x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Bermuda
(State
or other jurisdiction of
incorporation
or organization)
|
98-0570192
(IRS
Employer
Identification
No.)
|
131 Front Street,
Hamilton, Bermuda
(Address
of principal executive offices)
|
HM12
(Zip
Code)
|
(441)
292-7090
(Registrant’s
telephone number, including area
code)
|
Large
accelerated filer o
|
Accelerated
filer ý
|
Non-accelerated
filer o (Do not check if
a smaller reporting company)
|
Smaller
reporting company o
|
Page
|
||
PART
I - Financial Information
|
||
Item
1. Financial Statements
|
3
|
|
Condensed
Consolidated Balance Sheets as of March 31, 2010 (unaudited) and December
31, 2009
|
3
|
|
Condensed
Consolidated Statement of Income for the three months ended March 31, 2010
and 2009 (unaudited)
|
4
|
|
Condensed
Consolidated Statement of Changes in Shareholders’ Equity for the three
months ended March
31, 2010 and 2009 (unaudited)
|
5
|
|
Condensed
Consolidated Statement of Cash Flows for the three months ended March 31,
2010 and 2009
(unaudited)
|
6
|
|
Notes
to Condensed Consolidated Financial Statements
|
7
|
|
Item
2. Management’s Discussion and Analysis of Financial Condition and
Results of Operations
|
24
|
|
Item
3. Quantitative and Qualitative Disclosures About Market
Risk
|
41
|
|
Item
4. Controls and Procedures
|
42
|
|
PART
II - Other Information
|
||
Item
5. Other Information – Submission of Matters to a Vote of Security
Holders
|
43
|
|
Item
6. Exhibits
|
44
|
|
Signatures
|
45
|
March
31, 2010
(Unaudited)
|
December
31, 2009
(Audited)
|
|||||||
ASSETS
|
|
|
||||||
Investments:
|
|
|
||||||
Fixed
maturities, available for sale, at fair value
(Amortized cost 2010:
$1,669,433; 2009: $1,623,382)
|
$
|
1,726,472
|
$
|
1,661,692
|
||||
Other
investments, at fair value (Cost 2010: $ 5,681;
2009:$5,684)
|
5,601
|
5,549
|
||||||
Total
investments
|
1,732,073
|
1,667,241
|
||||||
Cash
and cash equivalents
|
62,743
|
107,396
|
||||||
Restricted
cash and cash equivalents
|
117,639
|
144,944
|
||||||
Accrued
investment income
|
12,582
|
11,405
|
||||||
Reinsurance
balances receivable (includes $87,326 and $43,382 from related party in
2010 and 2009, respectively)
|
299,237
|
208,495
|
||||||
Prepaid
reinsurance
|
26,268
|
28,752
|
||||||
Reinsurance
recoverable on unpaid losses
|
16,464
|
11,984
|
||||||
Loan
to related party
|
167,975
|
167,975
|
||||||
Deferred
commission and other acquisition costs (includes $95,244 and $85,979 from
related party in 2010 and 2009, respectively)
|
178,254
|
172,983
|
||||||
Other
assets
|
12,464
|
11,818
|
||||||
Intangible
assets, net
|
49,832
|
51,284
|
||||||
Goodwill
|
52,617
|
52,617
|
||||||
Total
assets
|
$
|
2,728,148
|
$
|
2,636,894
|
||||
LIABILITIES
|
|
|
||||||
Reserve
for loss and loss adjustment expenses (includes $195,683 and $174,046 from
related party in 2010 and 2009, respectively)
|
$
|
1,048,930
|
$
|
1,006,320
|
||||
Unearned
premiums (includes $292,030 and $264,751 from related party in 2010 and
2009, respectively)
|
629,940
|
583,478
|
||||||
Accrued
expenses and other liabilities
|
47,864
|
60,044
|
||||||
Securities
sold under agreements to repurchase, at contract value
|
76,324
|
95,401
|
||||||
Junior
subordinated debt
|
215,140
|
215,125
|
||||||
Total
liabilities
|
2,018,198
|
1,960,368
|
||||||
Commitments
and Contingencies
|
|
|||||||
Shareholders’
equity
|
|
|||||||
Common
shares ($0.01 par
value;71,254,093 and 71,253,625 shares issued in 2010 and 2009,
respectively;70,291,757 and 70,291,289 shares outstanding in 2010 and
2009, respectively)
|
713
|
713
|
||||||
Additional
paid-in capital
|
576,298
|
576,086
|
||||||
Accumulated
other comprehensive income
|
56,959
|
32,747
|
||||||
Retained
earnings
|
79,781
|
70,781
|
||||||
Treasury
shares, at cost (2010
and 2009: 962,336 shares)
|
(3,801
|
)
|
(3,801
|
)
|
||||
Total
shareholders’ equity
|
709,950
|
676,526
|
||||||
Total
liabilities and shareholders’ equity
|
$
|
2,728,148
|
$
|
2,636,894
|
For
the
Three
Months
Ended
March
31, 2010
|
For
the
Three
Months
Ended
March
31, 2009
|
|||||||
Revenues:
|
||||||||
Gross
premiums written
|
$ | 327,382 | $ | 336,548 | ||||
Net
premiums written
|
311,291 | 336,548 | ||||||
Change
in unearned premiums
|
(47,362 | ) | (126,456 | ) | ||||
Net
earned premium
|
263,929 | 210,092 | ||||||
Net
investment income
|
17,581 | 14,259 | ||||||
Net
realized investment gains (losses)
|
312 | (1,930 | ) | |||||
Total
revenues
|
281,822 | 222,421 | ||||||
Expenses:
|
||||||||
Loss
and loss adjustment expenses
|
170,285 | 146,288 | ||||||
Commission
and other acquisition expenses
|
77,396 | 46,631 | ||||||
Other operating
expenses
|
8,552 | 7,535 | ||||||
Subordinated
debt interest expense
|
9,115 | 7,090 | ||||||
Amortization
of intangible assets
|
1,452 | 1,564 | ||||||
Foreign
exchange loss
|
1,153 | 213 | ||||||
Total
expenses
|
267,953 | 209,321 | ||||||
Income
before income taxes
|
13,869 | 13,100 | ||||||
Income
taxes:
|
||||||||
Current
tax expense
|
— | — | ||||||
Deferred
tax expense
|
300 | — | ||||||
Income
tax expense
|
300 | — | ||||||
Net
income
|
$ | 13,569 | $ | 13,100 | ||||
Basic
and diluted earnings per common share
|
$ | 0.19 | $ | 0.19 | ||||
Dividends
declared per common share
|
$ | 0.065 | $ | 0.06 |
For the Three
Months Ended
March 31,
2010
|
For the Three
Months Ended
March 31,
2009
|
|||||||
Net
realized investment gains (losses):
|
||||||||
Total
other-than-temporary impairment losses
|
$
|
—
|
$
|
—
|
||||
Portion
of loss recognized in other comprehensive income
|
—
|
—
|
||||||
Net
impairment losses recognized in earnings
|
—
|
—
|
||||||
Other
net realized gain (loss) on investments
|
312
|
(1,930
|
)
|
|||||
Net
realized investment gains (losses)
|
$
|
312
|
$
|
(1,930
|
)
|
For
the
Three
Months
Ended
March
31, 2010
|
For
the
Three
Months
Ended
March
31, 2009
|
|||||||
Common
shares
|
|
|
||||||
Balance – beginning
of period
|
$ | 713 | $ | 596 | ||||
Exercise
of options and issuance of shares, net
|
— | 117 | ||||||
Balance – end
of period
|
713 | 713 | ||||||
Additional
paid-in capital
|
||||||||
Balance – beginning
of period
|
576,086 | 530,519 | ||||||
Exercise
of options and issuance of shares, net
|
2 | 44,928 | ||||||
Share
based compensation
|
210 | 159 | ||||||
Balance – end
of period
|
576,298 | 575,606 | ||||||
Accumulated
other comprehensive income (loss)
|
||||||||
Balance – beginning
of period
|
32,747 | (44,499 | ) | |||||
Net
unrealized gains (losses) on securities
|
24,212 | (16,486 | ) | |||||
Balance – end
of period
|
56,959 | (60,985 | ) | |||||
Retained
earnings
|
||||||||
Balance – beginning
of period
|
70,781 | 26,944 | ||||||
Net
income
|
13,569 | 13,100 | ||||||
Dividends
on common shares
|
(4,569 | ) | (4,217 | ) | ||||
Balance – end
of period
|
79,781 | 35,827 | ||||||
Treasury
shares
|
||||||||
Balance – beginning
of period
|
(3,801 | ) | (3,801 | ) | ||||
Shares
repurchased
|
— | — | ||||||
Balance – end
of period
|
(3,801 | ) | (3,801 | ) | ||||
Total
Shareholders’ Equity
|
