PEMBROKE, Bermuda–(BUSINESS WIRE)–Maiden Holdings, Ltd. (NASDAQ:MHLD) (“Maiden” or the “Company”) today
reported a first quarter 2019 net loss attributable to Maiden common
shareholders of $36.6 million or $0.44 per diluted common share,
compared to a net income attributable to Maiden common shareholders of
$13.7 million or $0.16 per diluted common share in the first quarter of
2018. The non-GAAP operating loss⁽¹¹⁾ was $26.9 million, or
$0.32 per diluted common share compared with a non-GAAP operating income
of $5.8 million, or $0.07 per diluted common share in the first quarter
of 2018.

Maiden’s book value per common share⁽¹⁾ was $1.44 at
March 31, 2019, an increase of 33.3% from December 31, 2018.

Consolidated Results for the Quarter Ended
March 31, 2019

In the first quarter of 2019, gross premiums written were $(561.1)
million, compared to $623.3 million in the prior year quarter, primarily
due to the termination of both quota share contracts in the AmTrust
Reinsurance segment and the return of unearned premiums on certain lines
covered by the Partial Termination Agreement with AmTrust. As previously
reported, both terminations were effective January 1, 2019. Net premiums
earned were $183.1 million in first quarter 2019, compared to $516.8
million in first quarter 2018 due to the combined impact of the
terminated quota share contracts within the AmTrust Reinsurance segment
and non-renewals in Maiden’s European Capital Solutions business and a
reduction in the German Auto programs produced by the Company’s IIS unit
within its Diversified Reinsurance segment.

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First quarter 2019 net loss and loss adjustment expenses decreased to
$152.7 million from $353.2 million in the first quarter of 2018, due
primarily to lower earned premiums for the AmTrust Reinsurance segment.
The first quarter 2019 loss ratio⁽⁶⁾ was 83.0% compared to
67.9% reported in first quarter 2018. The increase in the loss ratio was
primarily due to a change in the mix of business resulting from the
Partial Termination Amendment entered into with AmTrust. Prior year
adverse loss development was $7.3 million for the first quarter of 2019,
compared to $9.8 million for the same period in 2018.

Commission and other acquisition expenses decreased to $69.6 million in
first quarter 2019, from $166.6 million in the first quarter of 2018 due
to significantly lower earned premiums resulting from the terminations
in the AmTrust Reinsurance segment. The commission and other acquisition
expense ratio increased 5.9 points to 37.9% for the first quarter of
2019 from 32.0% for the same period in 2018 as a result of the
additional ceding commission agreed to as part of the Partial
Termination Amendment with AmTrust.

General and administrative expenses for the first quarter of 2019
totaled $15.9 million, compared to $15.7 million in the first quarter of
2018. Non-recurring expenses were $3.0 million during the first quarter
of 2019, primarily related to salaries and related benefits for
headcount reductions occurring in 2019. The general and administrative
expense ratio⁽⁸⁾ in the first quarter of 2019 increased to
8.7% from 3.0% in first quarter 2018 primarily as a result of lower
earned premiums, while the total expense ratio⁽⁹⁾ was 46.6%
in first quarter 2019 compared with 35.0% for the same period last year.

The combined ratio⁽¹⁰⁾ for first quarter 2019 totaled 129.6%,
compared with 102.9% in first quarter 2018.

First quarter 2019 net investment income decreased modestly to $32.0
million from $32.9 million in the first quarter of 2018 largely due to
the decline in average yield to 3.1% from 3.2% in the same period in
2018.

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Additional information regarding the Company’s results of operations can
be found in the Company’s Quarterly Report on Form 10-Q filing made
concurrent with this news release.

Quarterly Dividends

The Company’s Board of Directors did not authorize any quarterly
dividends related to either its common shares or any series of its
preferred shares. Additional information regarding the Company’s
dividends can be found in the Company’s Quarterly Report on Form 10-Q
filing made concurrent with this news release.

Other Financial Matters

Total assets were $4.6 billion at March 31, 2019, compared to $5.3
billion at December 31, 2018. Shareholders’ equity was $584.3 million at
March 31, 2019, compared to $554.3 million at December 31, 2018.

