Investor Update – May 2024

Maiden Holdings, Ltd.First Quart e r 2024 In vestor Pr esen ta tionMa y 2024~PAGE-BREAK~Invest or Disclosur es2Forward Looking StatementsThispresentationcontains"forward-lookingstatements"whicharemadepursuanttothesafeharbor provisionsofthePrivateS ecurities LitigationReformActof1995.Theforward-lookingstatementsarebasedonMaidenH oldings, Ltd.'s(theCompan y")futuredevelopmen tsandtheirpotentialeffectsontheCompany.Therecanbenoassurancethatactualdevelopmen tswillbethoseanticipatedbytheCompany.Actualresultsmaydiffermateriallyfromthoseprojectedasaresultof signific antrisksanduncertainties, includingnon-receiptoftheexpectedpayments,changesininterestrates,effectoftheperf ormance offinancial marketsoninvestmentincomeandfairvaluesofinvestments,developmentsofclaims andtheeffectonlossreserves,accuracyinprojectinglossreserves,theimpactofcompetitionandpricingenvironments, changesinthedemand forthe Compan y'sproducts,theeffectofgeneraleconomicco nditions and unusual fr equency ofstormactivity,adversestateandfederallegislation,regula tionsandregulatoryinvestigationsintoindustrypr actices, developmen tsrelatingtoexistingagr eemen ts,heightenedcompetition,changesinpricingenvironments,andchangesinassetvalua tions.Additionalinformationabout theserisksanduncertainties,aswellasothersthatmaycause actualresultstodiffermateriallyfromthoseprojectediscontainedinItem1A,RiskFactorsintheCompany'sAnnual ReportonForm10-Kfortheyearended December31, 2023,filedwiththeSEConMarch12,2024.The Companyundertakesnoobligationto publicly updateanyforward-lookingstatements,exceptasmayberequiredbylaw.Anydiscrepancies betweentheamounts included inthispresentationandamountsincludedintheCompany'sForm10-QforthethreemonthsendedMarch31,2024,filedwiththeSECareduetorounding.Non-GAAP FinancialM easuresIn additionto theS ummary Consolidat ed BalanceS heetsa nd Co nsolidat ed Stat em en ts of Inco me,m anag em entu sesc erta inkeyf inancial me asures,s omeofw hich aren on-GAAP me asures,toeva luatet he Compan y'sf inancial perf ormancea nd theov er allgrowthinv aluege neratedf or theC ompany's commons hare hold er s.Manage ment believ es that these measur es,wh ichmay be de finedd ifferent ly by otherc ompanies,ex plaint he Company'sr esultsto invest orsina manner that allowsforamorecom plete underst andingofthe under ly ingtre nds in theCom pany's business.T he non-GAAPmeas ures should notbev ew das asubstitu efo thos ede ermine di nacco danc ewit hU.S .GAAP .Seeth eAppend xo fth spresen atio nfo are concilia tion of theC ompany's non-GAAP measur esto then earest GAAP measur e.~PAGE-BREAK~Maiden Holdings Q1 2024 Financial Ov er vie w3• Positive Q1 2024 r esults incr eased adjus t ed book value to $3.24 per shar e as of Mar ch 31, 2024,and cont inues t• be stable -represent s true economic v a lue of MaidenoStreng thening in vestment results, foreign exchange ga ins and low er operating ex penses offset higheradversep rior period loss dev e lopmen t in Q1 2024oReport ed book v a lue per common shar e re mained s table at $2.48 per shar e as of March 31, 2024, reflectsGAAP P&L v olatility fr om loss deve lopmen t mostly subject t• LPT/ADC• See Q1 results recap starting on slide 10• Investment re sults incr eased t• $17.1m in Q1 2024 compar ed to $10.5m in Q1 2023oStreng thening r eturns on alternative investment s, particularly privat e equity along with higher yieldsoncollateral asse ts bolstered Q1 resultsoAlternative asset re turns of 3.4% in Q1 2024 in excess of cost of debt capit a l on annualiz ed basis• $5m or 76.2% of tota l PPD in Q1 2024 e xpect ed to re tuas future GAAP income fr om LPT /ADC• 76.2% of the t otal PPD in Q1 2024 expected to retuas futur e GAAP income fr om LPT /ADCoDeferred ga in of $75.9m at 3/31/2024 expected to be recogniz ed as GAAP income ov er time as LPT/ADCre coveries ar e re ceived subject t• reinsurance contra ct and r elevant GAAP accoun ting rules• Current estimate is