Maiden Holdings, Ltd. Announces Second Quarter 2022 Financial Results

PRESS RELEASE

Maiden Holdings, Ltd. Announces

Second Quarter 2022 Financial Results

PEMBROKE, Bermuda, August 9, 2022 - Maiden Holdings, Ltd. (NASDAQ: MHLD) ("Maiden" or the "Company") today reported second quarter 2022 net income available to Maiden common shareholders of $25.8 million or $0.29 per diluted common share compared to $26.8 million or $0.31 per diluted common share in the second quarter of 2021.

Non-GAAP operating earnings(5) were $16.6 million or $0.19 per diluted common share for the second quarter of 2022 compared to non-GAAP operating earnings of $13.9 million or $0.16 per diluted common share for the same period in 2021.

Maiden's book value per common share(1) was $2.62 at June 30, 2022 compared to $2.60 at December 31, 2021. Adjusted for the unamortized deferred gain on ceded retroactive reinsurance of $41.4 million at June 30, 2022, the Company's adjusted book value per common share(2) was $3.09 at June 30, 2022.

Commenting on the second quarter of 2022 financial results, Patrick J. Haveron and Lawrence F. Metz, Maiden's Co-Chief Executive Officers stated, "We were able to opportunistically execute additional capital management measures during the quarter, which lifted book value per common share to $2.62 and more than offset the headwinds created by a rising interest rate environment. Capital management contributed $24.7 million in gains during the period, bringing the total impact of our capital management initiatives to $1.81 per common share since the fourth quarter of 2020. Our alternative asset portfolio grew by 11.1% during the first half of 2022 and we continue to identify good opportunities despite more volatile conditions in financial markets. Those markets did result in more limited total returns from our portfolio during the quarter, but aside from investments in hedge funds, our total returns in our alternative portfolio continue to exceed our benchmark cost of debt capital. The pipeline of opportunities for Genesis Legacy Solutions ("GLS") continues to grow briskly which we believe sets the stage for a strong second half of 2022. Our balance sheet at June 30, 2022 does not reflect $1.27 in net deferred tax assets which still maintains a full valuation allowance. We believe the necessary performance that will enable us to recognize these tax assets in the future continues to accumulate."

Messrs. Haveron and Metz added, "Operating expenses were 18.1% lower on a year-over-year basis as we maintain an efficient operating profile. Loss development trends during the quarter were largely neutral but were less favorable versus the comparable period in 2021. The underwriting loss impact from higher-than-expected negative premium adjustments in our AmTrust cession was significantly more limited during the second quarter, as anticipated. Our second quarter book value was also hindered by unrealized losses on our fixed income portfolio of $0.28 per common share as interest rates rose sharply during the second quarter. We were able to offset much of this impact on book value through foreign currency gains as the US dollar continued to strengthen, as we maintain net non-US dollar liabilities. With 25.4% of our fixed income investments in floating rate securities, this has also helped mitigate the impact of the rise in interest rates on our financial statements."

Consolidated Results for the Quarter Ended June 30, 2022

Net income available to Maiden common shareholders for the three months ended June 30, 2022 was $25.8 million compared to $26.8 million for the same period in 2021. The most significant items affecting our financial performance during the second quarter of 2022 on a comparative basis to the second quarter of 2021 included:

• gain from repurchase of preference shares of $24.7 million for the three months ended June 30, 2022 compared to $18.7 million in the same period in 2021;
• excluding the gain from repurchase of our preference shares, net income was $1.1 million for the three months ended June 30, 2022 compared to net income of $8.1 million for the same period in 2021 largely due to the following factors:
• • underwriting loss(4) of $5.1 million in the second quarter of 2022 compared to underwriting income of $8.5 million in the same period in 2021. The decrease in underwriting results was due to adverse prior year loss development of $1.0 million in the second quarter of 2022 compared to favorable prior year loss development of $12.8 million during the same period in 2021;
  • total income from investment activities were $6.7 million for the three months ended June 30, 2022 compared to

$10.9 million for the same period in 2021 which was comprised of:

• net investment income of $7.7 million for the three months ended June 30, 2022 compared to $7.3 million for the same period in 2021;
• net realized and unrealized investment gains of $2.1 million for the three months ended June 30, 2022 compared to net realized and unrealized investment gains of $0.8 million for the same period in 2021; and
• interest in loss of equity method investments of $3.0 million for the three months ended June 30, 2022 compared to income of $2.8 million for the same period in 2021.