$ | 709,950 | $ | 547,360 | ||||
Comprehensive
income (loss)
|
||||||||
Net
income
|
$ | 13,569 | $ | 13,100 | ||||
Other
comprehensive income (loss)
|
24,212 | (16,486 | ) | |||||
Comprehensive
income (loss)
|
$ | 37,781 | $ | (3,386 | ) | |||
Disclosure
regarding net unrealized gains (losses)
|
||||||||
Unrealized
holding gains (losses) during the period
|
$ | 24,524 | $ | (18,416 | ) | |||
Adjustment
for reclassification of realized (gains) losses and other-than-temporary
losses recognized in net income
|
(312 | ) | 1,930 | |||||
Net
unrealized gains (losses) on securities
|
$ | 24,212 | $ | (16,486 | ) |
For
the
Three
Months
Ended
March
31, 2010
|
For
the
Three
Months
Ended
March
31, 2009
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$ | 13,569 | $ | 13,100 | ||||
Adjustments
to reconcile net income to net cash (used in) provided by operating
activities:
|
||||||||
Depreciation
and amortization of intangibles
|
1,749 | 1,636 | ||||||
Net
realized (gain) loss on sales of investments
|
(312 | ) | 1,930 | |||||
Foreign
exchange loss on revaluation
|
1,153 | 213 | ||||||
Amortization
of share-based compensation expense, bond premium and discount and
subordinated debt discount
|
(1,334 | ) | (927 | ) | ||||
Changes
in assets - (increase) decrease:
|
||||||||
Reinsurance
balances receivable
|
(87,416 | ) | (110,157 | ) | ||||
Prepaid
reinsurance
|
2,484 | — | ||||||
Accrued
investment income
|
(1,177 | ) | 840 | |||||
Deferred
commission and other acquisition costs
|
(5,271 | ) | (48,146 | ) | ||||
Other
assets
|
(270 | ) | (40 | ) | ||||
Changes
in liabilities – increase (decrease):
|
||||||||
Loss
and loss adjustment expenses, net
|
38,252 | 28,160 | ||||||
Unearned
premiums
|
46,462 | 126,457 | ||||||
Accrued
expenses and other liabilities
|
(10,717 | ) | 1,763 | |||||
Net
cash (used in) provided by operating activities
|
(2,828 | ) | 14,829 | |||||
Cash
flows from investing activities:
|
||||||||
Purchases
of investments:
|
||||||||
Purchases
of fixed-maturity securities
|
(205,443 | ) | (222,323 | ) | ||||
Purchases
of other investments
|
— | (138 | ) | |||||
Sale
of investments:
|
||||||||
Proceeds
from sales of fixed-maturity securities
|
37,737 | 85,769 | ||||||
Proceeds
from maturities and calls of fixed-maturity securities
|
123,558 | 19,423 | ||||||
Proceeds
from redemption of other investments
|
3 | 22 | ||||||
Decrease
in restricted cash and cash equivalents
|
27,305 | 46,694 | ||||||
Purchase
of capital assets
|
(673 | ) | (381 | ) | ||||
Net
cash used in investing activities
|
(17,513 | ) | (70,934 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Repurchase
agreements, net
|
(19,077 | ) | (232,646 | ) | ||||
Common
share issuance
|
2 | 117 | ||||||
Junior
subordinated debt issuance
|
— | 260,000 | ||||||
Junior
subordinated debt issuance cost
|
— | (4,342 | ) | |||||
Dividend
paid
|
(4,569 | ) | (3,515 | ) | ||||
Net
cash (used in) provided by financing activities
|
(23,644 | ) | 19,614 | |||||
Effect
of exchange rate changes on foreign currency cash
|
(668 | ) | (213 | ) | ||||
Net
decrease in cash and cash equivalents
|
(44,653 | ) | (36,704 | ) | ||||
Cash
and cash equivalents, beginning of period
|
107,396 | 131,897 | ||||||
Cash
and cash equivalents, end of period
|
$ | 62,743 | $ | 95,193 | ||||
Supplemental
information about non-cash investing and financing
activities
|
||||||||
Discount
on junior subordinated debt
|
$ | — | $ | (44,928 | ) | |||
Additional
paid in Capital
|
— | 44,928 |
March
31, 2010
|
Original
or
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
Fixed
Maturities:
|
|
|
|
|
||||||||||||
U.S. treasury
bonds
|
$ | 39,228 | $ | 211 | $ | (180 | ) | $ | 39,259 | |||||||
U.S.
agency bonds – mortgage and asset-backed
|
814,465 | 21,396 | (937 | ) | 834,924 | |||||||||||
U.S.
agency bonds – other
|
189,913 | 4,818 | (1 | ) | 194,730 | |||||||||||
Corporate
fixed maturities
|
604,449 | 42,920 | (12,069 | ) | 635,300 | |||||||||||
Municipal
bonds
|
21,378 | 881 | — | 22,259 | ||||||||||||
Total
available for sale fixed maturities
|
1,669,433 | 70,226 | (13,187 | ) | 1,726,472 | |||||||||||
Other
investments
|
5,681 | — | (80 | ) | 5,601 | |||||||||||
Total
investments
|
$ | 1,675,114 | $ | 70,226 | $ | (13,267 | ) | $ | 1,732,073 |
December
31, 2009
|
Original
or
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
Fixed
Maturities:
|
|
|
|
|
||||||||||||
U.S. treasury
bonds
|
$ | 39,297 | $ | 224 | $ | (283 | ) | $ | 39,238 | |||||||
U.S.
agency bonds – mortgage and asset-backed
|
779,400 | 17,504 | (2,321 | ) | 794,583 | |||||||||||
U.S.
agency bonds – other
|
217,192 | 4,772 | (447 | ) | 221,517 | |||||||||||
Corporate
fixed maturities
|
564,750 | 37,985 | (20,071 | ) | 582,664 | |||||||||||
Municipal
bonds
|
22,743 | 947 | — | 23,690 | ||||||||||||
Total
available for sale fixed maturities
|
1,623,382 | 61,432 | (23,122 | ) | 1,661,692 | |||||||||||
Other
investments
|
5,684 | — | (135 | ) | 5,549 | |||||||||||
Total
investments
|
$ | 1,629,066 | $ | 61,432 | $ | (23,257 | ) | $ | 1,667,241 |
As
at March 31, 2010
|
Amortized
Cost
|
Fair
Value
|
%
of Total
Fair
Value
|
|||||||||
Maturity
|
|
|
|
|||||||||
Due
in one year or less
|
$
|
168,341
|
$
|
171,972
|
9.96
|
%
|
||||||
Due
after one year through five years
|
181,342
|
187,816
|
10.88
|
%
|
||||||||
Due
after five years through ten years
|
415,670
|
433,300
|
25.10
|
%
|
||||||||
Due
after ten years
|
89,615
|
98,460
|
5.70
|
%
|
||||||||
|
854,968
|
891,548
|
51.64
|
%
|
||||||||
Mortgage
and asset-backed securities
|
814,465
|
834,924
|
48.36
|
%
|
||||||||
Total
|
$
|
1,669,433
|
$
|
1,726,472
|
100.00
|
%
|
Less
than 12 Months
|
12
Months or More
|
Total
|
||||||||||||||||||||||
March
31, 2010
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
Available-for-sale
securities:
|
|
|
|
|
|
|
||||||||||||||||||
U.S. treasury
bonds
|
$ | 7,615 | $ | (180 | ) | $ | — | $ | — | $ | 7,615 | $ | (180 | ) | ||||||||||
U.S.
agency bonds – mortgage and asset backed
|
181,777 | (931 | ) | 31,417 | (6 | ) | 213,194 | (937 | ) | |||||||||||||||
U.S.
agency bonds - other
|
2,004 | (1 | ) | — | — | 2,004 | (1 | ) | ||||||||||||||||
Corporate
fixed maturities
|
40,527 | (621 | ) | 192,120 | (11,448 | ) | 331,851 | (12,069 | ) | |||||||||||||||
|
$ | 231,923 | $ | (1,733 | ) | $ | 223,537 | $ | (11,454 | ) | $ | 455,460 | $ | (13,187 | ) | |||||||||
Other
investments
|
$ | — | $ | — | $ | 4,919 | $ | (80 | ) | $ | 4,919 | $ | (80 | ) | ||||||||||
Total
temporarily impaired available-for-sale securities and other
investments
|
$ | 231,923 | $ | (1,733 | ) | $ | 228,456 | $ | (11,534 | ) | $ | 460,379 | $ | (13,267 | ) |
Less
than 12 Months
|
12
Months or More
|
Total
|
||||||||||||||||||||||
December
31, 2009
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
U.S. treasury
bonds
|
$ | 8,632 | $ | (283 | ) | $ | — | $ | — | $ | 8,632 | $ | (283 | ) | ||||||||||
U.S.
agency bonds – mortgage and asset-backed
|
235,013 | (2,319 | ) | 694 | (2 | ) | 235,707 | (2,321 | ) | |||||||||||||||
U.S.
