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) |
Large accelerated filer x | Accelerated filer o | |
Non-accelerated filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
INDEX | ||
Page | ||
PART I - Financial Information | ||
Condensed Consolidated Balance Sheets as of September 30, 2016 (unaudited) and December 31, 2015 (audited) | ||
Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2016 and 2015 (unaudited) | ||
Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2016 and 2015 (unaudited) | ||
Condensed Consolidated Statements of Changes in Shareholders' Equity for the nine months ended September 30, 2016 and 2015 (unaudited) | ||
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015 (unaudited) | ||
PART II - Other Information | ||
September 30, 2016 (Unaudited) | December 31, 2015 (Audited) | ||||||
ASSETS | |||||||
Investments: | |||||||
Fixed maturities, available-for-sale, at fair value (amortized cost 2016: $3,660,873; 2015: $3,562,864) | $ | 3,748,342 | $ | 3,508,088 | |||
Fixed maturities, held-to-maturity, at amortized cost (fair value 2016: $798,081; 2015: $598,975) | 759,973 | 607,843 | |||||
Other investments, at fair value (cost 2016: $10,860; 2015: $10,816) | 12,268 | 11,812 | |||||
Total investments | 4,520,583 | 4,127,743 | |||||
Cash and cash equivalents | 67,459 | 89,641 | |||||
Restricted cash and cash equivalents | 366,563 | 242,859 | |||||
Accrued investment income | 33,884 | 32,288 | |||||
Reinsurance balances receivable, net (includes $220,555 and $147,365 from related parties in 2016 and 2015, respectively) | 535,015 | 377,318 | |||||
Reinsurance recoverable on unpaid losses | 97,070 | 71,248 | |||||
Loan to related party | 167,975 | 167,975 | |||||
Deferred commission and other acquisition expenses, net (includes $388,099 and $341,025 from related parties in 2016 and 2015, respectively) | 451,698 | 397,548 | |||||
Goodwill and intangible assets, net | 80,135 | 81,920 | |||||
Other assets | 147,580 | 115,038 | |||||
Total assets | $ | 6,467,962 | $ | 5,703,578 | |||
LIABILITIES | |||||||
Reserve for loss and loss adjustment expenses (includes $1,676,647 and $1,443,639 from related parties in 2016 and 2015, respectively) | $ | 2,759,518 | $ | 2,510,101 | |||
Unearned premiums (includes $1,204,853 and $1,077,460 from related parties in 2016 and 2015, respectively) | 1,571,435 | 1,354,572 | |||||
Accrued expenses and other liabilities | 150,741 | 135,897 | |||||
Liability for securities purchased | 78,581 | 3,976 | |||||
Senior Notes - principal amount | 362,500 | 360,000 | |||||
Less unamortized issuance costs | 11,172 | 10,067 | |||||
Senior notes, net | 351,328 | 349,933 | |||||
Total liabilities | 4,911,603 | 4,354,479 | |||||
Commitments and Contingencies | |||||||
EQUITY | |||||||
Preference shares | 315,000 | 480,000 | |||||
Common shares ($0.01 par value: 87,178,902 and 74,735,785 shares issued in 2016 and 2015, respectively; 86,128,999 and 73,721,140 shares outstanding in 2016 and 2015, respectively) | 872 | 747 | |||||
Additional paid-in capital | 747,203 | 579,178 | |||||
Accumulated other comprehensive income (loss) | 123,876 | (23,767 | ) | ||||
Retained earnings | 373,340 | 316,184 | |||||
Treasury shares, at cost (1,049,903 and 1,014,645 shares in 2016 and 2015, respectively) | (4,991 | ) | (4,521 | ) | |||
Total Maiden shareholders’ equity | 1,555,300 | 1,347,821 | |||||
Noncontrolling interest in subsidiaries | 1,059 | 1,278 | |||||
Total equity | 1,556,359 | 1,349,099 | |||||
Total liabilities and equity | $ | 6,467,962 | $ | 5,703,578 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Revenues: | ||||||||||||||||
Gross premiums written | $ | 706,854 | $ | 628,501 | $ | 2,259,290 | $ | 2,136,935 | ||||||||
Net premiums written | $ | 690,653 | $ | 599,153 | $ | 2,133,911 | $ | 2,025,754 | ||||||||
Change in unearned premiums | 7,625 | 59,367 | (182,060 | ) | (180,495 | ) | ||||||||||
Net premiums earned | 698,278 | 658,520 | 1,951,851 | 1,845,259 | ||||||||||||
Other insurance revenue | 2,345 | 2,177 | 8,696 | 9,408 | ||||||||||||
Net investment income | 35,666 | 32,843 | 107,291 | 96,260 | ||||||||||||
Net realized gains on investment | 1,900 | 1,216 | 4,511 | 2,327 | ||||||||||||
Total other-than-temporary impairment losses | — | (1,060 | ) | — | (1,060 | ) | ||||||||||
Portion of loss recognized in other comprehensive income (loss) | — | — | — | — | ||||||||||||
Net impairment losses recognized in earnings | — | (1,060 | ) | — | (1,060 | ) | ||||||||||
Total revenues | 738,189 | 693,696 | 2,072,349 | 1,952,194 | ||||||||||||
Expenses: | ||||||||||||||||
Net loss and loss adjustment expenses | 466,751 | 444,172 | 1,297,361 | 1,236,505 | ||||||||||||
Commission and other acquisition expenses | 206,706 | 197,639 | 587,501 | 551,678 | ||||||||||||
General and administrative expenses | 16,952 | 16,453 | 49,738 | 48,951 | ||||||||||||
Interest and amortization expenses | 6,856 | 7,266 | 21,314 | 21,796 | ||||||||||||
Accelerated amortization of senior note issuance cost | — | — | 2,345 | — | ||||||||||||
Amortization of intangible assets | 616 | 710 | 1,846 | 2,130 | ||||||||||||
Foreign exchange and other gains | (687 | ) | (1,427 | ) | (6,474 | ) | (4,062 | ) | ||||||||
Total expenses | 697,194 | 664,813 | 1,953,631 | 1,856,998 | ||||||||||||
Income before income taxes | 40,995 | 28,883 | 118,718 | 95,196 | ||||||||||||
Income tax expense | 199 | 368 | 1,206 | 1,636 | ||||||||||||
Net income | 40,796 | 28,515 | 117,512 | 93,560 | ||||||||||||
Loss attributable to noncontrolling interest | 56 | 69 | 166 | 116 | ||||||||||||
Net income attributable to Maiden shareholders | 40,852 | 28,584 | 117,678 | 93,676 | ||||||||||||
Dividends on preference shares | (9,023 | ) | (6,085 | ) | (27,723 | ) | (18,253 | ) | ||||||||
Net income attributable to Maiden common shareholders | $ | 31,829 | $ | 22,499 | $ | 89,955 | $ | 75,423 | ||||||||
Basic earnings per share attributable to Maiden common shareholders | $ | 0.42 | $ | 0.31 | $ | 1.20 | $ | 1.03 | ||||||||
Diluted earnings per share attributable to Maiden common shareholders | $ | 0.40 | $ | 0.30 | $ | 1.15 | $ | 0.99 | ||||||||
Dividends declared per common share | $ | 0.14 | $ | 0.13 | $ | 0.42 | $ | 0.39 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Net income | $ | 40,796 | $ | 28,515 | $ | 117,512 | $ | 93,560 | ||||||||
Net unrealized holding gains (losses) on available-for-sale fixed maturities arising during the period | 8,888 | (17,191 | ) | 155,052 | (80,725 | ) | ||||||||||
Adjustment for reclassification of net realized (gains) losses recognized in net income | (1,202 | ) | (11 | ) | 578 | (5 | ) | |||||||||
Foreign currency translation adjustment | (2,730 | ) | (741 | ) | (7,927 | ) | 8,316 | |||||||||
Other comprehensive income (loss), before tax | 4,956 | (17,943 | ) | 147,703 | (72,414 | ) | ||||||||||
Income tax benefit (expense) related to components of other comprehensive income | 11 | 18 | (28 | ) | 82 | |||||||||||
Other comprehensive income (loss), after tax | 4,967 | (17,925 | ) | 147,675 | (72,332 | ) | ||||||||||
Comprehensive income | 45,763 | 10,590 | 265,187 | 21,228 | ||||||||||||
Net loss attributable to noncontrolling interest | 56 | 69 | 166 | 116 | ||||||||||||
Other comprehensive (income) loss attributable to noncontrolling interest | (17 | ) | (1 | ) | (32 | ) | 46 | |||||||||
Comprehensive loss attributable to noncontrolling interest | 39 | 68 | 134 | 162 | ||||||||||||
Comprehensive income attributable to Maiden shareholders | $ | 45,802 | $ | 10,658 | $ | 265,321 | $ | 21,390 |
For the Nine Months Ended September 30, | 2016 | 2015 | ||||||
Preference shares | ||||||||
Beginning balance | $ | 480,000 | $ | 315,000 | ||||
Less: mandatory conversion of Preference Shares - Series B | (165,000 | ) | — | |||||
Ending balance | 315,000 | 315,000 | ||||||
Common shares | ||||||||
Beginning balance | 747 | 739 | ||||||
Exercise of options and issuance of shares | 4 | 8 | ||||||
Shares issued on mandatory conversion of Preference Shares - Series B | 121 | — | ||||||
Ending balance | 872 | 747 | ||||||
Additional paid-in capital | ||||||||
Beginning balance | 579,178 | 578,445 | ||||||
Exercise of options and issuance of common shares | 662 | 3,072 | ||||||
Share-based compensation expense | 2,625 | 2,519 | ||||||
Mandatory conversion of Preference Shares - Series B | 164,879 | — | ||||||
Others | (141 | ) | — | |||||
Ending balance | 747,203 | 584,036 | ||||||
Accumulated other comprehensive income | ||||||||
Beginning balance | (23,767 | ) | 95,293 | |||||
Change in net unrealized gains (losses) on investments, net | 155,602 | (80,648 | ) | |||||
Foreign currency translation adjustments | (7,959 | ) | 8,362 | |||||
Ending balance | 123,876 | 23,007 | ||||||
Retained earnings | ||||||||
Beginning balance | 316,184 | 255,084 | ||||||
Net income attributable to Maiden shareholders | 117,678 | 93,676 | ||||||
Dividends on preference shares | (27,723 | ) | (18,253 | ) | ||||
Dividends on common shares | (32,799 | ) | (28,711 | ) | ||||
Ending balance | 373,340 | 301,796 | ||||||
Treasury shares | ||||||||
Beginning balance | (4,521 | ) | (3,867 | ) | ||||
Shares repurchased for treasury | (470 | ) | (654 | ) | ||||
Ending balance | (4,991 | ) | (4,521 | ) | ||||
Noncontrolling interest in subsidiaries | ||||||||
Beginning balance | 1,278 | 472 | ||||||
Change in minority interest | (54 | ) | 1,710 | |||||
Dividend paid to noncontrolling interest | (31 | ) | (303 | ) | ||||
Loss attributable to noncontrolling interest | (166 | ) | (116 | ) | ||||
Foreign currency translation adjustments | 32 | (46 | ) | |||||
Ending balance | 1,059 | 1,717 | ||||||
Total equity | $ | 1,556,359 | $ | 1,221,782 |
For the Nine Months Ended September 30, | 2016 | 2015 | ||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 117,512 | $ | 93,560 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 16,841 | 7,077 | ||||||
Net realized gains on investment | (4,511 | ) | (2,327 | ) | ||||
Net impairment losses recognized in earnings | — | 1,060 | ||||||
Foreign exchange and other gains | (6,474 | ) | (4,062 | ) | ||||
Changes in assets – (increase) decrease: | ||||||||
Reinsurance balances receivable, net | (154,091 | ) | 14,093 | |||||
Reinsurance recoverable on unpaid losses | (26,281 | ) | (17,374 | ) | ||||
Accrued investment income | (1,537 | ) | (3,110 | ) | ||||
Deferred commission and other acquisition expenses | (49,713 | ) | (57,838 | ) | ||||
Other assets | (32,027 | ) | (64,512 | ) | ||||
Changes in liabilities – increase (decrease): | ||||||||
Reserve for loss and loss adjustment expenses | 250,937 | 291,123 | ||||||
Unearned premiums | 204,752 | 238,726 | ||||||
Accrued expenses and other liabilities | 10,749 | 29,596 | ||||||
Net cash provided by operating activities | 326,157 | 526,012 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of fixed maturities – available-for-sale | (732,001 | ) | (1,095,162 | ) | ||||
Purchases of other investments | (167 | ) | (144 | ) | ||||
Proceeds from sales of fixed maturities – available-for-sale | 101,923 | 116,093 | ||||||
Proceeds from maturities and calls of fixed maturities | 442,490 | 467,910 | ||||||
Proceeds from redemption of other investments | 572 | 344 | ||||||
(Increase) decrease in restricted cash and cash equivalents, net | (103,685 | ) | 41,022 | |||||
Other, net | (521 | ) | (715 | ) | ||||
Net cash used in investing activities | (291,389 | ) | (470,652 | ) | ||||
Cash flows from financing activities: | ||||||||
Senior notes issuance, net of issuance costs | 106,424 | — | ||||||
Redemption of 2011 senior notes | (107,500 | ) | — | |||||
Common share issuance | 666 | 3,080 | ||||||
Repurchase of common shares for treasury | (470 | ) | (654 | ) | ||||
Dividends paid to common shareholders | (31,062 | ) | (28,616 | ) | ||||
Dividends paid to preference shareholders | (27,723 | ) | (18,253 | ) | ||||
Net cash used in financing activities | (59,665 | ) | (44,443 | ) | ||||
Effect of exchange rate changes on foreign currency cash | 2,715 | (1,485 | ) | |||||
Net (decrease) increase in cash and cash equivalents | (22,182 | ) | 9,432 | |||||
Cash and cash equivalents, beginning of period | 89,641 | 108,119 | ||||||
Cash and cash equivalents, end of period | $ | 67,459 | $ | 117,551 |
For the Three Months Ended September 30, 2016 | Diversified Reinsurance | AmTrust Reinsurance | Other | Total | ||||||||||||
Gross premiums written | $ | 186,750 | $ | 520,104 | $ | — | $ | 706,854 | ||||||||
Net premiums written | $ | 179,092 | $ | 511,561 | $ | — | $ | 690,653 | ||||||||
Net premiums earned | $ | 175,141 | $ | 523,137 | $ | — | $ | 698,278 | ||||||||
Other insurance revenue | 2,345 | — | — | 2,345 | ||||||||||||
Net loss and loss adjustment expenses ("LAE") | (132,396 | ) | (334,310 | ) | (45 | ) | (466,751 | ) | ||||||||
Commission and other acquisition expenses | (39,868 | ) | (166,836 | ) | (2 | ) | (206,706 | ) | ||||||||
General and administrative expenses | (9,038 | ) | (759 | ) | — | (9,797 | ) | |||||||||
Underwriting income (loss) | $ | (3,816 | ) | $ | 21,232 | $ | (47 | ) | $ | 17,369 | ||||||
Reconciliation to net income | ||||||||||||||||
Net investment income and realized gains on investment | 37,566 | |||||||||||||||
Interest and amortization expenses | (6,856 | ) | ||||||||||||||
Amortization of intangible assets | (616 | ) | ||||||||||||||
Foreign exchange and other gains | 687 | |||||||||||||||
Other general and administrative expenses | (7,155 | ) | ||||||||||||||
Income tax expense | (199 | ) | ||||||||||||||
Net income | $ | 40,796 | ||||||||||||||
Net loss and LAE ratio (1) | 74.6 | % | 63.9 | % | 66.6 | % | ||||||||||
Commission and other acquisition expense ratio (2) | 22.5 | % | 31.9 | % | 29.5 | % | ||||||||||
General and administrative expense ratio (3) | 5.1 | % | 0.1 | % | 2.4 | % | ||||||||||
Combined ratio (4) | 102.2 | % | 95.9 | % | 98.5 | % |
For the Three Months Ended September 30, 2015 | Diversified Reinsurance | AmTrust Reinsurance | Other | Total | ||||||||||||
Gross premiums written | $ | 174,307 | $ | 454,194 | $ | — | $ | 628,501 | ||||||||
Net premiums written | $ | 163,710 | $ | 435,443 | $ | — | $ | 599,153 | ||||||||
Net premiums earned | $ | 193,207 | $ | 465,313 | $ | — | $ | 658,520 | ||||||||
Other insurance revenue | 2,177 | — | — | 2,177 | ||||||||||||
Net loss and LAE | (142,468 | ) | (297,780 | ) | (3,924 | ) | (444,172 | ) | ||||||||
Commission and other acquisition expenses | (51,714 | ) | (146,008 | ) | 83 | (197,639 | ) | |||||||||
General and administrative expenses | (8,218 | ) | (656 | ) | — | (8,874 | ) | |||||||||
Underwriting income (loss) | $ | (7,016 | ) | $ | 20,869 | $ | (3,841 | ) | $ | 10,012 | ||||||
Reconciliation to net income | ||||||||||||||||
Net investment income and realized gains on investment | 34,059 | |||||||||||||||
Net impairment losses recognized in earnings | (1,060 | ) | ||||||||||||||
Interest and amortization expenses | (7,266 | ) | ||||||||||||||
Amortization of intangible assets | (710 | ) | ||||||||||||||
Foreign exchange and other gains | 1,427 | |||||||||||||||
Other general and administrative expenses | (7,579 | ) | ||||||||||||||
Income tax expense | (368 | ) | ||||||||||||||
Net income | $ | 28,515 | ||||||||||||||
Net loss and LAE ratio (1) | 72.9 | % | 63.9 | % | 67.2 | % | ||||||||||
Commission and other acquisition expense ratio (2) | 26.5 | % | 31.4 | % | 29.9 | % | ||||||||||
General and administrative expense ratio (3) | 4.2 | % | 0.1 | % | 2.5 | % | ||||||||||
Combined ratio (4) | 103.6 | % | 95.4 | % | 99.6 | % |
For the Nine Months Ended September 30, 2016 | Diversified Reinsurance | AmTrust Reinsurance | Other | Total | ||||||||||||
Gross premiums written | $ | 667,388 | $ | 1,591,902 | $ | — | $ | 2,259,290 | ||||||||
Net premiums written | $ | 626,522 | $ | 1,507,389 | $ | — | $ | 2,133,911 | ||||||||
Net premiums earned | $ | 538,152 | $ | 1,413,699 | $ | — | $ | 1,951,851 | ||||||||
Other insurance revenue | 8,696 | — | — | 8,696 | ||||||||||||
Net loss and LAE | (395,718 | ) | (898,703 | ) | (2,940 | ) | (1,297,361 | ) | ||||||||
Commission and other acquisition expenses | (139,895 | ) | (447,604 | ) | (2 | ) | (587,501 | ) | ||||||||
General and administrative expenses | (26,717 | ) | (2,308 | ) | — | (29,025 | ) | |||||||||
Underwriting income (loss) | $ | (15,482 | ) | $ | 65,084 | $ | (2,942 | ) | $ | 46,660 | ||||||
Reconciliation to net income | ||||||||||||||||
Net investment income and realized gains on investment | 111,802 | |||||||||||||||
Interest and amortization expenses | (21,314 | ) | ||||||||||||||
Accelerated amortization of senior note issuance cost | (2,345 | ) | ||||||||||||||
Amortization of intangible assets | (1,846 | ) | ||||||||||||||
Foreign exchange and other gains | 6,474 | |||||||||||||||