The decrease in our results was partially offset by the following:

• corporate general and administrative expenses decreased to $3.0 million for the three months ended June 30, 2022 compared to $5.1 million for the same period in 2021 due to lower salary compensation associated with headcount reductions; and
• foreign exchange and other gains increased to $6.6 million during the three months ended June 30, 2022, compared to foreign exchange and other losses of $1.6 million for the same period in 2021.

Net premiums written for the three months ended June 30, 2022 were $3.2 million compared to $3.3 million for the same period in 2021. Net premiums written in the Diversified Reinsurance segment increased by $1.0 million for the three months ended June 30, 2022 compared to the same period in 2021 largely due to direct gross premiums written by wholly owned Swedish subsidiaries Maiden Life Försäkrings AB ("Maiden LF") and Maiden General Försäkrings AB ("Maiden GF") which increased by $0.6 million or 11.3% during the three months ended June 30, 2022, compared to the same period in 2021. Negative premium adjustments of $2.8 million in the AmTrust Reinsurance segment for the three months ended June 30, 2022 compared to $1.8 million for the same period in 2021.

Net premiums earned decreased by $2.9 million or 21.6% for the three months ended June 30, 2022 compared to the same period in 2021 primarily due to the combined impact of the terminated quota share contracts within the AmTrust Reinsurance segment and the Diversified Reinsurance segment due to run-off of the German Auto programs produced by our IIS unit.

Net investment income increased by $0.4 million or 5.3% for the three months ended June 30, 2022 compared to the same period in 2021, primarily due to an increase in annualized average book yields from fixed income assets to 2.0% for the three months ended June 30, 2022 compared to 1.7% for the same period in 2021. The decline in average aggregate fixed income assets of 26.8% is due to the cessation of active reinsurance underwriting on prospective risks since January 1, 2019, which is responsible for significant negative operating cash flows as we continue to run-off our existing reinsurance liabilities.

Net realized and unrealized investment gains for the three months ended June 30, 2022 were $2.1 million compared to $0.8 million for the same period in 2021. Net realized investment gains for the three months ended June 30, 2022 and 2021 reflect sales of corporate bonds for the settlement of claim payments to AmTrust.

Net loss and LAE increased by $12.2 million during the three months ended June 30, 2022 compared to the same period in 2021. Net loss and LAE for the second quarter of 2022 was impacted by net adverse prior year reserve development of $1.0 million compared to net favorable prior year reserve development of $12.8 million during the second quarter of 2021 primarily within the AmTrust Reinsurance segment in both respective periods.

Commission and other acquisition expenses decreased by $2.0 million or 29.2% for the three months ended June 30, 2022, compared to the same period in 2021 due to significantly lower earned premiums in the AmTrust Reinsurance segment.

Total general and administrative expenses decreased by $1.6 million, or 18.1% for the three months ended June 30, 2022, compared to the same period in 2021 due to lower salary, professional and regulatory fees.

