Maiden CEO thanks clients for loyalty

  • Art Raschbaum, CEO of Maiden Holdings

    Art Raschbaum, CEO of Maiden Holdings

Maiden Holdings Ltd’s chief executive officer has thanked customers for their loyalty as the company explores options for its future.

Arturo Raschbaum, speaking in a conference call with analysts after Maiden announced a return to profitability in the first quarter of this year, said he had fielded a few client calls in the wake of the company’s April announcement that its board had hired Bank of America Merrill Lynch to help explore “strategic alternatives”.

Asked by KBW analyst Meyer Shields how uncertainty over the future was impacting business development, Mr Raschbaum said he was appreciative of the loyalty of clients.

“We certainly get calls and we talk to customers and for the most part the majority have been very appreciative and understanding and recognise that there is not a lot we can divulge at this time,” Mr Raschbaum said.

“But the end objective is something that hopefully benefits them, as well as obviously most importantly our shareholders.”

The call came after Maiden posted net income of $13.7 million for the three months of the year, following on from three successive quarterly losses.

However, underwriting losses continued, as Maiden reported a combined ratio of 101.8 per cent for the quarter.

Gross premiums written fell 16.1 per cent to $278.7 million. Mr Raschbaum said there had been a fall in premium from Maiden’s largest client, AmTrust, and in its diversified segment s as a result of several accounts terminated over the last 12 months.

Book value per share tumbled nearly 10 per cent during the quarter, to $8.34 from $9.25 at the end of last year. The company attributed 82 cents per share of the drop to unrealised losses of $68.3 million in its fixed-income investment portfolio.

Karen Schmitt, Maiden’s chief financial officer, said on yesterday’s call: “However, importantly the change in market value was not driven by a weakening of credit quality or impaired assets. Maiden would only realise these valuation losses if it chose to sell assets at market.”

Yesterday, Maiden’s shares closed 30 cents, or 3.7 per cent, higher at $8.35 in New York trading.

Mr Raschbaum said there was “no further update” on Maiden’s progress in evaluating strategic options — language often used to indicate that a full or partial sell-off is being sought.

The Insurance Insider, a UK-based trade publication, reported last month that Maiden was seeking a buyer for its diversified reinsurance segment, which last year wrote $823 million or 31 per cent of the company’s premiums.

More than two-thirds of Maiden’s premiums last year come from a multiyear quota share reinsurance agreement with AmTrust, a US insurer closely associated with Maiden that shares the same founders. Last year, AmTrust had to restate results and repeatedly bolster reserves, as its share price plunged.

AmTrust is now set to go private. The $13.50-per-share offer has been made by members of the Karfunkel family, who also founded Maiden, and Stone Point Capital. Shareholders are scheduled to vote on the offer on June 4.

In a regulatory filing this week, AmTrust disclosed that it had been under investigation by the Securities and Exchange Commission for five years over its accounting practices.

Maiden’s board declared an unchanged dividend of 15 cents per common share for the first quarter.

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Published May 11, 2018 at 8:00 am (Updated May 10, 2018 at 9:46 pm)

Maiden CEO thanks clients for loyalty

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