
|
|||
Amortization of intangible assets
|
|
4.4
|
|
|
5.0
|
|
|
5.8
|
|
|||
Foreign exchange (gains) losses
|
|
(1.6
|
)
|
|
(0.3
|
)
|
|
0.5
|
|
|||
Income tax expense
|
|
2.2
|
|
|
1.9
|
|
|
1.3
|
|
|||
Income attributable to noncontrolling interests
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|||
Total expenses
|
|
1,849.7
|
|
|
1,611.9
|
|
|
1,178.1
|
|
|||
Dividends on preference shares
|
|
(3.6
|
)
|
|
—
|
|
|
—
|
|
|||
Net income attributable to Maiden common shareholders
|
|
$
|
46.5
|
|
|
$
|
28.5
|
|
|
$
|
69.9
|
|
Per Share Data:
|
|
|
|
|
|
|
||||||
Earnings per common share
(1)
:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
0.64
|
|
|
$
|
0.40
|
|
|
$
|
0.99
|
|
Diluted
|
|
$
|
0.64
|
|
|
$
|
0.39
|
|
|
$
|
0.98
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
72,263,022
|
|
|
72,155,503
|
|
|
70,799,966
|
|
|||
Diluted
|
|
73,105,531
|
|
|
72,903,688
|
|
|
71,372,688
|
|
|||
Dividends declared per common share
|
|
$
|
0.33
|
|
|
$
|
0.30
|
|
|
$
|
0.265
|
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
|||
Selected Consolidated Ratios:
|
|
|
|
|
|
|
|||
Loss and loss adjustment expense ratio
(2)
|
|
69.5
|
%
|
|
66.6
|
%
|
|
64.6
|
%
|
Commission and other acquisition expense ratio
(3)
|
|
27.1
|
%
|
|
28.0
|
%
|
|
28.8
|
%
|
General and administrative expense ratio
(4)
|
|
2.9
|
%
|
|
3.5
|
%
|
|
3.5
|
%
|
Expense ratio
(5)
|
|
30.0
|
%
|
|
31.5
|
%
|
|
32.3
|
%
|
Combined ratio
(6)
|
|
99.5
|
%
|
|
98.1
|
%
|
|
96.9
|
%
|
December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
($ in Millions, Except per Share Amounts)
|
||||||||||
Summary Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
|
$
|
81.5
|
|
|
$
|
188.1
|
|
|
$
|
96.2
|
|
Restricted cash and cash equivalents
|
|
132.3
|
|
|
114.9
|
|
|
89.8
|
|
|||
Investments at fair market value
|
|
2,621.6
|
|
|
2,022.9
|
|
|
1,880.3
|
|
|||
Reinsurance balances receivable, net
|
|
522.6
|
|
|
423.4
|
|
|
226.3
|
|
|||
Funds withheld
|
|
42.7
|
|
|
42.6
|
|
|
152.7
|
|
|||
Loan to related party
|
|
168.0
|
|
|
168.0
|
|
|
168.0
|
|
|||
Deferred commission and other acquisition expenses
|
|
270.7
|
|
|
248.4
|
|
|
203.6
|
|
|||
Total assets
|
|
4,138.2
|
|
|
3,395.1
|
|
|
2,982.6
|
|
|||
Reserve for loss and loss adjustment expenses
|
|
1,740.3
|
|
|
1,398.4
|
|
|
1,226.8
|
|
|||
Unearned premiums
|
|
936.5
|
|
|
832.0
|
|
|
657.6
|
|
|||
Securities sold under agreements to repurchase, at contract value
|
|
—
|
|
|
—
|
|
|
76.2
|
|
|||
Senior notes
|
|
207.5
|
|
|
107.5
|
|
|
—
|
|
|||
Junior subordinated debt
|
|
126.3
|
|
|
126.3
|
|
|
215.2
|
|
|||
Total Maiden shareholders’ equity
|
|
1,015.2
|
|
|
768.6
|
|
|
750.2
|
|
|||
Book value per common share
(7)
|
|
$
|
11.96
|
|
|
$
|
10.64
|
|
|
$
|
10.40
|
|
(1)
|
Please refer to Note 13 of the notes to Consolidated Financial Statements for the calculation of basic and diluted earnings per common share.
|
(2)
|
Calculated by dividing net loss and loss adjustment expenses by the sum of net premiums earned and other insurance revenue.
|
(3)
|
Calculated by dividing commission and other acquisition expenses by the sum of net premiums earned and other insurance revenue.
|
(4)
|
Calculated by dividing general and administrative expenses by the sum of net premiums earned and other insurance revenue.
|
(5)
|
Calculated by combining the commission and other acquisition expense ratio and the general and administrative expense ratio.
|
(6)
|
Calculated by combining the net loss and loss adjustment expense ratio, commission and other acquisition expense ratio and general and administrative expense ratio.
|
(7)
|
Basic book value per common share is defined as total shareholders’ equity available to common shareholders divided by the number of common shares issued and outstanding as of the end of the period, giving no effect to dilutive securities.
|
•
|
Entering into a quota share reinsurance agreement with American Capital Acquisition Corporation (“ACAC”) in 2010 (the “ACAC Quota Share”);
|
•
|
Acquiring the majority of the reinsurance-related infrastructure, assets and liabilities of U.K.-based GMAC International Insurance Services, Ltd. in 2010 (the “IIS Acquisition”);
|
•
|
Completing a public debt offering of $107.5 million in June 2011 and repurchasing a like amount of our outstanding TRUPS Offering securities in July 2011 ("2011 Senior Notes");
|
•
|
Completing a public debt offering of $100.0 million in March 2012 ("2012 Senior Notes"). The net proceeds of $96.6 million have been used for working capital and general corporate purposes; and
|
•
|
Completing a public offering of $150.0 million Preference Shares - Series A (the “Preference Shares”). The Company received net proceeds of $145.0 million from the offering. The net proceeds from the offering are expected to be used for continued support and development of our reinsurance business and for other general corporate purposes, which may include repurchasing a portion of the Company's outstanding common shares and repurchasing the Company's outstanding 14% 30-year trust preferred securities ("TRUPS") issued in January 2009.
|
For the Year Ended December 31, 2012
|
|
Maiden US
|
|
Maiden Specialty
|
|
ACAC
|
|
Total
|
||||||||
|
|
($ in Millions)
|
||||||||||||||
Losses Incurred
|
|
$
|
6.5
|
|
|
$
|
22.6
|
|
|
$
|
2.0
|
|
|
$
|
31.1
|
|
% of Total
|
|
20.9
|
%
|
|
72.7
|
%
|
|
6.4
|
%
|
|
100.0
|
%
|
•
|
Net income attributable to Maiden common shareholders of
$46.5 million
, or
$0.64
basic and diluted earnings per common share for the year ended
December 31, 2012
compared to
$28.5 million
, or
$0.40
basic and
$0.39
diluted earnings per common share for the year ended
December 31, 2011
.
|
•
|
Operating earnings
(1)
of
$48.5 million
, or
$0.67
basic and
$0.66
diluted operating earnings per common share
(1)
for the year ended
December 31, 2012
compared to
$69.6 million
, or
$0.97
basic and
$0.96
diluted operating earnings per common share for the year ended
December 31, 2011
.
|
•
|
Gross premiums written of
$2.0 billion
for the year ended
December 31, 2012
, a
10.4%
increase over the year ended
December 31, 2011
.
|
•
|
Net premiums earned of
$1.8 billion
for the year ended
December 31, 2012
, a
16.2%
increase over the year ended
December 31, 2011
.
|
•
|
Underwriting income of
$18.7 million
and combined ratio
(2)
of
99.5%
for the year ended
December 31, 2012
compared to
$42.8 million
and
98.1%
for the year ended
December 31, 2011
.
|
•
|
Net investment income of
$81.2 million
for the year ended
December 31, 2012
, a
8.4%
increase over the year ended
December 31, 2011
.
|
•
|
Operating return on common equity
(1)
of
5.9%
for the year ended
December 31, 2012
compared to
9.2%
for the year ended
December 31, 2011
.
|
•
|
Common shareholders’ equity of
$865.2 million
at
December 31, 2012
compared to
$768.6 million
at
December 31, 2011
; book value per common share of
$11.96
and
$10.64
at
December 31, 2012
and 2011, respectively.
|
•
|
Total cash and investments of
$2.8 billion
and
$2.3 billion
at
December 31, 2012
and 2011, respectively; fixed maturities comprise
92.4%
and
86.9%
of total invested assets, of which
48.0%
and
60.1%
have a credit rating of AA+ or better and an overall average credit rating of A+ at
December 31, 2012
and 2011, respectively.
|
•
|
Total assets of
$4.1 billion
at
December 31, 2012
compared to
$3.4 billion
at
December 31, 2011
.
|
•
|
Reserve for loss and loss adjustment expenses of
$1.7 billion
and
$1.4 billion
at
December 31, 2012
and 2011, respectively.
|
•
|
Total debt of
$333.8 million
and
$233.8 million
at
December 31, 2012
and 2011, respectively, and a debt to total capitalization ratio of
24.7%
and
23.3%
at
December 31, 2012
and 2011, respectively.
|
(1)
|
Operating earnings, operating earnings per share and operating return on equity are non-GAAP financial measures. See “
Non-GAAP Financial Measures
” for additional information and a reconciliation to the nearest U.S. GAAP financial measure (net income).
|
(2)
|
Combined ratio is an operating metric. See “
Non-GAAP Financial Measures
” for additional information.
|
•
|
Net realized and unrealized gains or losses on investment;
|
•
|
Foreign exchange and other gains or losses;
|
•
|
Amortization of intangible assets; and
|
•
|
Non-cash deferred tax expenses;
|
•
|
for 2011 and 2010, we exclude transaction expenses related to the IIS Acquisition as these are non-recurring; and
|
•
|
in 2011, we exclude the Junior Subordinated Debt repurchase expense and the accelerated amortization of Junior Subordinated Debt discount and issuance costs.
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
($ in Millions)
|
||||||||||
Net income attributable to Maiden common shareholders
|
|
$
|
46.5
|
|
|
$
|
28.5
|
|
|
$
|
69.9
|
|
Add (subtract):
|
|
|
|
|
|
|
|
|||||
Net realized and unrealized gains on investment
|
|
(1.9
|
)
|
|
(0.5
|
)
|
|
(6.6
|
)
|
|||
Foreign exchange (gains) losses
|
|
(1.6
|
)
|
|
(0.3
|
)
|
|
0.5
|
|
|||
Amortization of intangible assets
|
|
4.4
|
|
|
5.0
|
|
|
5.8
|
|
|||
Junior subordinated debt repurchase expense
|
|
—
|
|
|
15.1
|
|
|
—
|
|
|||
Accelerated amortization of junior subordinated debt discount and issuance cost
|
|
—
|
|
|
20.3
|
|
|
—
|
|
|||
Non-recurring general and administrative expenses relating to IIS Acquisition
|
|
—
|
|
|
0.2
|
|
|
1.9
|
|
|||
Non-cash deferred tax expense
|
|
1.1
|
|
|
1.3
|
|
|
1.2
|
|
|||
Operating earnings attributable to Maiden common shareholders
|
|
$
|
48.5
|
|
|
$
|
69.6
|
|
|
$
|
72.7
|
|
Operating earnings per common share:
|
|
|
|
|
|
|
||||||
Basic operating earnings per common share
|
|
$
|
0.67
|
|
|
$
|
0.97
|
|
|
$
|
1.03
|
|
Diluted operating earnings per common share
|
|
$
|
0.66
|
|
|
$
|
0.96
|
|
|
$
|
1.02
|
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
($ in Millions)
|
||||||||||
Operating earnings available to common shareholders
|
|
$
|
48.5
|
|
|
$
|
69.6
|
|
|
$
|
72.7
|
|
Opening common shareholders’ equity
|
|
$
|
768.6
|
|
|
$
|
750.2
|
|
|
$
|
676.5
|
|
Ending common shareholders’ equity
|
|
$
|
865.2
|
|
|
$
|
768.6
|
|
|
$
|
750.2
|
|
Average common shareholders’ equity
|
|
$
|
816.9
|
|
|
$
|
759.4
|
|
|
$
|
713.4
|
|
Operating return on common equity
|
|
5.9
|
%
|
|
9.2
|
%
|
|
10.2
|
%
|
December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
($ in Millions)
|
||||||||||
Ending common shareholders’ equity
|
|
$
|
865.2
|
|
|
$
|
768.6
|
|
|
$
|
750.2
|
|
Common shares outstanding
|
|
72,343,947
|
|
|
72,221,428
|
|
|
72,107,100
|
|
|||
Book value per common share
|
|
$
|
11.96
|
|
|
$
|
10.64
|
|
|
$
|
10.40
|
|
•
|
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.
|
December 31,
|
|
2012
|
|
2011
|
||||
|
|
($ in Millions)
|
||||||
Reserve for reported loss and loss adjustment expenses
|
|
$
|
1,029.6
|
|
|
$
|
820.8
|
|
Reserve for losses incurred but not reported
|
|
710.7
|
|
|
577.6
|
|
||
Reserve for loss and loss adjustment expenses
|
|
$
|
1,740.3
|
|
|
$
|
1,398.4
|
|
1.
|
the information developed from internal and independent external sources can be used to develop meaningful estimates of the likely future performance of business bound by the Company;
|
2.
|
the loss and exposure information provided by ceding companies, insureds and brokers in support of their submissions can be used to derive meaningful estimates of the likely future performance of business bound with respect to each contract and policy;
|
3.
|
historic loss development and trend experience is assumed to be indicative of future loss development and trends; and
|
4.
|
no significant emergence of losses or types of losses that are not represented in the information supplied to the Company by its brokers, ceding companies and insureds will occur.
|
i.
|
the lag in time between the time claims are reported to the ceding company and the time they are reported through one or more reinsurance broker intermediaries to the Company;
|
ii.
|
the differing reserving practices among ceding companies;
|
iii.
|
the diversity of loss development patterns among different types of reinsurance treaties or contracts; and
|
iv.
|
the Company’s need to rely on its ceding companies for loss information, which also exposes the Company to changes in the reserving philosophy of the ceding company and the adequacy of its underlying case reserves.
|
•
|
changes in the inflation rate for goods and services related to the covered damages;
|
•
|
changes in the general economic environment that could cause unanticipated changes in claim frequency or severity;
|
•
|
changes in the litigation environment regarding the representation of plaintiffs and potential plaintiffs;
|
•
|
changes in the judicial and/or arbitration environment regarding the interpretation of policy and contract provisions relating to the determination of coverage and/or the amount of damages awarded for certain types of claims;
|
•
|
changes in the social environment regarding the general attitude of juries in the determination of liability and damages;
|
•
|
changes in the legislative environment regarding the definition of damages;
|
•
|
new types of injuries caused by new types of injurious activities or exposures; and
|
•
|
in the case of assumed reinsurance, changes in ceding company case reserving and reporting patterns.
|
•
|
alterations in claims handling procedures;
|
•
|
growth in new lines of business where exposure and loss development patterns are not well established; or
|
•
|
changes in the quality of risk selection or pricing in the underwriting process.
|
•
|
Level 1
— Valuations based on quoted prices in active markets 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. Examples of assets and liabilities utilizing Level 1 inputs include: exchange-traded equity securities, U.S. Treasury securities, and listed derivatives that are actively traded.
|
•
|
Level 2
— Valuations based on quoted prices in active markets for similar assets or liabilities, quoted prices for identical assets or liabilities in inactive markets, or for which 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. Examples of assets and liabilities utilizing Level 2 inputs include: listed derivatives that are not actively traded; U.S. government-sponsored agency securities; non-U.S. government obligations; corporate and municipal bonds; mortgage-backed securities (“MBS”) and asset-backed securities (“ABS”); short-duration high yield fund, and over-the-counter (“OTC”) derivatives (e.g. foreign currency options and forward contracts).
|
•
|
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. Examples of assets and liabilities utilizing Level 3 inputs include: insurance and reinsurance derivative contracts; hedge and credit funds with partial transparency; and collateralized loan obligation (“CLO”) — equity tranche securities that are traded in less liquid markets.
|
•
|
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.
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
($ in Millions)
|
||||||||||
Gross premiums written
|
|
$
|
2,001.0
|
|
|
$
|
1,812.6
|
|
|
$
|
1,298.1
|
|
Net premiums written
|
|
$
|
1,901.3
|
|
|
$
|
1,723.5
|
|
|
$
|
1,227.8
|
|
Net premiums earned
|
|
$
|
1,803.8
|
|
|
$
|
1,552.4
|
|
|
$
|
1,169.8
|
|
Other insurance revenue
|
|
12.9
|
|
|
12.6
|
|
|
—
|
|
|||
Net loss and loss adjustment expenses
|
|
(1,262.3
|
)
|
|
(1,043.1
|
)
|
|
(755.1
|
)
|
|||
Commission and other acquisition expenses
|
|
(492.1
|
)
|
|
(438.8
|
)
|
|
(336.7
|
)
|
|||
General and administrative expenses
|
|
(43.6
|
)
|
|
(40.3
|
)
|
|
(27.9
|
)
|
|||
Total underwriting income
|
|
18.7
|
|
|
42.8
|
|
|
50.1
|
|
|||
Other general and administrative expenses
|
|
(10.2
|
)
|
|
(13.6
|
)
|
|
(14.3
|
)
|
|||
Net investment income
|
|
81.2
|
|
|
74.9
|
|
|
71.6
|
|
|||
Net realized and unrealized gains on investments
|
|
1.9
|
|
|
0.5
|
|
|
6.6
|
|
|||
Junior subordinated debt repurchase expense
|
|
—
|
|
|
(15.1
|
)
|
|
—
|
|
|||
Accelerated amortization of junior subordinated debt discount and issuance cost
|
|
—
|
|
|
(20.3
|
)
|
|
—
|
|
|||
Amortization of intangible assets
|
|
(4.4
|
)
|
|
(5.0
|
)
|
|
(5.8
|
)
|
|||
Foreign exchange gains (losses)
|
|
1.6
|
|
|
0.3
|
|
|
(0.5
|
)
|
|||
Interest and amortization expenses
|
|
(36.4
|
)
|
|
(34.1
|
)
|
|
(36.5
|
)
|
|||
Income tax expense
|
|
(2.2
|
)
|
|
(1.9
|
)
|
|
(1.3
|
)
|
|||
Income attributable to noncontrolling interests
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends on preference shares
|
|
(3.6
|
)
|
|
—
|
|
|
—
|
|
|||
Net income attributable to Maiden common shareholders
|
|
$
|
46.5
|
|
|
$
|
28.5
|
|
|
$
|
69.9
|
|
Ratios
|
|
|
|
|
|
|
||||||
Net loss and loss adjustment expense ratio*
|
|
69.5
|
%
|
|
66.6
|
%
|
|
64.6
|
%
|
|||
Commission and other acquisition expense ratio**
|
|
27.1
|
%
|
|
28.0
|
%
|
|
28.8
|
%
|
|||
General and administrative expense ratio***
|
|
2.9
|
%
|
|
3.5
|
%
|
|
3.5
|
%
|
|||
Expense ratio
|
|
30.0
|
%
|
|
31.5
|
%
|
|
32.3
|
%
|
|||
Combined ratio****
|
|
99.5
|
%
|
|
98.1
|
%
|
|
96.9
|
%
|
*
|
Calculated by dividing net loss and loss adjustment expenses by the sum of net premiums earned and other insurance revenue.
|
**
|
Calculated by dividing commission and other acquisition expenses by the sum of net premiums earned and other insurance revenue.
|
***
|
Calculated by dividing general and administrative expenses by the sum of net premiums earned and other insurance revenue.
|
****
|
Calculated by adding together net loss and loss adjustment expense ratio, commission and other acquisition expense ratio and general and administrative expense ratio.
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
|
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Diversified Reinsurance
|
|
$
|
765.3
|
|
|
40.3
|
%
|
|
$
|
798.0
|
|
|
46.3
|
%
|
|
$
|
(32.7
|
)
|
|
(4.1
|
)%
|
AmTrust Quota Share Reinsurance
|
|
840.3
|
|
|
44.2
|
%
|
|
669.3
|
|
|
38.8
|
%
|
|
171.0
|
|
|
25.6
|
%
|
|||
ACAC Quota Share
|
|
295.7
|
|
|
15.5
|
%
|
|
256.2
|
|
|
14.9
|
%
|
|
39.5
|
|
|
15.4
|
%
|
|||
Total
|
|
$
|
1,901.3
|
|
|
100.0
|
%
|
|
$
|
1,723.5
|
|
|
100.0
|
%
|
|
$
|
177.8
|
|
|
10.3
|
%
|
•
|
Growth on recurring business in the AmTrust Quota Share Reinsurance segment -
The results for the year ended
December 31, 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 $216.9 million or 34.8% for the year ended
December 31, 2012
|
•
|
Growth in the ACAC Quota Share segment -
For the year ended
December 31, 2012
, net premiums written increased by
$39.5 million
or
15.4%
compared to the year ended
December 31, 2011
, as ACAC continues to expand its business.
|
For the Year Ended December 31,
|
|
2011
|
|
2010
|
|
Change in
|
|||||||||||||||
|
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Diversified Reinsurance
|
|
$
|
798.0
|
|
|
46.3
|
%
|
|
$
|
554.1
|
|
|
45.1
|
%
|
|
$
|
243.9
|
|
|
44.0
|
%
|
AmTrust Quota Share Reinsurance
|
|
669.3
|
|
|
38.8
|
%
|
|
468.0
|
|
|
38.1
|
%
|
|
201.3
|
|
|
43.0
|
%
|
|||
ACAC Quota Share
|
|
256.2
|
|
|
14.9
|
%
|
|
205.7
|
|
|
16.8
|
%
|
|
50.5
|
|
|
24.5
|
%
|
|||
Total
|
|
$
|
1,723.5
|
|
|
100.0
|
%
|
|
$
|
1,227.8
|
|
|
100.0
|
%
|
|
$
|
495.7
|
|
|
40.4
|
%
|
•
|
Premium from the IIS Acquisition.
The IIS Acquisition was completed on November 30, 2010; IIS contributed $105.8 million for the year ended December 31, 2011 compared to $29.6 million for the year ended December 31, 2010.
|
•
|
Continued underwriting discipline by Maiden US
. Maiden US continues to maintain its underwriting discipline in the face of ongoing significant market competition. However, Maiden US continues to see demand for its products and the year ended December 31, 2011, was successful in securing a series of new accounts and experienced strong organic growth, which resulted in increased premiums of $167.4 million, or 33.4% during the year.
|
•
|
Growth in the AmTrust Quota Share Reinsurance segment premium.
The commencement of the European Hospital Liability Quota Share increased premiums written by $95.3 million in the year ended December 31, 2011, while the business assumed under the Reinsurance Agreement increased $106.0 million in the year ended December 31, 2011.
|
•
|
Growth in the ACAC Quota Share segment.