re ceipt of LPT/ADC recoveries expect ed to commence la te in 2024• Deferredta x asse t of $1.17 per shar e not y et re cogniz ed in book v alue• $334.0m in NOL carry forwards at 3/31/2024 - $151.2m or 45.3% ha ve no ex piry dateoFo cus on curr en t income pr oducing asse ts targets to offset cont inuing r eserve deve lopmen t* Please see the definition of non-GAAP financial measures in the Appendix of this presentation for additional important information regarding certain terms used herein~PAGE-BREAK~Maiden Holdings Business Str ategy4• We create shar eholder value by active ly mana ging and alloca ting our assets and capit aloWe leverage our deep knowledg e of the insur ance and related financial ser v ices indus tries intoowners hip and manag ement of businesses and asse ts with the opportunity f or incr eased r eturns• Our strate gy allow s us to more flex ibly alloca te capital to activities we believe will pr oduce thegreatest returns fo r our common shar eholder s• Our strategy curren tly has two principal ar eas of focus• Asse t manag ement-inves ting in asse ts and asset cl asses in a pruden t but expansiv e manner in or dertoma ximize investment returns• We limit the insur a nce risk w e assume relative to the asse ts we hold and main tain required regulatory capital atvery strong levels to manage our aggregate risk pr ofile• Capita l manag ement-effective ly managing capit al a nd when appr opriate, repur chasing securities orre turning capital to enhance common shar eholder returns• Strategic focus cont inues t oevolve -leg acy under w riting now in run-offoDeve loping mor e predictable ar eas of r evenue and pr ofit a priority -activ ely ex ploring f ee-base d anddist ribution insura nce opportunities, possibly supplemen ted by deploying limit ed reinsurancecapacity• Comple ted IIS Renewal Righ ts tr ansaction with AmT rus t as part of br oader plan t• ultimately divestof Internat ional primary business - expect additional tr ansactions curr ently being e valuated• Anticipate annual oper ating expenses will ultima tely be re duced by up to $6m over next 12 to 24 months• Capita l commitmen t to GLS has been comple ted and no additional capit a l commitmen ts tonewlegacy deals will occur -w ill run-off exis ting deals• We believe these ar eas of strategic focus will enhance our profit abilityoWe believe our strategy incr eases the lik elih ood of fully utilizing the significan t tax NOLcarryf orwardsw hich would cr eate additional common shar eholder v alue• Expect ed re turns fr om each strate gic pillar are ev aluated relative to our cos t of debt capit al~PAGE-BREAK~Q1 2024 Asse t Manag e men t Upda te5*Please see the definition of non-GAAP financial measures in the Appendix of this presentation foradditional important information regarding certain terms used herein TTM = Trailing Twelve MonthsNM -Not Meaningful Gross InvestmentRetu(TTM) 31-Mar-24 31-Dec-23YTD ChangeFixed IncomeAFS and cash 4.5% 289,621$ 293,279$ (3,658)$Loan to related party 7.2% 167,975$ 167,975$ -$Funds withheld receivable 3.6% 77,089$ 143,985$ (66,896)$Total Fixed Income 4.9% 534,685$ 605,239$ (70,554)$Alternative InvestmentsPrivate Equity 20.9% 92,106$ 82,230$ 9,876$Private Credit 14.2% 55,233$ 53,673$ 1,560$Hedge Funds NM -$ -$  -$Alternatives 8.2% 98,674$ 95,258$ 3,416$Venture Capital 6.6% 22,543$ 21,220$ 1,323$Real Estate 0.6% 58,419$ 56,658$ 1,760$Total Alternative Investments 11.0% 326,975$ 309,039$ 17,935$Total Investable Assets 6.7% 861,660$ 914,278$ (52,618)$Investable Assets~PAGE-BREAK~Q1 2024 Asse t Manag e men t Upda te6* Please see the definition of non-GAAP financial measures in the Appendix of this presentation foradditional important information regarding certain terms used herein Alternative Investments• Q12024tra ingtwe vemonthr  turnf  rthealternativeassetportfoliois 11.0%oStill on track to ex ceed long-t erm benchmark re turns (cos t ofdebt capital) -seeslide 7 for retutr ends and slide 8 forperf ormance by assetclass• Numerousalternativeandrealestateinvestmentscomprising38.3%ofthealternativeassetportfolionotmarkedtofairvalueyet-tooearlyinlifecycleofinvestments•expectedtoproducefuturereturns andgains• Alternativeinvestmentsincr easedby5.8%to $327.0m at3/31/2024 compar edto $309.0m at 12/31/2023oCont ributions t• Private Equity & Alternative Investmentasset classesrepresented 65.1% of all contributions in Q12024, with priv ate equity at 31.3% and alt ernativeinvestments at 33.8%• Q1 2024totalgrossreturnsonalternativeinvestmentsfor2024of $10.8m vs. $1.8mfor2023oRe turns bene fited fromrealized & unrealized gainsfromincr eases in net asse t values in cert ain privat e equityinvestment s, which incr eased $6.0m in year over yearoReturns further bene fited fr om unr ealized gains fromincr eases in net asse t values on cert ain private cr edit &alternativeinvestmen ts, which incr eased $1.9m and $1.4mrespectiv ely year over yearFixe d Income• FixedIncomereturns primarily drivenby higher income fromAmTrustloanandAFS securities• Short portfolio duration of 1.1 years well positioned forcurre nt credit marke t volatility• Higher yields on cash equivale nts and floating rate CLOs areoffsetting the impact of sh rinking fixed income portfolio• F xedincomeportfo iocon inuestodecreaseinsizeasAmTrust liabilities continuetorunoff• Payments now being made from Funds Withheld - balanceexpected to be exhausted in Q3 2024• Floatingratesecuritiescompose $231.2m or43.2%offixedincome investmentswhichisreducinginterestraterisko$63. 2m or 11.8% are CLOs which may be credit sensitive• Average CLO rating is AA+ with 93.4% rated AAA• EUR CLOs of $62.2m yield is 5.3%• USD CLOs of $1.0m yield is 10.0%o$168.0m or 31.4% is floating rate loan to related party and ispriced at Fed Funds rate + 200 basis points• Current yield of related party loan remains at 7.3%Performance of Investable AssetsFor the Three Months Ended March 31 2024 2023 2024 2023Gross Returns 1.3% 1.1% 3.4% 0.7%Net Returns 1.3% 1.1% 3.4% 0.7%4.Average invested assets is the average of the amounts disclosed in our quarterly U.S. GAAP consolidated FSFixed Income Alternative Investments1.Fixed income includes AFS securities, cash, restricted cash, funds withheld, and loan to related party.2.Alternative investments include other investments, equity securities, and equity method investments.3.Change in accumulated other comprehensive income ("AOCI") excludes unrealized FX gains and losses.~PAGE-BREAK~Invest ed Asse t R e turns Con t inue t• Str eng then7*Please see the definition of non-GAAP financial measures in the Appendix of this presentation foradditional important information regarding certain terms used herein Total Investment Re turns (T TM)• Q12024trailing-twelve-month(TTM)totalinvestment returnonthe entireportfoliowas 6.7%,represen tingas ignifican tincr easeovertheTTMinvestmentreturnof1.1%inQ1 2023oTheincreaseinQ12024totalinvestmentreturns wasprimarily drivenbyincr easedreturns oncertainPrivateEquity&PrivateCreditinvestments• Higher yieldsonthefixedincomeportfolioalsocontributedtotheimprovedresults• Q1 2024TTMtotalinvestmentreturnsonthealternative&fixedincomeportf olioswere11.0%(vs.-0.2%inQ1 2023) and4.9%(vs.1.4%inQ1 2023),r espectiv ely~PAGE-BREAK~Alt e rna tiv e In vest men t Re turns Con t inue to Build8*Please see the definition of non-GAAP financial measures in the Appendix of this presentation foradditional important information regarding certain terms used herein Alternative Investment Highligh ts• During Q1 2024,totalgrossreturnonthealternativeinvestmentportfoliowas$ 10.8m, primarily drivenbyunr ealizedgainsoncertainprivateequityinvestments• 38.3% ofourtotalalternativeinvestmentsasof 3/31/2023, primarily intheAlternativesandRealEstateassetclasses, donotreflectanyreturnstodate based onthedevelopmentstageof theseinvestments, which weexpecttoincreaseinfutureasinvestmentsdevelop• Ex cluding