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(1)(11) Please see the Non-GAAP Financial Measures table for additional
information on these non-GAAP financial measures and reconciliation of
these measures to GAAP measures.

(6)(7)(8)(9)(10) Loss ratio, commission and other acquisition expense
ratio, general and administrative expense ratio, expense ratio and
combined ratio are non-GAAP operating metrics. Please see the additional
information on these measures under Non-GAAP Financial Measures tables.

About Maiden Holdings, Ltd.

Maiden Holdings, Ltd. is a Bermuda-based holding company formed in 2007.
The Company is focused on serving the needs of regional and specialty
insurers in Europe and select other global markets by providing
innovative reinsurance solutions designed to support their capital needs.

Forward Looking Statements

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This release 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 the Company’s current expectations and beliefs 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
the 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,
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 and unusual frequency of storm
activity, 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. In addition, the Company
may not be able to complete the proposed transaction with Enstar on the
terms summarized above or other acceptable terms, or at all, due to a
number of factors, including but not limited to failure to obtain
governmental and regulatory approvals or to satisfy other closing
conditions. 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 Annual Report on Form 10-K for the year ended December 31,
2018 as updated in periodic filings with the SEC. However these factors
should not be construed as exhaustive. Forward-looking statements speak
only as of the date they are made and the Company undertakes no
obligation to update or revise any forward-looking statement that may be
made from time to time, whether as a result of new information, future
developments or otherwise, except as required by law.

Maiden Holdings, Ltd.
Consolidated Balance Sheets
(in thousands (000’s), except per share data)
					March 31, 2019				December 31, 2018
					(Unaudited)				(Audited)
	Assets
	Fixed maturities, available-for-sale, at fair value (Amortized cost 2019: $3,130,981 ; 2018: $3,109,980)			$	3,131,934			$	3,051,568
	Fixed maturities, held-to-maturity, at amortized cost (Fair value 2018: $998,012)				–				1,015,681
	Other investments, at fair value				24,693				23,716
	Total investments				3,156,627				4,090,965
	Cash and cash equivalents				89,521				200,841
	Restricted cash and cash equivalents				42,334				130,148
	Accrued investment income				27,788				27,824
	Reinsurance balances receivable, net				72,867				67,308
	Loan to related party				167,975				167,975
	Deferred commission and other acquisition expenses, net				161,976				388,442
	Funds withheld receivable				652,087				27,039
	Other assets				14,729				12,443
	Assets held for sale				177,452				174,475
	Total Assets			$	4,563,356			$	5,287,460
	Liabilities and Equity
	Liabilities
	Reserve for loss and loss adjustment expenses			$	2,980,113			$	3,055,976
	Unearned premiums				455,175				1,200,419
	Reinsurance balances payable, net				117,943				52,594
	Accrued expenses and other liabilities				12,087				12,900
	Senior notes – principal amount				262,500				262,500
	Less: unamortized debt issuance costs				7,753				7,806
	Senior notes, net				254,747				254,694
	Liabilities held for sale				159,002				155,961
	Total Liabilities				3,979,067				4,732,544
	Commitments and Contingencies
	Equity
	Preference Shares				465,000				465,000
	Common shares				881				879
	Additional paid-in capital				750,670				749,418
	Accumulated other comprehensive loss				(220)				(65,616)
	Accumulated deficit				(600,527)				(563,891)
	Treasury shares, at cost				(31,515)				(31,515)
	Total Maiden Shareholders’ Equity				584,289				554,275
	Noncontrolling interest in subsidiaries				–				641
	Total Equity				584,289				554,916
	Total Liabilities and Equity			$	4,563,356			$	5,287,460
	Book value per common share(1)			$	1.44			$	1.08
	Common shares outstanding				83,064,173				82,948,577

Maiden Holdings, Ltd.
Consolidated Statements of Income
(in thousands (000’s), except per share data)
(Unaudited)
	For the Three Months Ended March 31,
	2019			2018
Revenues:
Gross premiums written	$	(561,139)		$	623,328
Net premiums written	$	(561,530)		$	622,651
Change in unearned premiums		744,632			(105,838)
Net premiums earned		183,102			516,813
Other insurance revenue		750			3,726
Net investment income		32,022			32,869
Net realized (losses) gains on investment		(11,101)			357
Total revenues		204,773			553,765
Expenses:
Net loss and loss adjustment expenses		152,689			353,206
Commission and other acquisition expenses		69,617			166,628
General and administrative expenses		15,939			15,671
Total expenses		238,245			535,505
Non-GAAP (loss) income from operations(2)		(33,472)			18,260
Other expenses:
Interest and amortization expenses		(4,829)			(4,829)
Foreign exchange and other gains (losses)		4,979			(2,407)
Total other expenses		150			(7,236)
(Loss) income before income taxes		(33,322)			11,024
Less: income tax benefit		(38)			(1,324)
Net (loss) income from continuing operations		(33,284)			12,348
(Loss) income from discontinued operations, net of income tax		(3,352)			9,995
Net (loss) income		(36,636)			22,343
Net income from continuing operations attributable to noncontrolling interests		–			(71)
Net (loss) income attributable to Maiden		(36,636)			22,272
Dividends on preference shares(3)		–			(8,545)
Net loss attributable to Maiden common shareholders	$	(36,636)		$	13,727
Basic (loss) earnings from continuing operations per share attributable to Maiden common shareholders Advertisement	$	(0.40)		$	0.05
Basic (loss) earnings from discontinued operations per share attributable to Maiden common shareholders		(0.04)			0.12
Basic (loss) earnings per share attributable to Maiden common shareholders	$	(0.44)		$	0.17
Diluted (loss) earnings from continuing operations per share attributable to Maiden common shareholders(15)	$	(0.40)		$	0.04
Diluted (loss) earnings from discontinued operations per share attributable to Maiden common shareholders(15)		(0.04)			0.12
Diluted (loss) earnings per share attributable to Maiden common shareholders(15)	$	(0.44)		$	0.16
Dividends declared per common share	$	–		$	0.15
Annualized return on average common equity		-142.5%			7.6%
Weighted average number of common shares – basic		82,965,156			83,040,413
Adjusted weighted average number of common shares and assumed conversions – diluted(15)		82,965,156			83,318,542

Maiden Holdings, Ltd.
Supplemental Financial Data – Segment Information
(in thousands (000’s))
(Unaudited)
For the Three Months Ended March 31, 2019				Diversified Reinsurance				AmTrust Reinsurance Advertisement				Other				Total
Gross premiums written				$	15,338			$	(576,477)			$	–			$	(561,139)
Net premiums written				$	14,947			$	(576,477)			$	–			$	(561,530)
Net premiums earned				$	25,292			$	157,810			$	–			$	183,102
Other insurance revenue					750				–				–				750
Net loss and loss adjustment expenses (“loss and LAE”)					(14,391)				(138,070)				(228)				(152,689)
Commissions and other acquisition expenses					(9,261)				(60,356)				–				(69,617)
General and administrative expenses(4)					(3,031)				(1,266)				–				(4,297)
Underwriting loss(5)				$	(641)			$	(41,882)			$	(228)			$	(42,751)
Reconciliation to net loss from continuing operations
Net investment income and realized losses on investment																	20,921
Interest and amortization expenses																	(4,829)
Foreign exchange and other gains																	4,979
Other general and administrative expenses(4)																	(11,642)
Income tax benefit																	38
Net loss from continuing operations																$	(33,284)
Net loss and LAE ratio(6)					55.3%				87.5%								83.0%
Commission and other acquisition expense ratio(7)					35.6%				38.2%								37.9%
General and administrative expense ratio(8)					11.6%				0.8%								8.7%
Expense ratio(9)					47.2%				39.0%								46.6%
Combined ratio(10)					102.5%				126.5%								129.6%
For the Three Months Ended March 31, 2018				Diversified Reinsurance				AmTrust Reinsurance				Other				Total
Gross premiums written				$	49,400			$	573,928			$	–			$	623,328
Net premiums written				$	48,271			$	574,380			$	–			$	622,651
Net premiums earned				$	25,515			$	491,298			$	–			$	516,813
Other insurance revenue					3,726				–				–				3,726
Net loss and LAE					(15,899)				(337,307)				–				(353,206)
Commissions and other acquisition expenses					(9,312)				(157,316)				–				(166,628)
General and administrative expenses(4)					(4,481)				(920)				–				(5,401)
Underwriting loss(5)				$	(451)			$	(4,245)			$	–			$	(4,696)
Reconciliation to net income from continuing operations
Net investment income and realized gains on investment																	33,226
Interest and amortization expenses																	(4,829)
Foreign exchange losses																	(2,407)
Other general and administrative expenses(4)																	(10,270)
Income tax benefit																	1,324
Net income from continuing operations																$	12,348
Net loss and LAE ratio(6)					54.4%				68.7%								67.9%
Commission and other acquisition expense ratio(7)					31.8%				32.0%								32.0%
General and administrative expense ratio(8)					15.3%				0.2%								3.0%
Expense ratio(9)					47.1%				32.2%								35.0%
Combined ratio(10)					101.5%				100.9%								102.9%

Maiden Holdings, Ltd.
Non – GAAP Financial Measures
(in thousands (000’s), except per share data)
(Unaudited)
				For the Three Months Ended March 31,
				2019			2018
Non-GAAP operating (loss) income attributable to Maiden common shareholders(11)				$	(26,934)		$	5,782
Non-GAAP basic and diluted operating (loss) earnings per share attributable to Maiden common shareholders				$	(0.32)		$	0.07
Annualized non-GAAP operating return on average common equity(12)					-104.7%			3.2%
Reconciliation of net (loss) income attributable to Maiden common shareholders to non-GAAP operating (loss) income attributable to Maiden common shareholders:
Net (loss) income attributable to Maiden common shareholders				$	(36,636)		$	13,727
Add (subtract)
	Net realized losses (gains) on investment				11,101			(357)
	Foreign exchange and other (gains) losses				(4,979)			2,407
	Loss (income) from discontinued operations, net of income tax				3,352			(9,995)
	Divested NGHC Quota Share run-off				228			–
Non-GAAP operating (loss) income attributable to Maiden common shareholders(11)				$	(26,934)		$	5,782
Weighted average number of common shares – basic					82,965,156			83,040,413
Adjusted weighted average number of common shares and assumed conversions – diluted(15)					82,965,156			83,318,542
Reconciliation of diluted (loss) earnings per share attributable to Maiden common shareholders to non-GAAP diluted operating (loss) earnings per share attributable to Maiden common shareholders:
Diluted (loss) earnings per share attributable to Maiden common shareholders				$	(0.44)		$	0.16
Add (subtract)
	Net realized losses (gains) on investment				0.13			–
	Foreign exchange and other (gains) losses				(0.06)			0.03
	Loss (income) from discontinued operations, net of income tax				0.04			(0.12)
	Divested NGHC Quota Share run-off				0.01			–
Non-GAAP diluted operating (loss) earnings per share attributable to Maiden common shareholders				$	(0.32)		$	0.07
Reconciliation of net (loss) income attributable to Maiden to non-GAAP (loss) income from operations:
Net (loss) income attributable to Maiden				$	(36,636)		$	22,272
Add (subtract)
	Foreign exchange and other (gains) losses				(4,979)			2,407
	Interest and amortization expenses				4,829			4,829
	Income tax benefit				(38)			(1,324)
	Loss (income) from discontinued operations, net of income tax Advertisement				3,352			(9,995)
	Net income attributable to noncontrolling interest				–			71 Advertisement
Non-GAAP (loss) income from operations(2)				$	(33,472)		$	18,260

Maiden Holdings, Ltd.
Non – GAAP Financial Measures
(in thousands (000’s), except per share data)
(Unaudited)
						March 31, 2019						December 31, 2018
Investable assets:
Total investments						$			3,156,627			$	4,090,965
Cash and cash equivalents									89,521				200,841
Restricted cash and cash equivalents									42,334				130,148
Loan to related party									167,975				167,975
Funds withheld									652,087				27,039
Total investable assets(13)						$			4,108,544			$	4,616,968
						March 31, 2019						December 31, 2018
Capital:
Preference shares						$			465,000			$	465,000
Common shareholders’ equity									119,289				89,275
Total Maiden shareholders’ equity									584,289				554,275
2016 Senior Notes									110,000				110,000
2013 Senior Notes									152,500				152,500
Total capital resources(14)						$			846,789			$	816,775

(1) Book value per common share is calculated using Maiden common shareholders’ equity (shareholders’ equity excluding the aggregate liquidation value of our preference shares) divided by the number of common shares outstanding.

(2) Non-GAAP (loss) income from operations is a non-GAAP financial measure defined by the Company as net loss attributable to Maiden excluding foreign exchange and other gains and losses, interest and amortization expenses, income tax expense, net income or loss attributable to noncontrolling interest and loss from discontinued operations, net of income tax and should not be considered as an alternative to net income (loss). The Company’s management believes that non-GAAP (loss) income from operations is a useful measure of the Company’s underlying earnings fundamentals based on its underwriting and investment income before financing costs. This (loss) income from operations enables readers of this information to more clearly understand the essential operating results of the Company. The Company’s measure of non-GAAP (loss) income from operations may not be comparable to similarly titled measures used by other companies.

(3) Dividends on preference shares consist of $0 and $3,094 paid to Preference shares – Series A for the three months ended March 31, 2019 and 2018, respectively, $0 and $2,939 paid to Preference shares – Series C for the three months ended March 31, 2019 and 2018, respectively, and $0 and $2,512 paid to Preference shares – Series D for the three months ended March 31, 2019 and 2018, respectively.

(4) Underwriting related general and administrative expenses is a non-GAAP measure and includes expenses which are segregated for analytical purposes as a component of underwriting income.

(5) Underwriting loss is a non-GAAP measure and is calculated as net premiums earned plus other insurance revenue less net loss and LAE, commission and other acquisition expenses and general and administrative expenses directly related to underwriting activities. Management believes that this measure is important in evaluating the underwriting performance of the Company and its segments. This measure is also a useful tool to measure the profitability of the Company separately from the investment results and is also a widely used performance indicator in the insurance industry.

(6) Calculated by dividing net loss and LAE by the sum of net premiums earned and other insurance revenue.

(7) Calculated by dividing commission and other acquisition expenses by the sum of net premiums earned and other insurance revenue.

(8) Calculated by dividing general and administrative expenses by the sum of net premiums earned and other insurance revenue.

(9) Calculated by adding together the commission and other acquisition expense ratio and general and administrative expense ratio.

(10) Calculated by adding together the net loss and LAE ratio and the expense ratio.

(11) Non-GAAP operating (loss) income is a non-GAAP financial measure defined by the Company as net loss attributable to Maiden common shareholders excluding realized and unrealized investment gains and losses, foreign exchange and other gains and losses, Divested NGHC Quota Share run-off and loss from discontinued operations, net of income tax and should not be considered as an alternative to net loss. The Company’s management believes that non-GAAP operating (loss) income is a useful indicator of trends in the Company’s underlying operations. The Company’s measure of non-GAAP operating (loss) income may not be comparable to similarly titled measures used by other companies.

(12) Non-GAAP operating return on average common equity is a non-GAAP financial measure. Management uses non-GAAP 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 non-GAAP operating (loss) income attributable to Maiden common shareholders divided by average Maiden common shareholders’ equity.

(13) Investable assets is the total of the Company’s investments, cash and cash equivalents, funds withheld receivable and loan to a related party.

(14) Total capital resources is the sum of the Company’s principal amount of debt and Maiden shareholders’ equity.

(15) During a period of loss, the basic weighted average common shares outstanding is used in the denominator of the diluted loss per common share computation as the effect of including potential dilutive shares would be anti-dilutive.

Contacts

Sard Verbinnen & Co.
Maiden-SVC@sardverb.com