Maiden Holdings, Ltd.
Nasdaq:MHLD
Investor Presentation
May & June 2017
Forward Looking Statements
| Investor Presentation 2
This presentation contains “forward-looking statements” which are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. The forward-looking statements are based on current
expectations and beliefs of Maiden Holdings, Ltd. (the “Company”) concerning future developments and their
potential effects on the Company. There can be no assurance that actual developments will be those anticipated
by the Company. Actual results may differ materially from those projected as a result of significant risks and
uncertainties, including non-receipt of expected payments, changes in interest rates, effect of the performance of
financial markets on investment income and fair values of investments, developments of claims and the effect on
loss reserves, decreases in existing and new client projected premiums, accuracy in projecting loss reserves, the
impact of competition and pricing environments, changes in the demand for the Company’s products, the effect of
general economic conditions, adverse state and federal legislation, regulations and regulatory investigations into
industry practices, developments relating to existing agreements, heightened competition, changes in pricing
environments and changes in asset valuations. The Company undertakes no obligation to publicly update any
forward-looking statements, except as may be required by law. Additional information about these risks and
uncertainties, as well as others that may cause actual results to differ materially from those projected is contained
in Item 1A. Risk Factors in the Company’s most recent Annual Report on Form 10-K.
In presenting the Company’s results, management has included and discussed in this presentation certain non
generally accepted accounting principles (“non-GAAP”) financial measures within the meaning of Regulation G as
promulgated by the U.S. Securities and Exchange Commission. Management believes that these non-GAAP
measures, which may be defined differently by other companies, better explain the Company’s results of
operations in a manner that allows for a more complete understanding of the underlying trends in the Company’s
business. However, these measures should not be viewed as a substitute for those determined in accordance
with generally accepted accounting principles (“U.S. GAAP”). See the appendix of this presentation for a
reconciliation of non-GAAP measures used in this presentation to their most directly comparable
GAAP measures.
Non-GAAP Financial Measures
Maiden’s Value Proposition
| Investor Presentation 3
Significant line of business and geographical
diversity across low volatility underwriting
portfolio (Not focused on the property
catastrophe reinsurance market)
Long-term relationships with targeted
regional and specialty P&C insurers –
34-year operating history
Successful and stable multi-year strategic
reinsurance relationship with AmTrust Financial
Services, Inc. (“AmTrust”) since 2007
Predictable and stable operating results
Highly efficient and scalable operating
platform
Growing balance sheet scale and
capital efficiency supported by the
low-volatility model
Conservative investment portfolio
Strong commitment to rewarding
shareholders through dividends
1
2
Maiden targets consistent underwriting profitability, above industry average growth
and an operating ROACE* of 15% or greater
3
4
5
6
7
8
*ROACE is Return on Average Common Equity. We use ROACE as a measurement of profitability that focuses on the return to Maiden shareholders rather than using solely
net income. Please see the definition of non-GAAP financial measures on the final page of this presentation for additional important information.
RNR
VR
EIG
AWH
AXS
AGII
ACGL
PRE*ENH*
AHL
XL
MHLD
GLRE
60%
65%
70%
75%
80%
85%
90%
95%
100%
105%
110%
0 x1 x2 x3 x4 x5 x6 x7 x8 x9 x10
6
Y
e
a
r
A
v
e
rage
C
o
m
b
ine
d
Ra
ti
o
Multiple of MHLD's Standard Deviation in Combined Ratio
6 Year Average Quarterly Combined Ratio and Standard Deviation in Combined
Ratio
MHLD = x1 SD
Predictable and Stable Operating Performance
| Investor Presentation 4
Data Source: Quarterly Combined Ratio Data from SNL Financial – 1Q 2011 to 1Q 2017
*PRE is the former ticker of PartnerRe, which is no longer traded publicly following its acquisition by EXOR.
* ENH is the former ticker of Endurance, which is no longer traded publicly following it acquisition by Sompo.
Relatively stable and profitable combined ratio reflecting low volatility underwriting portfolio
Maiden’s History
| Investor Presentation 5
1 AmTrust’s founding shareholders were Michael Karfunkel, George Karfunkel, and Barry Zyskind. Michael Karfunkel passed away on April 27, 2016, thus the shares previously held by him are now controlled by his wife
Leah Karfunkel.