Other general and administrative expenses | (20,713 | ) | ||||||||||||||
Income tax expense | (1,206 | ) | ||||||||||||||
Net income | $ | 117,512 | ||||||||||||||
Net loss and LAE ratio (1) | 72.4 | % | 63.5 | % | 66.2 | % | ||||||||||
Commission and other acquisition expense ratio (2) | 25.6 | % | 31.7 | % | 30.0 | % | ||||||||||
General and administrative expense ratio (3) | 4.8 | % | 0.2 | % | 2.5 | % | ||||||||||
Combined ratio (4) | 102.8 | % | 95.4 | % | 98.7 | % |
For the Nine Months Ended September 30, 2015 | Diversified Reinsurance | AmTrust Reinsurance | Other | Total | ||||||||||||
Gross premiums written | $ | 631,294 | $ | 1,505,642 | $ | (1 | ) | $ | 2,136,935 | |||||||
Net premiums written | $ | 602,693 | $ | 1,423,060 | $ | 1 | $ | 2,025,754 | ||||||||
Net premiums earned | $ | 570,694 | $ | 1,274,563 | $ | 2 | $ | 1,845,259 | ||||||||
Other insurance revenue | 9,408 | — | — | 9,408 | ||||||||||||
Net loss and LAE | (417,846 | ) | (811,016 | ) | (7,643 | ) | (1,236,505 | ) | ||||||||
Commission and other acquisition expenses | (152,332 | ) | (399,291 | ) | (55 | ) | (551,678 | ) | ||||||||
General and administrative expenses | (25,976 | ) | (2,200 | ) | — | (28,176 | ) | |||||||||
Underwriting income (loss) | $ | (16,052 | ) | $ | 62,056 | $ | (7,696 | ) | $ | 38,308 | ||||||
Reconciliation to net income | ||||||||||||||||
Net investment income and realized gains on investment | 98,587 | |||||||||||||||
Net impairment losses recognized in earnings | (1,060 | ) | ||||||||||||||
Interest and amortization expenses | (21,796 | ) | ||||||||||||||
Amortization of intangible assets | (2,130 | ) | ||||||||||||||
Foreign exchange and other gains | 4,062 | |||||||||||||||
Other general and administrative expenses | (20,775 | ) | ||||||||||||||
Income tax expense | (1,636 | ) | ||||||||||||||
Net income | $ | 93,560 | ||||||||||||||
Net loss and LAE ratio (1) | 72.0 | % | 63.6 | % | 66.7 | % | ||||||||||
Commission and other acquisition expense ratio (2) | 26.3 | % | 31.3 | % | 29.7 | % | ||||||||||
General and administrative expense ratio (3) | 4.5 | % | 0.2 | % | 2.7 | % | ||||||||||
Combined ratio (4) | 102.8 | % | 95.1 | % | 99.1 | % |
(1) Calculated by dividing net loss and LAE by net premiums earned and other insurance revenue. | ||||||||
(2) Calculated by dividing commission and other acquisition expenses by net premiums earned and other insurance revenue. | ||||||||
(3) Calculated by dividing general and administrative expenses by net premiums earned and other insurance revenue. | ||||||||
(4) Calculated by adding together the net loss and LAE ratio, commission and other acquisition expense ratio and general and administrative expense ratio. |
September 30, 2016 | Diversified Reinsurance | AmTrust Reinsurance | Total | |||||||||
Total assets - reportable segments | $ | 1,929,455 | $ | 3,937,523 | $ | 5,866,978 | ||||||
Corporate assets | — | — | 600,984 | |||||||||
Total Assets | $ | 1,929,455 | $ | 3,937,523 | $ | 6,467,962 |
December 31, 2015 | Diversified Reinsurance | AmTrust Reinsurance | Total | |||||||||
Total assets - reportable segments | $ | 1,644,541 | $ | 3,178,859 | $ | 4,823,400 | ||||||
Corporate assets | — | — | 880,178 | |||||||||
Total Assets | $ | 1,644,541 | $ | 3,178,859 | $ | 5,703,578 |
For the Three Months Ended September 30, | 2016 | 2015 | ||||||||||||
Net premiums written | Total | % of Total | Total | % of Total | ||||||||||
Diversified Reinsurance | ||||||||||||||
Property | $ | 30,606 | 4.4 | % | $ | 29,574 | 4.9 | % | ||||||
Casualty | 115,360 | 16.7 | % | 101,191 | 16.9 | % | ||||||||
Accident and Health | 14,845 | 2.2 | % | 12,918 | 2.2 | % | ||||||||
International | 18,281 | 2.6 | % | 20,027 | 3.3 | % | ||||||||
Total Diversified Reinsurance | 179,092 | 25.9 | % | 163,710 | 27.3 | % | ||||||||
AmTrust Reinsurance | ||||||||||||||
Small Commercial Business | 314,677 | 45.6 | % | 231,416 | 38.6 | % | ||||||||
Specialty Program | 98,895 | 14.3 | % | 86,612 | 14.5 | % | ||||||||
Specialty Risk and Extended Warranty | 97,989 | 14.2 | % | 117,415 | 19.6 | % | ||||||||
Total AmTrust Reinsurance | 511,561 | 74.1 | % | 435,443 | 72.7 | % | ||||||||
$ | 690,653 | 100.0 | % | $ | 599,153 | 100.0 | % |
For the Three Months Ended September 30, | 2016 | 2015 | ||||||||||||
Net premiums earned | Total | % of Total | Total | % of Total | ||||||||||
Diversified Reinsurance | ||||||||||||||
Property | $ | 29,921 | 4.3 | % | $ | 39,593 | 6.0 | % | ||||||
Casualty | 105,893 | 15.2 | % | 115,646 | 17.6 | % | ||||||||
Accident and Health | 18,436 | 2.6 | % | 14,093 | 2.1 | % | ||||||||
International | 20,891 | 3.0 | % | 23,875 | 3.6 | % | ||||||||
Total Diversified Reinsurance | 175,141 | 25.1 | % | 193,207 | 29.3 | % | ||||||||
AmTrust Reinsurance | ||||||||||||||
Small Commercial Business | 320,596 | 45.9 | % | 257,296 | 39.1 | % | ||||||||
Specialty Program | 89,856 | 12.9 | % | 80,302 | 12.2 | % | ||||||||
Specialty Risk and Extended Warranty | 112,685 | 16.1 | % | 127,715 | 19.4 | % | ||||||||
Total AmTrust Reinsurance | 523,137 | 74.9 | % | 465,313 | 70.7 | % | ||||||||
$ | 698,278 | 100.0 | % | $ | 658,520 | 100.0 | % |
For the Nine Months Ended September 30, | 2016 | 2015 | ||||||||||||
Net premiums written | Total | % of Total | Total | % of Total | ||||||||||
Diversified Reinsurance | ||||||||||||||
Property | $ | 123,991 | 5.8 | % | $ | 128,482 | 6.3 | % | ||||||
Casualty | 365,332 | 17.1 | % | 359,530 | 17.8 | % | ||||||||
Accident and Health | 68,140 | 3.2 | % | 53,483 | 2.7 | % | ||||||||
International | 69,059 | 3.2 | % | 61,198 | 3.0 | % | ||||||||
Total Diversified Reinsurance | 626,522 | 29.3 | % | 602,693 | 29.8 | % | ||||||||
AmTrust Reinsurance | ||||||||||||||
Small Commercial Business | 983,601 | 46.1 | % | 857,617 | 42.3 | % | ||||||||
Specialty Program | 268,193 | 12.6 | % | 262,068 | 12.9 | % | ||||||||
Specialty Risk and Extended Warranty | 255,595 | 12.0 | % | 303,375 | 15.0 | % | ||||||||
Total AmTrust Reinsurance | 1,507,389 | 70.7 | % | 1,423,060 | 70.2 | % | ||||||||
Other | — | — | % | 1 | — | % | ||||||||
$ | 2,133,911 | 100.0 | % | $ | 2,025,754 | 100.0 | % |
For the Nine Months Ended September 30, | 2016 | 2015 | ||||||||||||
Net premiums earned | Total | % of Total | Total | % of Total | ||||||||||
Diversified Reinsurance | ||||||||||||||
Property | $ | 103,023 | 5.3 | % | $ | 112,878 | 6.1 | % | ||||||
Casualty | 313,736 | 16.1 | % | 350,549 | 19.0 | % | ||||||||
Accident and Health | 55,788 | 2.8 | % | 41,361 | 2.2 | % | ||||||||
International | 65,605 | 3.4 | % | 65,906 | 3.6 | % | ||||||||
Total Diversified Reinsurance | 538,152 | 27.6 | % | 570,694 | 30.9 | % | ||||||||
AmTrust Reinsurance | ||||||||||||||
Small Commercial Business | 864,699 | 44.3 | % | 734,731 | 39.8 | % | ||||||||
Specialty Program | 251,543 | 12.9 | % | 210,690 | 11.4 | % | ||||||||
Specialty Risk and Extended Warranty | 297,457 | 15.2 | % | 329,142 | 17.9 | % | ||||||||
Total AmTrust Reinsurance | 1,413,699 | 72.4 | % | 1,274,563 | 69.1 | % | ||||||||
Other | — | — | % | 2 | — | % | ||||||||
$ | 1,951,851 | 100.0 | % | $ | 1,845,259 | 100.0 | % |
September 30, 2016 | Original or amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | ||||||||||||
AFS fixed maturities: | ||||||||||||||||
U.S. treasury bonds | $ | 5,183 | $ | 317 | $ | — | $ | 5,500 | ||||||||
U.S. agency bonds – mortgage-backed | 1,572,387 | 34,128 | (737 | ) | 1,605,778 | |||||||||||
U.S. agency bonds – other | 4,256 | 362 | — | 4,618 | ||||||||||||
Non-U.S. government and supranational bonds | 35,579 | 264 | (3,181 | ) | 32,662 | |||||||||||
Asset-backed securities | 205,534 | 7,306 | (49 | ) | 212,791 | |||||||||||
Corporate bonds | 1,775,739 | 75,202 | (31,688 | ) | 1,819,253 | |||||||||||
Municipal bonds | 62,195 | 5,545 | — | 67,740 | ||||||||||||
Total AFS fixed maturities | 3,660,873 | 123,124 | (35,655 | ) | 3,748,342 | |||||||||||
Held-to-maturity ("HTM") fixed maturities: | ||||||||||||||||
Corporate bonds | 759,973 | 38,941 | (833 | ) | 798,081 | |||||||||||
Total HTM fixed maturities | 759,973 | 38,941 | (833 | ) | 798,081 | |||||||||||
Other investments | 10,860 | 1,408 | — | 12,268 | ||||||||||||
Total investments | $ | 4,431,706 | $ | 163,473 | $ | (36,488 | ) | $ | 4,558,691 |
December 31, 2015 | Original or amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | ||||||||||||
AFS fixed maturities: | ||||||||||||||||
U.S. treasury bonds | $ | 5,714 | $ | 312 | $ | (16 | ) | $ | 6,010 | |||||||
U.S. agency bonds – mortgage-backed | 1,471,782 | 15,399 | (10,190 | ) | 1,476,991 | |||||||||||
U.S. agency bonds – other | 23,734 | 577 | — | 24,311 | ||||||||||||
Non-U.S. government and supranational bonds | 35,128 | — | (4,584 | ) | 30,544 | |||||||||||
Asset-backed securities | 165,719 | 1,174 | (1,089 | ) | 165,804 | |||||||||||
Corporate bonds | 1,798,610 | 38,070 | (97,012 | ) | 1,739,668 | |||||||||||
Municipal bonds | 62,177 | 2,583 | — | 64,760 | ||||||||||||
Total AFS fixed maturities | 3,562,864 | 58,115 | (112,891 | ) | 3,508,088 | |||||||||||
HTM fixed maturities: | ||||||||||||||||
Corporate bonds | 607,843 | 3,458 | (12,326 | ) | 598,975 | |||||||||||
Total HTM fixed maturities | 607,843 | 3,458 | (12,326 | ) | 598,975 | |||||||||||
Other investments | 10,816 | 1,091 | (95 | ) | 11,812 | |||||||||||
Total investments | $ | 4,181,523 | $ | 62,664 | $ | (125,312 | ) | $ | 4,118,875 |
AFS fixed maturities | HTM fixed maturities | |||||||||||||||
September 30, 2016 | Amortized cost | Fair value | Amortized cost | Fair value | ||||||||||||
Maturity | ||||||||||||||||
Due in one year or less | $ | 124,653 | $ | 120,322 | $ | — | $ | — | ||||||||
Due after one year through five years | 483,935 | 486,485 | 223,261 | 226,753 | ||||||||||||
Due after five years through ten years | 1,260,222 | 1,308,224 | 531,624 | 566,140 | ||||||||||||
Due after ten years | 14,142 | 14,742 | 5,088 | 5,188 | ||||||||||||
1,882,952 | 1,929,773 | 759,973 | 798,081 | |||||||||||||
U.S. agency bonds – mortgage-backed | 1,572,387 | 1,605,778 | — | — | ||||||||||||
Asset-backed securities | 205,534 | 212,791 | — | — | ||||||||||||
Total fixed maturities | $ | 3,660,873 | $ | 3,748,342 | $ | 759,973 | $ | 798,081 |
Less than 12 Months | 12 Months or more | Total | ||||||||||||||||||||||
September 30, 2016 | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | ||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||
U.S. agency bonds – mortgage-backed | $ | 13,029 | $ | (27 | ) | $ | 54,566 | $ | (710 | ) | $ | 67,595 | $ | (737 | ) | |||||||||
Non–U.S. government and supranational bonds | 1,081 | (41 | ) | 27,645 | (3,140 | ) | 28,726 | (3,181 | ) | |||||||||||||||
Asset-backed securities | 21,746 | (49 | ) | — | — | 21,746 | (49 | ) | ||||||||||||||||
Corporate bonds | 171,844 | (1,551 | ) | 355,317 | (30,970 | ) | 527,161 | (32,521 | ) | |||||||||||||||
Total temporarily impaired fixed maturities | $ | 207,700 | $ | (1,668 | ) | $ | 437,528 | $ | (34,820 | ) | $ | 645,228 | $ | (36,488 | ) |
Less than 12 Months | 12 Months or more | Total | ||||||||||||||||||||||
December 31, 2015 | Fair value | Unrealized losses | Fair value | Unrealized losses | Fair value | Unrealized losses | ||||||||||||||||||
Fixed maturities | ||||||||||||||||||||||||
U.S. treasury bonds | $ | 1,119 | $ | (16 | ) | $ | — | $ | — | $ | 1,119 | $ | (16 | ) | ||||||||||
U.S. agency bonds – mortgage-backed | 443,331 | (4,113 | ) | 170,053 | (6,077 | ) | 613,384 | (10,190 | ) | |||||||||||||||
Non–U.S. government and supranational bonds | 6,958 | (365 | ) | 22,586 | (4,219 | ) | 29,544 | (4,584 | ) | |||||||||||||||
Asset-backed securities | 89,838 | (1,089 | ) | — | — | 89,838 | (1,089 | ) | ||||||||||||||||
Corporate bonds | 752,911 | (41,352 | ) | 399,779 | (67,986 | ) | 1,152,690 | (109,338 | ) | |||||||||||||||
Total temporarily impaired fixed maturities | 1,294,157 | (46,935 | ) | 592,418 | (78,282 | ) | 1,886,575 | (125,217 | ) | |||||||||||||||
Other investments | 4,905 | (95 | ) | — | — | 4,905 | (95 | ) | ||||||||||||||||
Total temporarily impaired fixed maturities and other investments | $ | 1,299,062 | $ | (47,030 | ) | $ | 592,418 | $ | (78,282 | ) | $ | 1,891,480 | $ | (125,312 | ) |
Ratings* as of September 30, 2016 | Amortized cost | Fair value | % of Total fair value | ||||||||
Fixed maturities | |||||||||||
U.S. treasury bonds | $ | 5,183 | $ | 5,500 | 0.1 | % | |||||
U.S. agency bonds | 1,576,643 | 1,610,396 | 35.4 | % | |||||||
AAA | 164,038 | 173,127 | 3.8 | % | |||||||
AA+, AA, AA- | 244,901 | 255,882 | 5.6 | % | |||||||
A+, A, A- | 1,300,659 | 1,344,515 | 29.6 | % | |||||||
BBB+, BBB, BBB- | 964,197 | 990,817 | 21.8 | % | |||||||
BB+ or lower | 165,225 | 166,186 | 3.7 | % | |||||||
Total | $ | 4,420,846 | $ | 4,546,423 | 100.0 | % |
Ratings* as of December 31, 2015 | Amortized cost | Fair value | % of Total fair value | ||||||||
Fixed maturities | |||||||||||
U.S. treasury bonds | $ | 5,714 | $ | 6,010 | 0.1 | % | |||||
U.S. agency bonds | 1,495,516 | 1,501,302 | 36.6 | % | |||||||
AAA | 170,190 | 170,391 | 4.1 | % | |||||||
AA+, AA, AA- | 222,506 | 223,084 | 5.4 | % | |||||||
A+, A, A- | 1,075,550 | 1,066,794 | 26.0 | % | |||||||
BBB+, BBB, BBB- | 1,077,064 | 1,039,228 | 25.3 | % | |||||||
BB+ or lower | 124,167 | 100,254 | 2.5 | % | |||||||
Total | $ | 4,170,707 | $ | 4,107,063 | 100.0 | % |
September 30, 2016 | December 31, 2015 | |||||||||||||
Fair value | % of Total fair value | Fair value | % of Total fair value | |||||||||||
Investment in quoted equity | $ | 5,560 | 45.3 | % | $ | 4,905 | 41.5 | % | ||||||
Investments in limited partnerships | 5,708 | 46.5 | % | 5,907 | 50.0 | % | ||||||||
Other | 1,000 | 8.2 | % | 1,000 | 8.5 | % | ||||||||
Total other investments | $ | 12,268 | 100.0 | % | $ | 11,812 | 100.0 | % |
For the Three Months Ended September 30, 2016 | Gross gains | Gross losses | Net | |||||||||
AFS fixed maturities | $ | 1,813 | $ | — | $ | 1,813 | ||||||
Other investments | 87 | — | 87 | |||||||||
Net realized gains on investment | $ | 1,900 | $ | — | $ | 1,900 |
For the Three Months Ended September 30, 2015 | Gross gains | Gross losses | Net | |||||||||
AFS fixed maturities | $ | 1,216 | $ | — | $ | 1,216 | ||||||
Net realized gains on investment | $ | 1,216 | $ | — | $ | 1,216 |
For the Nine Months Ended September 30, 2016 | Gross gains | Gross losses | Net | |||||||||
AFS fixed maturities | $ | 4,953 | $ | (891 | ) | $ | 4,062 | |||||
Other investments | 449 | — | 449 | |||||||||
Net realized gains on investment | $ | 5,402 | $ | (891 | ) | $ | 4,511 |
For the Nine Months Ended September 30, 2015 | Gross gains | Gross losses | Net | |||||||||
AFS fixed maturities | $ | 2,264 | $ | — | $ | 2,264 | ||||||
Other investments | 63 | — | 63 | |||||||||
Net realized gains on investment | $ | 2,327 | $ | — | $ | 2,327 |
September 30, 2016 | December 31, 2015 | |||||||
Fixed maturities | $ | 100,196 | $ | (55,024 | ) | |||
Other investments | 1,408 | 996 | ||||||
Total net unrealized gain (loss) | 101,604 | (54,028 | ) | |||||
Deferred income tax expense | (114 | ) | (84 | ) | ||||
Net unrealized gains, net of deferred income tax | $ | 101,490 | $ | (54,112 | ) | |||
Change in net unrealized gains, net of deferred income tax | $ | 155,602 |
September 30, 2016 | December 31, 2015 | |||||||
Restricted cash and cash equivalents – third party agreements | $ | 112,038 | $ | 102,837 | ||||
Restricted cash and cash equivalents – related party agreements | 254,433 | 139,944 | ||||||
Restricted cash and cash equivalents – U.S. state regulatory authorities | 92 | 78 | ||||||
Total restricted cash and cash equivalents | 366,563 | 242,859 | ||||||
Restricted investments AFS – in trust for third party agreements at fair value (amortized cost: 2016 – $1,233,629; 2015 – $1,081,202) | 1,256,528 | 1,067,602 | ||||||
Restricted investments AFS – in trust for related party agreements at fair value (amortized cost: 2016 – $1,969,268; 2015 – $1,781,178) | 2,011,761 | 1,754,705 | ||||||
Restricted investments HTM – in trust for related party agreements at fair value (amortized cost: 2016 – $759,973; 2015 – $607,843) | 798,081 | 598,975 | ||||||
Restricted investments AFS – in trust for U.S. state regulatory authorities (amortized cost: 2016 – $4,055; 2015 – $4,071) | 4,312 | 4,303 | ||||||
Total restricted investments | 4,070,682 | 3,425,585 | ||||||
Total restricted cash and cash equivalents and investments | $ | 4,437,245 | $ | 3,668,444 |
• | Level 1 — Valuations based on unadjusted quoted market prices for identical assets or liabilities that we have the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Examples of assets and liabilities utilizing Level 1 inputs include: exchange-traded equity securities and U.S. treasury bonds; |