2011 includes a full year of results compared to only ten months in 2010, resulting in growth of $50.5 million or 24.5% for the year ended December 31, 2011 compared to 2010.
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
|
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Diversified Reinsurance
|
|
$
|
795.3
|
|
|
44.1
|
%
|
|
$
|
748.4
|
|
|
48.3
|
%
|
|
$
|
46.9
|
|
|
6.3
|
%
|
AmTrust Quota Share Reinsurance
|
|
727.8
|
|
|
40.3
|
%
|
|
558.2
|
|
|
35.9
|
%
|
|
169.6
|
|
|
30.4
|
%
|
|||
ACAC Quota Share
|
|
280.7
|
|
|
15.6
|
%
|
|
245.8
|
|
|
15.8
|
%
|
|
34.9
|
|
|
14.2
|
%
|
|||
Total
|
|
$
|
1,803.8
|
|
|
100.0
|
%
|
|
$
|
1,552.4
|
|
|
100.0
|
%
|
|
$
|
251.4
|
|
|
16.2
|
%
|
•
|
Growth in Maiden US business in the Diversified Reinsurance segment in 2011
- Continued underwriting discipline and strong organic premium written growth in 2011, particularly the second half of that year, resulted in increased earned premiums by Maiden US of $73.8 million or 12.3% during the year ended
December 31, 2012
, compared to the year ended
December 31, 2011
. This growth in earned premium was partially offset by slower premium written growth in 2012 in Maiden US as noted. Additionally, reduced writings by Maiden Bermuda and the Company's international operations in 2011, as certain accounts reduced in size or were non-renewed, affected earned premium in 2012.
|
•
|
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 $49.4 million or 72.6% for the year ended
December 31, 2012
compared to the year ended
December 31, 2011
, while the business assumed under the Reinsurance Agreement increased $120.2 million or 24.5% for the year ended
December 31, 2012
compared to the year ended
December 31, 2011
.
|
•
|
Growth in the ACAC Quota Share segment -
For the year ended
December 31, 2012
, net premiums earned increased by
$34.9 million
or
14.2%
compared to the year ended
December 31, 2011
, as ACAC continues to expand its business.
|
For the Year Ended December 31,
|
|
2011
|
|
2010
|
|
Change in
|
|||||||||||||||
|
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Diversified Reinsurance
|
|
$
|
748.4
|
|
|
48.3
|
%
|
|
$
|
601.2
|
|
|
51.5
|
%
|
|
$
|
147.2
|
|
|
24.5
|
%
|
AmTrust Quota Share Reinsurance
|
|
558.2
|
|
|
35.9
|
%
|
|
445.1
|
|
|
38.0
|
%
|
|
113.1
|
|
|
25.4
|
%
|
|||
ACAC Quota Share
|
|
245.8
|
|
|
15.8
|
%
|
|
123.5
|
|
|
10.5
|
%
|
|
122.3
|
|
|
99.1
|
%
|
|||
Total
|
|
$
|
1,552.4
|
|
|
100.0
|
%
|
|
$
|
1,169.8
|
|
|
100.0
|
%
|
|
$
|
382.6
|
|
|
32.7
|
%
|
•
|
First full calendar year of the IIS Acquisition.
The IIS Acquisition was completed on November 30, 2010 and thus the year ended December 31, 2011 represents the first full calendar year of operations for the business associated with the IIS Acquisition, which contributed $107.3 million of the overall increase in net premiums earned year ended December 31, 2011 compared to 2010.
|
•
|
Growth in the AmTrust Quota Share Reinsurance segment premium.
The commencement of the European Hospital Liability Quota Share on April 1, 2011 increased premiums earned by $68.1 million for the year ended December 31, 2011 while the business assumed under the Reinsurance Agreement increased $45.0 million for the year ended December 31, 2011 compared to the year ended December 31, 2010, respectively.
|
•
|
Growth in the ACAC Quota Share segment.
As noted, this new segment commenced on March 1, 2010 and thus the year ended December 31, 2011 represents a full year of operations compared to only ten months in 2010, contributing $122.3 million of the increase for the year ended December 31, 2011.
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
||||
|
|
($ in Millions)
|
||||||
Average invested assets
|
|
$
|
2,764.6
|
|
|
$
|
2,360.0
|
|
Average book yield*
|
|
2.9
|
%
|
|
3.2
|
%
|
For the Year Ended December 31,
|
|
2011
|
|
2010
|
||||
|
|
($ in Millions)
|
||||||
Average invested assets
|
|
$
|
2,360.0
|
|
|
$
|
2,080.6
|
|
Average book yield*
|
|
3.2
|
%
|
|
3.5
|
%
|
•
|
the continued significant accumulation of cash and cash equivalents which occurred during
2011
and
2010
due largely to continuing strong operating cash flow; and
|
•
|
a continuing decline in the duration of the Company's investment portfolio, brought about largely by an increase in prepayments in the Company's mortgage-backed securities portfolio.
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
($ in Millions)
|
||||||||||
General and administrative expenses – segments
|
|
$
|
43.6
|
|
|
$
|
40.3
|
|
|
$
|
27.9
|
|
General and administrative expenses – corporate
|
|
10.2
|
|
|
13.6
|
|
|
14.3
|
|
|||
Total general and administrative expenses
|
|
$
|
53.8
|
|
|
$
|
53.9
|
|
|
$
|
42.2
|
|
•
|
Salary and employee welfare costs, including share compensation expense, increased approximately $7.9 million due to the 50 additional employees added in November 2010 as part of the IIS Acquisition;
|
•
|
Legal, audit and other professional fees decreased by $1.1 million - decreases in fees, primarily legal, arising due to smaller number and scale non-recurring activities in 2011 offset partially by increases relating to additional overseas locations;
|
•
|
Travel and office related expenses increased by $1.9 million, substantially all related to full years expenses relating to employees and offices acquired as part of the IIS Acquisition on November 30, 2010; and
|
•
|
Other expenses, including regulatory, depreciation and technology expenses, increased in by approximately $3.0 million.
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
($ in Millions)
|
||||||||||
TRUPS Offering
|
|
$
|
21.4
|
|
|
$
|
29.5
|
|
|
$
|
36.5
|
|
Senior Note Offerings
|
|
15.0
|
|
|
4.6
|
|
|
—
|
|
|||
Total
|
|
$
|
36.4
|
|
|
$
|
34.1
|
|
|
$
|
36.5
|
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
($ in Millions)
|
||||||||||
Net premiums written
|
|
$
|
765.3
|
|
|
$
|
798.0
|
|
|
$
|
554.1
|
|
Net premiums earned
|
|
$
|
795.3
|
|
|
$
|
748.4
|
|
|
$
|
601.2
|
|
Other insurance revenue
|
|
12.9
|
|
|
12.6
|
|
|
—
|
|
|||
Net loss and loss adjustment expenses
|
|
(584.0
|
)
|
|
(502.4
|
)
|
|
(394.6
|
)
|
|||
Commission and other acquisition expenses
|
|
(203.2
|
)
|
|
(200.2
|
)
|
|
(152.7
|
)
|
|||
General and administrative expenses
|
|
(40.9
|
)
|
|
(36.4
|
)
|
|
(26.1
|
)
|
|||
Underwriting (loss) income
|
|
$
|
(19.9
|
)
|
|
$
|
22.0
|
|
|
$
|
27.8
|
|
Ratios
|
|
|
|
|
|
|
||||||
Net loss and loss adjustment expense ratio
|
|
72.3
|
%
|
|
66.0
|
%
|
|
65.6
|
%
|
|||
Commission and other acquisition expense ratio
|
|
25.1
|
%
|
|
26.3
|
%
|
|
25.4
|
%
|
|||
General and administrative expense ratio
|
|
5.1
|
%
|
|
4.8
|
%
|
|
4.4
|
%
|
|||
Expense ratio
|
|
30.2
|
%
|
|
31.1
|
%
|
|
29.8
|
%
|
|||
Combined ratio
|
|
102.5
|
%
|
|
97.1
|
%
|
|
95.4
|
%
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
|
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
Net Premiums Written
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Property
|
|
$
|
190.1
|
|
|
24.8
|
%
|
|
$
|
208.0
|
|
|
26.1
|
%
|
|
$
|
(17.9
|
)
|
|
(8.6
|
)%
|
Casualty
|
|
433.3
|
|
|
56.6
|
%
|
|
441.6
|
|
|
55.3
|
%
|
|
(8.3
|
)
|
|
(1.9
|
)%
|
|||
Accident and Health
|
|
37.3
|
|
|
4.9
|
%
|
|
42.6
|
|
|
5.3
|
%
|
|
(5.3
|
)
|
|
(12.6
|
)%
|
|||
International
|
|
104.6
|
|
|
13.7
|
%
|
|
105.8
|
|
|
13.3
|
%
|
|
(1.2
|
)
|
|
(1.1
|
)%
|
|||
Total Diversified Reinsurance
|
|
$
|
765.3
|
|
|
100.0
|
%
|
|
$
|
798.0
|
|
|
100.0
|
%
|
|
$
|
(32.7
|
)
|
|
(4.1
|
)%
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
|
|
Total
|
|
% of
Total |
|
Total
|
|
% of
Total |
|
$
|
|
%
|
|||||||||
Net Premiums Earned
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Property
|
|
$
|
212.0
|
|
|
26.7
|
%
|
|
$
|
197.0
|
|
|
26.3
|
%
|
|
$
|
15.0
|
|
|
7.6
|
%
|
Casualty
|
|
444.7
|
|
|
55.9
|
%
|
|
395.5
|
|
|
52.8
|
%
|
|
49.2
|
|
|
12.4
|
%
|
|||
Accident and Health
|
|
42.0
|
|
|
5.3
|
%
|
|
43.2
|
|
|
5.8
|
%
|
|
(1.2
|
)
|
|
(2.9
|
)%
|
|||
International
|
|
96.6
|
|
|
12.1
|
%
|
|
112.7
|
|
|
15.1
|
%
|
|
(16.1
|
)
|
|
(14.3
|
)%
|
|||
Total Diversified Reinsurance
|
|
$
|
795.3
|
|
|
100.0
|
%
|
|
$
|
748.4
|
|
|
100.0
|
%
|
|
$
|
46.9
|
|
|
6.3
|
%
|
For the Year Ended December 31,
|
|
2011
|
|
2010
|
|
Change in
|
|||||||||||||||
|
|
Total
|
|
% of
Total |
|
Total
|
|
% of Total
|
|
$
|
|
%
|
|||||||||
Net Premiums Written
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Property
|
|
$
|
208.0
|
|
|
26.1
|
%
|
|
$
|
168.9
|
|
|
30.5
|
%
|
|
$
|
39.1
|
|
|
23.1
|
%
|
Casualty
|
|
441.6
|
|
|
55.3
|
%
|
|
311.9
|
|
|
56.3
|
%
|
|
129.7
|
|
|
41.6
|
%
|
|||
Accident and Health
|
|
42.6
|
|
|
5.3
|
%
|
|
43.7
|
|
|
7.9
|
%
|
|
(1.1
|
)
|
|
(2.4
|
)%
|
|||
International
|
|
105.8
|
|
|
13.3
|
%
|
|
29.6
|
|
|
5.3
|
%
|
|
76.2
|
|
|
257.1
|
%
|
|||
Total Diversified Reinsurance
|
|
$
|
798.0
|
|
|
100.0
|
%
|
|
$
|
554.1
|
|
|
100.0
|
%
|
|
$
|
243.9
|
|
|
44.0
|
%
|
For the Year Ended December 31,
|
|
2011
|
|
2010
|
|
Change in
|
|||||||||||||||
|
|
Total
|
|
% of Total
|
|
Total
|
|
% of Total
|
|
$
|
|
%
|
|||||||||
Net Premiums Earned
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Property
|
|
$
|
197.0
|
|
|
26.3
|
%
|
|
$
|
176.5
|
|
|
29.4
|
%
|
|
$
|
20.5
|
|
|
11.6
|
%
|
Casualty
|
|
395.5
|
|
|
52.8
|
%
|
|
356.4
|
|
|
59.3
|
%
|
|
39.1
|
|
|
11.0
|
%
|
|||
Accident and Health
|
|
43.2
|
|
|
5.8
|
%
|
|
62.9
|
|
|
10.5
|
%
|
|
(19.7
|
)
|
|
(31.4
|
)%
|
|||
International
|
|
112.7
|
|
|
15.1
|
%
|
|
5.4
|
|
|
0.8
|
%
|
|
107.3
|
|
|
1,997.5
|
%
|
|||
Total Diversified Reinsurance
|
|
$
|
748.4
|
|
|
100.0
|
%
|
|
$
|
601.2
|
|
|
100.0
|
%
|
|
$
|
147.2
|
|
|
24.5
|
%
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
($ in Millions)
|
||||||||||
Net premiums written
|
|
$
|
840.3
|
|
|
$
|
669.3
|
|
|
$
|
468.0
|
|
Net premiums earned
|
|
$
|
727.8
|
|
|
$
|
558.2
|
|
|
$
|
445.1
|
|
Net loss and loss adjustment expenses
|
|
(494.6
|
)
|
|
(380.3
|
)
|
|
(280.9
|
)
|
|||
Commission and other acquisition expenses
|
|
(200.6
|
)
|
|
(160.5
|
)
|
|
(144.7
|
)
|
|||
General and administrative expenses
|
|
(1.9
|
)
|
|
(2.3
|
)
|
|
(1.5
|
)
|
|||
Underwriting income
|
|
$
|
30.7
|
|
|
$
|
15.1
|
|
|
$
|
18.0
|
|
Ratios
|
|
|
|
|
|
|
||||||
Net loss and loss adjustment expense ratio
|
|
68.0
|
%
|
|
68.1
|
%
|
|
63.1
|
%
|
|||
Commission and other acquisition expense ratio
|
|
27.6
|
%
|
|
28.8
|
%
|
|
32.5
|
%
|
|||
General and administrative expense ratio
|
|
0.2
|
%
|
|
0.4
|
%
|
|
0.3
|
%
|
|||
Expense ratio
|
|
27.8
|
%
|
|
29.2
|
%
|
|
32.8
|
%
|
|||
Combined ratio
|
|
95.8
|
%
|
|
97.3
|
%
|
|
95.9
|
%
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
|
|
Total
|
|
% of Total
|
|
Total
|
|
% of Total
|
|
$
|
|
%
|
|||||||||
Net Premiums Written
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Small Commercial Business
|
|
$
|
364.1
|
|
|
43.3
|
%
|
|
$
|
237.6
|
|
|
35.5
|
%
|
|
$
|
126.5
|
|
|
53.3
|
%
|
Specialty Program
|
|
95.9
|
|
|
11.4
|
%
|
|
93.7
|
|
|
14.0
|
%
|
|
2.2
|
|
|
2.3
|
%
|
|||
Specialty Risk and Extended Warranty
|
|
380.3
|
|
|
45.3
|
%
|
|
338.0
|
|
|
50.5
|
%
|
|
42.3
|
|
|
12.5
|
%
|
|||
Total AmTrust Quota Share Reinsurance
|
|
$
|
840.3
|
|
|
100.0
|
%
|
|
$
|
669.3
|
|
|
100.0
|
%
|
|
$
|
171.0
|
|
|
25.6
|
%
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
|
|
Total
|
|
% of Total
|
|
Total
|
|
% of Total
|
|
$
|
|
%
|
|||||||||
Net Premiums Earned
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Small Commercial Business
|
|
$
|
313.1
|
|
|
43.0
|
%
|
|
$
|
215.9
|
|
|
38.7
|
%
|
|
$
|
97.2
|
|
|
45.0
|
%
|
Specialty Program
|
|
85.8
|
|
|
11.8
|
%
|
|
81.3
|
|
|
14.6
|
%
|
|
4.5
|
|
|
5.6
|
%
|
|||
Specialty Risk and Extended Warranty
|
|
328.9
|
|
|
45.2
|
%
|
|
261.0
|
|
|
46.7
|
%
|
|
67.9
|
|
|
26.0
|
%
|
|||
Total AmTrust Quota Share Reinsurance
|
|
$
|
727.8
|
|
|
100.0
|
%
|
|
$
|
558.2
|
|
|
100.0
|
%
|
|
$
|
169.6
|
|
|
30.4
|
%
|
For the Year Ended December 31,
|
|
2011
|
|
2010
|
|
Change in
|
|||||||||||||||
|
|
Total
|
|
% of Total
|
|
Total
|
|
% of Total
|
|
$
|
|
%
|
|||||||||
Net Premiums Written
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Small Commercial Business
|
|
$
|
237.6
|
|
|
35.5
|
%
|
|
$
|
197.0
|
|
|
42.1
|
%
|
|
$
|
40.6
|
|
|
20.6
|
%
|
Specialty Program
|
|
93.7
|
|
|
14.0
|
%
|
|
73.9
|
|
|
15.8
|
%
|
|
19.8
|
|
|
26.8
|
%
|
|||
Specialty Risk and Extended Warranty
|
|
338.0
|
|
|
50.5
|
%
|
|
197.1
|
|
|
42.1
|
%
|
|
140.9
|
|
|
71.5
|
%
|
|||
Total AmTrust Quota Share Reinsurance
|
|
$
|
669.3
|
|
|
100.0
|
%
|
|
$
|
468.0
|
|
|
100.0
|
%
|
|
$
|
201.3
|
|
|
43.0
|
%
|
For the Year Ended December 31,
|
|
2011
|
|
2010
|
|
Change in
|
|||||||||||||||
|
|
Total
|
|
% of Total
|
|
Total
|
|
% of Total
|
|
$
|
|
%
|
|||||||||
Net Premiums Earned
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Small Commercial Business
|
|
$
|
215.9
|
|
|
38.7
|
%
|
|
$
|
202.7
|
|
|
45.5
|
%
|
|
$
|
13.2
|
|
|
6.5
|
%
|
Specialty Program
|
|
81.3
|
|
|
14.6
|
%
|
|
71.6
|
|
|
16.1
|
%
|
|
9.7
|
|
|
13.5
|
%
|
|||
Specialty Risk and Extended Warranty
|
|
261.0
|
|
|
46.7
|
%
|
|
170.8
|
|
|
38.4
|
%
|
|
90.2
|
|
|
52.8
|
%
|
|||
Total AmTrust Quota Share Reinsurance
|
|
$
|
558.2
|
|
|
100.0
|
%
|
|
$
|
445.1
|
|
|
100.0
|
%
|
|
$
|
113.1
|
|
|
25.4
|
%
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
($ in Millions)
|
||||||||||
Net premiums written
|
|
$
|
295.7
|
|
|
$
|
256.2
|
|
|
$
|
205.7
|
|
Net premiums earned
|
|
$
|
280.7
|
|
|
$
|
245.8
|
|
|
$
|
123.5
|
|
Net loss and loss adjustment expenses
|
|
(183.7
|
)
|
|
(160.4
|
)
|
|
(79.7
|
)
|
|||
Commission and other acquisition expenses
|
|
(88.3
|
)
|
|
(78.1
|
)
|
|
(39.3
|
)
|
|||
General and administrative expenses
|
|
(0.8
|
)
|
|
(1.6
|
)
|
|
(0.3
|
)
|
|||
Underwriting income
|
|
$
|
7.9
|
|
|
$
|
5.7
|
|
|
$
|
4.2
|
|
|
|
|
|
|
|
|
||||||
Net loss and loss adjustment expense ratio
|
|
65.5
|
%
|
|
65.3
|
%
|
|
64.5
|
%
|
|||
Commission and other acquisition expense ratio
|
|
31.5
|
%
|
|
31.7
|
%
|
|
31.9
|
%
|
|||
General and administrative expense ratio
|
|
0.2
|
%
|
|
0.7
|
%
|
|
0.2
|
%
|
|||
Expense ratio
|
|
31.7
|
%
|
|
32.4
|
%
|
|
32.1
|
%
|
|||
Combined ratio
|
|
97.2
|
%
|
|
97.7
|
%
|
|
96.6
|
%
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
|
|
Total
|
|
% of Total
|
|
Total
|
|
% of Total
|
|
$
|
|
%
|
|||||||||
Net Premiums Written
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Automobile liability
|
|
$
|
159.9
|
|
|
54.1
|
%
|
|
$
|
147.4
|
|
|
57.5
|
%
|
|
$
|
12.5
|
|
|
8.5
|
%
|
Automobile physical damage
|
|
135.8
|
|
|
45.9
|
%
|
|
108.8
|
|
|
42.5
|
%
|
|
27.0
|
|
|
24.8
|
%
|
|||
Total ACAC Quota Share
|
|
$
|
295.7
|
|
|
100.0
|
%
|
|
$
|
256.2
|
|
|
100.0
|
%
|
|
$
|
39.5
|
|
|
15.4
|
%
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
Change in
|
|||||||||||||||
|
|
Total
|
|
% of Total
|
|
Total
|
|
% of Total
|
|
$
|
|
%
|
|||||||||
Net Premiums Earned
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Automobile liability
|
|
$
|
155.3
|
|
|
55.3
|
%
|
|
$
|
141.2
|
|
|
57.4
|
%
|
|
$
|
14.1
|
|
|
10.0
|
%
|
Automobile physical damage
|
|
125.4
|
|
|
44.7
|
%
|
|
104.6
|
|
|
42.6
|
%
|
|
20.8
|
|
|
19.8
|
%
|
|||
Total ACAC Quota Share
|
|
$
|
280.7
|
|
|
100.0
|
%
|
|
$
|
245.8
|
|
|
100.0
|
%
|
|
$
|
34.9
|
|
|
14.2
|
%
|
For the Year Ended December 31,
|
|
2011
|
|
2010
|
|
Change in
|
|||||||||||||||
|
|
Total
|
|
% of Total
|
|
Total
|
|
% of Total
|
|
$
|
|
%
|
|||||||||
Net Premiums Written
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Automobile liability
|
|
$
|
147.4
|
|
|
57.5
|
%
|
|
$
|
118.0
|
|
|
57.3
|
%
|
|
$
|
29.4
|
|
|
24.9
|
%
|
Automobile physical damage
|
|
108.8
|
|
|
42.5
|
%
|
|
87.7
|
|
|
42.7
|
%
|
|
21.1
|
|
|
24.0
|
%
|
|||
Total ACAC Quota Share
|
|
$
|
256.2
|
|
|
100.0
|
%
|
|
$
|
205.7
|
|
|
100.0
|
%
|
|
$
|
50.5
|
|
|
24.5
|
%
|
For the Year Ended December 31,
|
|
2011
|
|
2010
|
|
Change in
|
|||||||||||||||
|
|
Total
|
|
% of Total
|
|
Total
|
|
% of Total
|
|
$
|
|
%
|
|||||||||
Net Premiums Earned
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
|||||||||
Automobile liability
|
|
$
|
141.2
|
|
|
57.4
|
%
|
|
$
|
69.5
|
|
|
56.3
|
%
|
|
$
|
71.7
|
|
|
103.3
|
%
|
Automobile physical damage
|
|
104.6
|
|
|
42.6
|
%
|
|
54.0
|
|
|
43.7
|
%
|
|
50.6
|
|
|
93.8
|
%
|
|||
Total ACAC Quota Share
|
|
$
|
245.8
|
|
|
100.0
|
%
|
|
$
|
123.5
|
|
|
100.0
|
%
|
|
$
|
122.3
|
|
|
99.1
|
%
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
($ in Millions)
|
||||||||||
Operating activities
|
|
$
|
319.1
|
|
|
$
|
181.3
|
|
|
$
|
151.6
|
|
Investing activities
|
|
(637.5
|
)
|
|
13.3
|
|
|
(125.2
|
)
|
|||
Financing activities
|
|
208.8
|
|
|
(99.5
|
)
|
|
(37.2
|
)
|
|||
Effect of exchange rate changes on foreign currency cash
|
|
3.1
|
|
|
(3.1
|
)
|
|
(0.4
|
)
|
|||