investmentsstillcarriedatcost,alternativeinvestmentshavepr oduced anIRRof10.4% withanMOIC of 1.21x asof 3/31/2024• Inception todate,alternativedirectinvestmentsonrealassetshavepr oduced aninternalrateofreturnof38.5% anda multiple oninvested capitalof1.40x• SeeForm 10-Qfor further importantdetailsonalternativeinvestmentportfolio andrelatedreturnsNote -IRR refers to the Internal Rate of Retu& MOIC refers to the Multiple on Invested Capital~PAGE-BREAK~Q1 2024 Capit a l Manag e men t Upda te• Maiden con t inued active but disciplined long-t erm capital manag ement in Q1 2024• Our subsidiary Maiden R einsurance Ltd. (" MRL") r epur chased 352,111 common shar es in openmarket at an average price of $1.91 per shar e in Q1 2024• ITD repur chases as of March 31, 2024 totaled 1,791,686 c• mmon shar es at $1.84 per shareoPursuantto 10b-5 plan implemen ted prior to March 31, an additional 238,884 common sharesrepur chased in Q2 thro ugh Ma y 8 at an averag e price of $2.16 per share• Maiden e x pects t• mainta in activ e but prude nt and long-t erm appr oach t• balance sheetmanag ement as part of its ov erall strategy• Significan t Boar d authoriz ation re mains f• r both co mmon shar es and senior notes tocove r both openmarket pur chases and priv at ely neg otiated trades• $70.4 million and $99.9 million in authoriz ation av ailable for common share and seniornoterepur chases, r e spectiv ely , as of Ma y 8, 2024• MRL owns 30.1% of Maiden common shar es as of March 31, 2024, but is limit ed to 9.5%vo ting pow erp er Maiden bye-laws• Common shar es owne d by MRL elimina ted for accoun ting and f inancial re porting purposes on theCompan y'sc onsolida ted financial s tatemen ts and pr esented as tr easury sharesoPer share comput ations re flect elimina tion of MHLD common shar es owned b y MRL of 43,231,034 asof March 31, 2024 9* Please see the definition of non-GAAP financial measures in the Appendix of this presentation foradditional important information regarding certain terms used herein~PAGE-BREAK~Maiden Holdings - Q 1 2024 R e sults R ecap10* Please see the definition of non-GAAP financial measures in the Appendix of this presentation foradditional important information regarding certain terms used herein CommentsQ12023Q1 2024($ millions, exce pt per share amounts) Net Income and Per Share Data• Summa ry GAAP and Non-GAAP Financial Measures in Appendix$(11.3)  $(0.11)$1.5  $0.01GAAP Net Incom e (Loss) Available(Attributa ble) to Common SharesPer comm on shareKey Income Statement Details• Lower underwriting loss in Q1 2024 the result of improved Diversifiedunderwriting results caused by improved PPD which offset a higher AmTrust segment underwriting lossthe result of higher PPD• See slide 11 for detail on under w riting results and prior period loss developm ent$(8.3)$(7.5)Underwriting Loss• Net investment income 19.8% lower at $7.7m in Q1 2024 vs. $9.6m in Q1 2023 due tolower income from Funds Withheld as asset balance s continue to decrease• Realized and unrealized gains of $8.8m in Q1 2024 vs. $1.0m in Q1 2023 mainlyattributable to gains on equity securities & other investments in the private equityasset class• Income from equity method investments of $0.6m vs. loss of $0.1m in Q12023 mainly attributable to investments in the alterna tive & private equity assetclasses$10.5$17.1Investment Results• Operat ing expenses decrea sed by $2.0m or 20.3% vs. Q1 2023 due to lower incentivecompensation paid in Q1 2024$10.1$8.1Operat ing Expenses• Primarily due to non-USD reserve r evaluation -s trengthening of U.S. dollar relative toEuro and British pound in Q1 2024 caused FX gain vs U.S. dollar weake ning in Q1 2023which resulted to FX loss$(2.8)$2.1Foreign Exchange/ Other Gains(Losses)~PAGE-BREAK~

Attachments

• Original Link
• Original Document
• Permalink

Disclaimer

Maiden Holdings Ltd. published this content on 09 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 May 2024 20:28:57 UTC.