agency bonds – other
|
59,511 | (447 | ) | — | — | 59,511 | (447 | ) | ||||||||||||||||
Corporate
fixed maturities
|
11,687 | (619 | ) | 193,676 | (19,452 | ) | 205,363 | (20,071 | ) | |||||||||||||||
|
$ | 314,843 | $ | (3,668 | ) | $ | 194,370 | $ | (19,454 | ) | $ | 509,213 | $ | (23,122 | ) | |||||||||
Other
investments
|
$ | — | $ | — | $ | 4,864 | $ | (135 | ) | $ | 4,864 | $ | (135 | ) | ||||||||||
Total
temporarily impaired available-for-sale securities and other
investments
|
$ | 314,843 | $ | (3,668 | ) | $ | 199,234 | $ | (19,589 | ) | $ | 514,077 | $ | (23,257 | ) |
For
the Three Months Ended March 31, 2010
|
Gross
Gains
|
Gross
Losses
|
Net
|
|||||||||
Fixed
maturity securities
|
$ | 312 | $ | — | $ | 312 | ||||||
Other
investments
|
— | — | — | |||||||||
Net
realized gains (losses)
|
$ | 312 | $ | — | $ | 312 |
For
the Three Months Ended March 31, 2009
|
Gross
Gains
|
Gross
Losses
|
Net
|
|||||||||
Fixed
maturity securities
|
$
|
1,755
|
$
|
(3,670
|
)
|
$
|
(1,915
|
)
|
||||
Other
investments
|
—
|
(15
|
)
|
(15
|
)
|
|||||||
Net
realized gains (losses)
|
$
|
1,755
|
$
|
(3,685
|
)
|
$
|
(1,930
|
)
|
March
31, 2010
|
March
31, 2009
|
|||||||
Fixed
maturities
|
$
|
57,039
|
$
|
(60,452
|
)
|
|||
Other
investments
|
(80
|
)
|
(533
|
)
|
||||
Total
net unrealized gain (loss)
|
56,959
|
(60,985
|
)
|
|||||
Deferred
income tax expense
|
—
|
—
|
||||||
Net
unrealized losses, net of deferred income tax
|
$
|
56,959
|
$
|
(60,985
|
)
|
|||
Change
in unrealized gain (loss), net of deferred income tax
|
$
|
24,212
|
$
|
(16,486
|
)
|
March
31,
2010 |
December
31,
2009 |
|||||||
Restricted
cash – third party agreements
|
$ | 106,444 | $ | 133,029 | ||||
Restricted
cash – related party agreements
|
10,979 | 11,485 | ||||||
Restricted
cash – U.S. state regulatory authorities
|
216 | 430 | ||||||
Total
restricted cash
|
117,639 | 144,944 | ||||||
Restricted
investments – in Trust for third party agreements at fair value
(amortized cost:
2010 – $914,105; 2009 – $1,011,582)
|
946,098 | 1,022,337 | ||||||
Restricted
investments – in Trust for related party agreements at fair
value (amortized cost: 2010 – $210,275;
2009 – $177,537)
|
235,110 | 195,474 | ||||||
Restricted
investments – in Trust for U.S. state regulatory authorities
(amortized cost: 2010 – $13,316;
2009 – $13,032)
|
13,190 | 12,867 | ||||||
Total
restricted investments
|
1,194,398 | 1,230,678 | ||||||
Total
restricted cash and investments
|
$ | 1,312,037 | $ | 1,375,622 |
·
|
Level
1 - Unadjusted quoted market prices for identical assets or liabilities in
active markets that the Company has the ability to
access.
|
|
·
|
Level
2 - Quoted prices for similar assets or liabilities in active markets;
quoted prices for identical or similar assets or liabilities in inactive
markets; or valuations based on models where the significant inputs are
observable (e.g., interest rates, yield curves, prepayment speeds, default
rates, loss severities, etc.) or can be corroborated by observable market
data.
|
·
|
Level
3 - Valuations based on models where significant inputs are not
observable. The unobservable inputs reflect the Company’s own assumptions
about the assumptions that market participants would
use.
|
March
31, 2010
|
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
|
$ | 39,259 | $ | — | $ | — | $ | 39,259 | ||||||||
U.S.
agency bonds – mortgage and asset - backed
|
— | 834,924 | — | 834,924 | ||||||||||||
U.S.
agency bonds – other
|
— | 194,730 | — | 194,730 | ||||||||||||
Corporate
fixed maturities
|
— | 635,300 | — | 635,300 | ||||||||||||
Municipal
bonds
|
— | 22,259 | — | 22,259 | ||||||||||||
Other
investments
|
— | — | 5,601 | 5,601 | ||||||||||||
Total
|
$ | 39,259 | $ | 1,687,213 | $ | 5,601 | $ | 1,732,073 | ||||||||
As
a percentage of total assets
|
1.4 | % | 61.9 | % | 0.2 | % | 63.5 | % | ||||||||
Liabilities
|
||||||||||||||||
Securities
sold under agreements to repurchase
|
$ | — | $ | 76,324 | $ | — | $ | 76,324 | ||||||||
As
a percentage of total liabilities
|
— | 3.8 | % | — | 3.8 | % |
December
31, 2009
|
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
|
$ | 39,238 | $ | — | $ | — | $ | 39,238 | ||||||||
U.S.
agency bonds – mortgage and asset-backed
|
— | 794,583 | — | 794,583 | ||||||||||||
U.S.
agency bonds – other
|
— | 221,517 | — | 221,517 | ||||||||||||
Corporate
fixed maturities
|
— | 582,664 | — | 582,664 | ||||||||||||
Municipal
bonds
|
— | 23,690 | — | 23,690 | ||||||||||||
Other
investments
|
— | — | 5,549 | 5,549 | ||||||||||||
Total
|
$ | 39,238 | $ | 1,622,454 | $ | 5,549 | $ | 1,667,241 | ||||||||
As
a percentage of total assets
|
1.5 | % | 61.5 | % | 0.2 | % | 63.2 | % | ||||||||
Liabilities
|
||||||||||||||||
Securities
sold under agreements to repurchase
|
$ | — | $ | 95,401 | $ | — | $ | 95,401 | ||||||||
As
a percentage of total liabilities
|
— | 4.9 | % | — | 4.9 | % |
Three Months
Ended
March
31, 2010
|
Three Months
Ended
March
31, 2009
|
|||||||
Balance at
beginning of period
|
$ | 5,549 | $ | 5,291 | ||||
Net
realized and unrealized gains – included in net
income
|
— | — | ||||||
Net
realized and unrealized losses – included in net income
|
— | (15 | ) | |||||
Change
in net unrealized gains – included in other comprehensive income
(loss)
|
— | — | ||||||
Change
in net unrealized losses – included in other comprehensive income
(loss)
|
55 | (6 | ) | |||||
Purchases
|
— | 138 | ||||||
Sales
and redemptions
|
(3 | ) | (22 | ) | ||||
Transfers
into Level 3
|
— | — | ||||||
Transfers
out of Level 3
|
— | — | ||||||
Balance
at end of period
|
$ | 5,601 | $ | 5,386 | ||||
Level
3 gains (losses) included in net income attributable to the change in
unrealized gains (losses) relating to assets held at the reporting
date
|
$ | — | $ | (15 | ) |
March
31, 2010
|
Gross
|
Accumulated
Amortization
|
Net
|
Useful
Life
|
|||||||||
Goodwill
|
$ | 52,617 | $ | — | $ | 52,617 |
Indefinite
|
||||||
State
licenses
|
7,727 | — | 7,727 |
Indefinite
|
|||||||||
Customer
relationships
|
51,400 | (9,295 | ) | 42,105 |
15 years double declining
|
||||||||
Net
balance
|
$ | 111,744 | $ | (9,295 | ) | $ | 102,449 |
December
31, 2009
|
Gross
|
Accumulated
Amortization
|
Net
|
Useful
Life
|
|||||||||
Goodwill
|
$
|
52,617
|
$
|
—
|
$
|
52,617
|
Indefinite
|
||||||
State
licenses
|
7,727
|
—
|
7,727
|
Indefinite
|
|||||||||
Customer
relationships
|
51,400
|
(7,843
|
)
|
43,557
|
15 years double declining
|
||||||||
Net
balance
|
$
|
111,744
|
$
|
(7,843
|
)
|
$
|
103,901
|
March
31,
2010 |
||||
2010
|
$ | 4,356 | ||
2011
|
5,033 | |||
2012
|
4,362 | |||
2013
|
3,781 | |||
2014
|
3,276 |
Three
months
ended
March
31, 2010
|
Three
months
ended
March
31, 2009
|
|||||||
Net
income available to common shareholders
|
$
|
13,569
|
$
|
13,100
|
||||
Weighted
average number of common shares outstanding - basic
|
70,291,312
|
67,687,664
|
||||||
Potentially
dilutive securities:
|
||||||||
Warrants
|
—
|
—
|
||||||
Share
options
|
485,482
|
250,126
|
||||||
Weighted
average number of common shares outstanding - diluted
|
70,776,794
|
67,937,790
|
||||||
Basic
and diluted earnings per common share:
|
$
|
0.19
|
$
|
0.19
|
Assumptions:
|
March
31,
2010 |
|||
Volatility
|
29.8-46.0
|
%
|
||
Risk-free
interest rate
|
2.36-3.30
|
%
|
||
Weighted
average expected lives in years
|
5-6.1
years
|
|||
Forfeiture
rate
|
0
|
%
|
||
Dividend
yield rate
|
1-5.39
|
%
|
Three
Months Ended March 31, 2010
|
Number
of
Share
Options |
Weighted
Average Exercise Price |
Weighted
Average Remaining Contractual Term |
|||||||||
Outstanding,
December 31, 2009
|
2,036,542 | $ | 5.79 |
8.86
years
|
||||||||
Granted
|
300,000 | 7.25 |
9.93
years
|
|||||||||
Exercised
|
(468 | ) | 3.28 | — | ||||||||
Cancelled
|
(250 | ) | 3.28 | — | ||||||||
Outstanding,
March 31, 2010
|
2,335,824 | $ | 5.98 |
8.78
years
|
Three
Months Ended March 31, 2009
|
Number
of
Share
Options |
Weighted
Average Exercise Price |
Weighted
Average Remaining Contractual Term |
|||||||||
Outstanding,
December 31, 2008
|
1,519,834 | $ | 10.00 |
9.44
years
|
||||||||
Granted
|
150,000 | 4.39 |
9.91
years
|
|||||||||
Exercised
|
— | — | — | |||||||||
Cancelled
|
(200,000 | ) | 8.32 | — | ||||||||
Outstanding,
March 31, 2009
|
1,469,834 | $ | 5.55 |
9.31
years
|
·
|
by
lending funds in the amount of $167,975 as at March 31, 2010 and December
31, 2009 to AII pursuant to a loan agreement entered into between those
parties. This loan is carried at cost. The amount of collateral Maiden
Insurance is required to maintain, which is determined quarterly, equals
its proportionate share of (a) the amount of ceded paid losses for which
AII is responsible to such AmTrust subsidiaries but has not yet paid, (b)
the amount of ceded loss reserves (including ceded reserves for claims
reported but not resolved and losses incurred but not reported) for which
AII is responsible to AmTrust subsidiaries, and (c) the amount of ceded
reserves for unearned premiums ceded by AmTrust subsidiaries to AII.