• | Level 2 — Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical assets or liabilities in inactive markets, or valuations based on models where the significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data. Examples of assets and liabilities utilizing Level 2 inputs include: U.S. government-sponsored agency securities; non-U.S. government and supranational obligations; commercial mortgage-backed securities ("CMBS"); collateralized loan obligations ("CLO"); corporate and municipal bonds; and |
• | Level 3 — Valuations based on models where significant inputs are not observable. The unobservable inputs reflect our own assumptions about assumptions that market participants would use. Examples of assets and liabilities utilizing Level 3 inputs include: insurance and reinsurance derivative contracts; and hedge and credit funds with partial transparency. |
September 30, 2016 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Fair Value | ||||||||||||
AFS fixed maturities | ||||||||||||||||
U.S. treasury bonds | $ | 5,500 | $ | — | $ | — | $ | 5,500 | ||||||||
U.S. agency bonds – mortgage-backed | — | 1,605,778 | — | 1,605,778 | ||||||||||||
U.S. agency bonds – other | — | 4,618 | — | 4,618 | ||||||||||||
Non-U.S. government and supranational bonds | — | 32,662 | — | 32,662 | ||||||||||||
Asset-backed securities | — | 212,791 | — | 212,791 | ||||||||||||
Corporate bonds | — | 1,819,253 | — | 1,819,253 | ||||||||||||
Municipal bonds | — | 67,740 | — | 67,740 | ||||||||||||
Other investments | 5,560 | — | 6,708 | 12,268 | ||||||||||||
Total | $ | 11,060 | $ | 3,742,842 | $ | 6,708 | $ | 3,760,610 | ||||||||
As a percentage of total assets | 0.2 | % | 57.9 | % | 0.1 | % | 58.2 | % |
December 31, 2015 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total Fair Value | ||||||||||||
AFS fixed maturities | ||||||||||||||||
U.S. treasury bonds | $ | 6,010 | $ | — | $ | — | $ | 6,010 | ||||||||
U.S. agency bonds – mortgage-backed | — | 1,476,991 | — | 1,476,991 | ||||||||||||
U.S. agency bonds – other | — | 24,311 | — | 24,311 | ||||||||||||
Non-U.S. government and supranational bonds | — | 30,544 | — | 30,544 | ||||||||||||
Asset-backed securities | — | 165,804 | — | 165,804 | ||||||||||||
Corporate bonds | — | 1,739,668 | — | 1,739,668 | ||||||||||||
Municipal bonds | — | 64,760 | — | 64,760 | ||||||||||||
Other investments | 4,905 | — | 6,907 | 11,812 | ||||||||||||
Total | $ | 10,915 | $ | 3,502,078 | $ | 6,907 | $ | 3,519,900 | ||||||||
As a percentage of total assets | 0.2 | % | 61.4 | % | 0.1 | % | 61.7 | % |
For the Three Months Ended | ||||||||
Other investments: | September 30, 2016 | September 30, 2015 | ||||||
Balance at beginning of period | $ | 6,562 | $ | 6,906 | ||||
Total realized gains – included in net realized gains on investment | 87 | — | ||||||
Change in total unrealized gains – included in other comprehensive income (loss) | 29 | 161 | ||||||
Purchases | 75 | — | ||||||
Redemptions | (45 | ) | (270 | ) | ||||
Balance at end of period | $ | 6,708 | $ | 6,797 |
For the Nine Months Ended | ||||||||
Other investments: | September 30, 2016 | September 30, 2015 | ||||||
Balance at beginning of period | $ | 6,907 | $ | 6,581 | ||||
Total realized gains – included in net realized gains on investment | 449 | 63 | ||||||
Change in total unrealized gains – included in other comprehensive income (loss) | (243 | ) | 353 | |||||
Purchases | 167 | 144 | ||||||
Redemptions | (572 | ) | (344 | ) | ||||
Balance at end of period | $ | 6,708 | $ | 6,797 |
September 30, 2016 | December 31, 2015 | |||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
Financial Assets | ||||||||||||||||
HTM - corporate bonds | $ | 759,973 | $ | 798,081 | $ | 607,843 | $ | 598,975 | ||||||||
Total financial assets | $ | 759,973 | $ | 798,081 | $ | 607,843 | $ | 598,975 | ||||||||
Financial Liabilities | ||||||||||||||||
MHNA - 8.25% | $ | — | $ | — | $ | 107,500 | $ | 110,424 | ||||||||
MHNB - 8.00% | 100,000 | 102,608 | 100,000 | 105,328 | ||||||||||||
MHNC - 7.75% | 152,500 | 164,395 | 152,500 | 165,456 | ||||||||||||
MHLA - 6.625% | 110,000 | 114,752 | — | — | ||||||||||||
Total financial liabilities | $ | 362,500 | $ | 381,755 | $ | 360,000 | $ | 381,208 |
2012 Senior Notes | 2013 Senior Notes | 2016 Senior Notes | ||||||||||
Principal | $ | 100,000 | $ | 152,500 | $ | 110,000 | ||||||
Debt Issuance Costs | 3,406 | 5,054 | 3,715 | |||||||||
Net Proceeds | $ | 96,594 | $ | 147,446 | $ | 106,285 | ||||||
Unamortized debt issuance costs | $ | 2,894 | $ | 4,574 | $ | 3,704 | ||||||
Other details: | ||||||||||||
Maturity date | March 27, 2042 | December 1, 2043 | June 14, 2046 | |||||||||
Earliest redeemable date (for cash) | March 27, 2017 | December 1, 2018 | June 14, 2021 | |||||||||
Coupon rate | 8.00 | % | 7.75 | % | 6.625 | % | ||||||
Effective interest rate | 8.31 | % | 8.04 | % | 7.07 | % |
For the Three Months Ended September 30, | 2016 | 2015 | ||||||
Numerator: | ||||||||
Net income attributable to Maiden shareholders | $ | 40,852 | $ | 28,584 | ||||
Dividends on preference shares - Series A | (3,094 | ) | (3,094 | ) | ||||
Dividends on convertible preference shares - Series B | (2,991 | ) | (2,991 | ) | ||||
Dividends on preference shares - Series C | (2,938 | ) | — | |||||
Amount allocated to participating common shareholders(1) | (19 | ) | (17 | ) | ||||
Numerator for basic EPS - net income allocated to Maiden common shareholders | $ | 31,810 | $ | 22,482 | ||||
Potentially dilutive securities | ||||||||
Dividends on convertible preference shares - Series B | 2,991 | 2,991 | ||||||
Numerator for diluted EPS - net income allocated to Maiden common shareholders after assumed conversion | $ | 34,801 | $ | 25,473 | ||||
Denominator: | ||||||||
Weighted average number of common shares outstanding – basic | 75,993,451 | 73,638,980 | ||||||
Potentially dilutive securities: | ||||||||
Share options and restricted share units | 1,100,206 | 1,294,767 | ||||||
Convertible preference shares(2) | 9,057,294 | 10,809,258 | ||||||
Adjusted weighted average number of common shares and assumed conversions – diluted | 86,150,951 | 85,743,005 | ||||||
Basic earnings per share attributable to Maiden common shareholders: | $ | 0.42 | $ | 0.31 | ||||
Diluted earnings per share attributable to Maiden common shareholders: | $ | 0.40 | $ | 0.30 |
For the Nine Months Ended September 30, | 2016 | 2015 | ||||||
Numerator: | ||||||||
Net income attributable to Maiden shareholders | $ | 117,678 | $ | 93,676 | ||||
Dividends on preference shares - Series A | (9,282 | ) | (9,282 | ) | ||||
Dividends on convertible preference shares - Series B | (8,971 | ) | (8,971 | ) | ||||
Dividends on preference shares - Series C | (9,470 | ) | — | |||||
Amount allocated to participating common shareholders(1) | (55 | ) | (59 | ) | ||||
Numerator for basic EPS - net income allocated to Maiden common shareholders | $ | 89,900 | $ | 75,364 | ||||
Potentially dilutive securities | ||||||||
Dividends on convertible preference shares- Series B | 8,971 | 8,971 | ||||||
Numerator for diluted EPS - net income allocated to Maiden common shareholders after assumed conversion | $ | 98,871 | $ | 84,335 | ||||
Denominator: | ||||||||
Weighted average number of common shares outstanding – basic | 74,625,839 | 73,403,998 | ||||||
Potentially dilutive securities: | ||||||||
Share options and restricted share units | 1,085,740 | 1,272,746 | ||||||
Convertible preference shares(2) | 10,306,440 | 10,809,258 | ||||||
Adjusted weighted average number of common shares and assumed conversions – diluted | 86,018,019 | 85,486,002 | ||||||
Basic earnings per share attributable to Maiden common shareholders: | $ | 1.20 | $ | 1.03 | ||||
Diluted earnings per share attributable to Maiden common shareholders: | $ | 1.15 | $ | 0.99 |
For the Three Months Ended September 30, 2016 | Change in net unrealized gains on investments | Foreign currency translation adjustments | Total | |||||||||
Beginning balance | $ | 93,793 | $ | 25,034 | $ | 118,827 | ||||||
Other comprehensive income before reclassifications | 8,899 | (2,730 | ) | 6,169 | ||||||||
Amounts reclassified from AOCI to net income, net of tax | (1,202 | ) | — | (1,202 | ) | |||||||
Net current period other comprehensive income | 7,697 | (2,730 | ) | 4,967 | ||||||||
Ending balance | 101,490 | 22,304 | 123,794 | |||||||||
Less: AOCI attributable to noncontrolling interest | — | (82 | ) | (82 | ) | |||||||
Ending balance, Maiden shareholders | $ | 101,490 | $ | 22,386 | $ | 123,876 |
For the Three Months Ended September 30, 2015 | Change in net unrealized gains on investments | Foreign currency translation adjustments | Total | |||||||||
Beginning balance | $ | 15,115 | $ | 25,722 | $ | 40,837 | ||||||
Other comprehensive loss before reclassifications | (17,173 | ) | (741 | ) | (17,914 | ) | ||||||
Amounts reclassified from AOCI to net income, net of tax | (11 | ) | — | (11 | ) | |||||||
Net current period other comprehensive loss | (17,184 | ) | (741 | ) | (17,925 | ) | ||||||
Ending balance | (2,069 | ) | 24,981 | 22,912 | ||||||||
Less: AOCI attributable to noncontrolling interest | — | (95 | ) | (95 | ) | |||||||
Ending balance, Maiden shareholders | $ | (2,069 | ) | $ | 25,076 | $ | 23,007 |
For the Nine Months Ended September 30, 2016 | Change in net unrealized gains on investments | Foreign currency translation adjustments | Total | |||||||||
Beginning balance | $ | (54,112 | ) | $ | 30,231 | $ | (23,881 | ) | ||||
Other comprehensive income before reclassifications | 155,024 | (7,927 | ) | 147,097 | ||||||||
Amounts reclassified from AOCI to net income, net of tax | 578 | — | 578 | |||||||||
Net current period other comprehensive income | 155,602 | (7,927 | ) | 147,675 | ||||||||
Ending balance | 101,490 | 22,304 | 123,794 | |||||||||
Less: AOCI attributable to noncontrolling interest | — | (82 | ) | (82 | ) | |||||||
Ending balance, Maiden shareholders | $ | 101,490 | $ | 22,386 | $ | 123,876 |
For the Nine Months Ended September 30, 2015 | Change in net unrealized gains on investments | Foreign currency translation adjustments | Total | |||||||||
Beginning balance | $ | 78,579 | $ | 16,665 | $ | 95,244 | ||||||
Other comprehensive loss before reclassifications | (80,643 | ) | 8,316 | (72,327 | ) | |||||||
Amounts reclassified from AOCI to net income, net of tax | (5 | ) | — | (5 | ) | |||||||
Net current period other comprehensive loss | (80,648 | ) | 8,316 | (72,332 | ) | |||||||
Ending balance | (2,069 | ) | 24,981 | 22,912 | ||||||||
Less: AOCI attributable to noncontrolling interest | — | (95 | ) | (95 | ) | |||||||
Ending balance, Maiden shareholders | $ | (2,069 | ) | $ | 25,076 | $ | 23,007 |
Dividend per Share | Payable on: | Record date: | ||||||
Common shares | $ | 0.14 | October 19, 2016 | October 5, 2016 |
Dividend per Share | Payable on: | Record date: | ||||||
Common shares | $ | 0.15 | January 17, 2017 | January 3, 2017 | ||||
Preference shares - Series A | $ | 0.515625 | December 15, 2016 | December 1, 2016 | ||||
Preference shares - Series C | $ | 0.445313 | December 15, 2016 | December 1, 2016 |
For the Three Months Ended September 30, | 2016 | 2015 | % Change | ||||||||
($ in Millions except per share data) | |||||||||||
Summary Consolidated Statement of Income Data: | |||||||||||
Net Income | $ | 40.7 | $ | 28.5 | 43.1 | % | |||||
Net income attributable to Maiden common shareholders | 31.8 | 22.5 | 41.5 | % | |||||||
Net operating earnings attributable to Maiden common shareholders(1) | 30.2 | 25.8 | 17.2 | % | |||||||
Diluted earnings per common share: | |||||||||||
Net income attributable to Maiden common shareholders(2) | $ | 0.40 | $ | 0.30 | 33.3 | % | |||||
Net operating earnings attributable to Maiden common shareholders(1) | $ | 0.39 | $ | 0.34 | 14.7 | % | |||||
Dividends per common share | $ | 0.14 | $ | 0.13 | 7.7 | % | |||||
Gross premiums written | $ | 706.9 | $ | 628.5 | 12.5 | % | |||||
Net premiums earned | 698.3 | 658.5 | 6.0 | % | |||||||
Underwriting income (3) | 17.3 | 10.0 | 73.5 | % | |||||||
Net investment income | 35.7 | 32.8 | 8.6 | % | |||||||
Combined ratio(4) | 98.5 | % | 99.6 | % | (1.1 | )% | |||||
Annualized operating return on average common shareholders' equity(1) | 11.0 | % | 11.3 | % | (2.7 | )% |
For the Nine Months Ended September 30, | 2016 | 2015 | % Change | ||||||||
($ in Millions except per share data) | |||||||||||
Summary Consolidated Statement of Income Data: | |||||||||||
Net Income | $ | 117.5 | $ | 93.5 | 25.6 | % | |||||
Net income attributable to Maiden common shareholders | 90.0 | 75.4 | 19.3 | % | |||||||
Net operating earnings attributable to Maiden common shareholders(1) | 87.0 | 80.8 | 7.7 | % | |||||||
Diluted earnings per common share: | |||||||||||
Net income attributable to Maiden common shareholders(2) | $ | 1.15 | $ | 0.99 | 16.2 | % | |||||
Net operating earnings attributable to Maiden common shareholders(1) | $ | 1.11 | $ | 1.05 | 5.7 | % | |||||
Dividends per common share | $ | 0.42 | $ | 0.39 | 7.7 | % | |||||
Gross premiums written | $ | 2,259.3 | $ | 2,136.9 | 5.7 | % | |||||
Net premiums earned | 1,951.8 | 1,845.2 | 5.8 | % | |||||||
Underwriting income (3) | 46.6 | 38.3 | 21.8 | % | |||||||
Net investment income | 107.3 | 96.2 | 11.5 | % | |||||||
Combined ratio(4) | 98.7 | % | 99.1 | % | (0.4 | )% | |||||
Annualized operating return on average common shareholders' equity(1) | 11.8 | % | 11.8 | % | — | % |
September 30, 2016 | December 31, 2015 | % Change | |||||||||
($ in Millions except per share data) | |||||||||||
Summary Consolidated Balance Sheet Data: | |||||||||||
Total investments and cash and cash equivalents(5) | $ | 4,954.6 | $ | 4,460.2 | 11.1 | % | |||||
Total assets | 6,468.0 | 5,703.6 | 13.4 | % | |||||||
Reserve for loss and LAE | 2,759.5 | 2,510.1 | 9.9 | % | |||||||
Senior notes, net | 351.3 | 349.9 | 0.4 | % | |||||||
Maiden common shareholders' equity | 1,240.3 | 867.8 | 42.9 | % | |||||||
Maiden shareholders' equity | 1,555.3 | 1,347.8 | 15.4 | % | |||||||
Total capital resources(6) | 1,917.8 | 1,707.8 | 12.3 | % | |||||||
Ratio of debt to total capital resources | 18.9 | % | 21.1 | % | (10.4 | )% | |||||
Book Value: | |||||||||||
Book value per common share(7) | $ | 14.40 | $ | 11.77 | 22.3 | % | |||||
Accumulated dividends per common share | 3.17 | 2.75 | 15.3 | % | |||||||
Book value per common share plus accumulated dividends | $ | 17.57 | $ | 14.52 | 21.0 | % | |||||
Change in book value per common share plus accumulated dividends | $ | 3.05 | |||||||||
Diluted book value per common share(8) | $ | 14.20 | $ | 11.61 | 22.3 | % |
(1) | Operating earnings, operating earnings per common share and annualized operating return on average common shareholders' equity are non-GAAP financial measures. See "Key Financial Measures" for additional information and a reconciliation to the nearest GAAP financial measure (net income). |
(2) | Please refer to "Note 8. Earnings per Common Share" of the Notes to Condensed Consolidated Financial Statements for the calculation of basic and diluted earnings per common share. |
(3) | Underwriting income 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. |
(4) | Calculated by adding together the net loss and LAE ratio, commission and other acquisition expense ratio and general and administrative expense ratio. |
(5) | Total investments and cash and cash equivalents includes both restricted and unrestricted. |
(6) | Total capital resources is the sum of the Company's principal amount of debt and Maiden shareholders' equity. See "Key Financial Measures" for additional information. |
(7) | Book value per common share is calculated using common shareholders’ equity (shareholders' equity excluding the aggregate liquidation value of our preference shares) divided by the number of common shares outstanding. |
(8) | Diluted book value per common share is calculated by dividing common shareholders' equity, adjusted for assumed proceeds from the exercise of dilutive options, by the number of outstanding common shares plus dilutive options and restricted share units (assuming exercise of all dilutive stock based awards). The Mandatory Convertible Preference Shares - Series B are excluded at December 31, 2015, as they are anti-dilutive. |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
($ in Millions except per share data) | ||||||||||||||||
Net income attributable to Maiden common shareholders | $ | 31.8 | $ | 22.5 | $ | 90.0 | $ | 75.4 | ||||||||
Add (subtract): | ||||||||||||||||
Net realized gains on investment | (1.9 | ) | (1.2 | ) | (4.5 | ) | (2.3 | ) | ||||||||
Net impairment losses recognized in earnings | — | 1.1 | — | 1.1 | ||||||||||||
Foreign exchange and other gains | (0.7 | ) | (1.5 | ) | (6.4 | ) | (4.1 | ) | ||||||||