2 National General Holdings Corporation (“NGHC”), formerly known as American Capital Acquisition Corporation (“ACAC”), acquired GMAC Personal Lines Business in 2010. The Michael Karfunkel 2005 Family Trust (which
is controlled by Leah Karfunkel) and AmTrust own 43.0% and 11.6% of NGHC common stock, respectively.
3 As of most recent individual filings.
4 Last twelve months as of March 31, 2017.
.
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1Q17
Gross Premiums Written
(“GPW”)
$247 $727 $1,049 $1,298 $1,813 $2,001 $2,204 $2,507 $2,663 $2,831 $2,8914
Employees 5 129 139 204 213 214 185 194 204 211 213
Founding Shareholders¹
Ownership
18.6% 30.1% 30.1% 28.3% 28.3% 28.4% 28.4% 28.1% 20.3% 17.4% 17.4%3
2007 2008 2009 2010 2011 2012 2013 2014 2015
AmTrust’s founding shareholders¹
formed Maiden
Entered into 40% Quota Share
with AmTrust
Redeemed 14% TRUPS
January 15, 2014
Entered into 25% NGHC²
Quota Share
Acquired international insurance
business (IIS) from Ally
Sold property Excess & Surplus
(“E&S”) lines business
NGHC Quota Share discontinued
Acquired a reinsurance platform with
25 years of operations, GMAC RE,
with renewal rights, client relationships,
and infrastructure
(GPW in $ millions)
2016
AM Best rating
upgraded to A
September 1, 2016
Property
21%
Other Casualty
24%
Personal Auto
26%
Commercial Auto
8%
A&H
11%
International
10%
Last Twelve Months*
Gross Premiums Written = $841 million
Maiden’s Key Business Segments Today
Diversified Reinsurance Segment
Diversified Reinsurance – Focus on lower volatility “working layer” reinsurance needs
of regional and specialty P&C insurers in the U.S. and select international markets
Underwriting /
Distribution
DUAL UNDERWRITING
DISTRIBUTION:
• 46% direct / 54% brokered
distribution**
COMPETITIVE ADVANTAGES:
• Lasting, profitable, long-term
relationships with clients –
34-year operating history
• Dedicated Financial Trust®
offers highly rated security
• Deep multi-functional client service
support
• Purpose built balance sheet
and operating platform
* As of March 31, 2017
**As of December 31, 2016
IN THE U.S.:
Multi-Functional Teams:
• Underwriters, actuaries, accountants,
legal and claims specialists
Focus on traditional lines:
• Personal & commercial auto
• Commercial multi-peril
• General liability
• Workers’ compensation
• Non-cat property
IN SELECT INTERNATIONAL MARKETS:
OEM oriented business development team:
• Personal Auto
• Credit Life
Bermuda team - offering capital
solutions in Europe:
• Multi-line regional opportunities
| Investor Presentation 6
SPECIALTY RISK AND EXTENDED WARRANTY
(GLOBAL):
• Consumer and commercial goods warranty
• European Hospital liability
• Other
SMALL COMMERCIAL (U.S.):
• Workers’ compensation
• Commercial package
• Commercial lines
SPECIALTY PROGRAM:
• Commercial package for specialty
risks / segments
UNDERWRITING:
• Multi-year quota-share reinsurance relationship since 2007
— Master Agreement in place through June 2019 with negotiated contract
modifications occurring independent of renewal cycle twice previously
— Actively managed by Maiden to preserve targeted economics
• Strong controls and governance
— Independent underwriting and reserving
— All related party transactions require independent Audit Committee approvals
AMTRUST’S STRENGTHS:
• Significant driver of growth with profitable combined ratios
• AmTrust’s leading competitive position in specialty markets
• Highly efficient with strong technological core competency
Maiden’s Key Business Segments Today
AmTrust Reinsurance Segment
| Investor Presentation 7
AmTrust Quota Share – Providing strategically important capital support to AmTrust since 2007
Last Twelve Months*
Gross Premiums Written = $2.0 billion
* As of March 31, 2017
Small
Commercial
Business
60%
Specialty
Program
18%
Specialty Risk
and Extended
Warranty
22%
AmTrust Relationship
• Maiden maintains robust controls, procedures and governance. All
transactions between Maiden and AmTrust require review and approval by
the Maiden’s independent directors (Audit Committee).