Consolidated Results for the Six Months Ended June 30, 2022

Net income available to Maiden common shareholders for the six months ended June 30, 2022 was $27.3 million compared to $98.6 million for the same period in 2021. The most significant items affecting our financial performance included:

• gain from repurchase of preference shares of $28.2 million for the six months ended June 30, 2022 compared to $81.2 million in the same period in 2021;
• excluding the gain from repurchase of our preference shares, net loss was $0.9 million for the six months ended June 30,
  2022 compared to net income of $17.4 million for the same period in 2021 largely due to the following factors:
• • underwriting loss(4) of $6.8 million in the six months ended June 30, 2022 compared to underwriting income of $10.0 million in the same period in 2021. The decrease in underwriting results was primarily due to:
  • • favorable prior year loss development of $6.3 million for the six months ended June 30, 2022 compared to

favorable prior year loss development of $18.4 million during the same period in 2021;

• • on a current accident year basis, an underwriting loss of $13.1 million for the six months ended June 30, 2022 compared to an underwriting loss of $8.3 million for the same period in 2021 primarily due to results within the AmTrust Reinsurance segment as discussed below:
  • significantly higher than expected negative premium adjustments in the AmTrust Reinsurance segment related to adjustments for estimated surcharges on Workers' Compensation policies and inuring AmTrust reinsurance for certain programs in Specialty Risk and Extended Warranty cessions (collectively the "AmTrust Cession Adjustments"), net of commission and loss adjustments, contributed an underwriting loss of $5.1 million to our reported results during the six months ended June 30, 2022.
• total income from investment activities were $16.9 million for the six months ended June 30, 2022 compared to $31.8 million for the same period in 2021 which was comprised of:
• • net investment income decreased to $14.2 million for the six months ended June 30, 2022 compared to $17.1 million for the same period in 2021 due to the decline in average fixed income assets of 28.5%;
  • net realized and unrealized investment gains decreased to $4.4 million for the six months ended June 30, 2022 compared to $9.0 million for the same period in 2021; and
  • interest in loss of equity method investments of $1.8 million for the six months ended June 30, 2022 compared to interest in income of equity method investments of $5.7 million for the same period in 2021.
• corporate general and administrative expenses decreased to $11.3 million for the six months ended June 30, 2022 compared to $16.9 million for the same period in 2021 due to lower equity-based incentive compensation costs for employees; and
• foreign exchange and other gains increased to $10.5 million for the six months ended June 30, 2022 compared to foreign exchange and other gains of $2.0 million for the same period in 2021.

Net premiums written for the six months ended June 30, 2022 were $(7.1) million compared to $0.6 million for the same period in 2021. Net premiums written in the Diversified Reinsurance segment increased by $5.8 million for the six months ended June 30, 2022 compared to the same period in 2021 due to the prior year retuof unearned premiums written in German Auto quota share reinsurance contract which went into run-off on January 1, 2021. Direct gross premiums written by Maiden LF and Maiden GF increased by $0.4 million or 3.4% during the six months ended June 30, 2022, compared to the same period in 2021. Negative premium adjustments of $15.8 million from the AmTrust Cession Adjustments were the principal factor which resulted in $(17.7) million in net premiums written in the AmTrust Reinsurance segment in the six months ended June 30, 2022 compared to $(4.2) million for the same period in 2021.

Net premiums earned decreased by $13.5 million or 53.9% for the six months ended June 30, 2022 compared to the same period in 2021 primarily due to the AmTrust Cession Adjustments which resulted in negative earned premiums in the AmTrust Reinsurance segment.

Net investment income decreased by $2.9 million or 16.9% for the six months ended June 30, 2022 compared to the same period in 2021, primarily due to the decline in average aggregate fixed income assets of 28.5% in the same period. The decline in fixed income assets is largely due to the cessation of active reinsurance underwriting on prospective risks since January 1, 2019, which is responsible for significant negative operating cash flows as we continue to run-off our existing reinsurance liabilities. The Company's investment portfolio experienced an increase in annualized average book yields from fixed income assets to 1.9% for the six months ended June 30, 2022 compared to 1.8% for the same period in 2021.

Net realized and unrealized investment gains for the six months ended June 30, 2022 were $4.4 million compared to $9.0 million for the same period in 2021. Net realized and unrealized investment gains for the six months ended June 30, 2022 and 2021 included the recognition of $3.7 million and $3.9 million, respectively, in unrealized gains related to investments in insurtech start-up companies. Net realized investment gains for the six months ended June 30, 2022 and 2021 also reflect sales of corporate bonds for the settlement of claim payments to AmTrust.