Pursuant to the Master Agreement, AmTrust has agreed to cause AII not to
commingle Maiden Insurance’s assets with AII’s other assets and to cause
the AmTrust subsidiaries not to commingle Maiden Insurance’s assets with
the AmTrust subsidiaries’ other assets if an AmTrust subsidiary withdraws
those assets. AII has agreed that, if an AmTrust subsidiary returns to AII
excess assets withdrawn from a Trust Account, drawn on a Letter of Credit
or maintained by such AmTrust subsidiary as Withheld Funds, AII will
immediately return to Maiden Insurance its proportionate share of such
excess assets. AII has further agreed that if the aggregate fair market
value of the amount of Maiden Insurance’s assets held in the Trust Account
exceeds Maiden Insurance’s proportionate share of AII’s obligations, or if
an AmTrust subsidiary misapplies any such collateral, AII will immediately
return to Maiden Insurance an amount equal to such excess or misapplied
collateral, less any amounts AII has paid to Maiden Insurance. In
addition, if an AmTrust subsidiary withdraws Maiden Insurance’s assets
from a Trust Account and maintains those assets on its books as withheld
funds, AII has agreed to pay to Maiden Insurance interest at the rate
equivalent to the one-month London Interbank Offered Rate (“LIBOR”) plus
90 basis points per annum computed on the basis of a 360-day year on the
loan (except to the extent Maiden Insurance’s proportionate share of AII’s
obligations to that AmTrust subsidiary exceeds the value of the collateral
Maiden Insurance has provided), and net of unpaid fees Maiden Insurance
owes to AIIM and its share of fees owed to the trustee of the Trust
Accounts.
|
·
|
effective
December 1, 2008, the Company entered into a Reinsurer Trust Assets
Collateral agreement to provide to AII sufficient collateral to secure its
proportional share of AII’s obligations to the U.S. AmTrust subsidiaries.
The amount of the collateral, as at March 31, 2010 was approximately
$246,089 (December 31, 2009 – $206,960) and the accrued interest
was $2,718 (December 31,
2009 – $1,956).
|
For
the three months ended March 31, 2010
|
Diversified
Reinsurance
|
AmTrust
Quota Share
|
ACAC
Quota
Share
|
Total
|
||||||||||||
Net
premiums written
|
$
|
167,914
|
$
|
121,556
|
$
|
21,821
|
$
|
311,291
|
||||||||
Net
premiums earned
|
151,180
|
110,659
|
2,090
|
263,929
|
||||||||||||
Net
losses and loss expenses
|
(99,417
|
)
|
(69,562
|
)
|
(1,306
|
)
|
(170,285
|
)
|
||||||||
Commissions
and other acquisition costs
|
(40,514
|
)
|
(36,148
|
)
|
(734
|
)
|
(77,396
|
)
|
||||||||
General
and administrative expenses
|
(5,872
|
)
|
(474
|
)
|
—
|
(6,346
|
)
|
|||||||||
Underwriting
income
|
$
|
5,377
|
$
|
4,475
|
$
|
50
|
$
|
9,902
|
||||||||
Reconciliation
to net income
|
||||||||||||||||
Net
investment income and realized (loss)
|
17,893
|
|||||||||||||||
Amortization
of intangible assets
|
(1,452
|
)
|
||||||||||||||
Foreign
exchange loss
|
(1,153
|
)
|
||||||||||||||
Subordinated
debt interest expense
|
(9,115
|
)
|
||||||||||||||
Other
operating expenses
|
(2,206
|
)
|
||||||||||||||
Net
Income before income taxes
|
$
|
13,869
|
||||||||||||||
Net
loss and loss expense ratio*
|
65.7
|
%
|
62.9
|
%
|
62.5
|
%
|
64.5
|
%
|
||||||||
Acquisition
cost ratio**
|
26.8
|
%
|
32.7
|
%
|
35.1
|
%
|
29.3
|
%
|
||||||||
General
and administrative expense ratio***
|
3.9
|
%
|
0.4
|
%
|
—
|
%
|
3.3
|
%
|
||||||||
Combined
ratio****
|
96.4
|
%
|
96.0
|
%
|
97.6
|
%
|
97.1
|
%
|
For
the three months ended March 31, 2009
|
Diversified
Reinsurance
|
AmTrust
Quota Share
|
ACAC
Quota
Share
|
Total
|
||||||||||||
Net
premiums written
|
$
|
251,177
|
$
|
85,371
|
$
|
—
|
$
|
336,548
|
||||||||
Net
premiums earned
|
117,67
2
|
92,420
|
—
|
210,092
|
||||||||||||
Net
losses and loss expenses
|
(89,016
|
)
|
(57,272
|
)
|
—
|
(146,288
|
)
|
|||||||||
Commissions
and other acquisition costs
|
(16,222
|
)
|
(30,409
|
)
|
—
|
(46,631
|
)
|
|||||||||
General
and administrative expenses
|
(5,726
|
)
|
(374
|
)
|
—
|
(6,100
|
)
|
|||||||||
Underwriting
income
|
$
|
6,708
|
$
|
4,365
|
$
|
—
|
$
|
11,073
|
||||||||
Reconciliation
to net income
|
||||||||||||||||
Net
investment income and realized (loss)
|
12,329
|
|||||||||||||||
Amortization
of intangible assets
|
(1,564
|
)
|
||||||||||||||
Foreign
exchange loss
|
(213
|
)
|
||||||||||||||
Subordinated
debt interest expense
|
(7,090
|
)
|
||||||||||||||
Other
operating expenses
|
(1,435
|
)
|
||||||||||||||
Net
Income before income taxes
|
$
|
13,100
|
||||||||||||||
Net
loss and loss expense ratio*
|
75.6
|
%
|
62.0
|
%
|
—
|
%
|
69.6
|
%
|
||||||||
Acquisition
cost ratio**
|
13.8
|
%
|
32.9
|
%
|
—
|
%
|
22.2
|
%
|
||||||||
General
and administrative expense ratio***
|
4.9
|
%
|
0.4
|
%
|
—
|
%
|
3.
6
|
%
|
||||||||
Combined
ratio****
|
94.3
|
%
|
95.
3
|
%
|
—
|
%
|
95.4
|
%
|
*
|
Calculated by dividing net losses and loss expenses by net earned premium. |
**
|
Calculated by dividing commission and other acquisition expenses by net earned premium |
***
|
Calculated by dividing general and administrative expenses by net earned premium. |
****
|
Calculated
by adding together net loss and loss expense ratio, acquisition cost ratio
and general and administrative expense
ratio.