• AmTrust announced various adjustments and material weaknesses in its
financial reporting. These are unrelated to Maiden or Maiden’s financial
statements.
• AmTrust received a clean unqualified opinion from its auditor KPMG Nothing
in AmTrust’s restatement is related to the premium or losses ceded to
Maiden.
• AmTrust has been defending itself against short sellers for a number of years
and unsubstantiated allegations put forward in recent news articles seem to
be recycled attacks from those looking to gain from a fall in AmTrust’s share
price.
• Related party transactions are disclosed in Maiden’s Annual Report on Form
10-K.
| Investor Presentation 8
Diverse Portfolio of Low Volatility
Underwriting Business
Majority of business made up of lower
volatility proportional reinsurance
Low-hazard, profitable workers’
compensation business
• 41% of last twelve months
gross premiums written
• Focus on small premium,
small-employer policies
• Significantly lower workers’
compensation loss ratio vs. industry
mainly reflecting AmTrust’s
specialization and leading position
in low-hazard segment
| Investor Presentation 9
LAST TWELVE MONTHS Q1 2017 GROSS PREMIUMS WRITTEN
Last Twelve Months* Gross Premiums Written = $2.891 billion
1. Workers' compensation 41%
2. Personal auto 13%
3. Commercial auto 10%
4. Other liability 10%
5. Warranty 9%
6. Fire, allied lines and inland
marine 5%
7. Commercial multi-peril 4%
8. Accident & health 3%
9. European hospital liab. 2%
10. Others 2%
11. Homeowners' 1%
1
2
3
4
5
6
7
8
9
10 11
* As of March 31, 2017
Unique Operating Platform and Business Model
Drive Highly Efficient Expense Relativities
| Investor Presentation 10
1 LTM = Last twelve months from March 31, 2017
2 Aspen, Arch, Axis, AWAC, Endurance, EverestRe, PartnerRe, RenRe, Validus, XL
Source: SNL and Company Financials
LTM1 1Q 2017 G&A Expense Ratio
Maiden: 2.6%
Selected P&C (Re)Insurers2: 14.9%
$1,298
$1,813
$2,001
$2,204
$2,507 $2,663
$2,831 $2,891
3.5% 3.5%
2.9% 2.9%
2.8%
2.7% 2.6% 2.6%
2010 2011 2012 2013 2014 2015 2016 LTM 1Q 2017
Gross Premiums Written ($mm) G&A Expense Ratio
551 554
644 696 705
724 782
830 892
1,031 1,039
108
208
360
360
360
363 363
215
215
126
126
126
150
315
315
480
315 315
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 1 Q
2 0 1 7
T
O
T
A
L
CAPI
T
A
L
(E
X
CLUDIN
G
A
O
CI
)
Common Equity excluding AOCI Senior Notes Trust Preferred Preference Shares
Access to capital markets has enabled Maiden to
fund growth with long-term and perpetual securities
• January 2009: 14% Junior Subordinated Debt (“TRUPS” or
“Trust Preferred”) Offering of $260 million to finance the acquisition
of GMAC RE with significant support from Founding Shareholders
(Called in January 2014)
• June 2011: 30-Year, 8.25% Senior Notes Offering of $107.5 million,
replacing a portion of 14% TRUPS (NYSE:MHNA - Redeemed June
15, 2016)
• March 2012: 30-Year, 8% Senior Notes Offering of $100 million
(NYSE:MHNB)*
• August 2012: 8.25% Non-Cumulative Perpetual Preferred Share
Offering of $150 million (NYSE:MHPRA)*
• October 2013: 7.25% Mandatory Convertible Preference Share
Offering of $165 million, supporting reinsurance business growth
(NASDAQ:MHLDO)* - Converted to common equity on September
15, 2016
• November 2013: 30-Year, 7.75% Senior Notes Offering of $152.5
million, proceeds used to redeem remaining 14% TRUPS on
January 15, 2014 (NYSE:MHNC)*
• November 2015: 7.125% Non-Cumulative Perpetual Preferred
Share Offering of $165 million (NYSE:MHPRC)*
• June 2016: 30-Year, 6.625% Senior Notes Offering of $110 million
(NYSE:MHLA)* Proceeds used to redeem $107.5 million 8.25%
Senior Notes.