Net loss and LAE increased by $7.6 million during the six months ended June 30, 2022 compared to the same period in 2021. Net loss and LAE for the six months ended June 30, 2022 was impacted by lower net favorable prior year reserve development of $6.3 million compared to net favorable prior year reserve development of $18.4 million during the same period in 2021 primarily within the AmTrust Reinsurance segment in both respective periods.

Commission and other acquisition expenses decreased by $5.4 million or 42.3% for the six months ended June 30, 2022, compared to the same period in 2021 largely due to negative earned premiums in the AmTrust Reinsurance segment which reduced commission costs for the AmTrust Cession Adjustments as discussed above.

Total general and administrative expenses decreased by $4.7 million, or 20.6% for the six months ended June 30, 2022, compared to the same period in 2021 due to lower equity-based incentive compensation costs.

Operating Results for the three and six months ended June 30, 2022

In addition to other adjustments, management has adjusted the GAAP net income and underwriting results by excluding incurred losses and LAE covered by the Loss Portfolio Transfer and Adverse Development Cover Agreement ("LPT/ADC Agreement") with Cavello Bay Reinsurance Ltd. ("Cavello"), a subsidiary of Enstar Group Limited. Such losses are fully recoverable from Cavello, and therefore adjusting for these losses shows the ultimate economic benefit of the LPT/ADC Agreement to Maiden.

Non-GAAP operating earnings were $16.6 million or $0.19 per diluted common share for the second quarter of 2022 compared to non-GAAP operating earnings of $13.9 million or $0.16 per diluted common share for the second quarter of 2021. Adjusted to include net realized and unrealized investment gains and an interest in loss or income of equity method investments which are both a recurring part of investment results with the Company's underwriting activities in run-off, the non-GAAP operating earnings were $15.7 million or $0.17 per diluted common share for the second quarter of 2022, compared to non-GAAP operating earnings of $17.6 million or $0.20 per diluted common share for the second quarter of 2021.

Non-GAAP operating earnings were $9.7 million or $0.11 per diluted common share for the six months ended June 30, 2022 compared to non-GAAP operating earnings of $61.2 million or $0.71 per diluted common share for the same period in 2021. Adjusted to include net realized and unrealized investment gains and an interest in loss or income of equity method investments which are both a recurring part of investment results with the Company's underwriting activities in run-off, the non-GAAP operating earnings were $12.3 million or $0.14 per diluted common share for the six months ended June 30, 2022, compared to non-GAAP operating earnings of $75.9 million or $0.88 per diluted common share for the same period in 2021.

Similar to the reported GAAP results, the reduction in non-GAAP operating results for the three and six months ended June 30, 2022 compared to the same respective periods in 2021 primarily reflect gains from the repurchase of preference shares of $24.7 million and $28.2 million recognized in the three and six months ended June 30, 2022, respectively, compared to $18.7 million and $81.2 million for the same respective periods in 2021.

The unamortized deferred gain on retroactive reinsurance under the LPT/ADC Agreement with Cavello was $41.4 million as of June 30, 2022, a decrease of $4.5 million compared to $45.9 million at December 31, 2021. The decrease in the unamortized deferred gain under the LPT/ADC Agreement for the six months ended June 30, 2022 is attributable to $4.5 million in loss and LAE recognized as favorable loss development in the Company's GAAP income statement that was covered by the LPT/ADC Agreement.

Adjusted for favorable loss development covered by the LPT/ADC Agreement of $3.5 million and $4.5 million during the three and six months ended June 30, 2022, the non-GAAP underwriting loss(9) was $8.6 million and $11.2 million, respectively. This compared to non-GAAP underwriting loss of $2.4 million and $10.7 million, respectively, when adjusted for favorable loss development covered by the LPT/ADC Agreement of $10.8 million and $20.7 million during the three and six months ended June 30, 2021, respectively.