|
Diversified
Reinsurance
|
AmTrust
Quota
Share
|
ACAC
Quota
Share
|
Total
|
|||||||||||||
As
of March 31, 2010
|
|
|
|
|||||||||||||
Reinsurance
balances receivable, net
|
$ | 212,144 | $ | 72,630 | $ | 14,463 | $ | 299,237 | ||||||||
Prepaid
reinsurance
|
26,268 | — | — | 26,268 | ||||||||||||
Reinsurance
recoverable on unpaid losses
|
16,464 | — | — | 16,464 | ||||||||||||
Deferred
acquisition costs
|
83,078 | 88,243 | 6,933 | 178,254 | ||||||||||||
Loan
to related party
|
— | 167,975 | — | 167,975 | ||||||||||||
Goodwill
|
52,617 | — | — | 52,617 | ||||||||||||
Intangible
assets, net
|
49,832 | — | — | 49,832 | ||||||||||||
Restricted
investments and cash
|
1,065,948 | 246,089 | — | 1,312,037 | ||||||||||||
Corporate
and other assets
|
2,097 | — | — | 625,464 | ||||||||||||
Total
Assets
|
$ | 1,508,448 | $ | 574,937 | $ | 21,396 | $ | 2,728,148 |
Diversified
Reinsurance
|
AmTrust
Quota
Share
|
ACAC
Quota
Share
|
Total
|
|||||||||||||
As
of December 31, 2009
|
|
|
|
|||||||||||||
Reinsurance
balances receivable, net
|
$
|
168,639
|
$
|
39,856
|
$
|
—
|
$
|
208,495
|
||||||||
Prepaid
reinsurance
|
28,752
|
—
|
—
|
28,752
|
||||||||||||
Reinsurance
recoverable on unpaid losses
|
11,984
|
—
|
—
|
11,984
|
||||||||||||
Deferred
acquisition costs
|
88,224
|
84,759
|
—
|
172,983
|
||||||||||||
Loan
to related party
|
—
|
167,975
|
—
|
167,975
|
||||||||||||
Goodwill
|
52,617
|
—
|
—
|
52,617
|
||||||||||||
Intangible
assets, net
|
51,284
|
—
|
—
|
51,284
|
||||||||||||
Restricted
investments and cash
|
1,168,663
|
206,959
|
—
|
1,375,622
|
||||||||||||
Corporate
and other assets
|
2,502
|
—
|
—
|
567,182
|
||||||||||||
Total
Assets
|
$
|
1,572,665
|
$
|
499,549
|
$
|
—
|
$
|
2,636,894
|
For
the Three Months Ended
March
31, 2010
|
For
the Three Months Ended
March
31, 2009
|
|||||||||||||||
Total
|
%
of Total
|
Total
|
%
of Total
|
|||||||||||||
Net premiums written
|
|
|
|
|
||||||||||||
Diversified Reinsurance
|
|
|
|
|
||||||||||||
Property
|
$ | 58,053 | 18.6 | % | $ | 51,448 | 15.3 | % | ||||||||
Casualty
|
92,161 | 29.6 | % | 150,075 | 44.6 | % | ||||||||||
Accident
and Health
|
17,700 | 5.7 | % | 49,654 | 14.8 | % | ||||||||||
Total
Diversified Reinsurance
|
167,914 | 53.9 | % | 251,177 | 74.7 | % | ||||||||||
AmTrust Quota Share
|
||||||||||||||||
Small
Commercial Business
|
58,934 | 18.9 | % | 52,972 | 15.7 | % | ||||||||||
Specialty
Program Business
|
10,074 | 3.3 | % | 9,228 | 2.7 | % | ||||||||||
Specialty
Risk and Extended Warranty
|
52,548 | 16.9 | % | 23,171 | 6.9 | % | ||||||||||
Total
AmTrust Quota Share
|
121,556 | 39.1 | % | 85,371 | 25.3 | % | ||||||||||
ACAC
Quota Share
|
||||||||||||||||
Casualty
|
21,821 | 7.0 | % | — | — | % | ||||||||||
Total
ACAC Quota Share
|
21,821 | 7.0 | % | — | — | % | ||||||||||
Total net premiums written
|
$ | 311,291 | 100.0 | % | $ | 336,548 | 100 | % |
For
the Three Months Ended
March
31, 2010
|
For
the Three Months Ended
March
31, 2009
|
|||||||||||||||
Total
|
%
of Total
|
Total
|
%
of Total
|
|||||||||||||
Net
premiums earned
|
|
|
|
|||||||||||||
Diversified
Reinsurance
|
|
|
|
|||||||||||||
Property
|
$ | 41,788 | 15.8 | % | $ | 25,999 | 12.4 | % | ||||||||
Casualty
|
88,246 | 33.5 | % | 66,355 | 31.6 | % | ||||||||||
Accident
and Health
|
21,146 | 8.0 | % | 25,318 | 12.0 | % | ||||||||||
Total
Diversified Reinsurance
|
151,180 | 57.3 | % | 117,672 | 56.0 | % | ||||||||||
AmTrust
Quota Share
|
||||||||||||||||
Small
Commercial Business
|
51,954 | 19.7 | % | 54,627 | 26.0 | % | ||||||||||
Specialty
Program Business
|
14,774 | 5.6 | % | 13,348 | 6.4 | % | ||||||||||
Specialty
Risk and Extended Warranty
|
43,931 | 16.6 | % | 24,445 | 11.6 | % | ||||||||||
Total
AmTrust Quota Share
|
110,659 | 41.9 | % | 92,420 | 44.0 | % | ||||||||||
ACAC
Quota Share
|
||||||||||||||||
Casualty
|
2,090 | 0.8 | % | — | — | % | ||||||||||
Total
ACAC Quota Share
|
2,090 | 0.8 | % | — | — | % | ||||||||||
Total
net premiums earned
|
$ | 263,929 | 100.00 | % | $ | 210,092 | 100.00 | % |
·
|
GMAC
RE LLC ("GMAC RE"), a reinsurance managing general agent writing business
on behalf of Motors Insurance Corporation ("Motors") and the renewal
rights for the business written through GMAC RE (which was subsequently
renamed Maiden Re Insurance Services, LLC ("Maiden
Re"));
|
·
|
GMAC
Direct Insurance Company ("GMAC Direct") (which was subsequently renamed
Maiden Reinsurance Company); and
|
·
|
Integon
Specialty Insurance Company ("Integon") (which was subsequently renamed
Maiden Specialty Insurance
Company).
|
·
|
Net
income available to common shareholders of $13.6 million, or $0.19
basic and diluted earnings per share compared to $13.1 million or $0.19
basic and diluted earnings per share for the same period in
2009
|
·
|
Operating
earnings of $16.2 million, or $0.23 basic and diluted operating earnings
per share compared to $16.8 million or $0.25 basic and diluted
operating earnings per share in 2009(1)
|
·
|
Gross
premiums written of $327.4 million
|
·
|
Net
premiums earned of $263.9 million
|
·
|
Underwriting
income of $9.9 million and combined ratio of 97.1% compared
to $11.1 million and 95.4%, respectively for the same period in
2009(1)
|
·
|
Net
investment income of
$17.6 million
|
·
|
Annualized
operating return on equity of 9.4% as compared to 13.0% for the same
period in 2009(1)
|
·
|
Common
shareholders' equity of $710.0 million; book value per common share of
$10.10
|
·
|
Total
investments of $1.7 billion; fixed maturities and short-term
securities comprise 99.7% of total investments, of which 65.0% have a
credit rating of AAA and an overall average credit rating of
AA
|
·
|
Total
assets of $2.7 billion
|
·
|
Reserve
for losses and loss expenses of
$1.05 billion
|
·
|
Total
debt of $215.1 million and a debt to total capitalization ratio of
23.3%
|
(1)
|
Operating
earnings, operating earnings per share, underwriting income, combined
ratio and book value per share arc non-GAAP financial measures. Sec
"Non-GAAP Financial Measures" for additional information and a
reconciliation to the nearest GAAP financial measure (net
income).
|
For
the Three Months Ended March 31
|
||||||||
2010
|
2009
|
|||||||
($
in Millions)
|
||||||||
Net
income
|
$ | 13.6 | $ | 13.1 | ||||
Add
(subtract):
|
||||||||
Net
realized investment (gains) losses
|
(0.3 | ) | 1.9 | |||||
Amortization
of intangibles
|
1.4 | 1.6 | ||||||
Foreign
exchange and other (gains) losses
|
1.2 | 0.2 | ||||||
Deferred
tax expense
|
0.3 | — | ||||||
Operating
earnings
|
$ | 16.2 | $ | 16.8 | ||||
Operating
earnings per common share:
|
||||||||
Basic
and diluted operating earnings per share
|
$ | 0.23 | $ | 0.25 |
2010
|
2009
|
|||||||
($
in Millions)
|
||||||||
Operating
earnings
|
$ | 16.2 | $ | 16.8 | ||||
Opening
shareholders’ equity
|
$ | 676.5 | $ | 509.8 | ||||
Ending
shareholders’ equity
|
$ | 710.0 | $ | 547.4 | ||||
Average
shareholders’ equity
|
$ | 693.2 | $ | 528.6 | ||||
Operating
return on equity
|
2.3 | % | 3.2 | % | ||||
Annualized
operating return on equity
|
9.4 | % | 13.0 | % |
March
31, 2010
|
December
31, 2009
|
|||||||
($
in Millions)
|
||||||||
Ending
shareholders’ equity
|
$ | 710.0 | $ | 676.5 | ||||
Common
shares outstanding
|
70,291,757 | 70,291,289 | ||||||
Book
value per share
|
$ | 10.10 | $ | 9.62 |
·
|
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 Incurred but Not Reported (“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.