• Ongoing exploration of shareholder friendly, diverse and alternative
sources of capital
*MHNC, MHLA, MHPRA and MHPRC preferred shares have 5 year call provisions at par. MHNB called and will be redeemed on June 27, 2017.
Balanced & Diversified Capital Structure
| Investor Presentation 11
BALANCED AND DIVERSIFIED CAPITAL STRUCTURE
(In $ millions)
BB+ or lower
3%
AAA
4%
AA
5%
A
28%
BBB
24%
US Agency
36%
Cash & Cash
Equiv.
4%U.S. Agency
33%
Corporate
Bonds
53% Other2
10%
Maiden Maintains a Conservative
Investment Portfolio
• Continued emphasis on investing in GSE and high-grade corporate debt; new money yield on fixed maturities
in 1Q 2017 was 3.36%; overall 1Q 2017 book yield (excluding cash equivalents) was 3.29%
• March 31, 2017 average duration of investable assets (including cash equivalents) of 4.86 years compared to
duration of liabilities of 3.77 years
• Profitable growth & positive cash flow have expanded invested assets that will enhance earnings
• Cash and cash equivalent position was $193.2 million as of March 31, 2017.
| Investor Presentation 12
INVESTABLE ASSETS1 COMPOSITION
1 Investable assets include cash and cash equivalents, fixed maturities, other investments and loan to related party
2 “Other” includes loan to related party, investment grade commercial mortgage backed securities, collateralized loan obligations, municipal bonds
and non-U.S. government bonds
3 As of March 31, 2017
4 Credit quality ratings assigned by Standard & Poor’s (or equivalent) and include those with a + or – modifier
Total: $5.1bn3
STRONG CREDIT QUALITY OF INVESTMENTS4
Total: $4.7bn3
$ 62.9
$ 71.6
$ 74.9
$ 81.2
$ 91.4
$ 117.2
$ 131.1
$ 145.9
$ 151.7
2009 2010 2011 2012 2013 2014 2015 2016 Q1
2017
Low-Volatility Business Model Supporting Asset
and Investment Income Growth
GROWING NET INVESTMENT INCOME ($MM) EXPANDING INVESTABLE ASSETS BASE ($MM)
**Investable assets at December 31, 2013 include net proceeds of $147.4 million from November 2013 Senior Note
offering. Maiden primarily utilized the proceeds of its Senior Notes offering in November 2013, as well as cash on hand,
to redeem the $152.5 million face value TRUPs on January 15, 2014.
| Investor Presentation 13
$ 2,088
$ 2,234
$ 2,494
$ 3,003
$ 3,552
$ 4,030
$ 4,628
$ 5,054 $ 5,093
2009 2010 2011 2012 2013** 2014 2015 2016 Q1
2017
Strategic Initiatives
Maiden capital solutions activity in Europe actively marketing and entertaining
numerous prospect quoting opportunities
– Opportunities under development in multiple global markets
– Currently actively marketing throughout Europe
Maiden IIS is continuing to develop OEM opportunities with additional
expansion under development
Payment protection insurance (PPI) European pipeline under development
Maiden Re team in U.S. continues to identify opportunities to expand existing
client relationships and customers
– AM Best rating upgrade to A rating to benefit competitive position, particularly US facultative casualty
– Boiler & Equipment product actively marketed
– Implementing predictive analytics underwriting tools for commercial auto and A&H
– Developing capital solutions model for U.S. similar to Maiden Bermuda approach in Europe
| Investor Presentation 14
Investment Opportunity
• Differentiated P&C reinsurance business model with focus
on low-volatility, predictable lines of business and strong long-lasting
client relationships
• Demonstrated predictable, stable and highly efficient operating
performance targeting ROACE* of 15% or greater
• Shareholder-friendly capital management
• Strong commitment to rewarding shareholders through dividends
• Well-positioned for continued disciplined growth; significant
opportunities to further enhance profitability
| Investor Presentation 15
*Please see the definition of non-GAAP financial measures on the final page of this presentation for additional important information.