Amortization of intangible assets and non-cash deferred tax expense | 0.9 | 1.0 | 2.7 | 3.0 | ||||||||||||
Divested E&S business and NGHC run-off | 0.1 | 3.9 | 2.9 | 7.7 | ||||||||||||
Accelerated amortization of senior note issuance costs | — | — | 2.3 | — | ||||||||||||
Net operating earnings attributable to Maiden common shareholders | $ | 30.2 | $ | 25.8 | $ | 87.0 | $ | 80.8 | ||||||||
Diluted earnings per common share attributable to Maiden shareholders | $ | 0.40 | $ | 0.30 | $ | 1.15 | $ | 0.99 | ||||||||
Add (subtract): | ||||||||||||||||
Net realized gains on investment | (0.02 | ) | (0.01 | ) | (0.05 | ) | (0.03 | ) | ||||||||
Net impairment losses recognized in earnings | — | 0.01 | — | 0.01 | ||||||||||||
Foreign exchange and other gains | (0.01 | ) | (0.02 | ) | (0.08 | ) | (0.05 | ) | ||||||||
Amortization of intangible assets and non-cash deferred tax expense | 0.02 | 0.02 | 0.03 | 0.04 | ||||||||||||
Divested E&S business and NGHC run-off | — | 0.04 | 0.03 | 0.09 | ||||||||||||
Accelerated amortization of senior note issuance cost | — | — | 0.03 | — | ||||||||||||
Diluted operating earnings per common share attributable to Maiden shareholders | $ | 0.39 | $ | 0.34 | $ | 1.11 | $ | 1.05 |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
($ in Millions) | |||||||||||||||
Net operating earnings attributable to Maiden common shareholders | $ | 30.2 | $ | 25.8 | $ | 87.0 | $ | 80.8 | |||||||
Opening common shareholders’ equity | 1,049.7 | 908.7 | 867.8 | 925.7 | |||||||||||
Ending common shareholders’ equity | 1,240.3 | 905.1 | 1,240.3 | 905.1 | |||||||||||
Average common shareholders’ equity(1) | 1,091.2 | 906.9 | 981.2 | 915.4 | |||||||||||
Operating ROACE | 11.0 | % | 11.3 | % | 11.8 | % | 11.8 | % |
September 30, 2016 | December 31, 2015 | |||||||
($ in Millions except per share data) | ||||||||
Ending common shareholders’ equity | $ | 1,240.3 | $ | 867.8 | ||||
Proceeds from assumed conversion of dilutive options | 13.1 | 13.4 | ||||||
Numerator for diluted book value per common share calculation | $ | 1,253.4 | $ | 881.2 | ||||
Common shares outstanding | 86,128,999 | 73,721,140 | ||||||
Shares issued from assumed conversion of dilutive options and restricted share units | 2,166,892 | 2,166,545 | ||||||
Denominator for diluted book value per common share calculation | 88,295,891 | 75,887,685 | ||||||
Book value per common share | $ | 14.40 | $ | 11.77 | ||||
Diluted book value per common share(1) | $ | 14.20 | $ | 11.61 |
September 30, 2016 | December 31, 2015 | |||||||
($ in Millions) | ||||||||
Senior notes | $ | 362.5 | $ | 360.0 | ||||
Maiden shareholders’ equity | 1,555.3 | 1,347.8 | ||||||
Total capital resources | $ | 1,917.8 | $ | 1,707.8 | ||||
Ratio of debt to total capital resources | 18.9 | % | 21.1 | % |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
($ in Millions) | ($ in Millions) | |||||||||||||||
Gross premiums written | $ | 706.9 | $ | 628.5 | $ | 2,259.3 | $ | 2,136.9 | ||||||||
Net premiums written | $ | 690.7 | $ | 599.2 | $ | 2,133.9 | $ | 2,025.8 | ||||||||
Net premiums earned | $ | 698.3 | $ | 658.5 | $ | 1,951.8 | $ | 1,845.2 | ||||||||
Other insurance revenue | 2.3 | 2.2 | 8.7 | 9.4 | ||||||||||||
Net loss and loss adjustment expense | (466.8 | ) | (444.2 | ) | (1,297.4 | ) | (1,236.5 | ) | ||||||||
Commission and other acquisition expenses | (206.7 | ) | (197.6 | ) | (587.5 | ) | (551.6 | ) | ||||||||
General and administrative expenses | (9.8 | ) | (8.9 | ) | (29.0 | ) | (28.2 | ) | ||||||||
Underwriting income | 17.3 | 10.0 | 46.6 | 38.3 | ||||||||||||
Other general and administrative expenses | (7.2 | ) | (7.6 | ) | (20.7 | ) | (20.8 | ) | ||||||||
Net investment income | 35.7 | 32.8 | 107.3 | 96.2 | ||||||||||||
Net realized gains on investment | 1.9 | 1.2 | 4.5 | 2.3 | ||||||||||||
Net impairment losses recognized in earnings | — | (1.1 | ) | — | (1.1 | ) | ||||||||||
Accelerated amortization of senior note issuance costs | — | — | (2.3 | ) | — | |||||||||||
Amortization of intangible assets | (0.6 | ) | (0.7 | ) | (1.8 | ) | (2.1 | ) | ||||||||
Foreign exchange and other gains | 0.7 | 1.5 | 6.4 | 4.1 | ||||||||||||
Interest and amortization expenses | (6.9 | ) | (7.3 | ) | (21.3 | ) | (21.8 | ) | ||||||||
Income tax expense | (0.2 | ) | (0.3 | ) | (1.2 | ) | (1.6 | ) | ||||||||
Net Income | 40.7 | 28.5 | 117.5 | 93.5 | ||||||||||||
Loss attributable to noncontrolling interest | 0.1 | 0.1 | 0.2 | 0.2 | ||||||||||||
Dividends on preference shares | (9.0 | ) | (6.1 | ) | (27.7 | ) | (18.3 | ) | ||||||||
Net income attributable to Maiden common shareholders | $ | 31.8 | $ | 22.5 | $ | 90.0 | $ | 75.4 | ||||||||
Ratios | ||||||||||||||||
Net loss and LAE ratio(1) | 66.6 | % | 67.2 | % | 66.2 | % | 66.7 | % | ||||||||
Commission and other acquisition expense ratio(2) | 29.5 | % | 29.9 | % | 30.0 | % | 29.7 | % | ||||||||
General and administrative expense ratio(3) | 2.4 | % | 2.5 | % | 2.5 | % | 2.7 | % | ||||||||
Expense ratio(4) | 31.9 | % | 32.4 | % | 32.5 | % | 32.4 | % | ||||||||
Combined ratio(5) | 98.5 | % | 99.6 | % | 98.7 | % | 99.1 | % |
(1) Calculated by dividing net loss and LAE by net premiums earned and other insurance revenue. | ||||||||
(2) Calculated by dividing commission and other acquisition expenses by net premiums earned and other insurance revenue. | ||||||||
(3) Calculated by dividing general and administrative expenses by net premiums earned and other insurance revenue. | ||||||||
(4) Calculated by adding together the commission and other acquisition expense ratio and general and administrative expense ratio. | ||||||||
(5) Calculated by adding together the net loss and LAE ratio and expense ratio. |
For the Three Months Ended September 30, | 2016 | 2015 | Change in | ||||||||||||||||||
Total | % of Total | Total | % of Total | $ | % | ||||||||||||||||
($ in Millions) | ($ in Millions) | ($ in Millions) | |||||||||||||||||||
Diversified Reinsurance | $ | 179.1 | 25.9 | % | $ | 163.7 | 27.3 | % | $ | 15.4 | 9.4 | % | |||||||||
AmTrust Reinsurance | 511.6 | 74.1 | % | 435.5 | 72.7 | % | 76.1 | 17.5 | % | ||||||||||||
Total reportable segments | $ | 690.7 | 100.0 | % | $ | 599.2 | 100.0 | % | $ | 91.5 | 15.3 | % |
For the Nine Months Ended September 30, | 2016 | 2015 | Change in | ||||||||||||||||||
Total | % of Total | Total | % of Total | $ | % | ||||||||||||||||
($ in Millions) | ($ in Millions) | ($ in Millions) | |||||||||||||||||||
Diversified Reinsurance | $ | 626.5 | 29.3 | % | $ | 602.7 | 29.8 | % | $ | 23.8 | 4.0 | % | |||||||||
AmTrust Reinsurance | 1,507.4 | 70.7 | % | 1,423.1 | 70.2 | % | 84.3 | 5.9 | % | ||||||||||||
Total reportable segments | $ | 2,133.9 | 100.0 | % | $ | 2,025.8 | 100.0 | % | $ | 108.1 | 5.3 | % |
For the Three Months Ended September 30, | 2016 | 2015 | Change in | ||||||||||||||||||
Total | % of Total | Total | % of Total | $ | % | ||||||||||||||||
($ in Millions) | ($ in Millions) | ($ in Millions) | |||||||||||||||||||
Diversified Reinsurance | $ | 175.2 | 25.1 | % | $ | 193.2 | 29.3 | % | $ | (18.0 | ) | (9.4 | )% | ||||||||
AmTrust Reinsurance | 523.1 | 74.9 | % | 465.3 | 70.7 | % | 57.8 | 12.4 | % | ||||||||||||
Total reportable segments | $ | 698.3 | 100.0 | % | $ | 658.5 | 100.0 | % | $ | 39.8 | 6.0 | % |
For the Nine Months Ended September 30, | 2016 | 2015 | Change in | ||||||||||||||||||
Total | % of Total | Total | % of Total | $ | % | ||||||||||||||||
($ in Millions) | ($ in Millions) | ($ in Millions) | |||||||||||||||||||
Diversified Reinsurance | $ | 538.1 | 27.6 | % | $ | 570.7 | 30.9 | % | $ | (32.6 | ) | (5.7 | )% | ||||||||
AmTrust Reinsurance | 1,413.7 | 72.4 | % | 1,274.5 | 69.1 | % | 139.2 | 10.9 | % | ||||||||||||
Total reportable segments | $ | 1,951.8 | 100.0 | % | $ | 1,845.2 | 100.0 | % | $ | 106.6 | 5.8 | % |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
($ in Millions) | ($ in Millions) | |||||||||||||||
Average investable assets(1) | $ | 4,991.5 | $ | 4,376.7 | $ | 4,842.1 | $ | 4,210.6 | ||||||||
Average book yield(2) | 2.9 | % | 3.0 | % | 3.0 | % | 3.0 | % |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
($ in Millions) | ($ in Millions) | |||||||||||||||
General and administrative expenses – segments | $ | 9.8 | $ | 8.9 | $ | 29.0 | $ | 28.2 | ||||||||
General and administrative expenses – corporate | 7.2 | 7.6 | 20.7 | 20.8 | ||||||||||||
Total general and administrative expenses | $ | 17.0 | $ | 16.5 | $ | 49.7 | $ | 49.0 | ||||||||
General and administrative expense ratio | 2.4 | % | 2.5 | % | 2.5 | % | 2.7 | % |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
($ in Millions) | ||||||||||||||||
Gross premiums written | $ | 186.8 | $ | 174.3 | $ | 667.4 | $ | 631.3 | ||||||||
Net premiums written | $ | 179.1 | $ | 163.7 | $ | 626.5 | $ | 602.7 | ||||||||
Net premiums earned | $ | 175.2 | $ | 193.2 | $ | 538.1 | $ | 570.7 | ||||||||
Other insurance revenue | 2.3 | 2.2 | 8.7 | 9.4 | ||||||||||||
Net loss and LAE | (132.4 | ) | (142.5 | ) | (395.7 | ) | (417.9 | ) | ||||||||
Commission and other acquisition expenses | (39.9 | ) | (51.7 | ) | (139.9 | ) | (152.3 | ) | ||||||||
General and administrative expenses | (9.0 | ) | (8.2 | ) | (26.7 | ) | (26.0 | ) | ||||||||
Underwriting loss | $ | (3.8 | ) | $ | (7.0 | ) | $ | (15.5 | ) | $ | (16.1 | ) | ||||
Ratios | ||||||||||||||||
Net loss and LAE ratio | 74.6 | % | 72.9 | % | 72.4 | % | 72.0 | % | ||||||||
Commission and other acquisition expense ratio | 22.5 | % | 26.5 | % | 25.6 | % | 26.3 | % | ||||||||
General and administrative expense ratio | 5.1 | % | 4.2 | % | 4.8 | % | 4.5 | % | ||||||||
Expense ratio | 27.6 | % | 30.7 | % | 30.4 | % | 30.8 | % | ||||||||
Combined ratio | 102.2 | % | 103.6 | % | 102.8 | % | 102.8 | % |
For the Three Months Ended September 30, | 2016 | 2015 | Change in | ||||||||||||||||||
Total | % of Total | Total | % of Total | $ | % | ||||||||||||||||
Net Premiums Written | ($ in Millions) | ($ in Millions) | ($ in Millions) | ||||||||||||||||||
Property | $ | 30.6 | 17.1 | % | $ | 29.6 | 18.1 | % | $ | 1.0 | 3.5 | % | |||||||||
Casualty | 115.4 | 64.4 | % | 101.2 | 61.8 | % | 14.2 | 14.0 | % | ||||||||||||
Accident and Health | 14.8 | 8.3 | % | 12.9 | 7.9 | % | 1.9 | 14.9 | % | ||||||||||||
International | 18.3 | 10.2 | % | 20.0 | 12.2 | % | (1.7 | ) | (8.7 | )% | |||||||||||
Total Diversified Reinsurance | $ | 179.1 | 100.0 | % | $ | 163.7 | 100.0 | % | $ | 15.4 | 9.4 | % |
For the Nine Months Ended September 30, | 2016 | 2015 | Change in | ||||||||||||||||||
Total | % of Total | Total | % of Total | $ | % | ||||||||||||||||
Net Premiums Written | ($ in Millions) | ($ in Millions) | ($ in Millions) | ||||||||||||||||||
Property | $ | 124.0 | 19.8 | % | $ | 128.5 | 21.3 | % | $ | (4.5 | ) | (3.5 | )% | ||||||||
Casualty | 365.3 | 58.3 | % | 359.5 | 59.7 | % | 5.8 | 1.6 | % | ||||||||||||
Accident and Health | 68.1 | 10.9 | % | 53.5 | 8.9 | % | 14.6 | 27.4 | % | ||||||||||||
International | 69.1 | 11.0 | % | 61.2 | 10.1 | % | 7.9 | 12.8 | % | ||||||||||||
Total Diversified Reinsurance | $ | 626.5 | 100.0 | % | $ | 602.7 | 100.0 | % | $ | 23.8 | 4.0 | % |
For the Three Months Ended September 30, | 2016 | 2015 | Change in | ||||||||||||||||||
Total | % of Total | Total | % of Total | $ | % | ||||||||||||||||
Net Premiums Earned | ($ in Millions) | ($ in Millions) | ($ in Millions) | ||||||||||||||||||
Property | $ | 29.9 | 17.1 | % | $ | 39.6 | 20.5 | % | $ | (9.7 | ) | (24.4 | )% | ||||||||
Casualty | 105.9 | 60.5 | % | 115.6 | 59.8 | % | (9.7 | ) | (8.4 | )% | |||||||||||
Accident and Health | 18.5 | 10.5 | % | 14.1 | 7.3 | % | 4.4 | 30.8 | % | ||||||||||||
International | 20.9 | 11.9 | % | 23.9 | 12.4 | % | (3.0 | ) | (12.5 | )% | |||||||||||
Total Diversified Reinsurance | $ | 175.2 | 100.0 | % | $ | 193.2 | 100.0 | % | $ | (18.0 | ) | (9.4 | )% |
For the Nine Months Ended September 30, | 2016 | 2015 | Change in | ||||||||||||||||||
Total | % of Total | Total | % of Total | $ | % | ||||||||||||||||
Net Premiums Earned | ($ in Millions) | ($ in Millions) | ($ in Millions) | ||||||||||||||||||
Property | $ | 103.0 | 19.1 | % | $ | 112.9 | 19.8 | % | $ | (9.9 | ) | (8.7 | )% | ||||||||
Casualty | 313.7 | 58.3 | % | 350.5 | 61.4 | % | (36.8 | ) | (10.5 | )% | |||||||||||
Accident and Health | 55.8 | 10.4 | % | 41.4 | 7.2 | % | 14.4 | 34.9 | % | ||||||||||||
International | 65.6 | 12.2 | % | 65.9 | 11.6 | % | (0.3 | ) | (0.5 | )% | |||||||||||
Total Diversified Reinsurance | $ | 538.1 | 100.0 | % | $ | 570.7 | 100.0 | % | $ | (32.6 | ) | (5.7 | )% |
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
($ in Millions) | ||||||||||||||||
Gross premiums written | $ | 520.1 | $ | 454.2 | $ | 1,591.9 | $ | 1,505.6 | ||||||||
Net premiums written | $ | 511.6 | $ | 435.5 | $ | 1,507.4 | $ | 1,423.1 | ||||||||
Net premiums earned | $ | 523.1 | $ | 465.3 | $ | 1,413.7 | $ | 1,274.5 | ||||||||
Net loss and LAE | (334.3 | ) | (297.8 | ) | (898.7 | ) | (811.0 | ) | ||||||||
Commission and other acquisition expenses | (166.8 | ) | (146.0 | ) | (447.6 | ) | (399.2 | ) | ||||||||
General and administrative expenses | (0.8 | ) | (0.7 | ) | (2.3 | ) | (2.2 | ) | ||||||||
Underwriting income | $ | 21.2 | $ | 20.8 | $ | 65.1 | $ | 62.1 | ||||||||
Ratios | ||||||||||||||||
Net loss and LAE ratio | 63.9 | % | 63.9 | % | 63.5 | % | 63.6 | % | ||||||||
Commission and other acquisition expense ratio | 31.9 | % | 31.4 | % | 31.7 | % | 31.3 | % | ||||||||
General and administrative expense ratio | 0.1 | % | 0.1 | % | 0.2 | % | 0.2 | % | ||||||||
Expense ratio | 32.0 | % | 31.5 | % | 31.9 | % | 31.5 | % | ||||||||
Combined ratio | 95.9 | % | 95.4 | % | 95.4 | % | 95.1 | % |
For the Three Months Ended September 30, | 2016 | 2015 | Change in | ||||||||||||||||||
Total | % of Total | Total | % of Total | $ | % | ||||||||||||||||
Net Premiums Written | ($ in Millions) | ($ in Millions) | ($ in Millions) | ||||||||||||||||||
Small Commercial Business | $ | 314.7 | 61.5 | % | $ | 231.5 | 53.1 | % | $ | 83.2 | 36.0 | % | |||||||||
Specialty Program | 98.9 | 19.3 | % | 86.6 | 19.9 | % | 12.3 | 14.2 | % | ||||||||||||
Specialty Risk and Extended Warranty | 98.0 | 19.2 | % | 117.4 | 27.0 | % | (19.4 | ) | (16.5 | )% | |||||||||||
Total AmTrust Reinsurance | $ | 511.6 | 100.0 | % | $ | 435.5 | 100.0 | % | $ | 76.1 | 17.5 | % |
For the Nine Months Ended September 30, | 2016 | 2015 | Change in | ||||||||||||||||||
Total | % of Total | Total | % of Total | $ | % | ||||||||||||||||
Net Premiums Written | ($ in Millions) | ($ in Millions) | ($ in Millions) | ||||||||||||||||||
Small Commercial Business | $ | 983.6 | 65.3 | % | $ | 857.6 | 60.3 | % | $ | 126.0 | 14.7 | % | |||||||||
Specialty Program | 268.2 | 17.8 | % | 262.1 | 18.4 | % | 6.1 | 2.3 | % | ||||||||||||
Specialty Risk and Extended Warranty | 255.6 | 16.9 | % | 303.4 | 21.3 | % | (47.8 | ) | (15.7 | )% | |||||||||||
Total AmTrust Reinsurance | $ | 1,507.4 | 100.0 | % | $ | 1,423.1 | 100.0 | % | $ | 84.3 | 5.9 | % |
For the Three Months Ended September 30, | 2016 | 2015 | Change in | ||||||||||||||||||
Total | % of Total | Total | % of Total | $ | % | ||||||||||||||||
Net Premiums Earned | ($ in Millions) | ($ in Millions) | ($ in Millions) | ||||||||||||||||||
Small Commercial Business | $ | 320.6 | 61.3 | % | $ | 257.3 | 55.3 | % | $ | 63.3 | 24.6 | % | |||||||||
Specialty Program | 89.8 | 17.2 | % | 80.3 | 17.3 | % | 9.5 | 11.9 | % | ||||||||||||
Specialty Risk and Extended Warranty | 112.7 | 21.5 | % | 127.7 | 27.4 | % | (15.0 | ) | (11.8 | )% | |||||||||||
Total AmTrust Reinsurance | $ | 523.1 | 100.0 | % | $ | 465.3 | 100.0 | % | $ | 57.8 | 12.4 | % |
For the Nine Months Ended September 30, | 2016 | 2015 | Change in | ||||||||||||||||||
Total | % of Total | Total | % of Total | $ | % | ||||||||||||||||
Net Premiums Earned | ($ in Millions) | ($ in Millions) | ($ in Millions) | ||||||||||||||||||
Small Commercial Business | $ | 864.7 | 61.2 | % | $ | 734.7 | 57.7 | % | $ | 130.0 | 17.7 | % | |||||||||
Specialty Program | 251.5 | 17.8 | % | 210.7 | 16.5 | % | 40.8 | 19.4 | % | ||||||||||||
Specialty Risk and Extended Warranty | 297.5 | 21.0 | % | 329.1 | 25.8 | % | (31.6 | ) | (9.6 | )% | |||||||||||
Total AmTrust Reinsurance | $ | 1,413.7 | 100.0 | % | $ | 1,274.5 | 100.0 | % | $ | 139.2 | 10.9 | % |
For the Nine Months Ended September 30, | 2016 | 2015 | ||||||
($ in Millions) | ||||||||
Operating activities | $ | 326.2 | $ | 526.0 | ||||
Investing activities | (291.4 | ) | (470.7 | ) | ||||
Financing activities | (59.7 | ) | (44.4 | ) | ||||
Effect of exchange rate changes on foreign currency cash | 2.7 | (1.5 | ) | |||||
Total (decrease) increase in cash and cash equivalents | $ | (22.2 | ) | $ | 9.4 |
September 30, 2016 | December 31, 2015 | |||
Fixed maturities and cash and cash equivalents | 4.1 | 4.7 | ||
Reserve for loss and LAE | 4.2 | 4.4 |
September 30, 2016 | Original or Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Average yield* | Average duration | |||||||||||||||
($ in Millions) | |||||||||||||||||||||
AFS fixed maturities | |||||||||||||||||||||
U.S. treasury bonds | $ | 5.2 | $ | 0.3 | $ | — | $ | 5.5 | 3.0 | % | 2.6 years | ||||||||||
U.S. agency bonds – mortgage-backed | 1,572.4 | 34.1 | (0.7 | ) | 1,605.8 | 2.7 | % | 3.6 years | |||||||||||||
U.S. agency bonds – other | 4.2 | 0.4 | — | 4.6 | 5.8 | % | 9.0 years | ||||||||||||||
Non-U.S. government and supranational bonds | 35.6 | 0.3 | (3.2 | ) | 32.7 | 2.5 | % | 3.6 years | |||||||||||||
Asset-backed securities | 205.6 | 7.3 | (0.1 | ) | 212.8 | 3.8 | % | 2.3 years | |||||||||||||
Corporate bonds | 1,775.7 | 75.2 | (31.7 | ) | 1,819.2 | 3.4 | % | 5.1 years | |||||||||||||
Municipal bonds | 62.2 | 5.5 | — | 67.7 | 4.2 | % | 6.7 years | ||||||||||||||
Total AFS fixed maturities | 3,660.9 | 123.1 | (35.7 | ) | 3,748.3 | 3.1 | % | 4.3 years | |||||||||||||
HTM fixed maturities | |||||||||||||||||||||
Corporate bonds | 760.0 | 38.9 | (0.8 | ) | 798.1 | 3.6 | % | 5.3 years | |||||||||||||
Total HTM fixed maturities | 760.0 | 38.9 | (0.8 | ) | 798.1 | ||||||||||||||||
Cash and cash equivalents | 434.0 | — | — | 434.0 | 0.2 | % | 0.0 years | ||||||||||||||
Total | $ | 4,854.9 | $ | 162.0 | $ | (36.5 | ) | $ | 4,980.4 | 2.9 | % | 4.1 years |
December 31, 2015 | Original or Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | Average yield* | Average duration | |||||||||||||||
($ in Millions) | |||||||||||||||||||||
AFS fixed maturities | |||||||||||||||||||||
U.S. treasury bonds | $ | 5.7 | $ | 0.3 | $ | — | $ | 6.0 | 2.9 | % | 2.5 years | ||||||||||
U.S. agency bonds – mortgage-backed | 1,471.8 | 15.4 | (10.2 | ) | 1,477.0 | 2.8 | % | 4.5 years | |||||||||||||
U.S. agency bonds – other | 23.8 | 0.5 | — | 24.3 | 3.6 | % | 8.5 years | ||||||||||||||
Non-U.S. government and supranational bonds | 35.1 | — | (4.6 | ) | 30.5 | 2.6 | % | 4.0 years | |||||||||||||
Asset-backed securities | 165.7 | 1.2 | (1.1 | ) | 165.8 | 4.1 | % | 4.6 years | |||||||||||||
Corporate bonds | 1,798.6 | 38.1 | (97.0 | ) | 1,739.7 | 3.8 | % | 5.0 years | |||||||||||||
Municipal bonds | 62.2 | 2.6 | — | 64.8 | 4.2 | % | 6.3 years | ||||||||||||||
Total AFS fixed maturities | 3,562.9 | 58.1 | (112.9 | ) | 3,508.1 | 3.4 | % | 4.8 years | |||||||||||||
HTM fixed maturities | |||||||||||||||||||||
Corporate bonds | 607.8 | 3.5 | (12.3 | ) | 599.0 | 3.9 | % | 6.4 years | |||||||||||||
Total HTM fixed maturities | 607.8 | 3.5 | (12.3 | ) | 599.0 | ||||||||||||||||
Cash and cash equivalents | 332.5 | — | — | 332.5 | 0.2 | % | 0.0 years | ||||||||||||||
Total | $ | 4,503.2 | $ | 61.6 | $ | (125.2 | ) | $ | 4,439.6 | 3.2 | % | 4.7 years |
September 30, 2016 | December 31, 2015 | |||||||||||||||
AFS fixed maturities | HTM fixed maturities | AFS fixed maturities | HTM fixed maturities | |||||||||||||
Maturity | Fair value | Amortized cost | Fair value | Amortized cost | ||||||||||||
($ in Millions) | ($ in Millions) | |||||||||||||||
Due in one year or less | $ | 120.3 | $ | — | $ | 180.4 | $ | — | ||||||||
Due after one year through five years | 486.5 | 223.3 | 475.1 | 67.3 | ||||||||||||
Due after five years through ten years | 1,308.2 | 531.6 | 1,180.2 | 540.5 | ||||||||||||
Due after ten years | 14.7 | 5.1 | 29.6 | — | ||||||||||||
1,929.7 | 760.0 | 1,865.3 | 607.8 | |||||||||||||
U.S. agency bonds – mortgage-backed | 1,605.8 | — | 1,477.0 | — | ||||||||||||
Asset-backed securities | 212.8 | — | 165.8 | — | ||||||||||||
Total fixed maturities | $ | 3,748.3 | $ | 760.0 | $ | 3,508.1 | $ | 607.8 |
September 30, 2016 | December 31, 2015 | |||||||||||||
Fair Value | % of Total | Fair Value | % of Total | |||||||||||
($ in Millions) | ($ in Millions) | |||||||||||||
U.S. agency bonds - mortgage-backed: | ||||||||||||||
Residential mortgage-backed (RMBS) | ||||||||||||||
GNMA – fixed rate | $ | 340.1 | 21.1 | % | $ | 139.5 | 9.3 | % | ||||||
FNMA – fixed rate | 711.4 | 44.2 | % | 791.7 | 52.7 | % | ||||||||
FNMA – variable rate | 18.7 | 1.2 | % | 22.1 | 1.5 | % | ||||||||
FHLMC – fixed rate | 530.1 | 32.9 | % | 517.3 | 34.5 | % | ||||||||
FHLMC – variable rate | 5.5 | 0.3 | % | 6.4 | 0.4 | % | ||||||||
Total U.S. agency bonds - mortgage-backed | 1,605.8 | 99.7 | % | 1,477.0 | 98.4 | % | ||||||||
Non-MBS fixed rate U.S. agency bonds | 4.6 | 0.3 | % | 24.3 | 1.6 | % | ||||||||
Total U.S. agency bonds | $ | 1,610.4 | 100.0 | % | $ | 1,501.3 | 100.0 | % |
For the Three Months Ended September 30, | 2016 | 2015 | ||||||
($ in Millions) | ||||||||
U.S. agency bonds - mortgage-backed: | ||||||||
Beginning balance | $ | 1,451.8 | $ | 1,388.3 | ||||
Purchases | 267.0 | — | ||||||
Sales and paydowns | (104.1 | ) | (78.2 | ) | ||||
Net realized gains on sales – included in net income | — | — | ||||||
Change in net unrealized gains – included in other comprehensive income | (7.1 | ) | 15.0 | |||||
Amortization of bond premium and discount | (1.8 | ) | (1.6 | ) | ||||
Ending balance | $ | 1,605.8 | $ | 1,323.5 |
For the Nine Months Ended September 30, | 2016 | 2015 | ||||||
($ in Millions) | ||||||||
U.S. agency bonds - mortgage-backed: | ||||||||
Beginning balance | $ | 1,477.0 | $ | 1,322.4 | ||||
Purchases | 366.4 | 356.6 | ||||||
Sales and paydowns | (261.2 | ) | (363.5 | ) | ||||
Net realized gains on sales – included in net income | 0.2 | 0.1 | ||||||
Change in net unrealized gains – included in other comprehensive income | 28.2 | 12.1 | ||||||
Amortization of bond premium and discount | (4.8 | ) | (4.2 | ) | ||||
Ending balance | $ | 1,605.8 | $ | 1,323.5 |
Ratings* | ||||||||||||||||||||||
September 30, 2016 | AAA | AA+, AA, AA- | A+, A, A- | BBB+, BBB, BBB- | BB+ or lower | Fair Value | % of Corporate bonds portfolio | |||||||||||||||
($ in Millions) | ||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||
Basic Materials | — | % | — | % | 1.6 | % | 4.4 | % | 2.4 | % | $ | 218.9 | 8.4 | % | ||||||||
Communications | — | % | 0.5 | % | 1.0 | % | 7.1 | % | — | % | 224.0 | 8.6 | % | |||||||||
Consumer | — | % | 0.9 | % | 14.3 | % | 8.0 | % | 0.3 | % | 615.2 | 23.5 | % | |||||||||
Energy | — | % | 0.8 | % | 3.7 | % | 2.8 | % | 2.1 | % | 246.7 | 9.4 | % | |||||||||
Financial Institutions | 1.6 | % | 2.5 | % | 23.0 | % | 11.5 | % | 0.2 | % | 1,015.1 | 38.8 | % | |||||||||
Industrials | — | % | 1.0 | % | 2.0 | % | 2.9 | % | 0.7 | % | 172.5 | 6.6 | % | |||||||||
Technology | — | % | 2.4 | % | 1.2 | % | 0.4 | % | 0.7 | % | 124.9 | 4.7 | % | |||||||||
Total Corporate bonds | 1.6 | % | 8.1 | % | 46.8 | % | 37.1 | % | 6.4 | % | $ | 2,617.3 | 100.0 | % |
Ratings* | ||||||||||||||||||||||
December 31, 2015 | AAA | AA+, AA, AA- | A+, A, A- | BBB+, BBB, BBB- | BB+ or lower | Fair Value | % of Corporate bonds portfolio | |||||||||||||||
($ in Millions) | ||||||||||||||||||||||
Corporate bonds | ||||||||||||||||||||||
Basic Materials | — | % | — | % | 1.1 | % | 5.4 | % | 1.3 | % | $ | 182.5 | 7.8 | % | ||||||||
Communications | — | % | 0.6 | % | 0.8 | % | 7.7 | % | — | % | 212.0 | 9.1 | % | |||||||||
Consumer | — | % | 1.0 | % | 12.3 | % | 9.3 | % | 0.3 | % | 535.2 | 22.9 | % | |||||||||
Energy | — | % | 1.3 | % | 1.7 | % | 3.2 | % | 1.9 | % | 189.8 | 8.1 | % | |||||||||
Financial Institutions | 1.7 | % | 1.6 | % | 23.5 | % | 14.3 | % | 0.1 | % | 963.1 | 41.2 | % | |||||||||
Industrials | — | % | 0.5 | % | 1.7 | % | 3.7 | % | 0.5 | % | 149.9 | 6.4 | % | |||||||||
Technology | — | % | 2.3 | % | 1.6 | % | 0.4 | % | 0.2 | % | 106.2 | 4.5 | % | |||||||||
Total Corporate bonds | 1.7 | % | 7.3 | % | 42.7 | % | 44.0 | % | 4.3 | % | $ | 2,338.7 | 100.0 | % |
September 30, 2016 | Fair Value/Amortized cost | % Based on Carrying Value Investments | Rating* | ||||||
($ in Millions) | |||||||||
Morgan Stanley FLT, Due 10/18/2016 (1) | $ | 40.0 | 0.9 | % | BBB+ | ||||
Australia and New Zealand Banking Group, 3.7% Due 11/16/2025 | 27.4 | 0.6 | % | AA- | |||||
Schlumberger Holdings Corporation, 4.0% Due 12/21/2025 | 21.8 | 0.5 | % | AA- | |||||
JP Morgan Chase & Co, 3.9% Due 7/15/2025 | 21.6 | 0.5 | % | A- | |||||
BNP Paribas, 5.0% Due 1/15/2021 | 21.4 | 0.5 | % | A | |||||
IBM Corporation, 7.0% Due 10/30/2025 | 20.9 | 0.5 | % | AA- | |||||
Rabobank, 3.9% Due 2/08/2022 | 20.9 | 0.5 | % | A+ | |||||
Mondelez International, 4.0% Due 2/1/2024 | 20.5 | 0.4 | % | BBB | |||||
Brookfield Asset Management Inc, 4.0%, Due 1/15/2025 | 20.5 | 0.4 | % | A- | |||||
AT&T Inc, 2.6%, Due 12/1/2022 | 20.3 | 0.4 | % | BBB+ | |||||
Total | $ | 235.3 | 5.2 | % |
September 30, 2016 | December 31, 2015 | |||||||||||||
Fair Value | % of Total | Fair Value | % of Total | |||||||||||
($ in Millions) | ($ in Millions) | |||||||||||||
Non-U.S. dollar denominated corporate bonds | $ | 389.4 | 92.5 | % | $ | 323.3 | 91.6 | % | ||||||
Non-U.S. government and supranational bonds | 31.7 | 7.5 | % | 30.5 | 8.4 | % | ||||||||
Total non-U.S. dollar AFS fixed maturities | $ | 421.1 | 100.0 | % | $ | 353.8 | 100.0 | % |
September 30, 2016 | December 31, 2015 | |||||||||||||
Fair Value | % of Total | Fair Value | % of Total | |||||||||||
($ in Millions) | ($ in Millions) | |||||||||||||
Euro | $ | 357.4 | 84.9 | % | $ | 299.3 | 84.8 | % | ||||||
British pound | 41.8 | 9.9 | % | 41.4 | 11.7 | % | ||||||||
Australian dollar | 11.1 | 2.6 | % | 4.0 | 1.1 | % | ||||||||
Swedish krona | 5.7 | 1.4 | % | 5.8 | 1.7 | % | ||||||||
All other | 5.1 | 1.2 | % | 3.3 | 0.7 | % | ||||||||
Total non-U.S. dollar AFS fixed maturities | $ | 421.1 | 100.0 | % | $ | 353.8 | 100.0 | % |
September 30, 2016 | December 31, 2015 | |||||||||||||
Ratings* | Fair Value | % of Total | Fair Value | % of Total | ||||||||||
($ in Millions) | ($ in Millions) | |||||||||||||
AAA | $ | 34.6 | 8.9 | % | $ | 32.8 | 10.1 | % | ||||||
AA+, AA, AA- | 33.0 | 8.5 | % | 17.3 | 5.4 | % | ||||||||
A+, A, A- | 180.0 | 46.2 | % | 149.3 | 46.2 | % | ||||||||
BBB+, BBB, BBB- | 133.5 | 34.3 | % | 117.9 | 36.5 | % | ||||||||
BB+ or lower | 8.3 | 2.1 | % | 6.0 | 1.8 | % | ||||||||
Total non-U.S. dollar denominated corporate bonds | $ | 389.4 | 100.0 | % | $ | 323.3 | 100.0 | % |
September 30, 2016 | December 31, 2015 | Change | Change | ||||||||||||
($ in Millions) | % | ||||||||||||||
Reinsurance balances receivable, net | $ | 535.0 | $ | 377.3 | $ | 157.7 | 41.8 | % | |||||||
Reserve for loss and LAE | 2,759.5 | 2,510.1 | 249.4 | 9.9 | % | ||||||||||
Unearned premiums | 1,571.4 | 1,354.6 | 216.8 | 16.0 | % |
September 30, 2016 | December 31, 2015 | Change | Change | ||||||||||||
($ in Millions) | % | ||||||||||||||
Preference shares | $ | 315.0 | $ | 480.0 | $ | (165.0 | ) | (34.4 | )% | ||||||
Common shareholders' equity | 1,240.3 | 867.8 | 372.5 | 42.9 | % | ||||||||||
Total Maiden shareholders' equity | 1,555.3 | 1,347.8 | 207.5 | 15.4 | % | ||||||||||
Senior notes | 362.5 | 360.0 | 2.5 | 0.7 | % | ||||||||||
Total capital resources | $ | 1,917.8 | $ | 1,707.8 | $ | 210.0 | 12.3 | % |
• | increase in AOCI of $147.6 million. This increase arose due to: 1) increase of $155.6 million which arose from the net increase in our U.S. dollar denominated investment portfolio of $130.6 million relating to market price movements and the increase in our non-U.S. dollar denominated investment portfolio of $25.0 million. The increase in our non-U.S. dollar denominated investment portfolio was $8.1 million primarily as a result of the strengthening of the euro, relative to U.S. dollar at September 30, 2016 compared to December 31, 2015, and $16.9 million as a result of market price movements during the nine months ended September 30, 2016. See "Liquidity and Capital Resources - Investments" on page 45 for further information; offset by 2) decrease in the cumulative translation adjustment of $8.0 million due to the effect of the depreciation of the U.S. dollar relative to the original currencies on our non-U.S. dollar net liabilities (excluding non- U.S. dollar denominated AFS fixed maturities); |
• | net income attributable to Maiden shareholders of $117.7 million. See "Results of Operations - Net Income" on page 37 for a discussion of the Company’s net income for the nine months ended September 30, 2016; |
• | increase in additional paid in capital of $2.6 million resulting from share-based transactions; and |
• | increase in common shares and additional paid in capital of $165.6 million as result of the conversion of the Company's Preference Shares - Series B into common shares on September 15, 2016 and exercise of options. |
• | dividends declared of $60.5 million on the Company’s common and preference shares during the nine months ended September 30, 2016; |
• | increase in shares repurchased for treasury of $0.5 million which represents withholdings from employees surrendered in respect of tax obligations on the vesting of restricted shares and performance based shares; and |
• | decrease in Preference Shares - Series B of $165.0 million as result of the conversion into common shares on September 15, 2016. |
Hypothetical Change in Interest Rates | Fair Value | Estimated Change in Fair Value | Hypothetical % (Decrease) Increase in Shareholders’ Equity | ||||||||
($ in Millions) | |||||||||||
200 basis point increase | $ | 3,429.5 | $ | (318.8 | ) | (20.5 | )% | ||||
100 basis point increase | 3,583.8 | (164.5 | ) | (10.6 | )% | ||||||
No change | 3,748.3 | — | — | % | |||||||
100 basis point decrease | 3,913.7 | 165.4 | 10.6 | % | |||||||
200 basis point decrease | 4,076.6 | 328.3 | 21.1 | % |
September 30, 2016 | December 31, 2015 | |||||
Ratings* | ||||||
AA+ or better | 40.6 | % | 42.3 | % | ||
AA, AA-, A+, A, A- | 34.1 | % | 29.9 | % | ||
BBB+, BBB, BBB- | 21.7 | % | 25.4 | % | ||
BB+ or lower | 3.6 | % | 2.4 | % | ||
100.0 | % | 100.0 | % |
September 30, 2016 | December 31, 2015 | |||||
A or better | 97.1 | % | 99.1 | % | ||
B++ or lower | 2.9 | % | 0.9 | % | ||
100.0 | % | 100.0 | % |
Exhibit No. | Description | |
10.1 | Endorsement No. 4 to the Amended and Restated Quota Share Reinsurance Contract by and between Maiden Reinsurance Ltd. and AmTrust Europe Limited and/or AmTrust International Underwriters Limited incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2011 filed with the SEC on August 8, 2011 (No. 001-34042) | |
31.1 | Section 302 Certification of CEO | |
31.2 | Section 302 Certification of CFO | |
32.1 | Section 906 Certification of CEO | |
32.2 | Section 906 Certification of CFO | |
101.1 | The following materials from Maiden Holdings, Ltd. Quarterly Report on Form 10-Q, formatted in XBRL (eXtensive Business Reporting Language): (i) the unaudited Condensed Consolidated Balance Sheets, (ii) the unaudited Condensed Consolidated Statements of Income, (iii) the unaudited Condensed Consolidated Statements of Comprehensive Income, (iv) the unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity, (v) the unaudited Condensed Consolidated Statements of Cash Flows, and (vi) Notes to unaudited Condensed Consolidated Financial Statements. |
MAIDEN HOLDINGS, LTD. | ||
By: | ||
November 8, 2016 | /s/ Arturo M. Raschbaum | |
Arturo M. Raschbaum President and Chief Executive Officer | ||
/s/ Karen L. Schmitt | ||
Karen L. Schmitt Chief Financial Officer | ||
/s/ Michael J. Tait | ||
Michael J. Tait Chief Accounting Officer |
1. | The section of the Contract entitled “Treaty Detail,” as previously amended by Endorsement 2 and Endorsement 3 to the Contract, shall be deleted and the following substituted therefor: |
(a) | in respect of AmTrust International Underwriters Limited, Eire, forty percent (40%) of all business written or renewed with effect from the inception of the Contract until such time as otherwise agreed in writing between the parties; |
(b) | in respect of AmTrust Europe Limited, forty percent (40%) of all business written or renewed with effect from the inception of the Contract until 30 June 2016, thirty-two and a half percent (32.5%) of all business written or renewed on or after 1 July 2016 until 30 June 2017, and twenty percent (20%) of all business written or renewed on or after 1 July 2017 until such time as otherwise agreed in writing between the parties. |
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. |
November 8, 2016 | /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 |
(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. |
November 8, 2016 | /s/ KAREN L. SCHMITT | ||
Karen L. Schmitt | |||
Chief Financial Officer | |||
(Principal Financial and Accounting Officer) |
November 8, 2016 | By: | /s/ ARTURO M. RASCHBAUM | |
Arturo M. Raschbaum | |||
President and Chief Executive Officer |
November 8, 2016 | By: | /s/ KAREN L. SCHMITT | |
Karen L. Schmitt | |||
Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Nov. 01, 2016 |
|
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | MHLD | |
Entity Registrant Name | Maiden Holdings, Ltd. | |
Entity Central Index Key | 0001412100 | |
Current Fiscal Year End Data | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 86,131,861 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Revenues: | ||||
Gross premiums written | $ 706,854,000 | $ 628,501,000 | $ 2,259,290,000 | $ 2,136,935,000 |
Net premiums written | 690,653,000 | 599,153,000 | 2,133,911,000 | 2,025,754,000 |
Change in unearned premiums | 7,625,000 | 59,367,000 | (182,060,000) | (180,495,000) |
Net premiums earned | 698,278,000 | 658,520,000 | 1,951,851,000 | 1,845,259,000 |
Other insurance revenue | 2,345,000 | 2,177,000 | 8,696,000 | 9,408,000 |
Net investment income | 35,666,000 | 32,843,000 | 107,291,000 | 96,260,000 |
Net realized gains on investment | 1,900,000 | 1,216,000 | 4,511,000 | 2,327,000 |
Total other-than-temporary impairment losses | 0 | (1,060,000) | 0 | (1,060,000) |
Portion of loss recognized in other comprehensive income (loss) | 0 | 0 | 0 | 0 |
Net impairment losses recognized in earnings | 0 | (1,060,000) | 0 | (1,060,000) |
Total revenues | 738,189,000 | 693,696,000 | 2,072,349,000 | 1,952,194,000 |
Expenses: | ||||
Net loss and loss adjustment expenses | 466,751,000 | 444,172,000 | 1,297,361,000 | 1,236,505,000 |
Commission and other acquisition expenses | 206,706,000 | 197,639,000 | 587,501,000 | 551,678,000 |
General and administrative expenses | 16,952,000 | 16,453,000 | 49,738,000 | 48,951,000 |
Interest and amortization expenses | 6,856,000 | 7,266,000 | 21,314,000 | 21,796,000 |
Accelerated amortization of senior note issuance cost | 0 | 0 | 2,345,000 | 0 |
Amortization of intangible assets | 616,000 | 710,000 | 1,846,000 | 2,130,000 |
Foreign exchange and other gains | (687,000) | (1,427,000) | (6,474,000) | (4,062,000) |
Total expenses | 697,194,000 | 664,813,000 | 1,953,631,000 | 1,856,998,000 |
Income before income taxes | 40,995,000 | 28,883,000 | 118,718,000 | 95,196,000 |
Income tax expense | 199,000 | 368,000 | 1,206,000 | 1,636,000 |
Net income | 40,796,000 | 28,515,000 | 117,512,000 | 93,560,000 |
Loss attributable to noncontrolling interest | 56,000 | 69,000 | 166,000 | 116,000 |
Net income attributable to Maiden shareholders | 40,852,000 | 28,584,000 | 117,678,000 | 93,676,000 |
Dividends on preference shares | (9,023,000) | (6,085,000) | (27,723,000) | (18,253,000) |
Net income attributable to Maiden common shareholders | $ 31,829,000 | $ 22,499,000 | $ 89,955,000 | $ 75,423,000 |
Basic earnings per share attributable to Maiden common shareholders (in dollars per share) | $ 0.42 | $ 0.31 | $ 1.20 | $ 1.03 |
Diluted earnings per share attributable to Maiden common shareholders (in dollars per share) | 0.40 | 0.30 | 1.15 | 0.99 |
Dividends declared per common share (in dollars per share) | $ 0.14 | $ 0.13 | $ 0.42 | $ 0.39 |
Basis of Presentation |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Maiden Holdings, Ltd. ("Maiden Holdings") and its subsidiaries (the "Company" or "Maiden") and have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP" or "U.S. GAAP") for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the U.S. Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All significant inter-company transactions and accounts have been eliminated. These interim unaudited Condensed Consolidated Financial Statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim period and all such adjustments are of a normal recurring nature. The results of operations for the interim period are not necessarily indicative, if annualized, of those to be expected for the full year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. These unaudited Condensed Consolidated Financial Statements, including these notes, should be read in conjunction with the Company's audited Consolidated Financial Statements, and related notes thereto, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. Certain reclassifications have been made for 2015 to conform to the 2016 presentation and have no impact on net income and total equity previously reported. |
Significant Accounting Policies |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies There have been no material changes to our significant accounting policies as described in our Annual Report on Form 10-K for the year ended December 31, 2015 with the exception of the following: Transition related to Accounting Standards Update ("ASU") No. 2015-03: Simplifying the Presentation of Debt Issuance Costs Effective January 1, 2016, the Company adopted the new guidance under ASU 2015-03 which requires that debt issuance costs be presented as a direct deduction from the related debt liability rather than as an asset in the balance sheet. The amortization of such costs is reported as an interest expense. The Company applied this new guidance retrospectively to all prior periods presented. The adoption of this new guidance reduced the December 31, 2015 audited consolidated total assets and total liabilities by $10,067, respectively, representing the amount of unamortized issuance costs related to our Senior Notes which was previously presented as part of other assets. There was no impact on the net income, related per-share amounts or the retained earnings for the periods affected by the adoption of this guidance. Recently Issued Accounting Standards Not Yet Adopted Disclosures about Short-Duration Contracts In May 2015, the Financial Accounting Standards Board ("FASB") issued ASU 2015-09 which is aimed at providing users of financial statements with more transparent information about an insurance entity’s initial claim estimates and subsequent adjustments to those estimates, methodologies and judgments in estimating claims, and the timing, frequency and severity of claims. The new disclosures are required for short-duration insurance contracts issued by insurers. For public business entities, this guidance will be effective for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted and should be applied retrospectively by providing comparative disclosures for each period presented. As this guidance is disclosure-related only, the adoption of this guidance will not have a material impact on the Company’s statements of operations and financial position. Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued ASU 2016-01 that will change how entities measure certain equity investments and present changes in the fair value of financial liabilities measured under the fair value option that are attributable to their own credit. The new guidance also changes certain disclosure requirements and other aspects of current U.S. GAAP. It does not change the guidance for classifying and measuring investments in debt securities and loans. Under the new guidance, entities will have to measure many equity investments at fair value and recognize any changes in fair value in net income unless the investments qualify for the new practicability exception. This includes investments in partnerships, unincorporated joint ventures and limited liability companies that do not result in consolidation and are not accounted for under the equity method. Entities will no longer be able to recognize unrealized holding gains and losses on equity securities they classify today as available for sale ("AFS") in Accumulated Other Comprehensive Income ("AOCI"). They also will no longer be able to use the cost method of accounting for equity securities that do not have readily determinable fair values. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company is evaluating the impact of this new guidance on its consolidated results of operations and financial condition. 2. Significant Accounting Policies (continued) Accounting for Leases In February 2016, the FASB issued final Accounting Standards Codification ("ASC") 842 guidance that requires lessees to put most leases on their balance sheets but recognize expenses on their income statement in a manner similar to today's accounting. The guidance also eliminates today's real-estate-specific provisions for all entities. All entities classify leases to determine how to recognize lease-related revenue and expense. The U.S. GAAP standard is effective for public business entities and certain not-for-profit entities and employee benefit plans for annual periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted for all entities. The Company is evaluating the impact of this new guidance on its consolidated results of operations and financial condition. Improvements to Employee Share-Based Payment Accounting In March 2016, the FASB issued ASU 2016-09 guidance that outlines changes for certain aspects of share-based payments to employees, such as accounting for forfeitures, which applies to the Company. Under the new guidance, the entities can elect to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. The guidance is effective for public business entities for fiscal year beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted for all entities, in any annual or interim period for which financial statements haven't been issued or made available for issuance, but all of the guidance must be adopted in the same period. The Company is evaluating the impact of this new guidance on its consolidated results of operations and financial condition. Accounting for Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13 guidance that changes the impairment model for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace today's "incurred loss" approach with an "expected loss" model for instruments measured at amortized cost and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. Entities will apply the standard's provisions as a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The guidance is effective for public business entities for annual periods beginning after December 15, 2019, and interim periods therein. The Company is evaluating the impact of this new guidance on its consolidated results of operations and financial condition. Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued ASU 2016-15 guidance to clarify how entities should classify certain cash receipts and cash payments on the statement of cash flows. The new guidance amends ASC 230 Statement of Cash Flows, a principles based requiring judgment to determine the appropriate classification of cash flow as operating, investing or financing activities which created diversity in how certain cash receipts and cash payments were classified. The new guidance clarifies that if a receipt or payment has aspects of more than one class of cash flows and cannot be separated, the classification will depend on the predominant source or use. While the new guidance attempts to clarify how the predominance principle should be applied, judgment will still be required. The guidance is effective for public business entities for annual periods beginning after December 15, 2017 and interim periods therein. Early adoption is permitted. Entities will have to apply the guidance retrospectively, but if it is impracticable to do so for an issue, the amendments related to that issue would be applied prospectively. The Company is evaluating the impact of this new guidance on its consolidated results of operations and financial condition. Intra-Entity Assets Other Than Inventory In October 2016, the FASB issued ASU 2016-16 guidance that will require entities to recognize the income tax effects of intercompany sales and transfers of assets other than inventory as expense or benefit, in the period in which the transfer occurs as opposed to being deferred the income tax effects until the intercompany asset has been sold to an outside party, according to the current guidance in effect. The new guidance will require companies to defer the income tax effects only of intercompany transfers of inventory. The companies will be required to apply a modified retrospective approach with a cumulative catch-up adjustment to opening retained earnings in the period of adoption. In addition, companies will record deferred tax balances with an offset to opening retained earnings for amounts they haven't recognized under the new guidance. If a valuation allowance is necessary on the date of the adoption, that allowance will be recorded with an offset to opening retained earnings. The new guidance is effective for public business entities for annual periods beginning after December 15, 2017 and interim periods therein. Early adoption is permitted. The Company is evaluating the impact of this new guidance on its consolidated results of operations and financial condition. |
Segment Reporting |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Segment Reporting The Company currently has two reportable segments: Diversified Reinsurance and AmTrust Reinsurance. Our Diversified Reinsurance segment consists of a portfolio of predominantly property and casualty reinsurance business focusing on regional and specialty property and casualty insurance companies primarily located in the U.S. and Europe. Our AmTrust Reinsurance segment includes all business ceded to Maiden Reinsurance Ltd. ("Maiden Bermuda") by subsidiaries of AmTrust Financial Services, Inc. ("AmTrust"), primarily the AmTrust Quota Share and the European Hospital Liability Quota Share. Please refer to "Note 7. Related Party Transactions" for additional information. In addition to our reportable segments, the results of operations of the former NGHC Quota Share segment and the remnants of the U.S. excess and surplus ("E&S") business have been included in the "Other" category. The Company evaluates segment performance based on segment profit separately from the results of our investment portfolio. General and administrative expenses are allocated to the segments on an actual basis except salaries and benefits where management’s judgment is applied. The Company does not allocate general corporate expenses to the segments. In determining total assets by reportable segment, the Company identifies those assets that are attributable to a particular segment such as reinsurance balances receivable, reinsurance recoverable on unpaid losses, deferred commission and other acquisition expenses, loans, goodwill and intangible assets, restricted cash and cash equivalents and investments and prepaid reinsurance premiums. All remaining assets are allocated to Corporate. The following tables summarize our reporting segment's underwriting results and the reconciliation of our reportable segments and Other category's underwriting results to our consolidated net income:
3. Segment Reporting (continued)
3. Segment Reporting (continued)
3. Segment Reporting (continued)
The following tables summarize the total assets of our reportable segments including the reconciliation to our consolidated assets at September 30, 2016 and December 31, 2015:
3. Segment Reporting (continued) The following tables set forth financial information relating to net premiums written and earned by major line of business and reportable segment for the three and nine months ended September 30, 2016 and 2015:
3. Segment Reporting (continued)
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Investments |
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Schedule of Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments (a) Fixed Maturities and Other Investments The original or amortized cost, estimated fair value and gross unrealized gains and losses of investment in fixed maturities and other investments as of September 30, 2016 and December 31, 2015 are as follows:
During the second quarter of 2016, we designated additional fixed maturities with a total fair value of $155,538 as HTM reflecting our intent to hold these securities to maturity. The net unrealized holding gain of $15,770 at the designation date was reported in the carrying value of the HTM securities and is amortized through Other Comprehensive Income over the remaining life of the securities using the effective interest method in a manner consistent with the amortization of any premium or discount. The contractual maturities of our fixed maturities are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or repay obligations with or without prepayment penalties. 4. Investments (continued)
The following tables summarize fixed maturities and other investments in an unrealized loss position and the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position:
As of September 30, 2016, there were approximately 132 securities in an unrealized loss position with a fair value of $645,228 and unrealized losses of $36,488. Of these securities, there are 94 securities that have been in an unrealized loss position for 12 months or greater with a fair value of $437,528 and unrealized losses of $34,820.
4. Investments (continued) As of December 31, 2015, there were approximately 270 securities in an unrealized loss position with a fair value of $1,891,480 and unrealized losses of $125,312. Of these securities, there are 93 securities that have been in an unrealized loss position for 12 months or greater with a fair value of $592,418 and unrealized losses of $78,282. Other-Than-Temporary Impairments ("OTTI") The Company performs quarterly reviews of its investment portfolio in order to determine whether declines in fair value below the amortized cost basis were considered other-than-temporary in accordance with applicable guidance. At September 30, 2016, we have determined that the unrealized losses on fixed maturities were primarily due to widening of credit spreads since their date of purchase. Because we do not intend to sell these securities and it is not more likely than not that we will be required to do so until a recovery of fair value to amortized cost, we currently believe it is probable that we will collect all amounts due according to their respective contractual terms. Therefore, we do not consider these fixed maturities to be other-than-temporarily impaired at September 30, 2016. For the three and nine months ended ended September 30, 2016, the Company recognized no OTTI. For the three and nine months ended September 30, 2015, there was a credit impairment in respect of one corporate bond which resulted in the recognition of OTTI of $1,060 for both periods. The following summarizes the credit ratings of our fixed maturities:
*Based on Standard & Poor’s ("S&P"), or equivalent, ratings 4. Investments (continued) (b) Other Investments The following table shows our portfolio of other investments:
The Company has an unfunded commitment on its investments in limited partnerships of approximately $525 at September 30, 2016. (c) Realized Gains on Investment Realized gains or losses on the sale of investments are determined on the basis of the first in first out cost method. The following provides an analysis of net realized gains on investment included in the unaudited Condensed Consolidated Statements of Income:
Proceeds from sales of AFS fixed maturities were $15,260 and $101,923 for the three and nine months ended September 30, 2016, respectively (September 30, 2015 - $29,595 and $116,093, respectively). Net unrealized gains were as follows: 4. Investments (continued)
(d) Restricted Cash and Cash Equivalents and Investments We are required to maintain assets to serve as collateral for our reinsurance liabilities under various reinsurance agreements. We also utilize trust accounts to collateralize business with our reinsurance counterparties. The assets in trust as collateral are primarily cash and highly rated fixed maturity securities. The fair value of our restricted assets was as follows:
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Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments (a) Fair Values of Financial Instruments FASB ASC Topic 820, "Fair Value Measurements and Disclosures" ("ASC 820") defines fair value as the price that would be received upon the sale of an asset or paid to transfer a liability (i.e. the "exit price") in an orderly transaction between open market participants at the measurement date. Additionally, ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows:
5. Fair Value of Financial Instruments (continued)
The availability of observable inputs can vary from financial instrument to financial instrument and is affected by a wide variety of factors, including, for example, the type of financial instrument, whether the financial instrument is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires significantly more judgment. Accordingly, the degree of judgment exercised by management in determining fair value is greatest for instruments categorized in Level 3. We use prices and inputs that are current at the measurement date. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This condition could cause an instrument to be reclassified between levels. For investments that have quoted market prices in active markets, the Company uses the quoted market prices as fair value and includes these prices in the amounts disclosed in the Level 1 hierarchy. The Company receives the quoted market prices from a third party nationally recognized pricing service provider ("the Pricing Service"). When quoted market prices are unavailable, the Company utilizes the Pricing Service to determine an estimate of fair value. The fair value estimates are included in the Level 2 hierarchy. The Company will challenge any prices for its investments which are considered not to be representation of fair value. If quoted market prices and an estimate from the Pricing Service are unavailable, the Company produces an estimate of fair value based on dealer quotations for recent activity in positions with the same or similar characteristics to that being valued or through consensus pricing of a pricing service. The Company determines whether the fair value estimate is in the Level 2 or Level 3 hierarchy depending on the level of observable inputs available when estimating the fair value. The Company bases its estimates of fair values for assets on the bid price as it represents what a third party market participant would be willing to pay in an orderly transaction. ASC 825, “Disclosure About Fair Value of Financial Instruments", requires all entities to disclose the fair value of their financial instruments, both assets and liabilities recognized and not recognized in the balance sheet, for which it is practicable to estimate fair value. The following describes the valuation techniques used by the Company to determine the fair value of financial instruments held at September 30, 2016. U.S. government and U.S. agencies — Bonds issued by the U.S. Treasury, the Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation, Government National Mortgage Association and the Federal National Mortgage Association. The fair values of U.S. treasury bonds are based on quoted market prices in active markets, and are included in the Level 1 fair value hierarchy. We believe the market for U.S. treasury bonds is an actively traded market given the high level of daily trading volume. The fair values of U.S. agency bonds are determined using the spread above the risk-free yield curve. As the yields for the risk-free yield curve and the spreads for these securities are observable market inputs, the fair values of U.S. agency bonds are included in the Level 2 fair value hierarchy. Non-U.S. government and supranational bonds — These securities are generally priced by independent pricing services. The Pricing Service may use current market trades for securities with similar quality, maturity and coupon. If no such trades are available, the Pricing Service typically uses analytical models which may incorporate spreads, interest rate data and market/sector news. As the significant inputs used to price non-U.S. government and supranational bonds are observable market inputs, the fair values of non-U.S. government and supranational bonds are included in the Level 2 fair value hierarchy. Asset-backed securities — These securities comprise CMBS and CLO originated by a variety of financial institutions that on acquisition are rated BBB-/Baa3 or higher. These securities are priced by independent pricing services and brokers. The pricing provider applies dealer quotes and other available trade information, prepayment speeds, yield curves and credit spreads to the valuation. As the significant inputs used to price the CMBS and CLO are observable market inputs, the fair value of the CMBS and CLO is included in the Level 2 fair value hierarchy. Corporate bonds — Bonds issued by corporations that on acquisition are rated BBB-/Baa3 or higher. These securities are generally priced by independent pricing services. The spreads are sourced from broker/dealers, trade prices and the new issue market. Where pricing is unavailable from pricing services, we obtain non-binding quotes from broker-dealers. As the significant inputs used to price corporate bonds are observable market inputs, the fair values of corporate bonds are included in the Level 2 fair value hierarchy. Municipal bonds — Bonds issued by U.S. state and municipality entities or agencies. The fair values of municipal bonds are generally priced by independent pricing services. The pricing services typically use spreads obtained from broker-dealers, trade prices and the new issue market. As the significant inputs used to price the municipal bonds are observable market inputs, municipal bonds are classified within Level 2. 5. Fair Value of Financial Instruments (continued) Other investments — Includes both quoted and unquoted investments. The fair value of our quoted equity investment is obtained from the Pricing Service and is classified within Level 1. Unquoted other investments comprise investments in limited partnerships and an investment in preference shares of a start-up insurance producer. The fair values of the limited partnerships are determined by the fund manager based on recent filings, operating results, balance sheet stability, growth and other business and market sector fundamentals, and as such, the fair values are included in the Level 3 fair value hierarchy. The fair value of the investment in preference shares of a start-up insurance producer was determined using recent private market transactions and as such, the fair value is included in the Level 3 fair value hierarchy. Reinsurance balances receivable — The carrying values reported in the accompanying condensed consolidated balance sheets for these financial instruments approximate their fair value due to short term nature of the assets. Loan to related party — The carrying value reported in the accompanying condensed consolidated balance sheets for this financial instrument approximates its fair value. Senior notes — The amount reported in the accompanying condensed consolidated balance sheets for these financial instruments represents the carrying value of the notes. The fair values are based on indicative market pricing obtained from a third-party service provider and as such, are included in the Level 2 hierarchy. (b) Fair Value Hierarchy The Company’s estimates of fair value for financial assets and financial liabilities are based on the framework established in ASC 820. The framework is based on the inputs used in valuation and gives the highest priority to quoted prices in active markets and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the ASC 820 hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions. We classified our financial instruments measured at fair value on a recurring basis in the following valuation hierarchy:
5. Fair Value of Financial Instruments (continued)
The Company utilized a Pricing Service to estimate fair value measurements for approximately 99.9% of its fixed maturities at September 30, 2016 and December 31, 2015, respectively. The Pricing Service utilizes market quotations for fixed maturity securities that have quoted market prices in active markets. Since fixed maturities other than U.S. treasury bonds generally do not trade on a daily basis, the Pricing Service prepares estimates of fair value measurements using relevant market data, benchmark curves, sector groupings and matrix pricing and these have been classified as Level 2. At September 30, 2016 and December 31, 2015, 0.1% of the fixed maturities are valued using the market approach. At each date, a total of two securities, or approximately $5,451 and $4,943, respectively, of Level 2 fixed maturities, were priced using a quotation from a broker and/or custodian as opposed to the Pricing Service due to lack of information available. At September 30, 2016 and December 31, 2015, we have not adjusted any pricing provided to us based on the review performed by our investment managers. There have not been any transfers between Level 1 and Level 2 during the periods represented by these unaudited Condensed Consolidated Financial Statements. (c) Level 3 Financial Instruments The Company has determined that its investments in Level 3 securities are not material to its financial position or results of operations. The following table presents changes in Level 3 for our financial instruments measured at fair value on a recurring basis:
5. Fair Value of Financial Instruments (continued)
(d) Financial Instruments not measured at Fair Value The following table presents the fair value and carrying value of the financial instruments not measured at fair value:
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Long-Term Debt |
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Long-term Debt | Long-Term Debt Senior Notes Maiden Holdings and its wholly owned subsidiary, Maiden Holdings North America, Ltd. ("Maiden NA"), completed public debt offerings on four separate occasions, with the issuance of Senior Notes in 2011, 2012, 2013 and 2016, respectively, (the "Senior Notes"). Each of the issuances made by Maiden NA, namely the 2011, 2012 and 2013 Senior Notes, is fully and unconditionally guaranteed by the Company. The Senior Notes are an unsecured and unsubordinated obligation of the Company. On June 14, 2016, Maiden Holdings issued $110,000 6.625% Senior Notes for cash. On June 15, 2016, Maiden NA fully redeemed all of its 2011 Senior Notes using the proceeds from the 2016 Senior Notes issuance. The 2011 Senior Notes were redeemed at a redemption price equal to 100% of the principal amount of $107,500 plus accrued and unpaid interest on the principal amount being redeemed up to, but not including, the redemption date. As a result, the Company accelerated the amortization of the remaining debt issuance cost of $2,345. The following table details the Company's outstanding Senior Notes issuances as of September 30, 2016: 6. Long-Term Debt (continued)
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Related Party Transactions |
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Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Founding Shareholders of the Company are Michael Karfunkel, George Karfunkel and Barry Zyskind. Michael Karfunkel passed away on April 27, 2016. As of September 30, 2016, Leah Karfunkel (wife of Michael Karfunkel), George Karfunkel and Barry Zyskind own or control approximately 17.4% of the outstanding shares of the Company. Leah Karfunkel and George Karfunkel are directors of AmTrust, and Barry Zyskind is the president, CEO and chairman of AmTrust, and combined they own or control approximately 49.3% of the outstanding shares of AmTrust. AmTrust owns 11.6% of the issued and outstanding shares of National General Holdings Corporation ("NGHC") common stock, and the Michael Karfunkel 2005 Family Trust (which is controlled by Leah Karfunkel) owns 43.0% of the common stock of NGHC. Barry Zyskind is the non-executive chairman of NGHC. AmTrust The following describes transactions between the Company and AmTrust. AmTrust Quota Share Reinsurance Agreement Effective July 1, 2007, the Company and AmTrust entered into a master agreement, as amended (the "Master Agreement"), by which Maiden Bermuda, a wholly owned subsidiary of the Company, and AmTrust's Bermuda reinsurance subsidiary, AmTrust International Insurance, Ltd. ("AII"), to enter into a quota share reinsurance agreement (the "Reinsurance Agreement"). Under the Reinsurance Agreement, AII retrocedes to Maiden Bermuda an amount equal to 40% of the premium written by subsidiaries of AmTrust, net of the cost of unaffiliated inuring reinsurance (and in the case of AmTrust's U.K. insurance subsidiary, AmTrust Europe Limited ("AEL"), net of commissions) and 40% of losses. The Master Agreement further provided that AII receives a ceding commission of 31% of ceded written premiums. On June 11, 2008, Maiden Bermuda and AII amended the Reinsurance Agreement to add Retail Commercial Package Business to the Covered Business. AII receives a ceding commission of 34.375% on Retail Commercial Package Business. On July 1, 2016 the agreement was renewed through June 30, 2019. The agreement automatically renews for successive three-year periods thereafter unless AII or Maiden Bermuda elects to so terminate the Reinsurance Agreement by giving written notice to the other party not less than nine months prior to the expiration of any successive three-year period. Either party is entitled to terminate on thirty days' notice or less upon the occurrence of certain early termination events, which include a default in payment, insolvency, change in control of AII or Maiden Bermuda, run-off, or a reduction of 50% or more of the shareholders' equity of Maiden Bermuda or the combined shareholders' equity of AII and the AmTrust subsidiaries. In 2015, Maiden Bermuda and AII entered into an agreement to commute certain liabilities as of December 31, 2015. The commuted reserve value of $107,000, represents full and final settlement of all liabilities related to this business and as a result of this agreement, this business is no longer being ceded to Maiden. Additionally, for the Specialty Program portion of Covered Business only, AII will be responsible for ultimate net loss otherwise recoverable from Maiden Bermuda to the extent that the loss ratio to Maiden Bermuda, which shall be determined on an inception to date basis from July 1, 2007 through the date of calculation, is between 81.5% and 95%. Above and below the defined corridor, Maiden Bermuda will continue to reinsure losses at its proportional 40% share per the Reinsurance Agreement. 7. Related Party Transactions (continued) AmTrust European Hospital Liability Quota Share Agreement ("European Hospital Liability Quota Share") Effective April 1, 2011, Maiden Bermuda, entered into a quota share reinsurance contract with AEL and AmTrust International Underwriters Limited ("AIUL"), both wholly owned subsidiaries of AmTrust. Pursuant to the terms of the contract, Maiden Bermuda assumed 40% of the premiums and losses related to policies classified as European Hospital Liability, including associated liability coverages and policies covering physician defense costs, written or renewed on or after April 1, 2011. The contract also covers policies written or renewed on or before March 31, 2011, but only with respect to losses that occur, accrue or arise on or after April 1, 2011. The maximum limit of liability attaching shall be €5,000 (€10,000 effective January 1, 2012) or currency equivalent (on a 100% basis) per original claim for any one original policy. Maiden Bermuda will pay a ceding commission of 5%. The agreement has been renewed through March 31, 2017 and can be terminated at any April 1 by either party on four months notice. Effective July 1, 2016, the contract was amended such that Maiden Bermuda assumes from AEL 32.5% of the premiums and losses of all policies written or renewed on or after July 1, 2016 until June 30, 2017 and 20% of all policies written or renewed on or after July 1, 2017. The Company recorded approximately $163,336 and $447,767 of ceding commission expense for the three and nine months ended September 30, 2016, respectively (September 30, 2015 - $141,348 and $389,501, respectively) as a result of both these quota share arrangements with AmTrust. Other Reinsurance Agreements Effective September 1, 2010, the Company, through a subsidiary, entered into a quota share reinsurance agreement with Technology Insurance Company, Inc. ("Technology"), a subsidiary of AmTrust. Under the agreement, we ceded (a) 90% of its gross liability written under the Open Lending Program ("OPL") and (b) 100% of its surplus lines general liability business under the Naxos Avondale Specialty Casualty Program ("NAXS"). Our involvement is limited to certain states where Technology was not fully licensed. The agreement also provides that we receive a ceding commission of 5% of ceded written premiums. The OPL program was terminated on December 31, 2011, on a run-off basis, and the NAXS program was terminated on October 31, 2012. We recorded $0 and $12 of ceded premiums and $0 and $1 ceding commission income for the three and nine months ended September 30, 2016, (September 30, 2015 - $14 and $59 of premiums ceded and $0 and $3 of ceding commission income, respectively). Effective April 1, 2012, the Company, through a subsidiary, entered into a reinsurance agreement with AmTrust's wholly owned subsidiary, AmTrust North America, Inc. ("AmTrust NA"). We indemnify AmTrust NA, on an excess of loss basis, as a result of losses occurring on AmTrust NA's new and renewal policies relating to the lines of business classified as Automobile Liability by AmTrust NA in its annual statement utilizing the specific underwriting guidelines defined in the reinsurance agreement. AmTrust NA shall retain the first $1,000 of loss, per any one policy or per any one loss occurrence. This agreement has a term of one year and automatically renews annually unless terminated pursuant to the terms of the agreement. Under this agreement, for the three and nine months ended September 30, 2016, the Company recorded approximately $305 and $745 net premiums earned and $87 and $187 of commission expense, respectively, (September 30, 2015 - $154 and $483 net premiums earned and $35 and $117 commission expense, respectively). Collateral provided to AmTrust a) AmTrust Quota Share Reinsurance Agreement In order to provide AmTrust's U.S. insurance subsidiaries with credit for reinsurance on their statutory financial statements, AII, as the direct reinsurer of the AmTrust's insurance subsidiaries, has established trust accounts ("Trust Accounts") for their benefit. Maiden Bermuda has agreed to provide appropriate collateral to secure its proportional share under the Reinsurance Agreement of AII's obligations to the AmTrust subsidiaries to whom AII is required to provide collateral. This collateral may be in the form of (a) assets loaned by Maiden Bermuda to AII for deposit into the Trust Accounts, pursuant to a loan agreement between those parties, (b) assets transferred by Maiden Bermuda for deposit into the Trust Accounts, (c) a letter of credit obtained by Maiden Bermuda and delivered to an AmTrust subsidiary on AII's behalf, or (d) premiums withheld by an AmTrust subsidiary at Maiden Bermuda's request in lieu of remitting such premiums to AII. Maiden Bermuda may provide any or a combination of these forms of collateral, provided that the aggregate value thereof equals Maiden Bermuda's proportionate share of its obligations under the Reinsurance Agreement with AII. 7. Related Party Transactions (continued) Maiden Bermuda satisfied its collateral requirements under the Reinsurance Agreement with AII as follows: •by lending funds in the amount of $167,975 at September 30, 2016 and December 31, 2015 pursuant to a loan agreement entered into between those parties. This loan was assigned to AmTrust effective December 31, 2014 and is carried at cost. Interest is payable at a rate equivalent to the one-month LIBOR plus 90 basis points per annum; and •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, at September 30, 2016, was approximately $2,805,607 (December 31, 2015 - $2,256,383) and the accrued interest was $18,400 (December 31, 2015 - $15,448). Please refer to "Note 4. (d) Investments" for additional information. b) European Hospital Liability Quota Share AEL requested that Maiden Bermuda provide collateral to secure its proportional share under the European Hospital Liability Quota Share agreement. Please refer to "Note 4. (d) Investments" for additional information. Brokerage Agreement Effective July 1, 2007, the Company entered into a reinsurance brokerage agreement with AII Reinsurance Broker Ltd. ("AIIB"), a wholly owned subsidiary of AmTrust. Pursuant to the brokerage agreement, AIIB provides brokerage services relating to the Reinsurance Agreement and, the European Hospital Liability Quota Share agreement for a fee equal to 1.25% of the premium assumed. The brokerage fee is payable in consideration of AIIB's brokerage services. AIIB is not the Company's exclusive broker. The agreement may be terminated upon 30 days written notice by either party. Maiden Bermuda recorded approximately $6,652 and $18,330 of reinsurance brokerage expense for the three and nine months ended September 30, 2016, respectively (September 30, 2015 - $5,854 and $16,161, respectively) and deferred reinsurance brokerage of $15,051 at September 30, 2016 (December 31, 2015 - $13,464) as a result of this agreement. Asset Management Agreement Effective July 1, 2007, the Company entered into an asset management agreement with AII Insurance Management Limited ("AIIM"), a wholly owned subsidiary of AmTrust, pursuant to which AIIM has agreed to provide investment management services to the Company. AIIM provides investment management services for a quarterly fee of 0.0375% if the average value of the account for the previous calendar quarter is greater than $1 billion. The agreement may be terminated upon 30 days written notice by either party. The Company recorded approximately $1,780 and $5,122 of investment management fees for the three and nine months ended September 30, 2016, respectively (September 30, 2015 - $1,518 and $4,455, respectively) as a result of this agreement. Other The Company entered into time sharing agreements for the lease of aircraft owned by AmTrust Underwriters, Inc. ("AUI"), a wholly owned subsidiary of AmTrust, and by AmTrust on March 1, 2011 and November 5, 2014, respectively. The agreements automatically renew for successive one-year terms unless terminated in accordance with the provisions of the agreements. Pursuant to the agreements, the Company will reimburse AUI and AmTrust for actual expenses incurred as allowed by Federal Aviation Regulations. For the three and nine months ended September 30, 2016, the Company recorded an expense of $22 and $61, respectively (September 30, 2015 - $20 and $70, respectively) for the use of the aircraft. NGHC The following describes transactions between the Company and NGHC and its subsidiaries: NGHC Quota Share Reinsurance Agreement ("NGHC Quota Share") Maiden Bermuda, effective March 1, 2010, had a 50% participation in the NGHC Quota Share, by which it received 25% of net premiums of the personal lines automobile business and assumed 25% of the related net losses. On August 1, 2013, the Company and NGHC mutually agreed the termination of the NGHC Quota Share on a run-off basis effective on that date. Consequently, Maiden Bermuda recorded no ceding commission expense for the three and nine months ended September 30, 2016 and 2015, respectively, as a result of this transaction. Other Effective April 1, 2015, Maiden US renewed the Medical Excess of Loss reinsurance agreement with wholly owned subsidiaries of NGHC, Distributors Insurance Company PCC, AIBD Insurance Company IC and Professional Services Captive Corporation IC. Pursuant to this agreement, Maiden US indemnified on an excess of loss basis, for the amounts of net loss, paid from April 1, 7. Related Party Transactions (continued) 2015 through March 31, 2016. Maiden US was liable for 100% of the net loss for each covered person per agreement year in excess of the $1,175 retention (each covered person per agreement year). Maiden US' liability did not exceed $8,825 per covered person per agreement year. In addition, Maiden US continued to indemnify extra contractual obligations with a maximum liability of $2,000. This agreement terminated on March 31, 2016 and Maiden US was relieved of all liability hereunder for losses incurred or paid subsequent to such termination date. Under these agreements, Maiden US recorded approximately $0 and $157 of premiums earned for the three and nine months ended September 30, 2016, respectively (September 30, 2015 - $218 and $328, respectively). Effective May 1, 2015, Maiden US entered into an agreement with several NGHC subsidiaries for medical excess of loss programs. This program covers employer aggregate and traditional specific medical stop loss policies underwritten by the Managing General Agent that they support. The NGHC companies covered under the treaty are Integon Indemnity Insurance Company, Integon National Insurance Company and National Health Insurance Company. This agreement was renewed for another year and now terminates on April 30, 2017 with either party having the right to cancel by giving 60 days notice to the other party in the event that other party fails to maintain certain financial and other criteria. Upon expiration of this agreement, coverage remains in full force and effect on all assumed liability for policies in force on the date of expiration until expiration, cancellation or next anniversary date of such subject policies. The treaty limit of the aggregate medical stop loss is subject to a limit of $4,000 in excess of $1,000 any one insured person. The treaty limit on the traditional specific medical stop loss Layer 1 is subject to a limit of $1,000 in excess of $1,000 any one insured person; Layer 2 is subject to a limit of $3,000 in excess of $2,000 any one insured person and Layer 3 is subject to a limit of $5,000 in excess of $5,000. In addition to these limits, the Company shall cover extra contractual obligations arising under this agreement with a maximum liability of $2,000. Under these agreements, Maiden US recorded approximately $136 and $295 of premiums earned for the three and nine months ended September 30, 2016, respectively (September 30, 2015 - $19 and $22, respectively). |