Total (decrease) increase in cash and cash equivalents
|
|
$
|
(106.5
|
)
|
|
$
|
92.0
|
|
|
$
|
(11.2
|
)
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
($ in Millions)
|
||||||||||
Cash flows from Financing Activities
|
|
|
|
|
|
|
||||||
Senior notes issuance, net of issuance costs
|
|
$
|
96.6
|
|
|
$
|
104.7
|
|
|
$
|
—
|
|
Repayment of junior subordinated debt
|
|
—
|
|
|
(107.5
|
)
|
|
—
|
|
|||
Preference shares - Series A issuance, net of issuance costs
|
|
145.0
|
|
|
—
|
|
|
—
|
|
|||
Dividends paid to Maiden common shareholders
|
|
(29.6
|
)
|
|
(20.9
|
)
|
|
(18.4
|
)
|
|||
Dividends paid on preference shares
|
|
(3.6
|
)
|
|
—
|
|
|
—
|
|
|||
Other, net
|
|
0.4
|
|
|
(75.8
|
)
|
|
(18.8
|
)
|
|||
Net cash provided by (used in) financing activities
|
|
$
|
208.8
|
|
|
$
|
(99.5
|
)
|
|
$
|
(37.2
|
)
|
December 31,
|
2012
|
|
2011
|
||||||||||||||||||||
|
Restricted Cash &
Equivalents |
|
Fixed
Maturities |
|
Total
|
|
Restricted Cash &
Equivalents |
|
Fixed
Maturities |
|
Total
|
||||||||||||
|
($ in Millions)
|
|
($ in Millions)
|
||||||||||||||||||||
Maiden US
|
$
|
34.0
|
|
|
$
|
722.7
|
|
|
$
|
756.7
|
|
|
$
|
19.4
|
|
|
$
|
624.4
|
|
|
$
|
643.8
|
|
Maiden Bermuda
|
64.5
|
|
|
398.3
|
|
|
462.8
|
|
|
50.8
|
|
|
368.4
|
|
|
419.2
|
|
||||||
Diversified Reinsurance
|
98.5
|
|
|
1,121.0
|
|
|
1,219.5
|
|
|
70.2
|
|
|
992.8
|
|
|
1,063.0
|
|
||||||
Maiden Bermuda
|
32.4
|
|
|
824.6
|
|
|
857.0
|
|
|
41.7
|
|
|
419.5
|
|
|
461.2
|
|
||||||
AmTrust Quota Share Reinsurance
|
32.4
|
|
|
824.6
|
|
|
857.0
|
|
|
41.7
|
|
|
419.5
|
|
|
461.2
|
|
||||||
Maiden Bermuda
|
1.4
|
|
|
89.4
|
|
|
90.8
|
|
|
3.0
|
|
|
59.0
|
|
|
62.0
|
|
||||||
ACAC Quota Share
|
1.4
|
|
|
89.4
|
|
|
90.8
|
|
|
3.0
|
|
|
59.0
|
|
|
62.0
|
|
||||||
Total
|
$
|
132.3
|
|
|
$
|
2,035.0
|
|
|
$
|
2,167.3
|
|
|
$
|
114.9
|
|
|
$
|
1,471.3
|
|
|
$
|
1,586.2
|
|
As a % of Consolidated Balance Sheet captions
|
100.0
|
%
|
|
77.7
|
%
|
|
78.8
|
%
|
|
100.0
|
%
|
|
72.8
|
%
|
|
74.3
|
%
|
December 31,
|
2012
|
|
2011
|
||||||||||
|
Fair Value
|
|
% of Total
|
|
Fair Value
|
|
% of Total
|
||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
||||||
Fixed maturities, at fair value
|
$
|
26.4
|
|
|
116.4
|
%
|
|
$
|
27.3
|
|
|
112.2
|
%
|
Cash and cash equivalents
|
0.1
|
|
|
0.4
|
%
|
|
2.4
|
|
|
10.1
|
%
|
||
Funds held on underlying business
|
0.5
|
|
|
2.3
|
%
|
|
0.6
|
|
|
2.5
|
%
|
||
Insurance balances receivable and other
|
(4.3
|
)
|
|
(19.1
|
)%
|
|
(6.0
|
)
|
|
(24.8
|
)%
|
||
Total IIS Funds Withheld
|
$
|
22.7
|
|
|
100.0
|
%
|
|
$
|
24.3
|
|
|
100.0
|
%
|
December 31,
|
2012
|
|
2011
|
||||||||||
|
Fair Value
|
|
% of Total
|
|
Fair Value
|
|
% of Total
|
||||||
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
||||||
U.K. government bonds
|
$
|
20.0
|
|
|
75.7
|
%
|
|
$
|
27.3
|
|
|
100.0
|
%
|
Corporate bonds
|
6.4
|
|
|
24.3
|
%
|
|
—
|
|
|
—
|
%
|
||
Total
|
26.4
|
|
|
100.0
|
%
|
|
27.3
|
|
|
100.0
|
%
|
December 31, 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
|
|
|
$
|
1.2
|
|
|
$
|
—
|
|
|
$
|
43.9
|
|
|
1.9
|
%
|
|
1.2 years
|
U.S. agency bonds – mortgage-backed
|
|
962.6
|
|
|
31.0
|
|
|
(1.4
|
)
|
|
992.2
|
|
|
2.6
|
%
|
|
2.5 years
|
||||
U.S. agency bonds – other
|
|
11.7
|
|
|
1.4
|
|
|
—
|
|
|
13.1
|
|
|
4.4
|
%
|
|
4.8 years
|
||||
Non-U.S. government bonds
|
|
55.2
|
|
|
2.2
|
|
|
—
|
|
|
57.4
|
|
|
1.8
|
%
|
|
2.9 years
|
||||
Other mortgage-backed securities
|
|
23.1
|
|
|
0.9
|
|
|
—
|
|
|
24.0
|
|
|
2.8
|
%
|
|
3.8 years
|
||||
Corporate bonds
|
|
1,247.3
|
|
|
113.5
|
|
|
(6.5
|
)
|
|
1,354.3
|
|
|
4.6
|
%
|
|
4.8 years
|
||||
Municipal bonds
|
|
132.6
|
|
|
1.2
|
|
|
—
|
|
|
133.8
|
|
|
0.8
|
%
|
|
0.7 years
|
||||
Total available-for-sale fixed maturities
|
|
2,475.2
|
|
|
151.4
|
|
|
(7.9
|
)
|
|
2,618.7
|
|
|
3.5
|
%
|
|
3.5 years
|
||||
Other investments
|
|
2.6
|
|
|
0.4
|
|
|
(0.1
|
)
|
|
2.9
|
|
|
|
|
|
|||||
Total investments
|
|
$
|
2,477.8
|
|
|
$
|
151.8
|
|
|
$
|
(8.0
|
)
|
|
$
|
2,621.6
|
|
|
|
|
|
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 securities
|
|
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
|
||||||||||||||||||
December 31, 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
|
|
$
|
158.6
|
|
|
$
|
(1.4
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
158.6
|
|
|
$
|
(1.4
|
)
|
Corporate bonds
|
|
94.7
|
|
|
(1.1
|
)
|
|
141.9
|
|
|
(5.4
|
)
|
|
236.6
|
|
|
(6.5
|
)
|
||||||
|
|
253.3
|
|
|
(2.5
|
)
|
|
141.9
|
|
|
(5.4
|
)
|
|
395.2
|
|
|
(7.9
|
)
|
||||||
Other investments
|
|
—
|
|
|
—
|
|
|
2.0
|
|
|
(0.1
|
)
|
|
2.0
|
|
|
(0.1
|
)
|
||||||
Total temporarily impaired AFS securities and other investments
|
|
$
|
253.3
|
|
|
$
|
(2.5
|
)
|
|
$
|
143.9
|
|
|
$
|
(5.5
|
)
|
|
$
|
397.2
|
|
|
$
|
(8.0
|
)
|
|
|
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
|
)
|
||||||
|
|
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 AFS securities and other investments
|
|
$
|
302.6
|
|
|
$
|
(7.9
|
)
|
|
$
|
125.1
|
|
|
$
|
(22.8
|
)
|
|
$
|
427.7
|
|
|
$
|
(30.7
|
)
|
|
||||||||||||||
December 31,
|
|
2012
|
|
2011
|
||||||||||
|
|
($ in
Millions) |
|
% of
Total |
|
($ in
Millions) |
|
% of
Total |
||||||
Due in one year or less
|
|
$
|
58.7
|
|
|
2.2
|
%
|
|
$
|
54.3
|
|
|
2.7
|
%
|
Due after one year through five years
|
|
387.9
|
|
|
14.8
|
%
|
|
299.9
|
|
|
14.8
|
%
|
||
Due after five years through ten years
|
|
981.5
|
|
|
37.5
|
%
|
|
502.9
|
|
|
24.9
|
%
|
||
Due after ten years
|
|
174.4
|
|
|
6.7
|
%
|
|
181.6
|
|
|
9.0
|
%
|
||
|
|
1,602.5
|
|
|
61.2
|
%
|
|
1,038.7
|
|
|
51.4
|
%
|
||
U.S. agency bonds – mortgage-backed
|
|
992.2
|
|
|
37.9
|
%
|
|
972.1
|
|
|
48.1
|
%
|
||
Commercial mortgage-backed securities
|
|
24.0
|
|
|
0.9
|
%
|
|
9.9
|
|
|
0.5
|
%
|
||
Total AFS securities
|
|
$
|
2,618.7
|
|
|
100.0
|
%
|
|
$
|
2,020.7
|
|
|
100.0
|
%
|
December 31, 2012
|
|
Amortized
Cost |
|
Fair
Value |
|
% of Total Fair Value
|
|||||
|
|
($ in Millions)
|
|
|
|||||||
Ratings
|
|
|
|
|
|
|
|||||
U.S. treasury bonds
|
|
$
|
42.7
|
|
|
$
|
43.9
|
|
|
1.7
|
%
|
U.S. agency bonds
|
|
974.3
|
|
|
1,005.3
|
|
|
38.4
|
%
|
||
AAA
|
|
171.1
|
|
|
184.0
|
|
|
7.0
|
%
|
||
AA+, AA, AA-
|
|
186.5
|
|
|
196.7
|
|
|
7.5
|
%
|
||
A+, A, A-
|
|
477.2
|
|
|
515.4
|
|
|
19.7
|
%
|
||
BBB+, BBB, BBB-
|
|
587.9
|
|
|
637.1
|
|
|
24.3
|
%
|
||
BB+ or lower
|
|
35.5
|
|
|
36.3
|
|
|
1.4
|
%
|
||
Total AFS securities
|
|
$
|
2,475.2
|
|
|
$
|
2,618.7
|
|
|
100.0
|
%
|
December 31, 2011
|
|
Amortized
Cost |
|
Fair
Value |
|
% of Total Fair Value
|
|||||
|
|
($ in Millions)
|
|
|
|||||||
Ratings
|
|
|
|
|
|
|
|||||
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 AFS securities
|
|
$
|
1,957.1
|
|
|
$
|
2,020.7
|
|
|
100.0
|
%
|
December 31,
|
|
2012
|
|
2011
|
||||||||||
|
|
Fair Value
|
|
% of Total
|
|
Fair Value
|
|
% of Total
|
||||||
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
||||||
Mortgage-backed securities
|
|
|
|
|
|
|
|
|
||||||
Residential mortgage-backed (RMBS)
|
|
|
|
|
|
|
|
|
||||||
GNMA – fixed rate
|
|
$
|
100.8
|
|
|
10.0
|
%
|
|
$
|
185.3
|
|
|
18.8
|
%
|
FNMA – fixed rate
|
|
573.0
|
|
|
57.0
|
%
|
|
487.3
|
|
|
49.6
|
%
|
||
FNMA – variable rate
|
|
46.9
|
|
|
4.7
|
%
|
|
77.8
|
|
|
7.9
|
%
|
||
FHLMC – fixed rate
|
|
257.7
|
|
|
25.6
|
%
|
|
221.7
|
|
|
22.6
|
%
|
||
FHLMC – variable rate
|
|
13.8
|
|
|
1.4
|
%
|
|
—
|
|
|
—
|
%
|
||
Total RMBS
|
|
992.2
|
|
|
98.7
|
%
|
|
972.1
|
|
|
98.9
|
%
|
||
Total agency mortgage-backed securities
|
|
992.2
|
|
|
98.7
|
%
|
|
972.1
|
|
|
98.9
|
%
|
||
Non-MBS fixed rate agency securities
|
|
13.1
|
|
|
1.3
|
%
|
|
11.0
|
|
|
1.1
|
%
|
||
Total U.S. agency bonds
|
|
$
|
1,005.3
|
|
|
100.0
|
%
|
|
$
|
983.1
|
|
|
100.0
|
%
|
December 31,
|
|
2012
|
|
2011
|
||||
|
|
($ in Millions)
|
||||||
U.S. agency bonds - mortgage-backed:
|
|
|
|
|
||||
Beginning balance
|
|
$
|
972.1
|
|
|
$
|
969.5
|
|
Purchases
|
|
481.9
|
|
|
264.8
|
|
||
Sales and paydowns
|
|
(438.8
|
)
|
|
(283.5
|
)
|
||
Net realized gains (losses) on sales – included in net income
|
|
(1.3
|
)
|
|
4.2
|
|
||
Change in net unrealized (gains) losses – included in other comprehensive income
|
|
(11.3
|
)
|
|
22.4
|
|
||
Amortization of bond premium and discount
|
|
(10.4
|
)
|
|
(5.3)
|
|
||
Ending balance
|
|
$
|
992.2
|
|
|
$
|
972.1
|
|
|
|
Ratings*
|
|
|
|
|
||||||||||||||||
December 31, 2012
|
|
AAA
|
|
AA+, AA, AA-
|
|
A+, A, A-
|
|
BBB+, BBB, BBB-
|
|
B+ or lower
|
|
Fair Value
|
|
% of Corporate bonds portfolio
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
($ in Millions)
|
|
|
||||||||
Corporate bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Institutions
|
|
7.1
|
%
|
|
5.2
|
%
|
|
31.1
|
%
|
|
13.7
|
%
|
|
0.1
|
%
|
|
$
|
775.1
|
|
|
57.2
|
%
|
Industrials
|
|
—
|
%
|
|
1.2
|
%
|
|
4.8
|
%
|
|
30.8
|
%
|
|
1.7
|
%
|
|
520.9
|
|
|
38.5
|
%
|
|
Utilities/Other
|
|
—
|
%
|
|
—
|
%
|
|
0.9
|
%
|
|
2.5
|
%
|
|
0.9
|
%
|
|
58.3
|
|
|
4.3
|
%
|
|
Total Corporate bonds
|
|
7.1
|
%
|
|
6.4
|
%
|
|
36.8
|
%
|
|
47.0
|
%
|
|
2.7
|
%
|
|
$
|
1,354.3
|
|
|
100.0
|
%
|
|
|
Ratings*
|
|
|
|
|
||||||||||||||||
December 31, 2011
|
|
AAA
|
|
AA+, AA, AA-
|
|
A+, A, A-
|
|
BBB+, BBB, BBB-
|
|
B+ or lower
|
|
Fair Value
|
|
% of Corporate bonds portfolio
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
($ in Millions)
|
|
|
||||||||
Corporate bonds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Financial Institutions
|
|
7.5
|
%
|
|
2.6
|
%
|
|
36.8
|
%
|
|
22.1
|
%
|
|
0.8
|
%
|
|
$
|
531.1
|
|
|
69.8
|
%
|
Industrials
|
|
—
|
%
|
|
3.1
|
%
|
|
4.3
|
%
|
|
19.0
|
%
|
|
—
|
%
|
|
199.9
|
|
|
26.4
|
%
|
|
Utilities/Other
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
2.3
|
%
|
|
1.5
|
%
|
|
29.4
|
|
|
3.8
|
%
|
|
Total Corporate bonds
|
|
7.5
|
%
|
|
5.7
|
%
|
|
41.1
|
%
|
|
43.4
|
%
|
|
2.3
|
%
|
|
$
|
760.4
|
|
|
100.0
|
%
|
December 31, 2012
|
|
Fair Value
|
|
% of Holdings
Based on Fair Value of All Fixed Income Securities |
|
Rating*
|
|||
|
|
($ in Millions)
|
|
|
|
|
|||
Morgan Stanley FLT, Due 10/18/2016
(1)
|
|
$
|
38.0
|
|
|
1.5
|
%
|
|
A-
|
Citigroup FLT, Due 6/9/2016
(1)
|
|
25.5
|
|
|
1.0
|
%
|
|
BBB+
|
|
Northern Rock Asset Mgt., 3.875% Due 11/16/2020
|
|
25.1
|
|
|
1.0
|
%
|
|
AAA
|
|
BNP Paribas, Due 1/15/2021
|
|
22.5
|
|
|
0.9
|
%
|
|
A+
|
|
Rabobank Nederland UTREC, 3.875% Due 2/8/2022
|
|
21.5
|
|
|
0.8
|
%
|
|
AA-
|
|
Barclays Bank PLC NY FLT, Due 2/24/2020
(1)
|
|
20.0
|
|
|
0.8
|
%
|
|
A+
|
|
SLM Corp FLT, Due 1/27/2014
(1)
|
|
19.8
|
|
|
0.8
|
%
|
|
BBB-
|
|
Bear Stearns FLT, 11/21/2016
(1)
|
|
19.7
|
|
|
0.8
|
%
|
|
A
|
|
JPMorgan Chase & Co FLT, Due 6/13/2016
(1)
|
|
19.4
|
|
|
0.7
|
%
|
|
A
|
|
HSBC Financial FLT, Due 6/1/2016
(1)
|
|
19.4
|
|
|
0.7
|
%
|
|
A
|
|
Total
|
|
$
|
230.9
|
|
|
9.0
|
%
|
|
|
December 31,
|
|
2012
|
|
2011
|
||||||||||
|
|
Fair Value
|
|
% of Total
|
|
Fair Value
|
|
% of Total
|
||||||
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
||||||
Corporate bonds
|
|
$
|
156.5
|
|
|
73.1
|
%
|
|
$
|
65.7
|
|
|
55.7
|
%
|
Non-U.S. government bonds
|
|
57.4
|
|
|
26.9
|
%
|
|
52.3
|
|
|
44.3
|
%
|
||
Total non-U.S. dollar AFS securities
|
|
$
|
213.9
|
|
|
100.0
|
%
|
|
$
|
118.0
|
|
|
100.0
|
%
|
December 31,
|
|
2012
|
|
2011
|
||||||||||
|
|
Fair Value
|
|
% of Total
|
|
Fair Value
|
|
% of Total
|
||||||
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
||||||
Euro
|
|
$
|
191.7
|
|
|
89.6
|
%
|
|
$
|
107.2
|
|
|
90.8
|
%
|
Swedish Krona
|
|
10.9
|
|
|
5.1
|
%
|
|
9.9
|
|
|
8.4
|
%
|
||
Australian Dollar
|
|
7.7
|
|
|
3.6
|
%
|
|
—
|
|
|
—
|
%
|
||
British Pound
|
|
2.9
|
|
|
1.4
|
%
|
|
0.9
|
|
|
0.8
|
%
|
||
All other
|
|
0.7
|
|
|
0.3
|
%
|
|
—
|
|
|
—
|
%
|
||
Total non-U.S. dollar AFS securities
|
|
$
|
213.9
|
|
|
100.0
|
%
|
|
$
|
118.0
|
|
|
100.0
|
%
|
December 31,
|
|
2012
|
|
2011
|
||||||||||
|
|
Fair Value
|
|
% of Total
|
|
Fair Value
|
|
% of Total
|
||||||
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
||||||
Germany
|
|
$
|
24.8
|
|
|
43.1
|
%
|
|
$
|
28.6
|
|
|
54.6
|
%
|
European Investment Bank
|
|
12.5
|
|
21.7
|
%
|
|
—
|
|
|
—
|
%
|
|||
Sweden
|
|
6.1
|
|
10.7
|
%
|
|
8.8
|
|
16.8
|
%
|
||||
Netherlands
|
|
5.9
|
|
|
10.3
|
%
|
|
6.4
|
|
|
12.2
|
%
|
||
All other
|
|
8.1
|
|
|
14.2
|
%
|
|
8.5
|
|
|
16.4
|
%
|
||
Total non-U.S. government bonds
|
|
$
|
57.4
|
|
|
100.0
|
%
|
|
$
|
52.3
|
|
|
100.0
|
%
|
December 31,
|
|
2012
|
|
2011
|
||||||||||
|
|
Fair Value
|
|
% of Total
|
|
Fair Value
|
|
% of Total
|
||||||
|
|
($ in Millions)
|
|
|
|
($ in Millions)
|
|
|
||||||
AAA
|
|
$
|
61.8
|
|
|
39.5
|
%
|
|
$
|
22.7
|
|
|
34.5
|
%
|
AA+, AA, AA-
|
|
7.9
|
|
|
5.0
|
%
|
|
13.1
|
|
|
20.0
|
%
|
||
A+, A, A-
|
|
52.3
|
|
|
33.4
|
%
|
|
7.8
|
|
|
11.9
|
%
|
||
BBB+, BBB, BBB-
|
|
33.1
|
|
|
21.1
|
%
|
|
22.1
|
|
|
33.6
|
%
|
||
BB+ or lower
|
|
1.4
|
|
|
1.0
|
%
|
|
—
|
|
|
—
|
%
|
||
Total non-U.S. dollar denominated corporate bonds
|
|
$
|
156.5
|
|
|
100.0
|
%
|
|
$
|
65.7
|
|
|
100.0
|
%
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
|
|
($ in Millions)
|
||||||||||
Gross unpaid loss and loss adjustment expenses reserves at beginning of period
|
|
$
|
1,398.4
|
|
|
$
|
1,226.8
|
|
|
$
|
1,002.7
|
|
Less: reinsurance recoverable at beginning of period
|
|
20.3
|
|
|
6.7
|
|
|
8.4
|
|
|||
Net loss and loss adjustment expense reserves at beginning of period
|
|
1,378.1
|
|
|
1,220.1
|
|
|
994.3
|
|
|||
Net incurred losses related to:
|
|
|
|
|
|
|
||||||
Current year
|
|
1,239.0
|
|
|
1,028.9
|
|
|
788.0
|
|
|||
Prior years
|
|
23.3
|
|
|
14.2
|
|
|
(32.9
|
)
|
|||
|
|
1,262.3
|
|
|
1,043.1
|
|
|
755.1
|
|
|||
Net paid losses related to:
|
|
|
|
|
|
|
||||||
Current year
|
|
(485.0
|
)
|
|
(456.1
|
)
|
|
(365.3
|
)
|
|||
Prior years
|
|
(530.3
|
)
|
|
(423.9
|
)
|
|
(266.0
|
)
|
|||
|
|
(1,015.3
|
)
|
|
(880.0
|
)
|
|
(631.3
|
)
|
|||
Acquired loss and loss expense reserve
|
|
—
|
|
|
0.4
|
|
|
102.0
|
|
|||
Effect of foreign exchange movement
|
|
4.3
|
|
|
(5.5
|
)
|
|
—
|
|
|||
Net loss and loss adjustment expense reserves at end of period
|
|
1,629.4
|
|
|
1,378.1
|
|
|
1,220.1
|
|
|||
Reinsurance recoverable at end of period
|
|
110.9
|
|
|
20.3
|
|
|
6.7
|
|
|||
Gross unpaid loss and loss adjustment expenses reserves at end of period
|
|
$
|
1,740.3
|
|
|
$
|
1,398.4
|
|
|
$
|
1,226.8
|
|
December 31,
|
|
2012
|
|
2011
|
||||
|
|
($ in Millions)
|
||||||
Reinsurance balances receivable, net
|
|
$
|
522.6
|
|
|
$
|
423.4
|
|
Prepaid reinsurance premiums
|
|
38.7
|
|
|
35.4
|
|
||
Reinsurance Recoverable on unpaid losses
|
|
110.9
|
|
|
20.3
|
|
||
Deferred commission and other acquisition expenses
|
|
270.7
|
|
|
248.4
|
|
||
Reserve for loss and loss adjustment expenses
|
|
(1,740.3
|
)
|
|
(1,398.4
|
)
|
||
Unearned premiums
|
|
(936.5
|
)
|
|
(832.0
|
)
|
December 31,
|
|
2012
|
|
2011
|
||||
|
|
($ in Millions)
|
||||||
Senior notes
|
|
$
|
207.5
|
|
|
$
|
107.5
|
|
Junior subordinated debt
|
|
126.3
|
|
|
126.3
|
|
||
Maiden shareholders’ equity
|
|
1,015.2
|
|
|
768.6
|
|
||
Total capital resources
|
|
$
|
1,349.0
|
|
|
$
|
1,002.4
|
|
Ratio of debt to total capital resources
|
|
24.7
|
%
|
|
23.3
|
%
|
|
Payment Due by Period
|
||||||||||||||||||
December 31, 2012
|
Total
|
|
Less than
1 Year |
|
1 – 3 Years
|
|
3 – 5 Years
|
|
More than
5 Years |
||||||||||
|
($ in Millions)
|
||||||||||||||||||
Contractual Obligations
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating lease obligations
|
$
|
5.6
|
|
|
$
|
2.0
|
|
|
$
|
2.6
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
Junior subordinated debt and interest
|
713.0
|
|
|
21.4
|
|
|
42.7
|
|
|
42.7
|
|
|
606.2
|
|
|||||
Senior notes and interest
|
694.3
|
|
|
16.9
|
|
|
33.7
|
|
|
33.7
|
|
|
610.0
|
|
|||||
Reserve for loss and loss adjustment expenses
|
1,740.3
|
|
|
548.9
|
|
|
571.8
|
|
|
268.7
|
|
|
350.9
|
|
|||||
Other investments - unfunded commitments
|
3.1
|
|
|
1.0
|
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
3,156.3
|
|
|
$
|
590.2
|
|
|
$
|
652.9
|
|
|
$
|
346.1
|
|
|
$
|
1,567.1
|
|
Hypothetical Change in Interest Rates
|
|
Fair Value
|
|
Estimated
Change in Fair Value |
|
Hypothetical %
(Decrease) Increase in Shareholders’ Equity |
|||||
|
|
($ in Millions)
|
|
|
|||||||
200 basis point increase
|
|
$
|
2,418.2
|
|
|
$
|
(200.5
|
)
|
|
(19.7
|
)%
|
100 basis point increase
|
|
2,514.3
|
|
|
(104.4
|
)
|
|
(10.3
|
)%
|
||
No change
|
|
2,618.7
|
|
|
—
|
|
|
—
|
%
|
||
100 basis point decrease
|
|
2,727.1
|
|
|
108.4
|
|
|
10.7
|
%
|
||
200 basis point decrease
|
|
2,845.2
|
|
|
226.5
|
|
|
22.3
|
%
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
||
Ratings*
|
|
|
||||
AA+ or better
|
|
48.0
|
%
|
|
60.1
|
%
|
AA, AA-, A+, A, A-
|
|
26.3
|
%
|
|
22.7
|
%
|
BBB+, BBB, BBB-
|
|
24.3
|
%
|
|
16.3
|
%
|
BB+ or lower
|
|
1.4
|
%
|
|
0.9
|
%
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
MAIDEN HOLDINGS, LTD.
|
|
|
By:
|
|
|
|
/s/ Arturo M. Raschbaum
|
|
|
Name: Arturo M. Raschbaum
Title: President and Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
/s/ Arturo M. Raschbaum
|
|
President and Chief Executive Officer
|
|
March 8, 2013
|
Arturo M. Raschbaum
|
|
(Principal Executive Officer)
|
|
|
/s/ John M. Marshaleck
|
|
Chief Financial Officer
|
|
March 8, 2013
|
John M. Marshaleck
|
|
(Principal Financial and Accounting Officer)
|
|
|
/s/ Barry D. Zyskind
|
|
Chairman
|
|
March 8, 2013
|
Barry D. Zyskind
|
|
|
|
|
/s/ Raymond M. Neff
|
|
Director
|
|
March 8, 2013
|
Raymond M. Neff
|
|
|
|
|
/s/ Simcha G. Lyons
|
|
Director
|
|
March 8, 2013
|
Simcha G. Lyons
|
|
|
|
|
/s/ Yehuda L. Neuberger
|
|
Director
|
|
March 8, 2013
|
Yehuda L. Neuberger
|
|
|
|
|
/s/ Steven H. Nigro
|
|
Director
|
|
March 8, 2013
|
Steven H. Nigro
|
|
|
|
|
Exhibit
No.
|
|
Description
|
|
Reference
|
3.1
|
|
Memorandum of Association (as amended)
|
|
(1)
|
3.2
|
|
Bye-Laws
|
|
(2)
|
4.1
|
|
Form of Common Share Certificate
|
|
(2)
|
4.2
|
|
Registration Rights Agreement by and between Maiden Holdings, Ltd. and Friedman, Billings, Ramsey & Co., Inc., dated as of July 3, 2007
|
|
(2)
|
4.3
|
|
Amended and Restated Declaration of Trust by and among Wilmington Trust Company, as Institutional Trustee and as Delaware Trustee, Maiden Holdings North America, Ltd., as Sponsor, and the Administrators (as named therein), dated as of January 20, 2009
|
|
(3)
|
4.4
|
|
Indenture by and between Maiden Holdings North America, Ltd. and Wilmington Trust Company, as Trustee, relating to Fixed Rate Subordinated Deferrable Interest Debentures Due 2039 (including the form of debenture), dated January 20, 2009
|
|
(3)
|
4.5
|
|
Guarantee Agreement by and between Maiden Holdings, Ltd., as Guarantor, and Wilmington Trust Company, as Trustee, dated as of January 20, 2009
|
|
(3)
|
4.6
|
|
Guarantee Agreement by and between Maiden Holdings North America, Ltd., as Guarantor, and Wilmington Trust Company, as Trustee, dated as of January 20, 2009
|
|
(3)
|
4.7*
|
|
Form of Purchase Agreement by and among Maiden Holdings, Ltd., Maiden Capital Financing Trust, Maiden Holdings North America, Ltd. and various institutional investors, dated as of January 14, 2009
|
|
(3)
|
4.8
|
|
First Amendment to Amended and Restated Declaration of Trust, dated as of July 14, 2011, by and among Maiden Holdings North America, Ltd., Arturo M. Raschbaum, John M. Marshaleck and Karen L. Schmitt, as all of the Administrators, and Wilmington Trust Company, as Institutional Trustee and Delaware Trustee
|
|
(4)
|
4.9
|
|
Form of Indenture for Debt Securities by and among Maiden Holdings North America, Ltd., Maiden Holdings, Ltd., as guarantor, and Wilmington Trust Company, as trustee
|
|
(5)
|
4.10
|
|
First Supplemental Indenture, dated as of June 24, 2011, by and among Maiden Holdings North America, Ltd., Maiden Holdings, Ltd., as guarantor, and Wilmington Trust Company, as trustee
|
|
(6)
|
4.11
|
|
Form of 8.25% Notes due 2041 (included in Exhibit 4.10)
|
|
(6)
|
4.12
|
|
Second Supplemental Indenture, dated March 27, 2012, by and among Maiden Holdings North America, Ltd., Maiden Holdings, Ltd., as guarantor, and Wilmington Trust Company, as trustee
|
|
(7)
|
4.13
|
|
Form of 8.000% Notes due 2042 (included in Exhibit 4.12)
|
|
(7)
|
4.14
|
|
Certificate of Designations of 8.25% Non-Cumulative Preference Shares, Series A, adopted on August 7, 2012
|
|
(8)
|
4.15
|
|
Form of stock certificate evidencing 8.25% Series A Preference Share (included in Exhibit 4.14)
|
|
(8)
|
10.1*
|
|
Amended and Restated Maiden Holdings, Ltd. 2007 Share Incentive Plan as of July 26, 2011
|
|
(4)
|
10.2*
|
|
Form of Share Option Agreement for Employee Recipients of Options under 2007 Share Incentive Plan
|
|
(2)
|
10.3*
|
|
Form of Share Option Agreement for Non-Employee Recipients of Options under 2007 Share Incentive Plan
|
|
(2)
|
10.4*
|
|
Form of Performance-Based Restricted Share Unit Agreement for Employee Recipients of Restricted Share Units under the Amended and Restated 2007 Share Incentive Plan
|
|
(4)
|
10.5*
|
|
Form of Employment Agreement by and between Maiden and Arturo Raschbaum, John Marshaleck, Patrick J. Haveron, Karen Schmitt and Lawrence F. Metz, dated as of November 1, 2011
|
|
(9)
|
10.6*
|
|
Employment Agreement by and between Maiden Holdings, Ltd. and Ronald M. Judd, dated as of December 1, 2010
|
|
(10)
|
10.7*
|
|
Master Agreement by and between Maiden Holdings, Ltd. and AmTrust Financial Services, Inc., dated as of July 3, 2007
|
|
(2)
|
10.8*
|
|
Amendment No. 1 to the Master Agreement by and between Maiden Holdings, Ltd. and AmTrust Financial Services, Inc., dated as of September 17, 2007
|
|
(2)
|
10.9
|
|
Amended and Restated Quota Share Reinsurance Agreement by and between Maiden Insurance Company Ltd. and AmTrust International Insurance, Ltd. and dated as of June 1, 2008
|
|
(11)
|
10.10
|
|
Loan Agreement by and between AmTrust International Insurance, Ltd. and Maiden Insurance Company Ltd., dated as of November 16, 2007
|
|
(12)
|
10.11
|
|
Amendment No. 1 to the Loan Agreement by and between AmTrust International Insurance, Ltd. and Maiden Insurance Company Ltd., dated as of February 15, 2008
|
|
(12)
|
10.12
|
|
Asset Management Agreement by and between AII Insurance Management Limited and Maiden Insurance Company Ltd., dated as of July 3, 2007
|
|
(2)
|
10.13
|
|
First Amendment to Asset Management Agreement by and between AII Insurance Management Limited, Maiden Insurance Company Ltd., Maiden Holdings, Ltd., and Maiden Holdings North America, Ltd., dated as of November 3, 2008
|
|
(10)
|
10.14
|
|
Second Amendment to Asset Management Agreement by and between AII Insurance Management Limited, Maiden Insurance Company Ltd., Maiden Holdings, Ltd., Maiden Holdings North America, Ltd. and Maiden Reinsurance Company, dated as of December 23, 2008
|
|
(10
|
10.15
|
|
Third Amendment to Asset Management Agreement by and between AII Insurance Management Limited, Maiden Insurance Company Ltd., Maiden Holdings, Ltd., Maiden Holdings North America, Ltd., Maiden Reinsurance Company and Maiden Specialty Insurance Company dated as of September 1, 2009
|
|
(10)
|
10.16
|
|
Fourth Amendment to Asset Management Agreement by and between AII Insurance Management Limited, Maiden Insurance Company Ltd., Maiden Holdings, Ltd., Maiden Holdings North America, Ltd., Maiden Reinsurance Company and Maiden Specialty Insurance Company dated as of August 6, 2010
|
|
(10
|
10.17
|
|
Reinsurance Brokerage Agreement by and between Maiden Insurance Company Ltd. and AII Reinsurance Broker Ltd., dated as of July 3, 2007
|
|
(2)
|
10.18
|
|
Brokerage Services Agreement between Maiden Insurance Company Ltd. and IGI Intermediaries Limited, dated as of January 1, 2008
|
|
(12)
|
10.19
|
|
Reinsurance Brokerage Services Agreement between Maiden Insurance Company Ltd. and IGI Intermediaries, Inc., dated as of April 3, 2008
|
|
(13)
|
10.20
|
|
Endorsement No. 1 to the Amended and Restated Quota Share Reinsurance Agreement by and between Maiden Insurance Company Ltd. and AmTrust International Insurance, Ltd. dated as of July 26, 2011
|
|
(4)
|
10.21
|
|
Endorsement No. 2 to the Quota Share Reinsurance Contract by and between Maiden Insurance Company Ltd. and AmTrust International Insurance, Ltd. dated as of March 7, 2013
|
|
†
|
10.22
|
|
Quota Share Reinsurance Contract by and between Maiden Insurance Company Ltd. and AmTrust Europe Limited and/or AmTrust International Underwriters Limited dated as of April 1, 2011
|
|
(4)
|
10.23
|
|
Endorsement No. 1 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 July 26, 2011
|
|
(4)
|
10.24
|
|
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
|
|
(14)
|
10.25
|
|
Portfolio Transfer and Quota Share Reinsurance Agreement by and between Maiden Insurance Company Ltd. and Motors Insurance Corporation, dated as of October 31, 2008
|
|
(15)
|
10.26
|
|
Personal and Commercial Automobile Quota Share Reinsurance Agreement by and between Maiden Insurance Company Ltd. and Integon National Insurance Company, dated as March 1, 2010
|
|
(10)
|
10.27
|
|
Addendum No. 1 to Personal and Commercial Automobile Quota Share Reinsurance Agreement by and between Maiden Insurance Company Ltd. and Integon National Insurance Company and others, dated as October 1, 2012
|
|
†
|
10.28
|
|
Form of Indemnification Agreement between Maiden Holdings, Ltd. and its officers and directors
|
|
(12)
|
10.29
|
|
Warrant Exchange Agreement by and between Michael Karfunkel and Maiden Holdings, Ltd. as of September 20, 2010
|
|
(16)
|
10.30
|
|
Warrant Exchange Agreement by and between George Karfunkel and Maiden Holdings, Ltd. as of September 20, 2010
|
|
(16)
|
10.31*
|
|
Warrant Exchange Agreement by and between Barry Zyskind and Maiden Holdings, Ltd. as of September 20, 2010
|
|
(16)
|
10.32
|
|
Lockup Agreement by and between Michael Karfunkel and Maiden Holdings, Ltd. as of September 20, 2010
|
|
(16)
|
10.33
|
|
Lockup Agreement by and between George Karfunkel and Maiden Holdings, Ltd. as of September 20, 2010
|
|
(16)
|
10.34
|
|
Lockup Agreement by and between Barry Zyskind and Maiden Holdings, Ltd. as of September 20, 2010
|
|
(16)
|
21.1
|
|
Subsidiaries of the registrant
|
|
†
|
23.1
|
|
Consent of BDO USA, LLP
|
|
†
|
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
|
|
†
|
(1)
|
Incorporated by reference to the filing of such exhibit with the registrant's Registration Statement on Form S-8 filed with the SEC on May 18, 2010 (File No. 333-166934).
|
(2)
|
Incorporated by reference to the filing of such exhibit with the registrant's Registration Statement on S-1 initially filed with the SEC on September 17, 2007, subsequently amended and declared effective May 6, 2008 (File No. 333-146137).
|
(3)
|
Incorporated by reference to the filing of such exhibit with the registrant's Current Report on Form 8-K filed with the SEC on January 26, 2009 (File No. 001-34042).
|
(4)
|
Incorporated by reference to the filing of such exhibit with the registrant's Quarterly Report on Form 10-Q for the period ended September 30, 2010 filed with the SEC on August 8, 2011 (File No. 001-34042).
|
(5)
|
Incorporated by reference to the filing of such exhibit with the registrant's Registration Statement on S-3 filed with the SEC on February 7, 2011 (File Nos. 333-172107 and 333-172107-01).
|
(6)
|
Incorporated by reference to the filing of such exhibit with the registrant's Current Report on Form 8-K filed with the SEC on June 17, 2011 (File No. 001-34042).
|
(7)
|
Incorporated by reference to the filing of such exhibit with the registrant's Current Report on Form 8-K filed with the SEC on March 27, 2012 (File No. 001-34042).
|
(8)
|
Incorporated by reference to the filing of such exhibit with the registrant's Current Report on Form 8-K filed with the SEC on August 22, 2012 (File No. 001-34042).
|
(9)
|
Incorporated by reference to the filing of such exhibit with the registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2011 filed with the SEC on March 13, 2012 (File No. 001-34042).
|
(10)
|
Incorporated by reference to the filing of such exhibit with the registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 filed with the SEC on March 14, 2011 (File No. 001-34042).
|
(11)
|
Incorporated by reference to the filing of such exhibit with the registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2008 filed with the SEC on March 31, 2009 (File No. 001-34042).
|
(12)
|
Incorporated by reference to the filing of such exhibit with Amendment No. 2 to the registrant's Registration Statement on S-1 filed with the SEC on March 28, 2008 (No. 333-146137).
|
(13)
|
Incorporated by reference to the filing of such exhibit with Amendment No. 3 to the registrant's Registration Statement on S-1 filed with the SEC on April 24, 2008 (No. 333-146137).
|
(15)
|
Incorporated by reference to the filing of such exhibit with the registrant's Current Report on Form 8-K filed with the SEC on November 7, 2008 (File No. 001-34042).
|
(16)
|
Incorporated by reference to the filing of such exhibit with the registrant's Quarterly Report on Form 10-Q for the period ended June 30, 2010 filed with the SEC on November 9, 2010 (File No. 001-34042).
|
Index to Consolidated Financial Statements and Related Notes
|
|
Page
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
Supplementary Information
|
|
|
|
||
|
||
|
||
|
||
|
|
2012
|
|
2011
|
||||
ASSETS
|
|
|
|
||||
Investments:
|
|
|
|
||||
Fixed maturities, available-for-sale, at fair value
(Amortized cost 2012: $2,475,202; 2011: $1,957,106)
|
$
|
2,618,697
|
|
|
$
|
2,020,661
|
|
Other investments, at fair value
(Cost 2012: $2,599; 2011: $1,955)
|
2,901
|
|
|
2,192
|
|
||
Total investments
|
2,621,598
|
|
|
2,022,853
|
|
||
Cash and cash equivalents
|
81,543
|
|
|
188,082
|
|
||
Restricted cash and cash equivalents
|
132,327
|
|
|
114,895
|
|
||
Accrued investment income
|
21,007
|
|
|
13,215
|
|
||
Reinsurance balances receivable, net (
includes $265,766 and $178,745 from related parties in 2012 and 2011, respectively
)
|
522,614
|
|
|
423,355
|
|
||
Funds withheld
|
42,712
|
|
|
42,605
|
|
||
Prepaid reinsurance premiums
(includes $743 and $7,265 from related parties in 2012 and 2011, respectively)
|
38,725
|
|
|
35,381
|
|
||
Reinsurance recoverable on unpaid losses
(includes $9,387 and $7,207 from related parties in 2012 and 2011, respectively)
|
110,858
|
|
|
20,289
|
|
||
Loan to related party
|
167,975
|
|
|
167,975
|
|
||
Deferred commission and other acquisition expenses
(includes $187,387 and $147,743 from related parties in 2012 and 2011, respectively)
|
270,669
|
|
|
248,436
|
|
||
Goodwill and intangible assets, net
|
94,393
|
|
|
98,755
|
|
||
Other assets
|
33,742
|
|
|
19,270
|
|
||
Total assets
|
$
|
4,138,163
|
|
|
$
|
3,395,111
|
|
LIABILITIES
|
|
|
|
||||
Reserve for loss and loss adjustment expenses
(includes $610,810 and $396,198 from related parties in 2012 and 2011, respectively)
|
$
|
1,740,281
|
|
|
$
|
1,398,438
|
|
Unearned premiums (
includes $612,903 and $483,935 from related parties in 2012 and 2011, respectively)
|
936,497
|
|
|
832,047
|
|
||
Accrued expenses and other liabilities
|
111,957
|
|
|
161,883
|
|
||
Senior notes
|
207,500
|
|
|
107,500
|
|
||
Junior subordinated debt
|
126,317
|
|
|
126,263
|
|
||
Total liabilities
|
3,122,552
|
|
|
2,626,131
|
|
||
Commitments and Contingencies
|
|
|
|
|
|
||
EQUITY
|
|
|
|
||||
Preference shares - Series A
|
150,000
|
|
|
—
|
|
||
Common shares
($0.01 par value; 73,306,283 and 73,183,764 shares issued in 2012 and 2011, respectively; 72,343,947 and 72,221,428 shares outstanding in 2012 and 2011, respectively)
|
733
|
|
|
732
|
|
||
Additional paid-in capital
|
575,869
|
|
|
579,004
|
|
||
Accumulated other comprehensive income
|
141,130
|
|
|
64,059
|
|
||
Retained earnings
|
151,308
|
|
|
128,648
|
|
||
Treasury shares, at cost
(2012 and 2011: 962,336 shares)
|
(3,801
|
)
|
|
(3,801
|
)
|
||
Total Maiden shareholders’ equity
|
1,015,239
|
|
|
768,642
|
|
||
Noncontrolling interest in subsidiaries
|
372
|
|
|
338
|
|
||
Total equity
|
1,015,611
|
|
|
768,980
|
|
||
Total liabilities and equity
|
$
|
4,138,163
|
|
|
$
|
3,395,111
|
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Gross premiums written
|
|
$
|
2,000,992
|
|
|
$
|
1,812,597
|
|
|
$
|
1,298,055
|
|
Net premiums written
|
|
$
|
1,901,285
|
|
|
$
|
1,723,521
|
|
|
$
|
1,227,831
|
|
Change in unearned premiums
|
|
(97,505
|
)
|
|
(171,093
|
)
|
|
(58,041
|
)
|
|||
Net premiums earned
|
|
1,803,780
|
|
|
1,552,428
|
|
|
1,169,790
|
|
|||
Other insurance revenue
|
|
12,890
|
|
|
12,640
|
|
|
—
|
|
|||
Net investment income
|
|
81,188
|
|
|
74,891
|
|
|
71,651
|
|
|||
Net realized and unrealized gains on investments
|
|
1,907
|
|
|
481
|
|
|
6,604
|
|
|||
Total revenues
|
|
1,899,765
|
|
|
1,640,440
|
|
|
1,248,045
|
|
|||
Expenses:
|
|
|
|
|
|
|
||||||
Net loss and loss adjustment expenses
|
|
1,262,348
|
|
|
1,043,054
|
|
|
755,122
|
|
|||
Commission and other acquisition expenses
|
|
492,031
|
|
|
438,812
|
|
|
336,697
|
|
|||
General and administrative expenses
|
|
53,804
|
|
|
53,892
|
|
|
42,180
|
|
|||
Interest and amortization expenses
|
|
36,384
|
|
|
34,155
|
|
|
36,466
|
|
|||
Accelerated amortization of junior subordinated debt discount and issuance cost
|
|
—
|
|
|
20,313
|
|
|
—
|
|
|||
Junior subordinated debt repurchase expense
|
|
—
|
|
|
15,050
|
|
|
—
|
|
|||
Amortization of intangible assets
|
|
4,362
|
|
|
5,033
|
|
|
5,808
|
|
|||
Foreign exchange (gains) losses
|
|
(1,638
|
)
|
|
(323
|
)
|
|
580
|
|
|||
Total expenses
|
|
1,847,291
|
|
|
1,609,986
|
|
|
1,176,853
|
|
|||
Income before income taxes
|
|
52,474
|
|
|
30,454
|
|
|
71,192
|
|
|||
Income taxes:
|
|
|
|
|
|
|
||||||
Current tax expense
|
|
1,020
|
|
|
632
|
|
|
160
|
|
|||
Deferred tax expense
|
|
1,193
|
|
|
1,295
|
|
|
1,170
|
|
|||
Income tax expense
|
|
2,213
|
|
|
1,927
|
|
|
1,330
|
|
|||
Net income
|
|
50,261
|
|
|
28,527
|
|
|
69,862
|
|
|||
Add: (income) loss attributable to noncontrolling interest
|
|
(107
|
)
|
|
(3
|
)
|
|
4
|
|
|||
Net income attributable to Maiden shareholders
|
|
50,154
|
|
|
28,524
|
|
|
69,866
|
|
|||
Dividends on preference shares
|
|
(3,644
|
)
|
|
—
|
|
|
—
|
|
|||
Net income attributable to Maiden common shareholders
|
|
$
|
46,510
|
|
|
$
|
28,524
|
|
|
$
|
69,866
|
|
Basic earnings per share attributable to Maiden common shareholders
|
|
$
|
0.64
|
|
|
$
|
0.40
|
|
|
$
|
0.99
|
|
Diluted earnings per share attributable to Maiden common shareholders
|
|
$
|
0.64
|
|
|
$
|
0.39
|
|
|
$
|
0.98
|
|
Dividends declared per common share
|
|
$
|
0.33
|
|
|
$
|
0.30
|
|
|
$
|
0.27
|
|
Weighted average number of basic common shares outstanding
|
|
72,263,022
|
|
|
72,155,503
|
|
|
70,799,966
|
|
|||
Weighted average number of diluted common shares outstanding
|
|
73,105,531
|
|
|
72,903,688
|
|
|
71,372,688
|
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
Comprehensive income:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
50,261
|
|
|
$
|
28,527
|
|
|
$
|
69,862
|
|
Other comprehensive income
|
|
|
|
|
|
|
||||||
Unrealized holdings net gains arising during the period
|
|
82,915
|
|
|
12,189
|
|
|
30,154
|
|
|||
Adjustment for reclassification of net realized gains recognized in net income
|
|
(2,987
|
)
|
|
(3,206
|
)
|
|
(8,147
|
)
|
|||
Foreign currency translation adjustment
|
|
(2,852
|
)
|
|
733
|
|
|
(420
|
)
|
|||
Other comprehensive income
|
|
77,076
|
|
|
9,716
|
|
|
21,587
|
|
|||
Comprehensive income
|
|
127,337
|
|
|
38,243
|
|
|
91,449
|
|
|||
Net (income) loss attributable to noncontrolling interest
|
|
(107
|
)
|
|
(3
|
)
|
|
4
|
|
|||
Other comprehensive (income) loss attributable to noncontrolling interest
|
|
(5
|
)
|
|
9
|
|
|
—
|
|
|||
Comprehensive (income) loss attributable to noncontrolling interest
|
|
(112
|
)
|
|
6
|
|
|
4
|
|
|||
Comprehensive income attributable to Maiden shareholders
|
|
$
|
127,225
|
|
|
$
|
38,249
|
|
|
$
|
91,453
|
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
Preference shares - Series A
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Issuance of preference shares
|
|
150,000
|
|
—
|
|
|
—
|
|
||||
Ending balance
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|||
Common shares
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
732
|
|
|
731
|
|
|
713
|
|
|||
Exercise of options and issuance of shares
|
|
1
|
|
|
1
|
|
|
—
|
|
|||
Exchange of warrants
|
|
—
|
|
|
—
|
|
|
18
|
|
|||
Ending balance
|
|
733
|
|
|
732
|
|
|
731
|
|
|||
Additional paid-in capital
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
579,004
|
|
|
577,135
|
|
|
576,086
|
|
|||
Exercise of options and issuance of common shares
|
|
477
|
|
|
421
|
|
|
52
|
|
|||
Exchange of Warrants
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|||
Issuance costs of preference shares
|
|
(4,959
|
)
|
|
—
|
|
|
—
|
|
|||
Partial disposal of interest in subsidiary
|
|
—
|
|
|
141
|
|
|
—
|
|
|||
Share based compensation expense
|
|
1,347
|
|
|
1,307
|
|
|
1,015
|
|
|||
Ending balance
|
|
575,869
|
|
|
579,004
|
|
|
577,135
|
|
|||
Accumulated other comprehensive income
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
64,059
|
|
|
54,334
|
|
|
32,747
|
|
|||
Change in net unrealized gains on investments
|
|
79,928
|
|
|
8,983
|
|
|
22,007
|
|
|||
Foreign currency translation adjustment
|
|
(2,857
|
)
|
|
742
|
|
|
(420
|
)
|
|||
Ending balance
|
|
141,130
|
|
|
64,059
|
|
|
54,334
|
|
|||
Retained earnings
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
128,648
|
|
|
121,775
|
|
|
70,781
|
|
|||
Net income attributable to Maiden shareholders
|
|
50,154
|
|
|
28,524
|
|
|
69,866
|
|
|||
Dividends on preference shares
|
|
(3,644
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends on common shares
|
|
(23,850
|
)
|
|
(21,651
|
)
|
|
(18,872
|
)
|
|||
Ending balance
|
|
151,308
|
|
|
128,648
|
|
|
121,775
|
|
|||
Treasury shares
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
(3,801
|
)
|
|
(3,801
|
)
|
|
(3,801
|
)
|
|||
Ending balance
|
|
(3,801
|
)
|
|
(3,801
|
)
|
|
(3,801
|
)
|
|||
Noncontrolling interest in subsidiaries
|
|
|
|
|
|
|
||||||
Beginning balance
|
|
338
|
|
|
275
|
|
|
—
|
|
|||
Acquisition of subsidiary
|
|
—
|
|
|
—
|
|
|
279
|
|
|||
Partial disposal of interest in subsidiary
|
|
—
|
|
|
69
|
|
|
—
|
|
|||
Dividend paid to noncontrolling interest
|
|
(78
|
)
|
|
—
|
|
|
—
|
|
|||
Net income (loss) attributable to noncontrolling interest
|
|
107
|
|
|
3
|
|
|
(4
|
)
|
|||
Foreign currency translation adjustment
|
|
5
|
|
|
(9
|
)
|
|
—
|
|
|||
Ending balance
|
|
372
|
|
|
338
|
|
|
275
|
|
|||
Total equity
|
|
$
|
1,015,611
|
|
|
$
|
768,980
|
|
|
$
|
750,449
|
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
50,261
|
|
|
$
|
28,527
|
|
|
$
|
69,862
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization of intangibles
|
|
6,258
|
|
|
8,599
|
|
|
7,205
|
|
|||
Net realized and unrealized gains on investments
|
|
(1,907
|
)
|
|
(481
|
)
|
|
(6,604
|
)
|
|||
Foreign exchange (gains) losses
|
|
(1,638
|
)
|
|
(323
|
)
|
|
580
|
|
|||
Amortization of share-based compensation expense, bond premium and discount and subordinated debt discount, net
|
|
10,949
|
|
|
22,236
|
|
|
(3,586
|
)
|
|||
Changes in assets – (increase) decrease:
|
|
|
|
|
|
|
||||||
Reinsurance balances receivable, net
|
|
(98,987
|
)
|
|
(168,338
|
)
|
|
(29,036
|
)
|
|||
Funds withheld
|
|
917
|
|
|
16,074
|
|
|
(152,713
|
)
|
|||
Prepaid reinsurance premiums
|
|
(3,344
|
)
|
|
(6,389
|
)
|
|
(240
|
)
|
|||
Reinsurance recoverable on unpaid losses
|
|
(90,567
|
)
|
|
(13,632
|
)
|
|
1,684
|
|
|||
Accrued investment income
|
|
(7,719
|
)
|
|
836
|
|
|
(2,686
|
)
|
|||
Deferred commission and other acquisition expenses
|
|
(22,073
|
)
|
|
(45,037
|
)
|
|
(30,648
|
)
|
|||
Other assets
|
|
(13,277
|
)
|
|
(14,422
|
)
|
|
1,583
|
|
|||
Changes in liabilities – increase (decrease):
|
|
|
|
|
|
|
||||||
Reserve for loss and loss adjustment expenses
|
|
337,348
|
|
|
176,869
|
|
|
220,932
|
|
|||
Unearned premiums
|
|
103,796
|
|
|
178,436
|
|
|
68,413
|
|
|||
Accrued expenses and other liabilities
|
|
49,072
|
|
|
(1,685
|
)
|
|
6,833
|
|
|||
Net cash provided by operating activities
|
|
319,089
|
|
|
181,270
|
|
|
151,579
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Purchases of investments:
|
|
|
|
|
|
|
||||||
Purchases of fixed-maturity securities – available-for-sale
|
|
(1,193,768
|
)
|
|
(636,141
|
)
|
|
(1,010,142
|
)
|
|||
Purchases of fixed-maturity securities – trading and short sales
|
|
(102,073
|
)
|
|
(663,339
|
)
|
|
(1,293,386
|
)
|
|||
Purchases of other investments
|
|
(940
|
)
|
|
(1,173
|
)
|
|
(424
|
)
|
|||
Sale of investments:
|
|
|
|
|
|
|
||||||
Proceeds from sales of fixed-maturity securities – available-for-sale
|
|
142,694
|
|
|
304,499
|
|
|
331,593
|
|
|||
Proceeds from sales of fixed-maturity securities – trading and short sales
|
|
49,883
|
|
|
720,100
|
|
|
1,291,843
|
|
|||
Proceeds from maturities and calls of fixed maturity securities
|
|
484,091
|
|
|
310,526
|
|
|
507,326
|
|
|||
Proceeds from redemption of other investments
|
|
340
|
|
|
4,896
|
|
|
108
|
|
|||
(Increase) decrease in restricted cash and cash equivalents
|
|
(17,432
|
)
|
|
(25,139
|
)
|
|
55,657
|
|
|||
Acquisition of subsidiaries (net of cash acquired)
|
|
—
|
|
|
635
|
|
|
(4,893
|
)
|
|||
Purchase of capital assets
|
|
(341
|
)
|
|
(1,538
|
)
|
|
(2,875
|
)
|
|||
Net cash (used in) provided by investing activities
|
|
(637,546
|
)
|
|
13,326
|
|
|
(125,193
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Repurchase agreements, net
|
|
—
|
|
|
(76,225
|
)
|
|
(19,176
|
)
|
|||
Senior notes issuance, net of issuance costs
|
|
96,594
|
|
|
104,689
|
|
|
—
|
|
|||
Repayment of junior subordinated debt
|
|
—
|
|
|
(107,500
|
)
|
|
—
|
|
|||
Preference shares - Series A issuance, net of issuance costs
|
|
145,041
|
|
|
—
|
|
|
—
|
|
|||
Contribution of noncontrolling interest
|
|
—
|
|
|
—
|
|
|
279
|
|
|||
Common share issuance
|
|
478
|
|
|
422
|
|
|
52
|
|
|||
Dividends paid to Maiden common shareholders
|
|
(29,630
|
)
|
|
(20,921
|
)
|
|
(18,394
|
)
|
|||
Dividends paid on preference shares
|
|
(3,644
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
|
208,839
|
|
|
(99,535
|
)
|
|
(37,239
|
)
|
|||
Effect of exchange rate changes on foreign currency cash
|
|
3,079
|
|
|
(3,130
|
)
|
|
(392
|
)
|
Net (decrease) increase in cash and cash equivalents
|
|
(106,539
|
)
|
|
91,931
|
|
|
(11,245
|
)
|
|||
Cash and cash equivalents, beginning of period
|
|
188,082
|
|
|
96,151
|
|
|
107,396
|
|
|||
Cash and cash equivalents, end of period
|
|
$
|
81,543
|
|
|
$
|
188,082
|
|
|
$
|
96,151
|
|
Supplemental information on cash flows:
|
|
|
|
|
|
|
||||||
Interest paid
|
|
$
|
36,219
|
|
|
$
|
36,850
|
|
|
$
|
36,400
|
|
Taxes paid
|
|
55
|
|
|
429
|
|
|
129
|
|
|||
Supplemental information about non cash investing and financing activities:
|
|
|
|
|
|
|
|
|
|
|||
Acquisition of fixed maturities, available-for-sale
|
|
—
|
|
|
81,930
|
|
|
17,806
|
|
|||
Funds withheld
|
|
—
|
|
|
(81,930
|
)
|
|
—
|
|
|||
Reinsurance balances receivable
|
|
—
|
|
|
—
|
|
|
(17,806
|
)
|
|||
Additional paid-in capital
|
|
—
|
|
|
—
|
|
|
18
|
|
|||
Common shares issued in exchange of warrants
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|||
Redemption of other investment
|
|
—
|
|
|
—
|
|
|
(4,751
|
)
|
|||
Purchase of other investment
|
|
—
|
|
|
—
|
|
|
4,751
|
|
•
|
reserve for loss and loss adjustment expenses;
|
•
|
recoverability of deferred commission and other acquisition expenses;
|
•
|
determination of impairment of goodwill and other intangible assets;
|
•
|
valuation of financial instruments; and
|
•
|
determination of other-than-temporary impairment of investments.
|
•
|
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.
|
•
|
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. Examples of assets and liabilities utilizing Level 1 inputs include: exchange-traded equity securities, U.S. Treasury securities, and listed derivatives that are actively traded.
|
•
|
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. Examples of assets and liabilities utilizing Level 2 inputs include: listed derivatives that are not actively traded; U.S. government-sponsored agency securities; non-U.S. government obligations; corporate and municipal bonds; mortgage-backed securities (“MBS”) and asset-backed securities (“ABS”); short-duration high yield fund, and over-the-counter (“OTC”) derivatives (e.g. foreign currency options and forward contracts).
|
•
|
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. Examples of assets and liabilities utilizing Level 3 inputs include: insurance and reinsurance derivative contracts; hedge and credit funds with partial transparency; and collateralized loan obligation (“CLO”) — equity tranche securities that are traded in less liquid markets.
|
Furniture and fixtures
|
3 – 7 years
|
Computer equipment and software
|
3 years
|
Vehicles
|
3 years
|
Leasehold improvements
|
Lease term
|
For the Year Ended December 31, 2012
|
|
Diversified Reinsurance
|
|
AmTrust Quota Share Reinsurance
|
|
ACAC
Quota Share |
|
Total
|
||||||||
Net premiums written
|
|
$
|
765,293
|
|
|
$
|
840,346
|
|
|
$
|
295,646
|
|
|
$
|
1,901,285
|
|
Net premiums earned
|
|
$
|
795,341
|
|
|
$
|
727,781
|
|
|
$
|
280,658
|
|
|
$
|
1,803,780
|
|
Other insurance revenue
|
|
12,890
|
|
|
—
|
|
|
—
|
|
|
12,890
|
|
||||
Net loss and loss adjustment expenses
|
|
(583,970
|
)
|
|
(494,633
|
)
|
|
(183,745
|
)
|
|
(1,262,348
|
)
|
||||
Commission and other acquisition expenses
|
|
(203,209
|
)
|
|
(200,546
|
)
|
|
(88,276
|
)
|
|
(492,031
|
)
|
||||
General and administrative expenses
|
|
(40,951
|
)
|
|
(1,949
|
)
|
|
(737
|
)
|
|
(43,637
|
)
|
||||
Underwriting (loss) income
|
|
$
|
(19,899
|
)
|
|
$
|
30,653
|
|
|
$
|
7,900
|
|
|
18,654
|
|
|
Reconciliation to net income attributable to Maiden common shareholders
|
|
|
|
|
|
|
|
|
||||||||
Net investment income and realized
and unrealized gains on investments |
|
|
|
|
|
|
|
83,095
|
|
|||||||
Amortization of intangible assets
|
|
|
|
|
|
|
|
(4,362
|
)
|
|||||||
Foreign exchange gains
|
|
|
|
|
|
|
|
1,638
|
|
|||||||
Interest and amortization expenses
|
|
|
|
|
|
|
|
(36,384
|
)
|
|||||||
Other general and administrative expenses
|
|
|
|
|
|
|
|
(10,167
|
)
|
|||||||
Income tax expense
|
|
|
|
|
|
|
|
(2,213
|
)
|
|||||||
Income attributable to noncontrolling interest
|
|
|
|
|
|
|
|
(107
|
)
|
|||||||
Dividends on preference shares
|
|
|
|
|
|
|
|
(3,644
|
)
|
|||||||
Net income attributable to Maiden common shareholders
|
|
|
|
|
|
|
|
$
|
46,510
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||
Net loss and loss expense ratio*
|
|
72.3
|
%
|
|
68.0
|
%
|
|
65.5
|
%
|
|
69.5
|
%
|
||||
Commission and other acquisition expense ratio**
|
|
25.1
|
%
|
|
27.6
|
%
|
|
31.5
|
%
|
|
27.1
|
%
|
||||
General and administrative expense ratio***
|
|
5.1
|
%
|
|
0.2
|
%
|
|
0.2
|
%
|
|
2.9
|
%
|
||||
Combined ratio****
|
|
102.5
|
%
|
|
95.8
|
%
|
|
97.2
|
%
|
|
99.5
|
%
|
For the Year Ended December 31, 2011
|
|
Diversified Reinsurance
|
|
AmTrust Quota Share Reinsurance
|
|
ACAC
Quota Share |
|
Total
|
||||||||
Net premiums written
|
|
$
|
798,037
|
|
|
$
|
669,283
|
|
|
$
|
256,201
|
|
|
$
|
1,723,521
|
|
Net premiums earned
|
|
$
|
748,387
|
|
|
$
|
558,197
|
|
|
$
|
245,844
|
|
|
$
|
1,552,428
|
|
Other insurance revenue
|
|
12,640
|
|
|
—
|
|
|
—
|
|
|
12,640
|
|
||||
Net loss and loss adjustment expenses
|
|
(502,375
|
)
|
|
(380,263
|
)
|
|
(160,416
|
)
|
|
(1,043,054
|
)
|
||||
Commission and other acquisition expenses
|
|
(200,239
|
)
|
|
(160,522
|
)
|
|
(78,051
|
)
|
|
(438,812
|
)
|
||||
General and administrative expenses
|
|
(36,374
|
)
|
|
(2,283
|
)
|
|
(1,635
|
)
|
|
(40,292
|
)
|
||||
Underwriting income
|
|
$
|
22,039
|
|
|
$
|
15,129
|
|
|
$
|
5,742
|
|
|
42,910
|
|
|
Reconciliation to net income attributable to Maiden common shareholders
|
|
|
|
|
|
|
|
|
||||||||
Net investment income and realized
and unrealized gains on investments |
|
|
|
|
|
|
|
75,372
|
|
|||||||
Amortization of intangible assets
|
|
|
|
|
|
|
|
(5,033
|
)
|
|||||||
Foreign exchange gains
|
|
|
|
|
|
|
|
323
|
|
|||||||
Interest and amortization expenses
|
|
|
|
|
|
|
|
(34,155
|
)
|
|||||||
Accelerated amortization of junior subordinated debt discount and issuance cost
|
|
|
|
|
|
|
|
(20,313
|
)
|
|||||||
Junior subordinated debt repurchase expense
|
|
|
|
|
|
|
|
(15,050
|
)
|
|||||||
Other general and administrative expenses
|
|
|
|
|
|
|
|
(13,600
|
)
|
|||||||
Income tax expense
|
|
|
|
|
|
|
|
(1,927
|
)
|
|||||||
Income attributable to noncontrolling interest
|
|
|
|
|
|
|
|
(3
|
)
|
|||||||
Net income attributable to Maiden common shareholders
|
|
|
|
|
|
|
|
$
|
28,524
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||
Net loss and loss adjustment expense ratio*
|
|
66.0
|
%
|
|
68.1
|
%
|
|
65.3
|
%
|
|
66.6
|
%
|
||||
Commission and other acquisition expense ratio**
|
|
26.3
|
%
|
|
28.8
|
%
|
|
31.7
|
%
|
|
28.0
|
%
|
||||
General and administrative expense ratio***
|
|
4.8
|
%
|
|
0.4
|
%
|
|
0.7
|
%
|
|
3.5
|
%
|
||||
Combined ratio****
|
|
97.1
|
%
|
|
97.3
|
%
|
|
97.7
|
%
|
|
98.1
|
%
|
For the Year Ended December 31, 2010
|
|
Diversified Reinsurance
|
|
AmTrust Quota Share Reinsurance
|
|
ACAC
Quota Share |
|
Total
|
||||||||
Net premiums written
|
|
$
|
554,049
|
|
|
$
|
468,043
|
|
|
$
|
205,739
|
|
|
$
|
1,227,831
|
|
Net premiums earned
|
|
$
|
601,254
|
|
|
$
|
445,081
|
|
|
$
|
123,455
|
|
|
$
|
1,169,790
|
|
Net loss and loss adjustment expenses
|
|
(394,604
|
)
|
|
(280,890
|
)
|
|
(79,628
|
)
|
|
(755,122
|
)
|
||||
Commission and other acquisition expenses
|
|
(152,698
|
)
|
|
(144,655
|
)
|
|
(39,344
|
)
|
|
(336,697
|
)
|
||||
General and administrative expenses
|
|
(26,123
|
)
|
|
(1,500
|
)
|
|
(243
|
)
|
|
(27,866
|
)
|
||||
Underwriting income
|
|
$
|
27,829
|
|
|
$
|
18,036
|
|
|
$
|
4,240
|
|
|
50,105
|
|
|
Reconciliation to net income attributable to Maiden common shareholders
|
|
|
|
|
|
|
|
|
||||||||
Net investment income and realized
and unrealized gains on investments |
|
|
|
|
|
|
|
78,255
|
|
|||||||
Amortization of intangible assets
|
|
|
|
|
|
|
|
(5,808
|
)
|
|||||||
Foreign exchange losses
|
|
|
|
|
|
|
|
(580
|
)
|
|||||||
Interest and amortization expenses
|
|
|
|
|
|
|
|
(36,466
|
)
|
|||||||
Other general and administrative expenses
|
|
|
|
|
|
|
|
(14,314
|
)
|
|||||||
Income tax expense
|
|
|
|
|
|
|
|
(1,330
|
)
|
|||||||
Loss attributable to noncontrolling interest
|
|
|
|
|
|
|
|
4
|
|
|||||||
Net income attributable to Maiden common shareholders
|
|
|
|
|
|
|
|
$
|
69,866
|
|
||||||
|
|
|
|
|
|
|
|
|
||||||||
Net loss and loss adjustment expense ratio*
|
|
65.6
|
%
|
|
63.1
|
%
|
|
64.5
|
%
|
|
64.6
|
%
|
||||
Commission and other acquisition expense ratio**
|
|
25.4
|
%
|
|
32.5
|
%
|
|
31.9
|
%
|
|
28.8
|
%
|
||||
General and administrative expense ratio***
|
|
4.4
|
%
|
|
0.3
|
%
|
|
0.2
|
%
|
|
3.5
|
%
|
||||
Combined ratio****
|
|
95.4
|
%
|
|
95.9
|
%
|
|
96.6
|
%
|
|
96.9
|
%
|
*
|
Calculated by dividing net loss and loss adjustment expenses by the sum of net premiums earned and other insurance revenue.
|
**
|
Calculated by dividing commission and other acquisition expenses by the sum of net premiums earned and other insurance revenue.
|
***
|
Calculated by dividing general and administrative expenses by the sum of net premiums earned and other insurance revenue.
|
****
|
Calculated by adding together net loss and loss adjustment expense ratio, commission and other acquisition expense ratio and general and administrative expense ratio.
|
|
Diversified
Reinsurance |
|
AmTrust
Quota Share Reinsurance |
|
ACAC
Quota Share |
|
Total
|
||||||||
December 31, 2012
|
|
|
|
|
|
|
|
||||||||
Reinsurance balances receivable, net
|
$
|
260,161
|
|
|
$
|
170,983
|
|
|
$
|
91,470
|
|
|
$
|
522,614
|
|
Funds withheld
|
42,712
|
|
|
—
|
|
|
—
|
|
|
42,712
|
|
||||
Prepaid reinsurance premiums
|
38,725
|
|
|
—
|
|
|
—
|
|
|
38,725
|
|
||||
Reinsurance recoverable on unpaid losses
|
110,858
|
|
|
—
|
|
|
—
|
|
|
110,858
|
|
||||
Deferred commission and other acquisition expenses
|
83,287
|
|
|
153,530
|
|
|
33,852
|
|
|
270,669
|
|
||||
Loan to related party
|
—
|
|
|
167,975
|
|
|
—
|
|
|
167,975
|
|
||||
Goodwill and intangible assets, net
|
94,393
|
|
|
—
|
|
|
—
|
|
|
94,393
|
|
||||
Restricted cash and cash equivalents and investments
|
1,219,454
|
|
|
857,013
|
|
|
90,851
|
|
|
2,167,318
|
|
||||
Corporate and other assets
|
5,864
|
|
|
—
|
|
|
—
|
|
|
722,899
|
|
||||
Total Assets
|
$
|
1,855,454
|
|
|
$
|
1,349,501
|
|
|
$
|
216,173
|
|
|
$
|
4,138,163
|
|
|
|
|
|
|
|
|
|
||||||||
December 31, 2011
|
|
|
|
|
|
|
|
||||||||
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 cash and cash equivalents and investments
|
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 Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
Gross premiums written – North America
|
|
$
|
1,575,452
|
|
|
$
|
1,400,114
|
|
|
$
|
1,098,672
|
|
Gross premiums written – Other (predominantly Europe)
|
|
425,540
|
|
|
412,483
|
|
|
199,383
|
|
|||
Net premiums written – North America
|
|
1,481,076
|
|
|
1,317,265
|
|
|
1,028,518
|
|
|||
Net premiums written – Other (predominantly Europe)
|
|
420,209
|
|
|
406,256
|
|
|
199,313
|
|
|||
Net premiums earned – North America
|
|
1,413,596
|
|
|
1,194,628
|
|
|
1,038,859
|
|
|||
Net premiums earned – Other (predominantly Europe)
|
|
390,184
|
|
|
357,800
|
|
|
130,931
|
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
|||||||||||||||
|
|
Total
|
|
% of Total
|
|
Total
|
|
% of Total
|
|
Total
|
|
% of Total
|
|||||||||
Net premiums written
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Diversified Reinsurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Property
|
|
$
|
190,125
|
|
|
10.0
|
%
|
|
$
|
207,993
|
|
|
12.1
|
%
|
|
$
|
168,919
|
|
|
13.8
|
%
|
Casualty
|
|
433,307
|
|
|
22.8
|
%
|
|
441,666
|
|
|
25.6
|
%
|
|
311,852
|
|
|
25.4
|
%
|
|||
Accident and Health
|
|
37,244
|
|
|
2.0
|
%
|
|
42,604
|
|
|
2.5
|
%
|
|
43,658
|
|
|
3.5
|
%
|
|||
International
|
|
104,617
|
|
|
5.5
|
%
|
|
105,774
|
|
|
6.1
|
%
|
|
29,620
|
|
|
2.4
|
%
|
|||
Total Diversified Reinsurance
|
|
765,293
|
|
|
40.3
|
%
|
|
798,037
|
|
|
46.3
|
%
|
|
554,049
|
|
|
45.1
|
%
|
|||
AmTrust Quota Share Reinsurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Small Commercial Business
|
|
364,123
|
|
|
19.2
|
%
|
|
237,560
|
|
|
13.8
|
%
|
|
197,097
|
|
|
16.0
|
%
|
|||
Specialty Program
|
|
95,902
|
|
|
5.0
|
%
|
|
93,701
|
|
|
5.4
|
%
|
|
73,881
|
|
|
6.0
|
%
|
|||
Specialty Risk and Extended Warranty
|
|
380,321
|
|
|
20.0
|
%
|
|
338,022
|
|
|
19.6
|
%
|
|
197,065
|
|
|
16.1
|
%
|
|||
Total AmTrust Quota Share Reinsurance
|
|
840,346
|
|
|
44.2
|
%
|
|
669,283
|
|
|
38.8
|
%
|
|
468,043
|
|
|
38.1
|
%
|
|||
ACAC Quota Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Automobile Liability
|
|
159,861
|
|
|
8.4
|
%
|
|
147,362
|
|
|
8.6
|
%
|
|
117,962
|
|
|
9.6
|
%
|
|||
Automobile Physical Damage
|
|
135,785
|
|
|
7.1
|
%
|
|
108,839
|
|
|
6.3
|
%
|
|
87,777
|
|
|
7.2
|
%
|
|||
Total ACAC Quota Share
|
|
295,646
|
|
|
15.5
|
%
|
|
256,201
|
|
|
14.9
|
%
|
|
205,739
|
|
|
16.8
|
%
|
|||
|
|
$
|
1,901,285
|
|
|
100.0
|
%
|
|
$
|
1,723,521
|
|
|
100.0
|
%
|
|
$
|
1,227,831
|
|
|
100.0
|
%
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
|||||||||||||||
|
|
Total
|
|
% of Total
|
|
Total
|
|
% of Total
|
|
Total
|
|
% of Total
|
|||||||||
Net premiums earned
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Diversified Reinsurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Property
|
|
$
|
211,997
|
|
|
11.7
|
%
|
|
$
|
196,947
|
|
|
12.7
|
%
|
|
$
|
176,538
|
|
|
15.1
|
%
|
Casualty
|
|
444,775
|
|
|
24.7
|
%
|
|
395,533
|
|
|
25.5
|
%
|
|
356,389
|
|
|
30.5
|
%
|
|||
Accident and Health
|
|
41,968
|
|
|
2.3
|
%
|
|
43,210
|
|
|
2.8
|
%
|
|
62,954
|
|
|
5.4
|
%
|
|||
International
|
|
96,601
|
|
|
5.4
|
%
|
|
112,697
|
|
|
7.3
|
%
|
|
5,373
|
|
|
0.5
|
%
|
|||
Total Diversified Reinsurance
|
|
795,341
|
|
|
44.1
|
%
|
|
748,387
|
|
|
48.3
|
%
|
|
601,254
|
|
|
51.5
|
%
|
|||
AmTrust Quota Share Reinsurance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Small Commercial Business
|
|
313,110
|
|
|
17.3
|
%
|
|
215,941
|
|
|
13.9
|
%
|
|
202,716
|
|
|
17.3
|
%
|
|||
Specialty Program
|
|
85,812
|
|
|
4.8
|
%
|
|
81,281
|
|
|
5.2
|
%
|
|
71,596
|
|
|
6.1
|
%
|
|||
Specialty Risk and Extended Warranty
|
|
328,859
|
|
|
18.2
|
%
|
|
260,975
|
|
|
16.8
|
%
|
|
170,769
|
|
|
14.6
|
%
|
|||
Total AmTrust Quota Share Reinsurance
|
|
727,781
|
|
|
40.3
|
%
|
|
558,197
|
|
|
35.9
|
%
|
|
445,081
|
|
|
38.0
|
%
|
|||
ACAC Quota Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Automobile Liability
|
|
155,266
|
|
|
8.6
|
%
|
|
141,173
|
|
|
9.1
|
%
|
|
69,444
|
|
|
5.9
|
%
|
|||
Automobile Physical Damage
|
|
125,392
|
|
|
7.0
|
%
|
|
104,671
|
|
|
6.7
|
%
|
|
54,011
|
|
|
4.6
|
%
|
|||
Total ACAC Quota Share
|
|
280,658
|
|
|
15.6
|
%
|
|
245,844
|
|
|
15.8
|
%
|
|
123,455
|
|
|
10.5
|
%
|
|||
|
|
$
|
1,803,780
|
|
|
100.0
|
%
|
|
$
|
1,552,428
|
|
|
100.0
|
%
|
|
$
|
1,169,790
|
|
|
100.0
|
%
|
|
2011 Actual
|
|
2010 Estimate
|
||||
Cash
|
$
|
14,971
|
|
|
$
|
15,595
|
|
Restricted cash
|
450
|
|
|
469
|
|
||
Fixed maturity investments
|
13,480
|
|
|
13,999
|
|
||
Other assets
|
303
|
|
|
191
|
|
||
Goodwill
|
5,695
|
|
|
5,812
|
|
||
Assets acquired
|
34,899
|
|
|
36,066
|
|
||
Reserve for loss and loss adjustment expenses
|
4,739
|
|
|
3,192
|
|
||
Unearned premiums
|
5,454
|
|
|
5,665
|
|
||
Accrued expenses and other liabilities
|
3,074
|
|
|
4,935
|
|
||
Liabilities acquired
|
13,267
|
|
|
13,792
|
|
||
Total purchase price
|
$
|
21,632
|
|
|
$
|
22,274
|
|
December 31, 2012
|
|
Original or
amortized cost |
|
Gross
unrealized gains |
|
Gross
unrealized losses |
|
Fair value
|
||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. treasury bonds
|
|
$
|
42,671
|
|
|
$
|
1,260
|
|
|
$
|
—
|
|
|
$
|
43,931
|
|
U.S. agency bonds – mortgage-backed
|
|
962,649
|
|
|
30,998
|
|
|
(1,473
|
)
|
|
992,174
|
|
||||
U.S. agency bonds – other
|
|
11,682
|
|
|
1,407
|
|
|
—
|
|
|
13,089
|
|
||||
Non-U.S. government bonds
|
|
55,169
|
|
|
2,264
|
|
|
—
|
|
|
57,433
|
|
||||
Other mortgage-backed bonds
|
|
23,167
|
|
|
901
|
|
|
—
|
|
|
24,068
|
|
||||
Corporate bonds
|
|
1,247,260
|
|
|
113,386
|
|
|
(6,492
|
)
|
|
1,354,154
|
|
||||
Municipal bonds
|
|
132,604
|
|
|
1,244
|
|
|
—
|
|
|
133,848
|
|
||||
Total available-for-sale fixed maturities
|
|
2,475,202
|
|
|
151,460
|
|
|
(7,965
|
)
|
|
2,618,697
|
|
||||
Other investments
|
|
2,599
|
|
|
353
|
|
|
(51
|
)
|
|
2,901
|
|
||||
Total investments
|
|
$
|
2,477,801
|
|
|
$
|
151,813
|
|
|
$
|
(8,016
|
)
|
|
$
|
2,621,598
|
|
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
|
|
December 31, 2012
|
|
Amortized cost
|
|
Fair
value |
|
% of Total fair value
|
|||||
Maturity
|
|
|
|
|
|
|
|||||
Due in one year or less
|
|
$
|
57,675
|
|
|
$
|
58,672
|
|
|
2.2
|
%
|
Due after one year through five years
|
|
373,208
|
|
|
387,882
|
|
|
14.8
|
%
|
||
Due after five years through ten years
|
|
888,694
|
|
|
981,504
|
|
|
37.5
|
%
|
||
Due after ten years
|
|
169,809
|
|
|
174,397
|
|
|
6.7
|
%
|
||
|
|
1,489,386
|
|
|
1,602,455
|
|
|
61.2
|
%
|
||
U.S. agency bonds - mortgage-backed
|
|
962,649
|
|
|
992,174
|
|
|
37.9
|
%
|
||
Other mortgage-backed bonds
|
|
23,167
|
|
|
24,068
|
|
|
0.9
|
%
|
||
Total
|
|
$
|
2,475,202
|
|
|
$
|
2,618,697
|
|
|
100.0
|
%
|
|
|
Less than 12 Months
|
|
12 Months or More
|
|
Total
|
||||||||||||||||||
December 31, 2012
|
|
Fair
value |
|
Unrealized
losses |
|
Fair
value |
|
Unrealized
losses |
|
Fair
value |
|
Unrealized
losses |
||||||||||||
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. agency bonds – mortgage-backed
|
|
$
|
158,591
|
|
|
$
|
(1,473
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
158,591
|
|
|
$
|
(1,473
|
)
|
Corporate bonds
|
|
94,742
|
|
|
(1,098
|
)
|
|
141,842
|
|
|
(5,394
|
)
|
|
236,584
|
|
|
(6,492
|
)
|
||||||
|
|
253,333
|
|
|
(2,571
|
)
|
|
141,842
|
|
|
(5,394
|
)
|
|
395,175
|
|
|
(7,965
|
)
|
||||||
Other investments
|
|
—
|
|
|
—
|
|
|
2,011
|
|
|
(51
|
)
|
|
2,011
|
|
|
(51
|
)
|
||||||
Total temporarily impaired available-for-sale securities and other investments
|
|
$
|
253,333
|
|
|
$
|
(2,571
|
)
|
|
$
|
143,853
|
|
|
$
|
(5,445
|
)
|
|
$
|
397,186
|
|
|
$
|
(8,016
|
)
|
|
|
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 of December 31, 2012
|
|
Amortized
cost |
|
Fair
value |
|
% of Total
fair value |
|||||
U.S. treasury bonds
|
|
$
|
42,671
|
|
|
$
|
43,931
|
|
|
1.7
|
%
|
U.S. agency bonds
|
|
974,331
|
|
|
1,005,263
|
|
|
38.4
|
%
|
||
AAA
|
|
171,136
|
|
|
183,950
|
|
|
7.0
|
%
|
||
AA+, AA, AA-
|
|
186,495
|
|
|
196,797
|
|
|
7.5
|
%
|
||
A+, A, A-
|
|
477,236
|
|
|
515,383
|
|
|
19.7
|
%
|
||
BBB+, BBB, BBB-
|
|
587,858
|
|
|
637,089
|
|
|
24.3
|
%
|
||
BB+ or lower
|
|
35,475
|
|
|
36,284
|
|
|
1.4
|
%
|
||
Total
|
|
$
|
2,475,202
|
|
|
$
|
2,618,697
|
|
|
100.0
|
%
|
Rating* as of 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
|
%
|
December 31,
|
|
2012
|
|
2011
|
||||||||||
Investment in limited partnerships
|
|
$
|
2,901
|
|
|
100.0
|
%
|
|
$
|
2,192
|
|
|
100.0
|
%
|
Total other investments
|
|
$
|
2,901
|
|
|
100.0
|
%
|
|
$
|
2,192
|
|
|
100.0
|
%
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
Fixed maturities
|
|
$
|
79,891
|
|
|
$
|
72,050
|
|
|
$
|
71,607
|
|
Cash and cash equivalents
|
|
1,439
|
|
|
925
|
|
|
1,680
|
|
|||
Funds withheld
|
|
1,648
|
|
|
4,235
|
|
|
407
|
|
|||
Loan to related party
|
|
1,945
|
|
|
1,925
|
|
|
1,996
|
|
|||
|
|
84,923
|
|
|
79,135
|
|
|
75,690
|
|
|||
Less:
|
|
|
|
|
|
|
||||||
Investment expenses
|
|
(3,735
|
)
|
|
(3,488
|
)
|
|
(2,992
|
)
|
|||
Interest expense on securities sold under agreements to repurchase
|
|
—
|
|
|
(756
|
)
|
|
(1,047
|
)
|
|||
Total
|
|
$
|
81,188
|
|
|
$
|
74,891
|
|
|
$
|
71,651
|
|
For the Year Ended December 31, 2012
|
|
Gross gains
|
|
Gross losses
|
|
Net
|
||||||
Available-for-sale securities
|
|
$
|
3,468
|
|
|
$
|
(13
|
)
|
|
$
|
3,455
|
|
Trading securities and short sales
|
|
—
|
|
|
(1,592
|
)
|
|
(1,592
|
)
|
|||
Other investments
|
|
55
|
|
|
(11
|
)
|
|
44
|
|
|||
Net realized gains on investments
|
|
$
|
3,523
|
|
|
$
|
(1,616
|
)
|
|
$
|
1,907
|
|
For the Year Ended December 31, 2011
|
|
Gross gains
|
|
Gross losses
|
|
Net
|
||||||
Available-for-sale securities
|
|
$
|
5,091
|
|
|
$
|
(1,812
|
)
|
|
$
|
3,279
|
|
Trading securities and short sales
|
|
2,709
|
|
|
(1,902
|
)
|
|
807
|
|
|||
Other investments
|
|
43
|
|
|
(116
|
)
|
|
(73
|
)
|
|||
Net realized gains
|
|
7,843
|
|
|
(3,830
|
)
|
|
4,013
|
|
|||
Unrealized losses on short sales
|
|
—
|
|
|
(3,532
|
)
|
|
(3,532
|
)
|
|||
Net realized and unrealized gains on investments
|
|
$
|
7,843
|
|
|
$
|
(7,362
|
)
|
|
$
|
481
|
|
For the Year Ended December 31, 2010
|
|
Gross gains
|
|
Gross losses
|
|
Net
|
||||||
Available-for-sale securities
|
|
$
|
10,372
|
|
|
$
|
(1,976
|
)
|
|
$
|
8,396
|
|
Trading securities and short sales
|
|
6,372
|
|
|
(7,915
|
)
|
|
(1,543
|
)
|
|||
Other investments
|
|
—
|
|
|
(249
|
)
|
|
(249
|
)
|
|||
Net realized gains on investments
|
|
$
|
16,744
|
|
|
$
|
(10,140
|
)
|
|
$
|
6,604
|
|
December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
Available-for-sale securities
|
|
$
|
143,495
|
|
|
$
|
63,555
|
|
|
$
|
54,658
|
|
Other investments
|
|
302
|
|
|
237
|
|
|
96
|
|
|||
Total net unrealized gains
|
|
143,797
|
|
|
63,792
|
|
|
54,754
|
|
|||
Deferred income tax
|
|
(132
|
)
|
|
(55
|
)
|
|
—
|
|
|||
Net unrealized gains, net of deferred income tax
|
|
$
|
143,665
|
|
|
$
|
63,737
|
|
|
$
|
54,754
|
|
Change in net unrealized gains, net of deferred income tax
|
|
$
|
79,928
|
|
|
$
|
8,983
|
|
|
$
|
22,007
|
|
December 31,
|
|
2012
|
|
2011
|
||||
Restricted cash and cash equivalents – third party agreements
|
|
$
|
97,695
|
|
|
$
|
67,627
|
|
Restricted cash and cash equivalents – related party agreements
|
|
33,882
|
|
|
46,729
|
|
||
Restricted cash and cash equivalents – U.S. state regulatory authorities
|
|
750
|
|
|
539
|
|
||
Total restricted cash and cash equivalents
|
|
132,327
|
|
|
114,895
|
|
||
Restricted investments – in trust for third party agreements at fair value (
Amortized cost: 2012 – $1,048,827; 2011 – $950,103
)
|
|
1,101,971
|
|
|
972,130
|
|
||
Restricted investments – in trust for related party agreements at fair value (
Amortized cost: 2012 – $851,873; 2011 – $458,105
)
|
|
919,557
|
|
|
485,468
|
|
||
Restricted investments – in trust for U.S. state regulatory authorities (
Amortized cost: 2012 – $12,744; 2011 – $12,862
)
|
|
13,463
|
|
|
13,750
|
|
||
Total restricted investments
|
|
2,034,991
|
|
|
1,471,348
|
|
||
Total restricted cash and cash equivalents and investments
|
|
$
|
2,167,318
|
|
|
$
|
1,586,243
|
|
December 31, 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
|
|
$
|
43,931
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
43,931
|
|
U.S. agency bonds – mortgage-backed
|
|
—
|
|
|
992,174
|
|
|
—
|
|
|
992,174
|
|
||||
U.S. agency bonds – other
|
|
—
|
|
|
13,089
|
|
|
—
|
|
|
13,089
|
|
||||
Non-U.S. government bonds
|
|
—
|
|
|
57,433
|
|
|
—
|
|
|
57,433
|
|
||||
Other mortgage-backed securities
|
|
—
|
|
|
24,068
|
|
|
—
|
|
|
24,068
|
|
||||
Corporate bonds
|
|
—
|
|
|
1,354,154
|
|
|
—
|
|
|
1,354,154
|
|
||||
Municipal bonds
|
|
—
|
|
|
133,848
|
|
|
—
|
|
|
133,848
|
|
||||
Other investments
|
|
—
|
|
|
—
|
|
|
2,901
|
|
|
2,901
|
|
||||
Total
|
|
$
|
43,931
|
|
|
$
|
2,574,766
|
|
|
$
|
2,901
|
|
|
$
|
2,621,598
|
|
As a percentage of total assets
|
|
1.1
|
%
|
|
62.2
|
%
|
|
0.1
|
%
|
|
63.4
|
%
|
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 securities
|
|
—
|
|
|
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 under agreements to repurchase
|
|
$
|
—
|
|
|
$
|
55,830
|
|
|
$
|
—
|
|
|
$
|
55,830
|
|
As a percentage of total liabilities
|
|
—
|
%
|
|
2.1
|
%
|
|
—
|
%
|
|
2.1
|
%
|
|
|
For the Year Ended December 31,
|
||||||
Other investments:
|
|
2012
|
|
2011
|
||||
Balance at beginning of period
|
|
$
|
2,192
|
|
|
$
|
5,847
|
|
Net realized and unrealized gains – included in net income
|
|
44
|
|
|
—
|
|
||
Net realized and unrealized (losses) – included in net income
|
|
—
|
|
|
(73
|
)
|
||
Change in net unrealized gains – included in other comprehensive income
|
|
65
|
|
|
141
|
|
||
Change in net unrealized losses – included in other comprehensive income
|
|
—
|
|
|
—
|
|
||
Purchases
|
|
940
|
|
|
1,173
|
|
||
Sales and redemptions
|
|
(340
|
)
|
|
(4,896
|
)
|
||
Transfers into Level 3
|
|
—
|
|
|
—
|
|
||
Transfers out of Level 3
|
|
—
|
|
|
—
|
|
||
Balance at end of period
|
|
$
|
2,901
|
|
|
$
|
2,192
|
|
Level 3 gains (losses) included in net income attributable to the change in unrealized gains (losses) relating to assets held at the reporting date
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
December 31, 2012
|
|
December 31, 2011
|
|||||||||||||
|
Interest Rate
|
|
Carrying Value
|
|
Fair Value
|
|
Carrying Value
|
|
Fair Value
|
|||||||||
2011 Senior Notes
|
8.25
|
%
|
|
$
|
107,500
|
|
|
$
|
112,832
|
|
|
$
|
107,500
|
|
|
$
|
104,888
|
|
2012 Senior Notes
|
8.00
|
%
|
|
100,000
|
|
|
105,600
|
|
|
—
|
|
|
—
|
|
||||
Junior Subordinated Debt
|
14.00
|
%
|
|
126,317
|
|
|
166,919
|
|
|
126,263
|
|
|
173,621
|
|
|
Goodwill
|
|
Intangible Assets
|
|
Total
|
||||||
December 31, 2010
|
$
|
58,429
|
|
|
$
|
45,476
|
|
|
$
|
103,905
|
|
Adjustment during the year
|
(117
|
)
|
|
—
|
|
|
(117
|
)
|
|||
Amortization
|
—
|
|
|
(5,033
|
)
|
|
(5,033
|
)
|
|||
December 31, 2011
|
58,312
|
|
|
40,443
|
|
|
98,755
|
|
|||
Amortization
|
—
|
|
|
(4,362
|
)
|
|
(4,362
|
)
|
|||
December 31, 2012
|
$
|
58,312
|
|
|
$
|
36,081
|
|
|
$
|
94,393
|
|
December 31, 2012
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Useful Life
|
||||||
Goodwill
|
|
$
|
58,312
|
|
|
$
|
—
|
|
|
$
|
58,312
|
|
|
Indefinite
|
State licenses
|
|
7,727
|
|
|
—
|
|
|
7,727
|
|
|
Indefinite
|
|||
Customer relationships
|
|
51,400
|
|
|
(23,046
|
)
|
|
28,354
|
|
|
15 years double declining
|
|||
Net balance
|
|
$
|
117,439
|
|
|
$
|
(23,046
|
)
|
|
$
|
94,393
|
|
|
|
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 Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
Premiums written
|
|
|
|
|
|
|
|
|
|
|||
Direct
|
|
$
|
122,412
|
|
|
$
|
114,036
|
|
|
$
|
71,625
|
|
Assumed
|
|
1,878,580
|
|
|
1,698,561
|
|
|
1,226,430
|
|
|||
Ceded
|
|
(99,707
|
)
|
|
(89,076
|
)
|
|
(70,224
|
)
|
|||
Net
|
|
$
|
1,901,285
|
|
|
$
|
1,723,521
|
|
|
$
|
1,227,831
|
|
Premiums earned
|
|
|
|
|
|
|
|
|
|
|||
Direct
|
|
$
|
119,398
|
|
|
$
|
112,308
|
|
|
$
|
68,967
|
|
Assumed
|
|
1,780,745
|
|
|
1,523,685
|
|
|
1,168,116
|
|
|||
Ceded
|
|
(96,363
|
)
|
|
(83,565
|
)
|
|
(67,293
|
)
|
|||
Net
|
|
$
|
1,803,780
|
|
|
$
|
1,552,428
|
|
|
$
|
1,169,790
|
|
Loss and loss adjustment expenses
|
|
|
|
|
|
|
|
|
|
|||
Gross loss and loss adjustment expenses
|
|
$
|
1,457,404
|
|
|
$
|
1,103,821
|
|
|
$
|
788,815
|
|
Loss and loss adjustment expenses ceded
|
|
(195,056
|
)
|
|
(60,767
|
)
|
|
(33,693
|
)
|
|||
Net
|
|
$
|
1,262,348
|
|
|
$
|
1,043,054
|
|
|
$
|
755,122
|
|
December 31,
|
|
2012
|
|
2011
|
||||
Reserve for reported loss and loss adjustment expenses
|
|
$
|
1,029,594
|
|
|
$
|
820,795
|
|
Reserve for losses incurred but not reported
|
|
710,687
|
|
|
577,643
|
|
||
Reserve for loss and loss adjustment expenses
|
|
$
|
1,740,281
|
|
|
$
|
1,398,438
|
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
Gross unpaid loss and loss adjustment expenses reserves at beginning of period
|
|
$
|
1,398,438
|
|
|
$
|
1,226,773
|
|
|
$
|
1,002,676
|
|
Less: reinsurance recoverable on unpaid losses at beginning of period
|
|
20,289
|
|
|
6,656
|
|
|
8,340
|
|
|||
Net loss and loss adjustment expense reserves at beginning of period
|
|
1,378,149
|
|
|
1,220,117
|
|
|
994,336
|
|
|||
Net incurred losses related to:
|
|
|
|
|
|
|
|
|
|
|||
Current year
|
|
1,239,016
|
|
|
1,028,855
|
|
|
787,967
|
|
|||
Prior years
|
|
23,332
|
|
|
14,199
|
|
|
(32,845
|
)
|
|||
|
|
1,262,348
|
|
|
1,043,054
|
|
|
755,122
|
|
|||
Net paid losses related to:
|
|
|
|
|
|
|
|
|
|
|||
Current year
|
|
(485,015
|
)
|
|
(456,149
|
)
|
|
(365,343
|
)
|
|||
Prior years
|
|
(530,294
|
)
|
|
(423,855
|
)
|
|
(265,991
|
)
|
|||
|
|
(1,015,309
|
)
|
|
(880,004
|
)
|
|
(631,334
|
)
|
|||
Acquired loss and loss expense reserve
|
|
—
|
|
|
450
|
|
|
102,020
|
|
|||
Effect of foreign exchange movements
|
|
4,235
|
|
|
(5,468
|
)
|
|
(27
|
)
|
|||
Net loss and loss adjustment expense reserves at end of period
|
|
1,629,423
|
|
|
1,378,149
|
|
|
1,220,117
|
|
|||
Reinsurance recoverable on unpaid losses at end of period
|
|
110,858
|
|
|
20,289
|
|
|
6,656
|
|
|||
Gross unpaid loss and loss adjustment expenses reserves at end of period
|
|
$
|
1,740,281
|
|
|
$
|
1,398,438
|
|
|
$
|
1,226,773
|
|
|
December 31, 2012
|
||
2013
|
$
|
2,004
|
|
2014
|
1,646
|
|
|
2015
|
942
|
|
|
2016
|
482
|
|
|
2017
|
482
|
|
|
|
$
|
5,556
|
|
|
Dividend per Share
|
|
Payable on:
|
|
Record date:
|
||
Common shares
|
$
|
0.09
|
|
|
December 28, 2012
|
|
December 14, 2012
|
Preference shares - Series A
|
$
|
0.6073
|
|
|
December 17, 2012
|
|
December 1, 2012
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
Net income attributable to Maiden common shareholders
|
|
$
|
46,510
|
|
|
$
|
28,524
|
|
|
$
|
69,866
|
|
Weighted average number of common shares outstanding – basic
|
|
72,263,022
|
|
|
72,155,503
|
|
|
70,799,966
|
|
|||
Potentially dilutive securities:
|
|
|
|
|
|
|
|
|
|
|||
Share options
|
|
842,509
|
|
|
748,185
|
|
|
572,722
|
|
|||
Weighted average number of common shares outstanding – diluted
|
|
73,105,531
|
|
|
72,903,688
|
|
|
71,372,688
|
|
|||
Basic earnings per share attributable to Maiden common shareholders:
|
|
$
|
0.64
|
|
|
$
|
0.40
|
|
|
$
|
0.99
|
|
Diluted earnings per share attributable to Maiden common shareholders:
|
|
$
|
0.64
|
|
|
$
|
0.39
|
|
|
$
|
0.98
|
|
|
2012
|
|
2011
|
|
2010
|
|||
Assumptions:
|
|
|
|
|
|
|
|
|
Volatility
|
45.30 – 47.60
|
%
|
|
45.55 – 47.60
|
%
|
|
29.50 – 46.00
|
%
|
Risk-free interest rate
|
0.85 – 1.29
|
%
|
|
1.29 – 1.62
|
%
|
|
1.62 – 3.21
|
%
|
Weighted average expected lives in years
|
6.1 years
|
|
|
6.1 years
|
|
|
5.5 – 6.1 years
|
|
Forfeiture rate
|
1.60
|
%
|
|
0
|
%
|
|
0
|
%
|
Dividend yield rate
|
3.04 – 3.55
|
%
|
|
3.04 – 3.27
|
%
|
|
1.00 – 3.57
|
%
|
|
Number of
Share Options |
|
Weighted
Average Exercise Price |
|
Fair Value
of Options |
|
Weighted
Average Remaining Contractual Term |
|
Aggregate
Intrinsic Value |
|
Range of
Exercise Prices |
|||||||
Outstanding, December 31, 2009
|
2,036,542
|
|
|
$
|
5.79
|
|
|
|
|
|
8.86 years
|
|
$
|
1,548
|
|
|
$3.28 – 10.00
|
|
Granted
|
931,333
|
|
|
$
|
7.57
|
|
|
$
|
2.45
|
|
|
9.60 years
|
|
|
|
|
$6.94 – 7.99
|
|
Exercised
|
(15,811
|
)
|
|
$
|
3.28
|
|
|
|
|
|
|
|
$
|
68
|
|
|
|
|
Expired
|
(688
|
)
|
|
$
|
3.28
|
|
|
|
|
|
|
|
|
|
|
|
||
Forfeited
|
(10,500
|
)
|
|
$
|
3.28
|
|
|
|
|
|
|
|
|
|
|
|
||
Outstanding, December 31, 2010
|
2,940,876
|
|
|
$
|
6.41
|
|
|
|
|
|
8.40 years
|
|
$
|
5,286
|
|
|
$3.28 – 10.00
|
|
Granted
|
133,500
|
|
|
$
|
8.57
|
|
|
$
|
2.89
|
|
|
9.77 years
|
|
|
|
|
$7.63 – 9.40
|
|
Exercised
|
(114,328
|
)
|
|
$
|
3.69
|
|
|
|
|
|
|
|
$
|
587
|
|
|
|
|
Expired
|
(375
|
)
|
|
$
|
7.65
|
|
|
|
|
|
|
|
|
|
|
|
||
Forfeited
|
(43,530
|
)
|
|
$
|
7.19
|
|
|
|
|
|
|
|
|
|
|
|
||
Outstanding, December 31, 2011
|
2,916,143
|
|
|
$
|
6.61
|
|
|
|
|
|
7.55 years
|
|
$
|
6,866
|
|
|
$3.28 – 10.00
|
|
Granted
|
117,000
|
|
|
$
|
8.89
|
|
|
$
|
2.65
|
|
|
9.65 years
|
|
|
|
$8.14 – 9.42
|
||
Exercised
|
(122,519
|
)
|
|
$
|
3.90
|
|
|
|
|
|
|
|
$
|
616
|
|
|
|
|
Expired
|
(103,847
|
)
|
|
$
|
9.87
|
|
|
|
|
|
|
|
|
|
|
|
||
Forfeited
|
(11,340
|
)
|
|
$
|
7.54
|
|
|
|
|
|
|
|
|
|
|
|
||
Outstanding, December 31, 2012
|
2,795,437
|
|
|
$
|
6.70
|
|
|
|
|
|
6.75 years
|
|
$
|
7,271
|
|
|
$3.28 – 10.00
|
|
Total options exercisable at December 31, 2012
|
2,127,141
|
|
|
$
|
6.35
|
|
|
|
|
|
6.35 years
|
|
$
|
6,336
|
|
|
$3.28 – 10.00
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
Current tax expense – U.S.
|
|
$
|
34
|
|
|
$
|
79
|
|
|
$
|
130
|
|
Current tax expense – Other jurisdictions
|
|
986
|
|
|
553
|
|
|
30
|
|
|||
Total current tax expense
|
|
1,020
|
|
|
632
|
|
|
160
|
|
|||
Deferred tax expense – U.S.
|
|
1,161
|
|
|
1,161
|
|
|
1,170
|
|
|||
Deferred tax expense – Other jurisdictions
|
|
32
|
|
|
134
|
|
|
—
|
|
|||
Total deferred tax expense
|
|
1,193
|
|
|
1,295
|
|
|
1,170
|
|
|||
Total income tax expense
|
|
$
|
2,213
|
|
|
$
|
1,927
|
|
|
$
|
1,330
|
|
For the Year Ended December 31,
|
|
2012
|
|
2011
|
|
2010
|
||||||
Income before income taxes
|
|
$
|
52,474
|
|
|
$
|
30,454
|
|
|
$
|
71,192
|
|
Income tax expense
|
|
2,213
|
|
|
1,927
|
|
|
1,330
|
|
|||
Net income
|
|
$
|
50,261
|
|
|
$
|
28,527
|
|
|
$
|
69,862
|
|
Reconciliation of effective tax rate (% of income before taxes)
|
|
|
|
|
|
|
|
|
|
|||
Bermuda tax rate
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|||
U.S. taxes at statutory rates
|
|
(9.4
|
)%
|
|
(67.2
|
)%
|
|
(18.8
|
)%
|
|||
Valuation allowance in respect of U.S. taxes
|
|
11.7
|
%
|
|
71.3
|
%
|
|
20.6
|
%
|
|||
Other jurisdictions
|
|
1.9
|
%
|
|
2.2
|
%
|
|
0.1
|
%
|
|||
Actual tax rate
|
|
4.2
|
%
|
|
6.3
|
%
|
|
1.9
|
%
|
December 31,
|
|
2012
|
|
2011
|
||||
Deferred tax assets:
|
|
|
|
|
||||
Net operating losses
|
|
$
|
42,014
|
|
|
$
|
38,279
|
|
Unearned premiums
|
|
8,929
|
|
|
5,595
|
|
||
Discounting of net loss and loss adjustment expense reserves
|
|
10,585
|
|
|
5,212
|
|
||
Accruals not currently deductible
|
|
88
|
|
|
1,647
|
|
||
Amortization of intangibles
|
|
2,988
|
|
|
2,680
|
|
||
Others
|
|
913
|
|
|
343
|
|
||
Deferred tax assets before valuation allowance
|
|
65,517
|
|
|
53,756
|
|
||
Valuation allowance
|
|
41,231
|
|
|
36,208
|
|
||
Deferred tax assets, net
|
|
24,286
|
|
|
17,548
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|
|
||
Deferred commission and other acquisition expenses
|
|
13,054
|
|
|
7,829
|
|
||
Indefinite lived intangible
|
|
2,870
|
|
|
2,870
|
|
||
Amortization of goodwill
|
|
4,837
|
|
|
3,676
|
|
||
Net unrealized gains on investments
|
|
10,249
|
|
|
9,111
|
|
||
Market discount on bonds
|
|
488
|
|
|
497
|
|
||
Others
|
|
488
|
|
|
24
|
|
||
Deferred tax liabilities
|
|
31,986
|
|
|
24,007
|
|
||
Net deferred tax liability
|
|
$
|
7,700
|
|
|
$
|
6,459
|
|
|
Maiden Bermuda
|
|
Maiden US
|
|
Maiden Specialty
|
|
Maiden LF
|
||||||||
Statutory Capital and Surplus
|
|
|
|
|
|
|
|
||||||||
December 31, 2012
|
$
|
942,806
|
|
|
$
|
267,863
|
|
|
$
|
46,164
|
|
|
$
|
8,603
|
|
December 31, 2011
|
693,435
|
|
|
268,055
|
|
|
36,280
|
|
|
7,866
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Statutory Net Income (Loss)
|
|
|
|
|
|
|
|
||||||||
For the Year Ended December 31, 2012
|
$
|
79,113
|
|
|
$
|
(19,156
|
)
|
|
$
|
1,227
|
|
|
$
|
464
|
|
For the Year Ended December 31, 2011
|
30,070
|
|
|
(1,684
|
)
|
|
119
|
|
|
753
|
|
||||
For the Year Ended December 31, 2010
|
89,562
|
|
|
1,268
|
|
|
1,675
|
|
|
486
|
|
|
Dividend per Share
|
|
Payable on:
|
|
Record date:
|
||
Common shares
|
$
|
0.09
|
|
|
April 15, 2013
|
|
April 1, 2013
|
Preference shares - Series A
|
$
|
0.515625
|
|
|
March 15, 2013
|
|
March 1, 2013
|
|
2012 Quarters Ended
|
||||||||||||||
|
Mar 31
|
|
Jun 30
|
|
Sep 30
|
|
Dec 31
|
||||||||
Total revenues
|
$
|
463,052
|
|
|
$
|
456,536
|
|
|
$
|
475,555
|
|
|
$
|
504,622
|
|
Net income (loss)
|
20,378
|
|
|
14,606
|
|
|
21,934
|
|
|
(6,657
|
)
|
||||
Net income (loss) attributable to Maiden common shareholders
|
20,377
|
|
|
14,541
|
|
|
21,919
|
|
|
(10,327
|
)
|
||||
Comprehensive income (loss) - attributable to Maiden shareholders
|
47,167
|
|
|
19,250
|
|
|
63,802
|
|
|
(2,994
|
)
|
||||
Basic earnings (loss) per common share attributable to Maiden shareholders
|
$
|
0.28
|
|
|
$
|
0.20
|
|
|
$
|
0.30
|
|
|
$
|
(0.14
|
)
|
Diluted earnings (loss) per common share attributable to Maiden shareholders
|
$
|
0.28
|
|
|
$
|
0.20
|
|
|
$
|
0.30
|
|
|
$
|
(0.14
|
)
|
|
2011 Quarters Ended
|
||||||||||||||
|
Mar 31
|
|
Jun 30
|
|
Sep 30
|
|
Dec 31
|
||||||||
Total revenues
|
$
|
370,378
|
|
|
$
|
390,371
|
|
|
$
|
440,656
|
|
|
$
|
439,035
|
|
Net income (loss)
|
19,345
|
|
|
(24,372
|
)
|
|
16,002
|
|
|
17,552
|
|
||||
Net income (loss) attributable to Maiden common shareholders
|
19,342
|
|
|
(24,366
|
)
|
|
16,004
|
|
|
17,544
|
|
||||
Comprehensive income (loss) - attributable to Maiden shareholders
|
24,212
|
|
|
(5,722
|
)
|
|
12,918
|
|
|
6,841
|
|
||||
Basic earnings (loss) per common share attributable to Maiden shareholders
|
$
|
0.27
|
|
|
$
|
(0.34
|
)
|
|
$
|
0.22
|
|
|
$
|
0.25
|
|
Diluted earnings (loss) per common share attributable to Maiden shareholders
|
$
|
0.27
|
|
|
$
|
(0.34
|
)
|
|
$
|
0.22
|
|
|
$
|
0.24
|
|
December 31, 2012
|
|
Amortized
Cost* |
|
Fair
Value |
|
Amount at
Which Shown in the Balance Sheet |
||||||
Available-for-sale securities:
|
|
|
|
|
|
|
||||||
U.S. treasury bonds
|
|
$
|
42,671
|
|
|
$
|
43,931
|
|
|
$
|
43,931
|
|
U.S. agency bonds – mortgage-backed
|
|
962,649
|
|
|
992,174
|
|
|
992,174
|
|
|||
U.S. agency bonds – other
|
|
11,682
|
|
|
13,089
|
|
|
13,089
|
|
|||
Non-U.S. government bonds
|
|
55,169
|
|
|
57,433
|
|
|
57,433
|
|
|||
Other mortgage-backed bonds
|
|
23,167
|
|
|
24,068
|
|
|
24,068
|
|
|||
Corporate bonds
|
|
1,247,260
|
|
|
1,354,154
|
|
|
1,354,154
|
|
|||
Municipal bonds
|
|
132,604
|
|
|
133,848
|
|
|
133,848
|
|
|||
Total available-for-sale fixed maturities
|
|
2,475,202
|
|
|
2,618,697
|
|
|
2,618,697
|
|
|||
Other investments
|
|
2,599
|
|
|
2,901
|
|
|
2,901
|
|
|||
Total investments
|
|
$
|
2,477,801
|
|
|
$
|
2,621,598
|
|
|
$
|
2,621,598
|
|
|
2012
|
|
2011
|
||||
Assets:
|
|
|
|
||||
Fixed maturities, available-for-sale, at fair value
(Amortized cost: $103,049)
|
$
|
103,651
|
|
|
$
|
—
|
|
Cash and cash equivalents
|
3,147
|
|
|
550
|
|
||
Investment in subsidiaries
|
1,213,865
|
|
|
983,816
|
|
||
Balances due from subsidiaries
|
55,370
|
|
|
137,733
|
|
||
Other assets
|
1,063
|
|
|
233
|
|
||
Total assets
|
$
|
1,377,096
|
|
|
$
|
1,122,332
|
|
Liabilities:
|
|
|
|
||||
Accrued expenses and other liabilities
|
$
|
1,138
|
|
|
$
|
8,495
|
|
Balances due to subsidiaries
|
360,719
|
|
|
345,195
|
|
||
Total liabilities
|
361,857
|
|
|
353,690
|
|
||
Shareholders’ equity
|
|
|
|
||||
Preference shares - Series A
|
150,000
|
|
|
—
|
|
||
Common shares
($0.01 par value; 73,306,283 and 73,183,764 shares issued in 2012 and 2011, respectively; 72,343,947 and 72,221,428 shares outstanding in 2012 and 2011, respectively)
|
733
|
|
|
732
|
|
||
Additional paid-in capital
|
575,869
|
|
|
579,004
|
|
||
Accumulated other comprehensive income
|
141,130
|
|
|
64,059
|
|
||
Retained earnings
|
151,308
|
|
|
128,648
|
|
||
Treasury shares, at cost (2012 and 2011: 962,336 shares)
|
(3,801
|
)
|
|
(3,801
|
)
|
||
Total shareholders’ equity
|
1,015,239
|
|
|
768,642
|
|
||
Total liabilities and shareholders’ equity
|
$
|
1,377,096
|
|
|
$
|
1,122,332
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2012
|
|
2011
|
|
2010
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Net investment income (loss)
|
$
|
795
|
|
|
$
|
408
|
|
|
$
|
(118
|
)
|
Net realized and unrealized gains on investments
|
229
|
|
|
—
|
|
|
—
|
|
|||
|
1,024
|
|
|
408
|
|
|
(118
|
)
|
|||
Expenses:
|
|
|
|
|
|
||||||
General and administrative expenses
|
8,030
|
|
|
10,806
|
|
|
7,076
|
|
|||
Foreign exchange (gains) losses
|
(225
|
)
|
|
31
|
|
|
—
|
|
|||
|
7,805
|
|
|
10,837
|
|
|
7,076
|
|
|||
Loss before equity in earnings of consolidated subsidiaries
|
(6,781
|
)
|
|
(10,429
|
)
|
|
(7,194
|
)
|
|||
Equity in earnings of consolidated subsidiaries
|
56,935
|
|
|
38,953
|
|
|
77,060
|
|
|||
Net income attributable to Maiden shareholders
|
50,154
|
|
|
28,524
|
|
|
69,866
|
|
|||
Dividends on preference shares
|
(3,644
|
)
|
|
—
|
|
|
—
|
|
|||
Net income attributable to Maiden common shareholders
|
$
|
46,510
|
|
|
$
|
28,524
|
|
|
$
|
69,866
|
|
|
2012
|
|
2011
|
|
2010
|
||||||
Cash flows provided by operating activities:
|
|
|
|
|
|
||||||
Net income attributable to Maiden shareholders
|
$
|
50,154
|
|
|
$
|
28,524
|
|
|
$
|
69,866
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
||||||
Equity in earnings of consolidated subsidiaries
|
(56,935
|
)
|
|
(38,953
|
)
|
|
(77,060
|
)
|
|||
Amortization of bond premium and discount
|
786
|
|
|
—
|
|
|
—
|
|
|||
Net realized and unrealized gains on investments
|
(229
|
)
|
|
—
|
|
|
—
|
|
|||
Foreign exchange (gains) losses
|
(225
|
)
|
|
31
|
|
|
—
|
|
|||
Non-cash share compensation expense
|
1,347
|
|
|
1,307
|
|
|
1,015
|
|
|||
Changes in assets – decrease (increase):
|
|
|
|
|
|
||||||
Balance due from subsidiaries
|
82,588
|
|
|
(36,414
|
)
|
|
(4,209)
|
|
|||
Other assets
|
(829
|
)
|
|
230
|
|
|
(57)
|
|
|||
Changes in liabilities – (decrease) increase:
|
|
|
|
|
|
||||||
Accounts payable and accrued liabilities
|
(1,579
|
)
|
|
1,746
|
|
|
387
|
|
|||
Balances due to subsidiaries
|
15,524
|
|
|
63,633
|
|
|
36,485
|
|
|||
Net cash provided by operating activities
|
90,602
|
|
|
20,104
|
|
|
26,427
|
|
|||
Cash flows used in investing activities:
|
|
|
|
|
|
||||||
Purchases of fixed-maturity securities – available-for-sale
|
(137,486
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sales of fixed-maturity securities – available-for-sale
|
9,452
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from maturities and calls of fixed maturity securities
|
24,427
|
|
|
—
|
|
|
—
|
|
|||
Investment in subsidiaries
|
(96,643
|
)
|
|
148
|
|
|
(7,476
|
)
|
|||
Net cash (used in) provided by investing activities
|
(200,250
|
)
|
|
148
|
|
|
(7,476
|
)
|
|||
Cash flows used in financing activities:
|
|
|
|
|
|
||||||
Preference shares - Series A issuance, net of issuance costs
|
145,041
|
|
|
—
|
|
|
—
|
|
|||
Dividends paid on preference shares
|
(3,644
|
)
|
|
—
|
|
|
—
|
|
|||
Dividends paid to Maiden common shareholders
|
(29,630
|
)
|
|
(20,921
|
)
|
|
(18,394
|
)
|
|||
Issuance of common shares
|
478
|
|
|
422
|
|
|
52
|
|
|||
Net cash provided by (used in) financing activities
|
112,245
|
|
|
(20,499
|
)
|
|
(18,342
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
2,597
|
|
|
(247
|
)
|
|
609
|
|
|||
Cash and cash equivalents, beginning of year
|
550
|
|
|
797
|
|
|
188
|
|
|||
Cash and cash equivalents, end of year
|
$
|
3,147
|
|
|
$
|
550
|
|
|
$
|
797
|
|
|
December 31, 2012
|
|
For the Year Ended December 31, 2012
|
||||||||||||||||||||||||||||||||
|
Deferred
commission and other
acquisition
expenses |
|
Reserve
for loss and loss adjustment expenses |
|
Unearned
premiums |
|
Net
premiums earned |
|
Net
investment income |
|
Net loss and
loss adjustment expenses |
|
Amortization
of deferred commission and other acquisition expenses |
|
General and
administrative expenses |
|
Net
premiums written |
||||||||||||||||||
Diversified Reinsurance
|
$
|
83,287
|
|
|
$
|
1,139,179
|
|
|
$
|
324,954
|
|
|
$
|
795,341
|
|
|
$
|
—
|
|
|
$
|
583,970
|
|
|
$
|
203,209
|
|
|
$
|
40,951
|
|
|
$
|
765,293
|
|
AmTrust Quota Share Reinsurance
|
153,530
|
|
|
521,924
|
|
|
503,915
|
|
|
727,781
|
|
|
—
|
|
|
494,633
|
|
|
200,546
|
|
|
1,949
|
|
|
840,346
|
|
|||||||||
ACAC Quota Share
|
33,852
|
|
|
79,178
|
|
|
107,628
|
|
|
280,658
|
|
|
—
|
|
|
183,745
|
|
|
88,276
|
|
|
737
|
|
|
295,646
|
|
|||||||||
Corporate
|
—
|
|
|
—
|
|
|
|
|
|
—
|
|
|
81,188
|
|
|
—
|
|
|
—
|
|
|
10,167
|
|
|
—
|
|
|||||||||
Total
|
$
|
270,669
|
|
|
$
|
1,740,281
|
|
|
$
|
936,497
|
|
|
$
|
1,803,780
|
|
|
$
|
81,188
|
|
|
$
|
1,262,348
|
|
|
$
|
492,031
|
|
|
$
|
53,804
|
|
|
$
|
1,901,285
|
|
|
December 31, 2011
|
|
For the Year Ended December 31, 2011
|
||||||||||||||||||||||||||||||||
|
Deferred
commission and other acquisition expenses |
|
Reserve
for loss and loss adjustment expenses |
|
Unearned
premiums |
|
Net
premiums earned |
|
Net
investment income |
|
Net loss and
loss adjustment expenses |
|
Amortization
of deferred commission and other acquisition expenses |
|
General and
administrative expenses |
|
Net
premiums written |
||||||||||||||||||
Diversified Reinsurance
|
$
|
98,712
|
|
|
$
|
1,011,431
|
|
|
$
|
348,131
|
|
|
$
|
748,387
|
|
|
$
|
—
|
|
|
$
|
502,375
|
|
|
$
|
200,239
|
|
|
$
|
36,374
|
|
|
$
|
798,037
|
|
AmTrust Quota Share Reinsurance
|
120,369
|
|
|
327,101
|
|
|
391,275
|
|
|
558,197
|
|
|
—
|
|
|
380,263
|
|
|
160,522
|
|
|
2,283
|
|
|
669,283
|
|
|||||||||
ACAC Quota Share
|
29,355
|
|
|
59,906
|
|
|
92,641
|
|
|
245,844
|
|
|
—
|
|
|
160,416
|
|
|
78,051
|
|
|
1,635
|
|
|
256,201
|
|
|||||||||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
74,891
|
|
|
—
|
|
|
—
|
|
|
13,600
|
|
|
—
|
|
|||||||||
Total
|
$
|
248,436
|
|
|
$
|
1,398,438
|
|
|
$
|
832,047
|
|
|
$
|
1,552,428
|
|
|
$
|
74,891
|
|
|
$
|
1,043,054
|
|
|
$
|
438,812
|
|
|
$
|
53,892
|
|
|
$
|
1,723,521
|
|
|
December 31, 2010
|
|
For the Year Ended December 31, 2010
|
||||||||||||||||||||||||||||||||
|
Deferred
commission and other acquisition expenses |
|
Reserve
for loss and loss adjustment expenses |
|
Unearned
premiums |
|
Net
premiums earned |
|
Net
investment income |
|
Net loss and
loss adjustment expenses |
|
Amortization
of deferred commission and other acquisition expenses |
|
General and
administrative expenses |
|
Net
premiums written |
||||||||||||||||||
Diversified Reinsurance
|
$
|
85,252
|
|
|
$
|
971,317
|
|
|
$
|
291,148
|
|
|
$
|
601,254
|
|
|
$
|
—
|
|
|
$
|
394,604
|
|
|
$
|
152,698
|
|
|
$
|
26,123
|
|
|
$
|
554,049
|
|
AmTrust Quota Share Reinsurance
|
92,155
|
|
|
222,812
|
|
|
284,124
|
|
|
445,081
|
|
|
—
|
|
|
280,890
|
|
|
144,655
|
|
|
1,500
|
|
|
468,043
|
|
|||||||||
ACAC Quota Share
|
26,224
|
|
|
32,644
|
|
|
82,284
|
|
|
123,455
|
|
|
—
|
|
|
79,628
|
|
|
39,344
|
|
|
243
|
|
|
205,739
|
|
|||||||||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
71,651
|
|
|
—
|
|
|
—
|
|
|
14,314
|
|
|
—
|
|
|||||||||
Total
|
$
|
203,631
|
|
|
$
|
1,226,773
|
|
|
$
|
657,556
|
|
|
$
|
1,169,790
|
|
|
$
|
71,651
|
|
|
$
|
755,122
|
|
|
$
|
336,697
|
|
|
$
|
42,180
|
|
|
$
|
1,227,831
|
|
For the Year Ended December 31,
|
(a)
Gross |
|
(b)
Ceded to other companies |
|
(c)
Assumed from other companies |
|
(d)
Net amount (a) - (b) + (c) |
|
Percentage of
amount to net (c)/(d) |
|||||||||
2012 Premiums – General Insurance
|
$
|
122,412
|
|
|
$
|
99,707
|
|
|
$
|
1,878,580
|
|
|
$
|
1,901,285
|
|
|
98.8
|
%
|
2011 Premiums – General Insurance
|
114,036
|
|
|
89,076
|
|
|
1,698,561
|
|
|
1,723,521
|
|
|
98.6
|
%
|
||||
2010 Premiums – General Insurance
|
71,625
|
|
|
70,224
|
|
|
1,226,430
|
|
|
1,227,831
|
|
|
99.9
|
%
|
|
Net loss and loss adjustment expenses
|
|
Paid loss
and loss adjustment expenses |
||||||||
For the Year Ended December 31,
|
Current Year
|
|
Prior Year
|
|
|||||||
2012
|
$
|
1,239,016
|
|
|
$
|
23,332
|
|
|
$
|
1,015,309
|
|
2011
|
1,028,855
|
|
|
14,199
|
|
|
880,004
|
|
|||
2010
|
787,967
|
|
|
(32,845
|
)
|
|
631,334
|
|
C.
|
The Reinsurer shall allow the Company a 31% commission on all Subject Premium ceded hereunder and attributable to Covered Business, except that the Reinsurer shall allow the Company a 34.375% commission on the UBI UEP and Subject Premium related to Retail Commercial Package Business. The Company and Reinsurer acknowledge and agree that the commission payable hereunder shall be subject to appropriate adjustments if Additional Business is reinsured hereunder as described in Section B of Article I hereof. The Company shall allow the Reinsurer return commission on return premiums at the rate in effect when the return premiums were originally ceded to the Reinsurer. It is expressly agreed that the ceding commission allowed the Company includes provision for all commissions, taxes, assessments (other than assessments based on losses of an Affiliate as a ceding company under an Underlying Reinsurance Agreement) and all other expenses of whatever nature of the Company and Affiliates, except loss adjustment expense.
|
A.
|
This Agreement shall remain in effect until July 1, 2016, and shall automatically renew for successive three-year periods thereafter, unless the Reinsurer or Company elects to terminate this Agreement effective as of July 1, 2016 or as of the expiration of any successive three-year period. If the Reinsurer or Company elects to so terminate this Agreement, it shall give written notice to the other party hereto not less than nine months prior to either July 1, 2016 or the expiration of any successive three-year period.
|
A.
|
1. Commencing as of the Effective Time, except as otherwise provided on Schedule A, as now stated and as amended from time to time with respect to Additional Business and Excess Retention Business, the Company hereby agrees to cede to the Reinsurer, and the Reinsurer agrees to accept and reinsure, the Ultimate Net Loss of the Company equal to forty percent (40%) of the Affiliate Ultimate Net Loss with respect to Covered Business ceded to the Company by each Affiliate, subject to all other terms and conditions set forth in this Agreement. For purposes of this Agreement “Affiliate Ultimate Net Loss” means the sum actually paid or to be paid by such Affiliate in settlement of losses for which it is liable in respect of the Covered Business, after making deductions for all inuring reinsurance (other than reinsurance with any direct or indirect subsidiary of AmTrust), whether collectible or not, and all Recoveries.
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a.
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Name: INTEGON NATIONAL INSURANCE COMPANY
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b.
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Name: MAIDEN INSURANCE COMPANY LTD.
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c.
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Name: TECHNOLOGY INSURANCE COMPANY, INC.
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d.
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Name: ACP Re, Ltd.
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a.
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The Personal and Commercial Automobile Quota Share Agreement between the parties was originally effective from March 1, 2010 to March 1, 2013 with provisions for automatic renewal for successive three year periods unless either party elects to not renew. The Personal and Commercial Automobile Quota Share Agreement was automatically renewed for another agreement term effective through March 1, 2016.
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a.
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Nature of this transaction: Revise the ceding commission adjustment rates, revise the remittance schedule for adjusted commission payments, clarify that losses incurred includes reserves on incurred but not reported losses, clarify the Company retention requirement under the Personal and Commercial Automobile Quota Share Agreement between the parties. The proposed amendment to the Personal and Commercial Automobile Quota Share Agreement is attached hereto as Exhibit A.
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b.
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The proposed effective date of the transaction is October 1, 2012.
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I.
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ARTICLE IV,WARRANTIES, Paragraph 1 is revised to read as follows:
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II.
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ARTICLE VII, CEDING COMMISSION is revised to read as follows:
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A.
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The Reinsurer shall allow the Company a provisional ceding commission of 32.0% of all Net Earned Premium ceded to the Reinsurer hereunder. The Company shall allow the Reinsurer return commission on return premiums at the same rate.
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B.
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The provisional commission allowed to the Company shall be adjusted periodically in accordance with the provisions set forth herein.
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C.
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The first adjustment period shall be from the inception date of this Agreement through December 31, 2010 and each subsequent 12 month period shall be a separate adjustment period, with the final separate adjustment period being a 14 month period (each an “Adjustment Period” and, collectively, “Adjustment Periods”). However, if this Agreement is terminated, the final adjustment period shall be from the beginning of the then current Adjustment Period through the date of termination if this Agreement is terminated on a “cutoff” basis or the end of the runoff period if this Agreement is terminated on a “runoff” basis. The first calculation of adjusted commission for an Adjustment Period shall be made as of the date that is 12 months after the end of such Adjustment Period (the “Initial Calculation Date”).
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D.
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The adjusted commission rate shall be calculated as follows and be applied to Net Earned Premium for the Adjustment Period under consideration:
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1.
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If the Actual Loss Ratio for the Adjustment Period is 64.5% or greater, the adjusted commission rate for the Adjustment Period under consideration shall be a minimum commission of 30.0%;
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2.
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If the Actual Loss Ratio for the Adjustment Period is less than 64.5%,
but equal to or greater than 62.0%, the adjusted commission rate for such Adjustment Period under consideration shall be 32.5%, minus the difference in percentage points between 62.0% and the Actual Loss Ratio for such Adjustment Period;
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3.
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If the Actual Loss Ratio for the Adjustment Period is less than 62.0%, but greater than 60.0% the adjusted commission rate for such Adjustment Period under consideration shall be 32.5% plus the difference in percentage points between 62.0% and the Actual Loss Ratio for such Adjustment Period;
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4.
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If the Actual Loss Ratio for the Adjustment Period is 60.0% or less, the adjusted commission rate for such Adjustment Period shall be 34.5%.
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E.
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The Reinsurer shall calculate and report the adjusted commission on Net Earned Premium within 30 days after the Initial Calculation Date, and within 30 days after the end of each subsequent calendar year thereafter with respect to each Adjustment Period until all losses subject hereto have been finally settled. Each such calculation shall be based on cumulative transactions hereunder from the beginning of each Adjustment Period under consideration through the date of adjustment. With respect to the first Adjustment Period, remittance of adjusted commission on Net Earned
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F.
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It is expressly agreed that the ceding commission allowed the Company includes provision for all unallocated loss expenses, dividends, commissions, taxes (exclusive of Federal Excise Taxes), assessments and all other expenses of whatever nature, except allocated Loss Adjustment Expense.
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III.
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Item G. of Article XII, Definitions is revised to read as follows:
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G.
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“Losses Incurred” as used herein shall mean Net Losses and Loss Adjustment Expense paid as of the effective date of calculation, plus the ceded reserves for losses and Loss Adjustment Expense (including reserves for incurred but not reported losses) outstanding as of the same date, all as respects losses occurring during the Adjustment Period under consideration plus the change in Losses Incurred from the preceding Adjustment Period.
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IV.
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The following sentence shall be added to the end of Item I. of Article XII:
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V.
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Item B. of Article XVI. Special Termination is revised to read as follows:
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VI.
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All references to MK Re, Ltd in the Agreement shall be deemed to be references to ACP Re, Ltd.
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Sliding Scale and Ceding Commission Matrix
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Loss Ratio
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Ceding Commission
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64.5% or greater
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30.0%
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Minimum
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64.0%
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30.5%
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63.5%
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31.0%
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63.0%
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31.5%
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62.5%
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32.0%
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Provisional
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62.0%
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32.5%
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61.5%
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33.0%
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61.0%
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33.5%
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60.5%
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34.0%
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60.0% or less
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34.5%
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Maximum
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Timing of Annual Calculations and Payments
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Loss Year
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2010
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2011
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2012
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2013
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2014
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2015
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2016
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2017 and thereafter
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2010
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C/P
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C/P
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C/P
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C/P
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C/P
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We currently do not support nested tables...
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2011
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C
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C
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C
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C
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C/P
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2012
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C
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C
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C
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C/P
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Ultimate until losses are finally settled
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2013
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C
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C
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C/P
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2014
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C
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C/P
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2015
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C/P
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C = Calculation
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P = Cash Payment
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Name
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Jurisdiction
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Maiden Insurance Company Ltd.
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Bermuda
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Maiden Holdings North America, Ltd.
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Delaware
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Maiden Re Insurance Services, LLC
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Delaware
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Maiden Reinsurance Company
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Missouri
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Maiden Specialty Insurance Company
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North Carolina
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Maiden Global Servicing Company, LLC
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Delaware
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Maiden Life Försäkrings AB
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Sweden
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Maiden Global Holdings, Ltd.
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England
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Maiden Germany GmbH
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Germany
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Opel Händler VersicherungsService GmbH
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Germany
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Maiden Australia (Holdings) Pty Ltd
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Australia
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Maiden Russia LLC
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Russia
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Maiden Nederland B.V.
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Netherlands
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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(s) 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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5.
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The registrant's other certifying officer(s) 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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Dated:
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March 8, 2013
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/s/ ARTURO M. RASCHBAUM
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Name: Arturo M. Raschbaum
Title: President and Chief Executive Officer
(Principal Executive Officer)
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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(s) 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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5.
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The registrant's other certifying officer(s) 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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Dated:
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March 8, 2013
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/s/ JOHN M. MARSHALECK
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Name: John M. Marshaleck
Title: Chief Financial Officer
(Principal Financial Officer)
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Dated:
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March 8, 2013
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/s/ ARTURO M. RASCHBAUM
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Name: Arturo M. Raschbaum
Title: President and Chief Executive Officer
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Dated:
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March 8, 2013
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/s/ JOHN M. MARSHALECK
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Name: John M. Marshaleck
Title: Chief Financial Officer
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