Maiden Holdings, Ltd.
Appendix
• Targeted Operating Metrics
• Summary Balance Sheet
• Summary Income Statement
• Non-GAAP Financial Measures – Reconciliation
• Non-GAAP Financial Measures – Reconciliation ROACE
• Non-GAAP Financial Measures
| Investor Presentation 17 Appendix
Targets Achievable Over Time
| Investor Presentation 18
• Medium-term Operating ROACE* > 15%
• Risk adjusted underwriting profit
— G&A expense ratio < 4%
• NPW compounded annual growth rate of 10%+
• Core regional insurer client retention rate of > 85%
• Modeled annual aggregate exposure to cat events < annual net income
15% operating ROACE* attainable over medium-term with improved underwriting results,
growth in invested assets and current capital structure
*Please see the definition of non-GAAP financial measures on the final page of this presentation for additional important information.
TARGETED OPERATING METRICS
Appendix
2011 2012 2013 2014 2015 2016 Q1 2017
($ in millions)
Investable Assets
Investments $ 2,022.9 $ 2,621.6 $ 3,167.2 $ 3,469.5 $ 4,127.7 $ 4,736.9 $ 4,732.0
Cash & Cash Equivalents 303.0 213.8 217.2 392.5 332.5 149.5 193.2
Loan to Related Party 168.0 168.0 168.0 168.0 168.0 168.0 168.0
Total Investable Assets 2,493.9 3,003.4 3,552.4 4,030.0 4,628.2 5,054.4 5,093.2
Net Reinsurance Receivable 423.4 522.6 560.1 513.0 377.3 410.2 615.6
Deferred Acquisition Costs 248.4 270.7 304.9 372.5 397.5 424.6 472.5
Other Assets 229.4 341.5 296.0 248.6 300.6 363.1 375.7
Total Assets $ 3,395.1 $ 4,138.2 $ 4,713.4 $ 5,164.1 $ 5,703.6 $ 6,252.3 $ 6,557.0
Loss and LAE Reserve $ 1,398.4 $ 1,740.3 $ 1,957.8 $ 2,271.3 $ 2,510.1 $ 2,896.5 $ 2,991.6
Unearned Premiums 832.0 936.5 1,034.8 1,207.7 1,354.6 1,475.5 1,670.9
Senior Notes 107.5 207.5 360.0 360.0 349.9 351.4 351.5
Trust Preferred Securities 126.3 126.3 126.4 - - - -
Liability for securities purchased - - - - 4.0 - -
Other Liabilities 161.9 112.0 110.1 83.9 135.9 167.7 172.9
Total Liabilities 2,626.1 3,122.6 3,589.1 3,922.9 4,354.5 4,891.1 5,186.9
Equity 769.0 1,015.6 1,124.3 1,241.2 1,349.1 1,361.2 1,370.1
Total Liabilities & Equity $ 3,395.1 $ 4,138.2 $ 4,713.4 $ 5,164.1 $ 5,703.6 $ 6,252.3 $ 6,557.0
Book Value per Common Share $ 10.64 $ 11.96 $ 11.14 $ 12.69 $ 11.77 $ 12.12 $ 12.19
Growth in Total Investable Assets 11.6% 20.4% 18.3% 13.4% 14.8% 25.4% 0.8%
Ratio of Total Investable Assets to
Equity 324.3% 295.7% 316.0% 324.7% 343.1% 371.3% 371.7%
Summary Balance Sheet
| Investor Presentation 19 Appendix
*Senior notes from 2015 onwards are reported net of deferred issuance costs due to a change in U.S. GAAP
2011 2012 2013 2014 2015 2016 Q1 2017
($ in millions)
Gross Premiums Written $ 1,812.6 $ 2,001.0 $ 2,204.2 $ 2,507.4 $ 2,662.8 $ 2,831.3 $ 923.4
Net Premiums Written $ 1,723.5 $ 1,901.3 $ 2,096.3 $ 2,458.1 $ 2,514.1 $ 2,655.0 $ 900.5
Net Premiums Earned $ 1,552.4 $ 1,803.8 $ 2,000.9 $ 2,251.7 $ 2,429.1 $ 2,568.2 $ 709.5
Net Investment Income 74.9 81.2 91.4 117.2 131.1 145.9 42.2