For the three and six months ended June 30, 2022, our non-GAAP operating earnings included underwriting results for business not covered by the LPT/ADC Agreement, specifically Hospital Liability business and run-off of the AmTrust Reinsurance segment.

In addition, the Company estimates that it incurred operating expenses of $0.4 million and $0.8 million during the three and six months ended June 30, 2022, respectively, which it believes will not recur in future periods.

Please refer to the Non-GAAP Financial Measures tables in this release for additional information on these non-GAAP financial measures and reconciliation of these measures to the appropriate GAAP measures.

Quarterly Report on Form 10-Q for Period Ended June 30, 2022 and Other Financial Matters

The Company's Quarterly Report on Form 10-Q for the period ended June 30, 2022 was filed with the U.S. Securities and Exchange Commission on August 9, 2022. Additional information on the matters reported in this news release along with other required disclosures can be found in that filing.

Total assets were $2.2 billion at June 30, 2022 compared to $2.3 billion at December 31, 2021. Shareholders' equity was $347.9 million at June 30, 2022 compared to $384.3 million at December 31, 2021. Adjusted shareholders' equity(2) was $389.3 million at June 30, 2022 compared to $434.2 million at December 31, 2021, which reflects the unamortized deferred gain under the LPT/ADC Agreement of $41.4 million at June 30, 2022 and $45.9 million at December 31, 2021. Adjusted shareholders' equity for December 31, 2021 also included an adjustment of $4.1 million to reflect the equity accounting related to the fair value of certain hedged liabilities in an equity method investment in a limited partnership investment held by the Company wherein the

ultimate realizable value of the asset supporting the hedged liabilities was not recognized at fair value until it was sold at a realized gain in the first quarter of 2022.

Effective October 1, 2021, GLS completed its first loss portfolio transfer transaction which included an adverse development cover. GLS continues to write additional retroactive reinsurance transactions consistent with its business plan. As of June 30, 2022, GLS and its subsidiaries have insurance related liabilities that it assumed through retroactive reinsurance contracts of $36.3 million which included total reserves of $22.4 million, derivative liability on retroactive reinsurance of $9.3 million, and deferred gains on retroactive reinsurance of $4.6 million. In addition to producing returns that exceed the target cost of capital, we expect business produced through GLS to further enhance our ability to pursue the asset and capital management pillars of our business strategy.

The Company's wholly owned subsidiary, Maiden Holdings North America, Ltd., holds net operating loss carryforwards ("NOLs") which were $232.4 million as of June 30, 2022. These NOLs, in combination with additional net deferred tax assets primarily related to our insurance liabilities, result in a net deferred tax asset (before valuation allowance) of $111.0 million or $1.27 per common share as of June 30, 2022. These net deferred tax assets are not presently recognized on the Company's balance sheet as a full valuation allowance is carried against them.

The Company no longer presents certain non-GAAP measures such as combined ratio and its related components in its news release or its quarterly reports, as it believes that as the run-off of its reinsurance portfolios progresses, such ratios are increasingly not meaningful and of less value to readers as they evaluate our financial results.

Preference Shares

On March 3, 2021 and May 6, 2021, the Company's Board of Directors approved the repurchase, including the repurchase by wholly-owned-subsidiary Maiden Reinsurance Ltd. ("Maiden Reinsurance") in accordance with its investment guidelines, of up to $100.0 million and $50.0 million, respectively, of the Company's preference shares from time to time at market prices in open market purchases or as may be privately negotiated. These authorizations are collectively referred to as the "2021 Preference Share Repurchase Program". The principal purpose of the 2021 Preference Share Repurchase Program was to adjust our capital structure to reflect current operations and the amount of capital required to operate Maiden Reinsurance.

The following table shows the summary of repurchases made of the Company's preference shares pursuant to the 2021 Preference Share Repurchase Program during the three and six months ended June 30, 2022 and 2021, respectively: