Maiden Holdings Profile
Maiden Holdings, Ltd. operates as a property and casualty holding company.
The company creates shareholder value by actively managing and allocating the company’s assets and capital, including through ownership and management of businesses and assets primarily in the insurance and related financial services industries where the company can leverage the company’s deep knowledge of those markets. The company also provides a full range of legacy services to small insurance companies, particularly those in run-off or with blocks of reserves that are no longer core to those companies' operations, working with clients to develop and implement finality solutions, including acquiring entire companies that enable the company’s clients to meet their capital and risk management objectives. The company expects its legacy solutions business to contribute to the company’s active asset and capital management strategies.
The company is not underwriting reinsurance business on new prospective risks but are actively underwriting risks on a retroactive basis through Genesis Legacy Solutions, LLC (‘GLS’). The company also has various historic reinsurance programs underwritten by the company’s wholly owned subsidiary, Maiden Reinsurance Ltd. (‘Maiden Reinsurance’), which are in run-off, including the liabilities associated with AmTrust Financial Services, Inc. (‘AmTrust’), which was terminated in 2019. In addition, the company has a Loss Portfolio Transfer and Adverse Development Cover Agreement (‘LPT/ADC Agreement’) with Cavello Bay Reinsurance Limited (‘Cavello’) and a commutation agreement that further reduces the company’s exposure to and limits the potential volatility related to AmTrust liabilities in run-off.
Short-term income protection business is written on a primary basis by the company’s wholly owned subsidiaries Maiden Life Försäkrings AB (‘Maiden LF’) and Maiden General Försäkrings AB (‘Maiden GF’) in the Scandinavian and Northern European markets, each with branches in the United Kingdom (‘U.K.’). Insurance support services are provided to Maiden LF and Maiden GF through the company’s wholly owned subsidiary, Maiden Global Holdings Ltd. (‘Maiden Global’), which is also a licensed intermediary in the U.K. Maiden Global had previously operated internationally by providing branded auto and credit life insurance products through insurer partners, particularly those in Europe and other global markets. These products also produced reinsurance programs, which were underwritten by Maiden Reinsurance.
Business Strategy
The company’s strategy has the following principal areas of focus:
Asset Management - Investing in assets and asset classes in a prudent but expansive manner in order to maximize investment returns and is principally enabled by limiting the amount of insurance risk the company assumes in relation to the assets the company holds and maintaining required regulatory capital at very strong levels to manage the company’s aggregate risk profile; and
Legacy Underwriting - Judiciously building a portfolio of legacy run-off acquisitions and retroactive reinsurance transactions.
Principal Operating Subsidiaries
Maiden Reinsurance, a wholly owned subsidiary of the company, is an affiliated reinsurance company licensed in the state of Vermont in the U.S. and the company’s principal operating subsidiary. Maiden Reinsurance is subject to the statutes and regulations of Vermont in the ordinary course of business. Maiden Reinsurance owns 29% of the total outstanding common shares of the company.
Maiden Holdings North America, Ltd. (‘Maiden NA’) is the company’s wholly owned U.S. holding company and is domiciled in the state of Delaware.
Maiden Global, a wholly owned subsidiary of the company, operates as an insurance services company. Maiden Global is organized under the laws of England and Wales. Maiden LF and Maiden GF, both wholly owned subsidiaries of the company, are insurance companies organized under the laws of Sweden and write income protection insurance on a primary basis in the Scandinavian and Northern European market.
GLS was formed in November 2020 and is a wholly owned subsidiary of Maiden Reinsurance domiciled in the state of Delaware. GLS Services Company (‘GLS Services’) is a wholly owned subsidiary of GLS. GLS specializes in providing a full range of legacy services to small insurance entities, particularly those in run-off or with blocks of reserves that are no longer core to those companies' operations, working with clients to develop and implement finality solutions, including acquiring entire companies that enable the company’s clients to meet their capital and risk management objectives. Genesis Legacy Insurance Company (Vermont) Limited, is a wholly owned subsidiary of GLS Services licensed in Vermont, and is the operating entity utilized by GLS to assume portfolios of legacy liabilities.
Segments
The company’s business consists of two reportable segments: Diversified Reinsurance and AmTrust Reinsurance.
The company’s Diversified Reinsurance segment consists of a portfolio of predominantly property and casualty insurance and reinsurance business focusing on regional and specialty property and casualty insurance companies located primarily in Europe. This segment now also includes transactions entered into by GLS.
The company’s AmTrust Reinsurance segment includes all business ceded to Maiden Reinsurance by AmTrust, primarily the quota share reinsurance agreement (‘AmTrust Quota Share’) between Maiden Reinsurance and AmTrust’s wholly owned subsidiary, AmTrust International Insurance, Ltd. (‘AII’) and the European hospital liability quota share reinsurance contract (‘European Hospital Liability Quota Share’) with AmTrust’s wholly owned subsidiaries AmTrust Europe Limited (‘AEL’) and AmTrust International Underwriters DAC (‘AIU DAC’), which are both in run-off effective January 1, 2019.
Diversified Reinsurance segment
In this segment, Maiden Reinsurance previously wrote treaties on both a quota share basis and excess of loss basis outside the U.S. whereas Maiden LF and Maiden GF write business within Europe on a primary basis.
Maiden Global’s business development teams partnered with automobile manufacturers, dealer associations and local primary insurers to design and implement point of sale insurance programs, which generated revenue for the auto manufacturer and insurance premiums for the primary insurer (‘IIS business’).
AmTrust Reinsurance segment
AmTrust is a multinational specialty property and casualty insurance holding company with operations in the U.S., Europe and Bermuda. Effective January 1, 2019, the AmTrust Quota Share and the European Hospital Liability Quota Share were terminated on a run-off basis. These transactions are broadly referred to herein as the ‘Final AmTrust QS Terminations’.
Through the company’s reinsurance agreements with AmTrust, the company reinsured specific lines of business within the following AmTrust business segments:
Small commercial business insurance, which includes the U.S. workers’ compensation, commercial package and other low-hazard property and casualty insurance products;
Specialty risk and extended warranty coverage for consumer and commercial goods and custom designed coverages, such as accidental damage plans and payment protection plans offered in connection with the sale of consumer and commercial goods, in the U.S., the U.K., and certain other global markets and European hospital liability; and
Specialty program, which includes package products, general liability, commercial auto liability, excess and surplus lines programs and other specialty commercial property and casualty insurance to a narrowly defined, homogeneous group of small and middle market companies.
Regulatory Matters
Maiden Reinsurance is subject to the financial supervision and regulation of the Vermont DFR.
Maiden LF and Maiden GF are subject to regulation and supervision by Finansinpektionen, the Swedish financial supervisory authority (the ‘Swedish FSA’).
The company has been designated as non-resident for exchange control purposes by the Bermuda Monetary Authority (‘BMA’) and is required to obtain the permission of the BMA for the issue and transfer of all of its shares.
To the extent that the ESA applies to Maiden Holdings, the company is required to demonstrate compliance with economic substance requirements that the company has ‘adequate’ economic substance in Bermuda, and the company must file an annual economic substance declaration with the Bermuda Registrar of Companies (‘Registrar’) on that basis.
Terrorism Risk Insurance Act of 2002 (‘TRIA’), which was previously amended and extended in 2005, 2007, 2015 and again in 2019 by the Terrorism Risk Insurance Program Reauthorization Act of 2019 (‘TRIPRA’), was enacted to ensure the availability of insurance coverage for terrorist acts in the U.S. TRIPRA has impacted some of the company’s reinsurance clients, but not all due to the lines of business covered by TRIA. Also, in general, the company’s reinsurance contracts contain inuring language regarding any potential recoveries from TRIA.