|
Three
Months ended March 31,
|
||||||||
2010
|
2009
|
|||||||
($
in Millions)
|
||||||||
Gross
premiums written
|
$
|
327.4
|
$
|
336.5
|
||||
Net
premiums written
|
$
|
311.3
|
$
|
336.5
|
||||
Net
earned premium
|
$
|
264.0
|
$
|
210.1
|
||||
Loss
and loss adjustment expenses
|
170.3
|
146.3
|
||||||
Commissions
and other acquisition expenses
|
77.4
|
46.6
|
||||||
General
and administrative expenses
|
6.3
|
6.1
|
||||||
Total
underwriting income
|
10.0
|
11.1
|
||||||
Other
operating expenses
|
(2.2
|
)
|
(1.4
|
)
|
||||
Net
investment income
|
17.6
|
14.2
|
||||||
Net
realized investment gains (losses)
|
0.3
|
(1.9
|
)
|
|||||
Amortization
of intangible assets
|
(1.5
|
)
|
(1.6
|
)
|
||||
Foreign
exchange loss
|
(1.2
|
)
|
(0.2
|
)
|
||||
Junior
subordinated debt interest expense
|
(9.1
|
)
|
(7.1
|
)
|
||||
Deferred
tax expense
|
(0.3
|
)
|
—
|
|||||
Net
income
|
$
|
13.6
|
$
|
13.1
|
Three
Months ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Selected
Consolidated Ratios:
|
||||||||
Loss
and loss expense ratio
|
64.5
|
%
|
69.6
|
%
|
||||
Acquisition
cost ratio
|
29.3
|
%
|
22.2
|
%
|
||||
General
and administrative expense ratio
|
3.3
|
%
|
3.6
|
%
|
||||
Expense
ratio
|
32.6
|
%
|
25.8
|
%
|
||||
Combined
ratio
|
97.1
|
%
|
95.4
|
%
|
Net
Premiums Written
|
Net
Premiums Earned
|
|||||||||||||||
Three
months ended March 31,
|
Three
months ended March 31,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Diversified
Reinsurance
|
53.9
|
% | 74.7 | % | 57.3 | % | 56.0 | % | ||||||||
AmTrust
Quota Share
|
39.1 | % | 25.3 | % | 41.9 | % | 44.0 | % | ||||||||
ACAC
Quota Share
|
7.0 | % | — | 0.8 | % | — | ||||||||||
Total
|
100.0 | % | 100.0 | % | 100 | % | 100.0 | % |
·
|
A decrease in premiums written
in the Diversified Reinsurance segment. The Company did not renew
certain large accounts as part of its disciplined underwriting practice
and as a result, premiums written decreased by $83.3 million or 33.1% for
the three months ended March 31, 2010 as compared to the same period in
2009.
|
·
|
Strong growth in our AmTrust
Quota Share segment. The AmTrust Quota Share segment increased by
$36.2 million or 42.4% in the three months ended March 31, 2010 as
compared to the same period in 2009, the result of significant growth in
the Specialty Risk and Extended Warranty line, which was supplemented by
more modest growth in that segment’s Small Commercial and Specialty
Program lines of business.
|
For
the three months ended March 31,
|
||||||||
2010
|
2009
|
|||||||
($
in Millions)
|
||||||||
General
and administrative expenses – segments
|
$ | 6.3 | $ | 6.1 | ||||
Other
operating expenses – corporate
|
2.2 | 1.4 | ||||||
Total
|
$ | 8.5 | $ | 7.5 |
Three
months ended March 31,
|
||||||||
2010
|
2009
|
|||||||
($
in Millions)
|
||||||||
Net
premiums written
|
$
|
167.9
|
$
|
251.2
|
||||
Net
premiums earned
|
151.1
|
117.7
|
||||||
Net
losses and loss expenses
|
(99.4)
|
(89.0
|
)
|
|||||
Commissions
and other acquisition expenses
|
(40.5)
|
(16.2
|
)
|
|||||
General
and administrative expenses
|
(5.8)
|
(5.8
|
)
|
|||||
Underwriting
income
|
$
|
5.4
|
$
|
6.7
|
||||
Loss
and loss expense ratio
|
65.7
|
%
|
75.6
|
%
|
||||
Acquisition
cost ratio
|
26.8
|
%
|
13.8
|
%
|
||||
General
and administrative expense ratio
|
3.9
|
%
|
4.9
|
%
|
||||
Expense
ratio
|
30.7
|
%
|
18.7
|
%
|
||||
Combined
ratio
|
96.4
|
%
|
94.3
|
%
|
|
Three
months ended March 31,
|
|
|
|||||||||||||
2010
|
2009
|
$
Change
|
%
Change
|
|||||||||||||
($
in Millions)
|
||||||||||||||||
Property
|
$ | 58.0 | $ | 51.4 | $ | 6.6 | 12.8 | % | ||||||||
Casualty
|
92.2 | 150.1 | (57.9 | ) | (38.6 | )% | ||||||||||
Accident
and Health
|
17.7 | 49.7 | (32.0 | ) | (64.4 | )% | ||||||||||
Total
Diversified Reinsurance
|
$ | 167.9 | $ | 251.2 | $ | (83.3 | ) | (33.1 | )% |
Three
months ended March 31,
|
|
|
||||||||||||||
2010
|
2009
|
$ Change
|
%
Change
|
|||||||||||||
($
in Millions)
|
||||||||||||||||
Property
|
$ | 41.8 | $ | 26.0 | $ | 15.8 | 60.7 | % | ||||||||
Casualty
|
88.2 | 66.4 | 21.8 | 33.0 | % | |||||||||||
Accident
and Health
|
21.2 | 25.3 | (4.2 | ) | (16.6 | )% | ||||||||||
Total
Diversified Reinsurance
|
$ | 151.2 | $ | 117.7 | $ | 33.4 | 28.4 | % |
Three
months ended March 31,
|
||||||||
2010
|
2009
|
|||||||
($
in Millions)
|
||||||||
Net
premiums written
|
$ | 121.6 | $ | 85.4 | ||||
Net
premiums earned
|
$ | 110.7 | $ | 92.4 | ||||
Net
losses and loss expenses
|
(69.6 | ) | (57.2 | ) | ||||
Commissions
and other acquisition expenses
|
(36.1 | ) | (30.4 | ) | ||||
General
and administrative expenses
|
(0.5 | ) | (0.4 | ) | ||||
Underwriting
income
|
$ | 4.5 | $ | 4.4 | ||||
Net
loss and loss expense ratio
|
62.9 | % | 62.0 | % | ||||
Acquisition
cost ratio
|
32.7 | % | 32.9 | % | ||||
General
and administrative expense ratio
|
0.4 | % | 0.4 | % | ||||
Expense
ratio
|
33.1 | % | 33.3 | % | ||||
Combined
ratio
|
96.0 | % | 95.3 | % |
Three
months ended March 31,
|
|
|
||||||||||||||
2010
|
2009
|
$
Change
|
%
Change
|
|||||||||||||
($
in Millions)
|
||||||||||||||||
Small
Commercial Business
|
$ | 58.9 | $ | 53.0 | $ | 5.9 | 11.3 | % | ||||||||
Specialty
Program Business
|
10.1 | 9.2 | 0.9 | 9.2 | % | |||||||||||
Specialty
Risk and Extended Warranty
|
52.6 | 23.2 | 29.4 | 126.8 | % | |||||||||||
Total
AmTrust Quota Share
|
$ | 121.6 | $ | 85.4 | $ | 36.2 | 42.4 | % |
Three
months ended March 31,
|
|
|
||||||||||||||
2010
|
2009
|
$
Change
|
%
Change
|
|||||||||||||
($
in Millions)
|
||||||||||||||||
Small
Commercial Business
|
$ | 52.0 | $ | 54.6 | $ | (2.6 | ) | (4.9 | )% | |||||||
Specialty
Program Business
|
14.8 | 13.4 | 1.4 | 10.7 | % | |||||||||||
Specialty
Risk and Extended Warranty
|
43.9 | 24.4 | 19.5 | 79.7 | % | |||||||||||
Total
AmTrust Quota Share
|
$ | 110.7 | $ | 92.4 | $ | 18.3 | 19.7 | % |
March
31,
|
||||||||
2010
|
2009
|
|||||||
($
in Millions)
|
||||||||
Operating
activities
|
$ | (2.9 | ) | $ | 14.8 | |||
Investing
activities
|
(17.5 | ) | (70.9 | ) | ||||
Financing
activities
|
(23.6 | ) | 19.6 | |||||
Effect
of foreign exchange
|
(0.7 | ) | (0.2 | ) | ||||
Total
decrease in cash and cash equivalents
|
$ | (44.7 | ) | $ | (36.7 | ) |
March
31, 2010
|
December
31, 2009
|
|||||||||||||||||||||||
Cash
& Equivalents
|
Fixed
Maturities
|
Total
|
Cash
& Equivalents
|
Fixed
Maturities
|
Total
|
|||||||||||||||||||
($ in Millions) |
($
in Millions)
|
|||||||||||||||||||||||
Maiden
US
|
$
|
29.4
|
$
|
341.0
|
$
|
370.4
|
$
|
38.6
|
$
|
258.9
|
$
|
297.5
|
||||||||||||
Maiden
Bermuda
|
77.3
|
618.2
|
695.5
|
94.8
|
776.3
|
871.1
|
||||||||||||||||||
Total
Diversified Reinsurance Segment
|
106.7
|
959.2
|
1,065.9
|
133.4
|
1,035.2
|
1,168.6
|
||||||||||||||||||
Maiden
Bermuda
|
11.0
|
235.1
|
246.1
|
11.5
|
195.5
|
207.0
|
||||||||||||||||||
Total
AmTrust Quota Share Segment
|
11.0
|
235.1
|
246.1
|
11.5
|
195.5
|
207.0
|
||||||||||||||||||
Total
|
$
|
117.7
|
$
|
1,194.3
|
$
|
1,312.0
|
$
|
144.9
|
$
|
1,230.7
|
$
|
1,375.6
|
March
31, 2010
|
Original
or
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
($
in Millions)
|
||||||||||||||||
Fixed
Maturities:
|
|
|
|
|
||||||||||||
U.S. treasury
bonds
|
$
|
39.3
|
$
|
0.2
|
$
|
(0.2
|
)
|
$
|
39.3
|
|||||||
U.S.
agency bonds – mortgage and asset-backed
|
814.5
|
21.4
|
(0.9
|
)
|
835.0
|
|||||||||||
U.S.
agency bonds – other
|
189.9
|
4.8
|
—
|
194.7
|
||||||||||||
Corporate
fixed maturities
|
604.5
|
42.9
|
(12.1
|
)
|
635.3
|
|||||||||||
Municipal
bonds
|
21.3
|
0.9
|
—
|
22.2
|
||||||||||||
Total
available - for - sale fixed maturities
|
1,669.5
|
70.2
|
(13.2)
|
1,726.5
|
||||||||||||
Other
investments
|
5.6
|
—
|
—
|
5.6
|
||||||||||||
Total
investments
|
$
|
1,675.1
|
$
|
70.2
|
$
|
(13.2)
|
$
|
1,732.1
|
December
31, 2009
|
Original
or
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
($
in Millions)
|
||||||||||||||||
Fixed
Maturities:
|
|
|
|
|
||||||||||||
U.S. treasury
bonds
|
$
|
39.3
|
$
|
0.2
|
$
|
(0.3
|
)
|
$
|
39.2
|
|||||||
U.S.
agency bonds – mortgage and asset - backed
|
779.4
|
17.5
|
(2.3
|
)
|
794.6
|
|||||||||||
U.S.
agency bonds – other
|
217.2
|
4.8
|
(0.5
|
)
|
221.5
|
|||||||||||
Corporate
fixed maturities
|
564.8
|
38.0
|
(20.1
|
)
|
582.7
|
|||||||||||
Municipal
bonds
|
22.7
|
1.0
|
—
|
23.7
|
||||||||||||
Total
available - for - sale fixed maturities
|
1,623.4
|
61.5
|
(23.2
|
)
|
1,661.7
|
|||||||||||
Other
investments
|
5.7
|
—
|
(0.1
|
)
|
5.6
|
|||||||||||
Total
investments
|
$
|
1,629.1
|
$
|
61.5
|
$
|
(23.3
|
)
|
$
|
1,667.3
|
Less
than 12 Months
|
12
Months or More
|
Total
|
||||||||||||||||||||||
March
31, 2010
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
($
in Millions)
|
||||||||||||||||||||||||
Available-for-sale
securities:
|
|
|
|
|
|
|
||||||||||||||||||
U.S. treasury
bonds
|
$
|
7.6
|
$
|
(0.2
|
)
|
$
|
—
|
$
|
—
|
$
|
7.6
|
$
|
(0.2
|
)
|
||||||||||
U.S.
agency bonds – mortgage and asset - backed
|
181.8
|
(1.0
|
)
|
31.4
|
—
|
213.2
|
(1.0
|
)
|
||||||||||||||||
U.S.
agency bonds - other
|
2.0
|
—
|
—
|
—
|
2.0
|
—
|
||||||||||||||||||
Corporate
fixed maturities
|
40.5
|
(0.5
|
)
|
192.2
|
(11.5
|
)
|
232.7
|
(12.0
|
)
|
|||||||||||||||
Total available - for - sale securities
|
$
|
231.9
|
$
|
(1.7
|
)
|
$
|
223.6
|
$
|
(11.5
|
)
|
$
|
455.5
|
$
|
(13.2
|
)
|
|||||||||
Other
investments
|
$
|
—
|
$
|
—
|
$
|
4.9
|
$
|
(0.1
|
)
|
$
|
4.9
|
$
|
(0.1
|
)
|
||||||||||
Total
temporarily impaired available-for-sale securities and other
investments
|
$
|
231.9
|
$
|
(1.7
|
)
|
$
|
228.5
|
$
|
(11.6
|
)
|
$
|
460.4
|
$
|
(13.3
|
)
|
Less
Than 12 Months
|
12
Months or More
|
Total
|
||||||||||||||||||||||
December
31, 2009
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
||||||||||||||||||
($
in Millions)
|
||||||||||||||||||||||||
Available-for-sale
securities:
|
|
|
|
|
|
|
||||||||||||||||||
U.S. treasury
bonds
|
$
|
8.6
|
$
|
(0.3
|
)
|
$
|
—
|
$
|
—
|
$
|
8.6
|
$
|
(0.3
|
)
|
||||||||||
U.S.
agency bonds – mortgage and asset - backed
|
235.0
|
(2.3
|
)
|
0.7
|
—
|
|
235.7
|
(2.3
|
)
|
|||||||||||||||
U.S.
agency bonds - other
|
59.5
|
(0.5
|
)
|
—
|
—
|
59.5
|
(0.5
|
)
|
||||||||||||||||
Corporate
fixed maturities
|
11.7
|
(0.6
|
)
|
193.7
|
(19.5
|
)
|
205.4
|
(20.1
|
)
|
|||||||||||||||
Total available - for - sale securities
|
$
|
314.8
|
$
|
(3.7
|
)
|
$
|
194.4
|
$
|
(19.5
|
)
|
$
|
509.2
|
$
|
(23.2
|
)
|
|||||||||
Other
investments
|
$
|
—
|
$
|
—
|
$
|
4.9
|
$
|
(0.1
|
)
|
$
|
4.9
|
$
|
(0.1
|
)
|
||||||||||
Total
temporarily impaired available-for-sale securities and other
investments
|
$
|
314.8
|
$
|
(3.7
|
)
|
$
|
199.3
|
$
|
(19.6
|
)
|
$
|
514.1
|
$
|
(23.3
|
)
|
March
31, 2010
|
December
31, 2009
|
|||||||||||||||
|
($
in
Millions)
|
%
of
Total
|
($
in
Millions)
|
%
of
Total
|
||||||||||||
Due
in one year or less
|
$
|
172.0
|
10.0
|
%
|
$
|
159.4
|
9.6
|
%
|
||||||||
Due
after one year through five years
|
187.8
|
10.9
|
%
|
222.4
|
13.4
|
%
|
||||||||||
Due
after five years through ten years
|
433.3
|
25.1
|
%
|
366.7
|
22.1
|
%
|
||||||||||
Due
after ten years
|
98.4
|
5.7
|
%
|
118.6
|
7.1
|
%
|
||||||||||
U.S.
agency bonds - mortgage-backed securities
|
835.0
|
48.3
|
%
|
794.6
|
47.8
|
%
|
||||||||||
Total
|
$
|
1,726.5
|
100.0
|
%
|
$
|
1661.7
|
100.0
|
%
|
Ratings
as of March 31, 2010
|
Amortized
Cost
|
Fair
Market
Value
|
%
of Total Fair
Market Value
|
|||||||||
($
in Millions)
|
||||||||||||
U.S.
treasury bonds
|
$
|
39.3
|
$
|
39.3
|
2.3
|
%
|
||||||
AAA
U.S. agency bonds – mortgage backed securities
|
814.5
|
835.0
|
48.4
|
%
|
||||||||
AAA
|
237.9
|
248.1
|
14.4
|
%
|
||||||||
AA+,
AA, AA-
|
71.2
|
77.2
|
4.4
|
%
|
||||||||
A+,
A, A-
|
292.8
|
293.1
|
17.0
|
%
|
||||||||
BBB+,
BBB, BBB-
|
203.0
|
223.1
|
12.9
|
%
|
||||||||
B
or lower
|
10.8
|
10.7
|
0.6
|
%
|
||||||||
Total
|
$
|
1,669.5
|
$
|
1,726.5
|
100.0
|
%
|
Ratings
as of December 31, 2009
|
Amortized
Cost
|
Fair
Market
Value
|
%
of Total Fair
Market Value
|
|||||||||
($
in Millions)
|
||||||||||||
U.S.