Interest and Amortization Expenses 34.1 36.4 39.8 30.0 29.1 28.2 6.9
Net Income attributable to Maiden
common shareholders $ 28.5 $ 46.5 $ 87.9 $ 77.1 $ 100.1 $ 15.2 $ 20.5
Non-GAAP Operating Earnings * $ 69.6 $ 48.5 $ 87.5 $ 117.7 $ 107.2 $ 17.3 $ 22.6
Non-GAAP Operating EPS * $ 0.96 $ 0.66 $ 1.18 $ 1.53 $ 1.39 $ 0.22 $ 0.26
Non-GAAP Operating ROE * 9.2% 5.9% 10.5% 13.6% 12.0% 1.9% 8.7%
Loss Ratio 66.6% 69.5% 67.0% 66.1% 66.9% 70.6% 67.4%
Expense Ratio 31.5% 30.0% 30.5% 31.9% 32.4% 32.6% 33.5%
Combined Ratio 98.1% 99.5% 97.5% 98.0% 99.3% 103.2% 100.9%
Summary Income Statement
| Investor Presentation 20
*2011 Includes $9.5 million or 0.6% in loss ratio and combined ratio impact from U.S. thunderstorm and tornado activity in 2Q11.
2012 includes $31.1 million or 1.7% in loss ratio and combined ratio impact from Superstorm Sandy in 4Q12.
2016 includes $108.9 million reserve charge taken in 4Q16.
Please see the non-GAAP reconciliation table in the appendix of this presentation for additional important information.
Appendix
Non-GAAP Financial Measures Reconciliation
| Investor Presentation 21
Note: Please see the definition of non-GAAP financial measures on final page for additional important information.
Appendix
2011 2012 2013 2014 2015 2016 Q1 2017
($ in millions)
Net income $ 28.5 $ 50.2 $ 102.8 $ 101.5 $ 124.2 $ 48.1 $ 26.5
(Income) loss attributable to non-controlling interest - (0.1) (0.1) (0.1) 0.2 0.8 0.0
Dividends on preference shares - (3.6) (14.8) (24.3) (24.3) (33.7) (6.0)
Add (subtract):
Net realized and unrealized (gains) losses on investment (0.5) (1.9) (3.6) (1.2) (2.5) (6.8) (0.9)
Net impairment losses recognized in earnings - - - 2.4 1.1 - -
Foreign exchange and other (gains) losses (0.3) (1.6) (2.8) (4.2) (7.8) (11.6) 1.9
Amortization of intangible assets 5.0 4.4 3.8 3.3 2.8 2.5 0.5
Divested excess and surplus business and NGHC run-off - - - 10.4 12.3 14.5 0.3
Junior subordinated debt repurchase expense 15.1 - - - - - -
Accelerated amortization of debt discount and issuance cost 20.3 - - 28.2 - 2.3
Interest expense incurred related to 2013 Senior Notes prior to
actual redemption of the junior subordinated debt - - 1.2 0.5 - - -
Non-recurring general and administrative expenses relating to
IIS Acquisition (2010) 0.2 - - - - - -
Non-cash deferred tax expense 1.3 1.1 1.0 1.2 1.2 1.2 0.3
Non-GAAP Operating earnings $ 69.6 $ 48.5 $ 87.5 $ 117.7 $ 107.2 $ 17.3 $ 22.6
Earnings per common share:
Basic earnings per share $ 0.40 $ 0.64 $ 1.21 $ 1.06 $ 1.36 $ 0.20 $ 0.24
Diluted earnings per share $ 0.39 $ 0.64 $ 1.18 $ 1.04 $ 1.31 $ 0.19 $ 0.23
Non-GAAP Operating earnings per common share:
Non-GAAP basic operating earnings per share $ 0.97 $ 0.67 $ 1.21 $ 1.61 $ 1.46 $ 0.22 $ 0.26
Non-GAAP diluted operating earnings per share $ 0.96 $ 0.66 $ 1.18 $ 1.53 $ 1.39 $ 0.22 $ 0.26
Non-GAAP Financial Measures Reconciliation -
ROACE
| Investor Presentation 22
Note: Please see the definition of non-GAAP financial measures on final page for additional important information.