Earnings per Common Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Common Share | Earnings per Common Share The following is a summary of the elements used in calculating basic and diluted earnings per common share:
8. Earnings per Common Share (continued)
(1) This represents earnings allocated to the holders of non-vested restricted shares issued to the Company's employees under the 2007 Share Incentive Plan. (2) Please refer to "Notes to Consolidated Financial Statements" included under Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2015 for the terms and conditions of each of these anti-dilutive instruments. The mandatory convertible preference shares - series B were included in the calculation of diluted earnings per share only for the period that they were outstanding. On September 15, 2016, the Company's $165,000 mandatory convertible preference shares - Series B were automatically converted into 12,069,090 of the Company's common shares at a conversion rate of 3.6573 per preference share. |
Shareholders' Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Shareholders' Equity At September 30, 2016, the aggregate authorized share capital of the Company is 150,000,000 shares from which the Company has issued 87,178,902 common shares, of which 86,128,999 are outstanding, and issued 12,600,000 preference shares. The remaining 50,221,098 are undesignated at September 30, 2016. For further discussion on the components of Shareholders' Equity, please refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2015. Mandatory Convertible Preference Shares - Series B On September 15, 2016, each of the then outstanding Preference Share - Series B were automatically converted into 12,069,090 of the Company's common shares at a conversion rate of 3.6573 per preference share. Treasury Shares On January 1, 2016, February 15, 2016, February 17, 2016 and March 10, 2016, the Company repurchased 3,351 shares at a price per share of $14.91, 10,255 shares at a price per share of $13.16, 1,183 shares at a price per share of $13.36 and 20,469 shares at a price per share of $13.16, respectively, from employees, which represent withholdings in respect of tax obligations on the vesting of restricted shares and performance based shares. 9. Shareholders' Equity (continued) Accumulated Other Comprehensive Income The following tables set forth financial information regarding the changes in the balances of each component of AOCI:
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies There are no material changes from the commitments and contingencies previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. Dividends Declared On August 3, 2016, the Company's Board of Directors authorized the following quarterly dividend:
Legal Proceedings From time to time, the Company is subject to routine legal proceedings, including arbitrations, arising in the ordinary course of business. These legal proceedings generally relate to claims asserted by or against the Company in the ordinary course of insurance or reinsurance operations. Based on the Company's opinion, the eventual outcome of these legal proceedings is not expected to have a material adverse effect on its financial condition or results of operations. In April 2009, the Company learned that Bentzion S. Turin, the former Chief Operating Officer, General Counsel and Secretary of Maiden Holdings and Maiden Bermuda, sent a letter to the U.S. Department of Labor claiming that his employment with the Company was terminated in retaliation for corporate whistle blowing in violation of the whistle blower protection provisions of the Sarbanes-Oxley Act of 2002. Mr. Turin alleged concerns regarding corporate governance with respect to negotiation of the terms of the Trust Preferred Securities Offering and seeks reinstatement as Chief Operating Officer, General Counsel and Secretary of Maiden Holdings and Maiden Bermuda, back pay and legal fees incurred. On December 31, 2009, the U.S. Secretary of Labor found no reasonable cause for Mr. Turin’s claim and dismissed the complaint in its entirety. Mr. Turin objected to the Secretary's findings and requested a hearing before an administrative law judge in the U.S. Department of Labor. The Company moved to dismiss Mr. Turin's complaint, and its motion was granted by the Administrative Law Judge on June 30, 2011. On July 13, 2011, Mr. Turin filed a petition for review of the Administrative Law Judge's decision with the Administrative Review Board in the U.S. Department of Labor. The Company filed its brief in opposition to the petition for review on October 19, 2011. On March 29, 2013, the Administrative Review Board reversed the dismissal of the complaint on procedural grounds, and remanded the case to the administrative law judge. The administrative hearing began in September 2014, and we expect it to conclude in 2017. The Company believes that it had ample reason for terminating such employment for good and sufficient legal cause, and the Company believes that the claim is without merit and is vigorously defending this claim. |
Subsequent Events |
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Subsequent Events [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsequent Events | Subsequent Events On November 1, 2016, the Company's Board of Directors authorized the following quarterly dividends:
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Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of Maiden Holdings, Ltd. ("Maiden Holdings") and its subsidiaries (the "Company" or "Maiden") and have been prepared in accordance with generally accepted accounting principles in the United States ("GAAP" or "U.S. GAAP") for interim financial statements and with the instructions to Form 10-Q and Article 10 of Regulation S-X as promulgated by the U.S. Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All significant inter-company transactions and accounts have been eliminated. These interim unaudited Condensed Consolidated Financial Statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim period and all such adjustments are of a normal recurring nature. The results of operations for the interim period are not necessarily indicative, if annualized, of those to be expected for the full year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. These unaudited Condensed Consolidated Financial Statements, including these notes, should be read in conjunction with the Company's audited Consolidated Financial Statements, and related notes thereto, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. Certain reclassifications have been made for 2015 to conform to the 2016 presentation and have no impact on net income and total equity previously reported. |
Recently Issued Accounting Standards Not Yet Adopted | Transition related to Accounting Standards Update ("ASU") No. 2015-03: Simplifying the Presentation of Debt Issuance Costs Effective January 1, 2016, the Company adopted the new guidance under ASU 2015-03 which requires that debt issuance costs be presented as a direct deduction from the related debt liability rather than as an asset in the balance sheet. The amortization of such costs is reported as an interest expense. The Company applied this new guidance retrospectively to all prior periods presented. The adoption of this new guidance reduced the December 31, 2015 audited consolidated total assets and total liabilities by $10,067, respectively, representing the amount of unamortized issuance costs related to our Senior Notes which was previously presented as part of other assets. There was no impact on the net income, related per-share amounts or the retained earnings for the periods affected by the adoption of this guidance. Recently Issued Accounting Standards Not Yet Adopted Disclosures about Short-Duration Contracts In May 2015, the Financial Accounting Standards Board ("FASB") issued ASU 2015-09 which is aimed at providing users of financial statements with more transparent information about an insurance entity’s initial claim estimates and subsequent adjustments to those estimates, methodologies and judgments in estimating claims, and the timing, frequency and severity of claims. The new disclosures are required for short-duration insurance contracts issued by insurers. For public business entities, this guidance will be effective for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted and should be applied retrospectively by providing comparative disclosures for each period presented. As this guidance is disclosure-related only, the adoption of this guidance will not have a material impact on the Company’s statements of operations and financial position. Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued ASU 2016-01 that will change how entities measure certain equity investments and present changes in the fair value of financial liabilities measured under the fair value option that are attributable to their own credit. The new guidance also changes certain disclosure requirements and other aspects of current U.S. GAAP. It does not change the guidance for classifying and measuring investments in debt securities and loans. Under the new guidance, entities will have to measure many equity investments at fair value and recognize any changes in fair value in net income unless the investments qualify for the new practicability exception. This includes investments in partnerships, unincorporated joint ventures and limited liability companies that do not result in consolidation and are not accounted for under the equity method. Entities will no longer be able to recognize unrealized holding gains and losses on equity securities they classify today as available for sale ("AFS") in Accumulated Other Comprehensive Income ("AOCI"). They also will no longer be able to use the cost method of accounting for equity securities that do not have readily determinable fair values. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. The Company is evaluating the impact of this new guidance on its consolidated results of operations and financial condition. 2. Significant Accounting Policies (continued) Accounting for Leases In February 2016, the FASB issued final Accounting Standards Codification ("ASC") 842 guidance that requires lessees to put most leases on their balance sheets but recognize expenses on their income statement in a manner similar to today's accounting. The guidance also eliminates today's real-estate-specific provisions for all entities. All entities classify leases to determine how to recognize lease-related revenue and expense. The U.S. GAAP standard is effective for public business entities and certain not-for-profit entities and employee benefit plans for annual periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted for all entities. The Company is evaluating the impact of this new guidance on its consolidated results of operations and financial condition. Improvements to Employee Share-Based Payment Accounting In March 2016, the FASB issued ASU 2016-09 guidance that outlines changes for certain aspects of share-based payments to employees, such as accounting for forfeitures, which applies to the Company. Under the new guidance, the entities can elect to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. The guidance is effective for public business entities for fiscal year beginning after December 15, 2016, and interim periods within those fiscal years. Early adoption is permitted for all entities, in any annual or interim period for which financial statements haven't been issued or made available for issuance, but all of the guidance must be adopted in the same period. The Company is evaluating the impact of this new guidance on its consolidated results of operations and financial condition. Accounting for Measurement of Credit Losses on Financial Instruments In June 2016, the FASB issued ASU 2016-13 guidance that changes the impairment model for most financial assets and certain other instruments that are not measured at fair value through net income. The standard will replace today's "incurred loss" approach with an "expected loss" model for instruments measured at amortized cost and require entities to record allowances for available-for-sale debt securities rather than reduce the carrying amount, as they do today under the other-than-temporary impairment model. It also simplifies the accounting model for purchased credit-impaired debt securities and loans. Entities will apply the standard's provisions as a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The guidance is effective for public business entities for annual periods beginning after December 15, 2019, and interim periods therein. The Company is evaluating the impact of this new guidance on its consolidated results of operations and financial condition. Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued ASU 2016-15 guidance to clarify how entities should classify certain cash receipts and cash payments on the statement of cash flows. The new guidance amends ASC 230 Statement of Cash Flows, a principles based requiring judgment to determine the appropriate classification of cash flow as operating, investing or financing activities which created diversity in how certain cash receipts and cash payments were classified. The new guidance clarifies that if a receipt or payment has aspects of more than one class of cash flows and cannot be separated, the classification will depend on the predominant source or use. While the new guidance attempts to clarify how the predominance principle should be applied, judgment will still be required. The guidance is effective for public business entities for annual periods beginning after December 15, 2017 and interim periods therein. Early adoption is permitted. Entities will have to apply the guidance retrospectively, but if it is impracticable to do so for an issue, the amendments related to that issue would be applied prospectively. The Company is evaluating the impact of this new guidance on its consolidated results of operations and financial condition. Intra-Entity Assets Other Than Inventory In October 2016, the FASB issued ASU 2016-16 guidance that will require entities to recognize the income tax effects of intercompany sales and transfers of assets other than inventory as expense or benefit, in the period in which the transfer occurs as opposed to being deferred the income tax effects until the intercompany asset has been sold to an outside party, according to the current guidance in effect. The new guidance will require companies to defer the income tax effects only of intercompany transfers of inventory. The companies will be required to apply a modified retrospective approach with a cumulative catch-up adjustment to opening retained earnings in the period of adoption. In addition, companies will record deferred tax balances with an offset to opening retained earnings for amounts they haven't recognized under the new guidance. If a valuation allowance is necessary on the date of the adoption, that allowance will be recorded with an offset to opening retained earnings. The new guidance is effective for public business entities for annual periods beginning after December 15, 2017 and interim periods therein. Early adoption is permitted. The Company is evaluating the impact of this new guidance on its consolidated results of operations and financial condition. |
Segment Reporting (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Underwriting results of operating segments | The following tables summarize our reporting segment's underwriting results and the reconciliation of our reportable segments and Other category's underwriting results to our consolidated net income:
3. Segment Reporting (continued)
3. Segment Reporting (continued)
3. Segment Reporting (continued)
The following tables summarize the total assets of our reportable segments including the reconciliation to our consolidated assets at September 30, 2016 and December 31, 2015:
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Net premiums by major line of business | The following tables set forth financial information relating to net premiums written and earned by major line of business and reportable segment for the three and nine months ended September 30, 2016 and 2015:
3. Segment Reporting (continued)
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Investments (Tables) |
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Schedule of Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Original or amortized cost, estimated fair value and gross unrealized gains and losses of available-for-sale and other investments | The original or amortized cost, estimated fair value and gross unrealized gains and losses of investment in fixed maturities and other investments as of September 30, 2016 and December 31, 2015 are as follows:
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Contractual maturities of fixed maturities, available-for-sale | The contractual maturities of our fixed maturities are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or repay obligations with or without prepayment penalties. 4. Investments (continued)
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Summary of available-for-sale securities and other investments in an unrealized loss position and the aggregate fair value and gross unrealized loss by length of time the securities have continuously been in an unrealized loss position | The following tables summarize fixed maturities and other investments in an unrealized loss position and the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position:
As of September 30, 2016, there were approximately 132 securities in an unrealized loss position with a fair value of $645,228 and unrealized losses of $36,488. Of these securities, there are 94 securities that have been in an unrealized loss position for 12 months or greater with a fair value of $437,528 and unrealized losses of $34,820.
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Summary of the credit ratings of fixed maturities | The following summarizes the credit ratings of our fixed maturities:
*Based on Standard & Poor’s ("S&P"), or equivalent, ratings |
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Portfolio of other investments | The following table shows our portfolio of other investments:
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Analysis of realized and unrealized gains on investment | The following provides an analysis of net realized gains on investment included in the unaudited Condensed Consolidated Statements of Income:
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Net unrealized gains on available-for-sale securities and other investments | Proceeds from sales of AFS fixed maturities were $15,260 and $101,923 for the three and nine months ended September 30, 2016, respectively (September 30, 2015 - $29,595 and $116,093, respectively). Net unrealized gains were as follows: 4. Investments (continued)
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Fair value of restricted assets | The fair value of our restricted assets was as follows:
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Fair Value of Financial Instruments (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value hierarchy of financial assets and financial liabilities measured on a recurring basis | We classified our financial instruments measured at fair value on a recurring basis in the following valuation hierarchy:
5. Fair Value of Financial Instruments (continued)
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Changes in Level 3 for financial instruments measured at fair value on a recurring basis | The following table presents changes in Level 3 for our financial instruments measured at fair value on a recurring basis:
5. Fair Value of Financial Instruments (continued)
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Carrying values and fair values of financial instruments | The following table presents the fair value and carrying value of the financial instruments not measured at fair value:
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Long-Term Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Outstanding Senior Notes Issuances | The following table details the Company's outstanding Senior Notes issuances as of September 30, 2016: 6. Long-Term Debt (continued)
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Earnings per Common Share (Tables) |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of elements used in calculating basic and diluted earnings per common share | The following is a summary of the elements used in calculating basic and diluted earnings per common share:
8. Earnings per Common Share (continued)
(1) This represents earnings allocated to the holders of non-vested restricted shares issued to the Company's employees under the 2007 Share Incentive Plan. (2) Please refer to "Notes to Consolidated Financial Statements" included under Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2015 for the terms and conditions of each of these anti-dilutive instruments. The mandatory convertible preference shares - series B were included in the calculation of diluted earnings per share only for the period that they were outstanding. On September 15, 2016, the Company's $165,000 mandatory convertible preference shares - Series B were automatically converted into 12,069,090 of the Company's common shares at a conversion rate of 3.6573 per preference share. |
Shareholders' Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accumulated other comprehensive income | 9. Shareholders' Equity (continued) Accumulated Other Comprehensive Income The following tables set forth financial information regarding the changes in the balances of each component of AOCI:
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Commitments and Contingencies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of dividends declared | On August 3, 2016, the Company's Board of Directors authorized the following quarterly dividend:
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Subsequent Events (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsequent Events [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of quarterly dividends | On November 1, 2016, the Company's Board of Directors authorized the following quarterly dividends:
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Significant Accounting Policies (Details) - ASU 2015-03 $ in Thousands |
Dec. 31, 2015
USD ($)
|
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Total assets | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Unamortized debt issuance costs | $ (10,067) |
Total liabilities | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Unamortized debt issuance costs | $ 10,067 |
Investments - Other Investments (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Schedule of Investments [Line Items] | ||
Other investments | $ 12,268 | $ 11,812 |
% of Total fair value | 100.00% | 100.00% |
Investment in quoted equity [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments | $ 5,560 | $ 4,905 |
% of Total fair value | 45.30% | 41.50% |
Investments in limited partnerships [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments | $ 5,708 | $ 5,907 |
% of Total fair value | 46.50% | 50.00% |
Unfunded commitment on investments in limited partnerships | $ 525 | |
Other [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments | $ 1,000 | $ 1,000 |
% of Total fair value | 8.20% | 8.50% |
Fair Value of Financial Instruments - Changes in Level 3 Financial Instruments (Details) - Other investments [Member] - Fair Value, Measurements, Recurring [Member] - Significant Unobservable Inputs (Level 3) [Member] - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
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Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at beginning of period | $ 6,562 | $ 6,906 | $ 6,907 | $ 6,581 |
Total realized gains – included in net realized gains on investment | 87 | 0 | 449 | 63 |
Change in total unrealized gains – included in other comprehensive income (loss) | 29 | 161 | (243) | 353 |
Purchases | 75 | 0 | 167 | 144 |
Redemptions | (45) | (270) | (572) | (344) |
Balance at end of period | $ 6,708 | $ 6,797 | $ 6,708 | $ 6,797 |
Long-Term Debt - Narrative (Details) - USD ($) |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 15, 2016 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Jun. 14, 2016 |
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Debt Instrument [Line Items] | ||||||
Accelerated amortization of remaining debt issuance costs | $ 2,345,000 | $ 0 | $ 0 | $ 2,345,000 | $ 0 | |
Senior Notes [Member] | 2016 Senior Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 110,000,000 | $ 110,000,000 | $ 110,000,000 | |||
Stated interest rate | 6.625% | 6.625% | 6.625% | |||
Senior Notes [Member] | 2011 Senior Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 107,500,000 | |||||
Redemption price percentage | 100.00% |
Long-Term Debt - Schedule of Outstanding Senior Notes Issuances (Details) - Senior Notes [Member] - USD ($) |
9 Months Ended | |
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Sep. 30, 2016 |
Jun. 14, 2016 |
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2012 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal | $ 100,000,000 | |
Debt Issuance Costs | 3,406,000 | |
Net Proceeds | 96,594,000 | |
Unamortized debt issuance costs | $ 2,894,000 | |
Coupon rate | 8.00% | |
Effective interest rate | 8.31% | |
2013 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal | $ 152,500,000 | |
Debt Issuance Costs | 5,054,000 | |
Net Proceeds | 147,446,000 | |
Unamortized debt issuance costs | $ 4,574,000 | |
Coupon rate | 7.75% | |
Effective interest rate | 8.04% | |
2016 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal | $ 110,000,000 | $ 110,000,000 |
Debt Issuance Costs | 3,715,000 | |
Net Proceeds | 106,285,000 | |
Unamortized debt issuance costs | $ 3,704,000 | |
Coupon rate | 6.625% | 6.625% |
Effective interest rate | 7.07% |
Shareholders' Equity - Narrative (Details) - $ / shares |
Sep. 15, 2016 |
Mar. 10, 2016 |
Feb. 17, 2016 |
Feb. 15, 2016 |
Jan. 01, 2016 |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|---|---|---|
Class of Stock [Line Items] | |||||||
Common stock, shares authorized (in shares) | 150,000,000 | ||||||
Common stock, shares issued (in shares) | 87,178,902 | 74,735,785 | |||||
Common stock, shares outstanding (in shares) | 86,128,999 | 73,721,140 | |||||
Preference shares issued (in shares) | 12,600,000 | ||||||
Undesignated shares (in shares) | 50,221,098 | ||||||
Shares repurchased (in shares) | 20,469,000 | 1,183,000 | 10,255 | 3,351 | |||
Shares repurchased, price per share (in dollars per share) | $ 13.16 | $ 13.36 | $ 13.16 | $ 14.91 | |||
Series B Convertible Preferred Stock [Member] | |||||||
Class of Stock [Line Items] | |||||||
Number of shares converted (in shares) | 12,069,090 | ||||||
Common shares issued per convertible preference share (in shares) | 3.6573 |
Commitments and Contingencies (Details) - $ / shares |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Aug. 03, 2016 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Commitments and Contingencies Disclosure [Abstract] | |||||
Dividends declared per common share (in dollars per share) | $ 0.14 | $ 0.14 | $ 0.13 | $ 0.42 | $ 0.39 |
Subsequent Events (Details) - $ / shares |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Nov. 01, 2016 |
Aug. 03, 2016 |
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Subsequent Event [Line Items] | ||||||
Dividends declared per common share (in dollars per share) | $ 0.14 | $ 0.14 | $ 0.13 | $ 0.42 | $ 0.39 | |
Subsequent event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Dividends declared per common share (in dollars per share) | $ 0.15 | |||||
Subsequent event [Member] | Series A Preferred Stock [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Dividends declared per Preference share (in dollars per share) | 0.515625 | |||||
Subsequent event [Member] | Series C Preferred Stock [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Dividends declared per Preference share (in dollars per share) | $ 0.445313 |
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