treasury bonds
|
$
|
39.3
|
$
|
39.2
|
2.4
|
%
|
||||||
AAA
U.S. agency bonds – mortgage backed securities
|
779.4
|
796.6
|
47.8
|
%
|
||||||||
AAA
|
265.6
|
272.2
|
16.5
|
%
|
||||||||
AA+,
AA, AA-
|
51.6
|
57.4
|
3.4
|
%
|
||||||||
A+,
A, A-
|
290.0
|
285.4
|
17.2
|
%
|
||||||||
BBB+,
BBB, BBB-
|
187.6
|
201.4
|
12.1
|
%
|
||||||||
B
or lower
|
9.9
|
9.5
|
0.6
|
%
|
||||||||
Total
|
$
|
1,623.4
|
$
|
1,661.7
|
100.0
|
%
|
March
31, 2010
|
December
31, 2009
|
|||||||||||||||
Fair
Value
|
%
of Total
|
Fair
Value
|
%
of Total
|
|||||||||||||
($
in Millions)
|
||||||||||||||||
Mortgage-backed
securities
|
|
|
||||||||||||||
Residential
mortgage-backed (RMBS)
|
||||||||||||||||
GNMA – Fixed
Rate
|
$
|
336.7
|
32.7
|
%
|
$
|
333.1
|
32.8
|
%
|
||||||||
FNMA – Fixed
Rate
|
240.5
|
23.4
|
%
|
125.5
|
12.3
|
%
|
||||||||||
FNMA – Variable
Rate
|
150.2
|
14.6
|
%
|
135.7
|
13.4
|
%
|
||||||||||
FHLMC – Fixed
Rate
|
105.1
|
10.2
|
%
|
200.3
|
19.7
|
%
|
||||||||||
FHLMC – Variable
Rate
|
2.5
|
0.2
|
%
|
—
|
—
|
%
|
||||||||||
Total
agency RMBS
|
835.0
|
81.1
|
%
|
794.6
|
78.2
|
%
|
||||||||||
Non-agency
RMBS
|
—
|
—
|
%
|
—
|
—
|
%
|
||||||||||
Total
RMBS
|
835.0
|
81.1
|
%
|
794.6
|
78.2
|
%
|
||||||||||
Commercial
mortgage-backed
|
—
|
—
|
%
|
—
|
—
|
%
|
||||||||||
Total
mortgage-backed securities
|
835.0
|
81.1
|
%
|
794.6
|
78.2
|
%
|
||||||||||
Non-MBS
fixed rate Agency securities
|
194.7
|
18.9
|
%
|
221.5
|
21.8
|
%
|
||||||||||
Total
US Agency bonds
|
$
|
1,029.7
|
100.0
|
%
|
$
|
1,016.1
|
100.0
|
%
|
March
31, 2010
|
December
31, 2009
|
|||||||||||||||
Fair
Value
|
%
of Total
|
Fair
Value
|
%
of Total
|
|||||||||||||
($
in Millions)
|
||||||||||||||||
Corporate
Securities
|
||||||||||||||||
Financial
Institutions
|
$
|
458.3
|
72.1
|
%
|
$
|
430.4
|
73.9
|
%
|
||||||||
Industrials
|
119.7
|
18.8
|
%
|
108.6
|
18.6
|
%
|
||||||||||
Utilities/Other
|
57.3
|
9.1
|
%
|
43.7
|
7.5
|
%
|
||||||||||
Total
Corporate Securities
|
$
|
635.3
|
100.0
|
%
|
$
|
582.7
|
100.0
|
%
|
March
31,
2010
|
December
31,
2009
|
|||||||
($
in Millions)
|
||||||||
Reinsurance
balances receivable
|
$ | 299.2 | $ | 208.5 | ||||
Prepaid
reinsurance
|
26.3 | 28.8 | ||||||
Deferred
acquisition costs
|
178.3 | 173.0 | ||||||
Reserve
for loss and loss adjustment expenses
|
(1,048.9 | ) | (1,006.3 | ) | ||||
Unearned
premiums
|
(629.9 | ) | (583.5 | ) |
March
31,
2010
|
December
31,
2009
|
|||||||
($
in Millions)
|
||||||||
Junior
subordinated debt
|
$ | 215.1 | $ | 215.1 | ||||
Shareholders’
equity
|
710.0 | 676.5 | ||||||
Total
capital resources
|
$ | 925.1 | $ | 891.6 | ||||
Ratio
of debt to total capitalization
|
23.3 | % | 24.1 | % |
Fair
Value
|
Estimated
Change in Fair Value
|
Hypothetical
Percentage Increase (Decrease) in Shareholders’ Equity
|
||||||||||
($
in Millions)
|
||||||||||||
200
basis point increase
|
$
|
1,617.3
|
$
|
(109.2
|
)
|
(15.4
|
%)
|
|||||
100
basis point increase
|
1,673.8
|
(52.7
|
)
|
(7.4
|
%)
|
|||||||
No
change
|
1,726.5
|
—
|
0
|
%
|
||||||||
100
basis point decrease
|
1,756.7
|
39.2
|
5.5
|
%
|
||||||||
200
basis point decrease
|
$
|
1,793.3
|
$
|
66.8
|
9.4
|
%
|
|
(a)
|
The
2010 Annual General Meeting of Shareholders was held on May 4,
2010.
|
|
(b)
|
All
of the Company's director nominees, Simcha G. Lyons, Raymond M. Neff,
Yehuda L. Neuberger, Steven H. Nigro and Barry D. Zyskind, were
elected. There was no solicitation in opposition to the
Company's nominees.
|
|
(c)
|
Matters
voted on at the meeting and the number of votes
cast:
|
|
1.
|
To
elect five directors to the Board of Directors of Maiden Holdings, Ltd. to
serve until the 2011 Annual General Meeting of Shareholders or until their
successors have been duly elected or appointed and
qualified:
|
Name
|
Votes
For
|
Withheld
|
||||||
Simcha
G. Lyons
|
56,799,114 | 578,000 | ||||||
Raymond
M. Neff
|
57,127,722 | 249,392 | ||||||
Yehuda
L. Neuberger
|
56,557,134 | 819,980 | ||||||
Steven
H. Nigro
|
57,125,222 | 251,892 | ||||||
Barry
D. Zyskind
|
56,877,431 | 499,683 |
|
2.
|
To
elect four directors to the Board of Directors of Maiden Insurance Company
Ltd. to serve until the 2011 Annual General Meeting of Shareholders or
until their successors have been duly elected or appointed and
qualified:
|
Name
|
Votes
For
|
Withheld
|
||||||
David
A. Lamneck
|
57,078,091 | 299,023 | ||||||
John
Marshaleck
|
57,078,091 | 299,023 | ||||||
Lawrence
F. Metz
|
57,078,091 | 299,023 | ||||||
Arturo
M. Raschbaum
|
57,078,091 | 299,023 |
|
3.
|
To
amend the Company’s 2007 Share Incentive Plan (the ‘‘Plan’’) to, among
other things, increase the number of common shares reserved for issuance
under the Plan from two million eight hundred thousand (2,800,000) shares
to ten million (10,000,000) shares:
|
Voted
For
|
Voted
Against
|
Abstain
|
Broker
Non-Votes
|
||||
53,003,897
|
4,353,853
|
19,364
|
5,604,816
|
|
4.
|
To
ratify the selections of BDO Seidman, LLP to serve as the Company’s
independent registered public accounting firm for the year ending December
31, 2010, and Arthur Morris and Company as Maiden Insurance Company Ltd.’s
independent registered public accounting firm for the year ending December
31, 2010:
|
Voted
For
|
Voted
Against
|
Abstain
|
Broker
Non-Votes
|
||||
62,922,572
|
14,674
|
44,684
|
0
|
Description
|
||
10.1
|
Amended
and Restated Maiden Holdings, Ltd. 2007 Share Incentive Plan (incorporated
by reference to Appendix A to the Company's definitive proxy statement
filed with the Securities and Exchange Commission on April 2,
2010).
|
|
31.1
|
Certification
of the Chief Executive Officer, pursuant to Rule 13a-14(a) or 15d-14(a),
for the quarter ended March 31, 2010.
|
|
31.2
|
Certification
of the Chief Financial Officer, pursuant to Rule 13a-14(a) or 15d-14(a),
for the quarter ended March 31, 2010.
|
|
32.1
|
Certification
of the Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, for
the quarter ended March 31, 2010.
|
|
32.2
|
Certification
of the Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, for
the quarter ended March 31, 2010.
|
MAIDEN
HOLDINGS, LTD.
(Registrant)
|
|||
Date:
May 10, 2010
|
/s/ ARTURO
M. RASCHBAUM
|
||
Arturo
M. Raschbaum
|
|||
President
and Chief Executive Officer
|
|||
/s/ JOHN
MARSHALECK
|
|||
John
Marshaleck
|
|||
Chief
Financial Officer
|
|||
(Principal
Financial and Accounting Officer)
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of Maiden Holdings,
Ltd.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f) for the registrant and
have:
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including any
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles.
|
(c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
(d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Date:
May 10, 2010
|
/s/ ARTURO
M. RASCHBAUM
|
||
Arturo
M. Raschbaum
|
|||
President
and Chief Executive Officer
|
|||
(Principal Executive
Officer)
|
1.
|
I
have reviewed this quarterly report on Form 10-Q of Maiden Holdings,
Ltd.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
The
registrant’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including any
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles.
|
(c)
|
Evaluated
the effectiveness of the registrant’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
(d)
|
Disclosed
in this report any change in the registrant’s internal control over
financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant’s fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant’s internal control over financial
reporting; and
|
5.
|
The
registrant’s other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of the registrant’s
board of directors (or persons performing the equivalent
functions):
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information;
and
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant’s internal control
over financial reporting.
|
Dated:
May 10, 2010
|
/s/ JOHN
MARSHALECK
|
||
John
Marshaleck
|
|||
Chief
Financial Officer
|
|||
(Principal
Financial and Accounting Officer)
|
Date:
May 10, 2010
|
By:
|
/s/ ARTURO
M. RASCHBAUM
|
|
Name: Arturo M. Raschbaum | |||
Title: President and Chief Executive Officer |
Date:
May 10, 2010
|
By:
|
/s/ JOHN
MARSHALECK
|
|
Name: John Marshaleck | |||
Title: Chief Financial Officer |