Appendix
2011 2012 2013 2014 2015 2016 Q1 2017
($ in millions)
Net income attributable to Maiden common shareholders $ 28.5 $ 46.5 $ 87.9 $ 77.1 $ 100.1 $ 15.3 $ 20.5
Non-GAAP Net operating earnings attributable to Maiden common
shareholders 69.6 48.5 87.5 117.7 107.2 17.3 22.6
Opening common shareholders' equity 750.2 768.6 865.2 808.8 925.7 867.8 1,045.8
Ending common shareholders' equity 768.6 865.2 808.8 925.7 867.8 1,045.8 1,054.8
Average common shareholders' equity 759.4 816.9 837.0 867.3 896.8 923.0 1,050.3
Annualized return on average common equity 3.8% 5.7% 10.5% 8.9% 11.2% 1.6% 7.9%
Annualized non-GAAP operating return on average common equity 9.2% 5.9% 10.5% 13.6% 12.0% 1.9% 8.7%
Non-GAAP Financial Measures
| Investor Presentation 23
In presenting the Company’s results, management has included and discussed in this presentation non-GAAP financial measures within the meaning of
Regulation G as promulgated by the U.S. Securities and Exchange Commission. Management believes that these non-GAAP measures, which may be
defined differently by other companies, better explain the company’s results of operations in a manner that allows for a more complete understanding of
the underlying trends in the Company’s business. However, these measures should not be viewed as a substitute for those determined in accordance with
U.S. generally accepted accounting principles (“U.S. GAAP”).
Operating Earnings and Operating Earnings per Common Share: In addition to presenting net income determined in accordance with U.S. GAAP, we
believe that showing operating earnings enables investors, analysts, rating agencies and other users of our financial information to more easily analyze
our results of operations in a manner similar to how management analyzes our underlying business performance. Operating earnings should not be
viewed as a substitute for U.S. GAAP net income. Operating earnings are an internal performance measure used in the management of our operations
and represents operating results excluding, as applicable on a recurring basis, 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. We exclude net realized and unrealized gains
or losses on investment and foreign exchange and other gains or losses as we believe that both are heavily influenced in part by market opportunities and
other factors. We do not believe amortization of intangible assets are representative of our ongoing business. We believe all of these amounts are largely
independent of our business and underwriting process and including them distorts the analysis of trends in our operations. We also exclude certain non-
recurring expenditures that are material to understanding our results of operations. During the third quarter of 2014 and 2015, we exclude impairment
losses. Beginning in the second quarter of 2014, we exclude our divested E&S business as it has been in run-off for over one year following the sale to
Brit effective May 1, 2013. Similarly, beginning in the fourth quarter of 2014, we exclude results from NGHC as this business segment has been in run-off
for one year following the mutual cancellation on a run-off basis of our contract. Furthermore, in Q1 of 2014 and Q2 2011, we exclude the accelerated
amortization of the Junior Subordinated Debt discount and the write off of the associated issuance costs. In Q2 2016, we also excluded the write off of the
amortized issuance cost related to the 8.2% Senior Notes redeemed in June 2016. In Q1 2014 and Q4 2013, we also exclude the interest expense
incurred on our 2013 Senior Notes prior to the redemption of the outstanding Junior Subordinated Debt given the one time nature of the additional funding
cost. For 2011 we exclude transaction expenses related to the IIS Acquisition as these are non-recurring.
Operating Return on Average Common Equity ("Operating ROACE"): Management uses operating return on average common shareholders' equity as a
measure of profitability that focuses on the return to Maiden common shareholders. It is calculated using operating earnings available to common
shareholders (as defined above) divided by average Maiden common shareholders' equity. Average common shareholders’ equity for the twelve months
ended December 31, 2016 is adjusted for the period the Mandatory Convertible Preference Shares - Series B are outstanding (prior to mandatory
conversion date of September 15, 2016). Management has set as a target a long-term average of 15% Operating ROACE, which management believes
provides an attractive return to shareholders for the risk assumed from our business.
See the previous two pages of this presentation for a reconciliation of non-GAAP measures used in this presentation to their most directly comparable
GAAP measures.
Appendix