UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



x☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2019~~2020



o☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File No. 001-34042

MAIDEN HOLDINGS, LTD.

(Exact name of registrant as specified in its charter)



Bermuda	98-0570192
(State or other jurisdiction of incorporation or organization)	~~98-0570192~~ (IRS Employer Identification No.)
94 Pitts Bay Road
~~94 Pitts Bay Road,~~ Pembroke
Bermuda	HM08
(Address of principal executive offices)	~~HM08~~ (Zip Code)

~~(441)~~ (441) 298-4900

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class	Trading symbol(s)	Name of Each Exchange on Which Registered
Common Shares, par value $0.01 per share	MHLD	NASDAQ ~~Global Select~~Capital Market
Series A Preference Shares, par value $0.01 per share	MH.PA	New York Stock Exchange ~~Inc.~~
Series C Preference Shares, par value $0.01 per share	MH.PC	New York Stock Exchange ~~Inc.~~
Series D Preference Shares, par value $0.01 per share	MH.PD	New York Stock Exchange ~~Inc.~~

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ~~Yes~~ xYes☒ No o☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ~~Yes~~ xYes☒ No o☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filerx	☐	Accelerated filero	☐
Non-accelerated filero	☒	(Do not check if a smaller reporting company)
		Smaller reporting companyo	☒
		Emerging growth companyo	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act).

Yes o☐ No x☒

As of ~~April 30, 2019,~~May 10, 2020, the number of shares of the Registrant's Common Stock ($.01 par value) outstanding was ~~83,041,135.~~84,718,837.

INDEX

		Page
PART I - Financial Information
Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets as of March 31, ~~2019~~2020 (unaudited) and December 31, ~~2018~~2019 (audited)	3

	Condensed Consolidated Statements of Income for the Three Months Ended March 31, ~~2019~~2020 and ~~2018~~2019 (unaudited)	4

	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, ~~2019~~2020 and ~~2018~~2019 (unaudited)	5

	Condensed Consolidated Statements of Changes in Shareholders' Equity for the Three Months Ended March 31, ~~2019~~2020 and ~~2018~~2019 (unaudited)	6

	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, ~~2019~~2020 and ~~2018~~2019 (unaudited)	7

	Notes to Condensed Consolidated Financial Statements (unaudited)	8

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	32

~~Item 3.~~	~~Quantitative and Qualitative Disclosures About Market Risk~~	5530

Item 4.	Controls and Procedures	5653

PART II - Other Information

Item 1.	Legal Proceedings	5754

Item 1A.	Risk Factors	5754

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5855

Item 3.	Defaults Upon Senior Securities	5855

Item 4.	Mine Safety Disclosures	5855

Item 5.	Other Information	5855

Item 6.	Exhibits	5956

	Signatures	6057

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

MAIDEN HOLDINGS, LTD.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands of U.S. dollars, except share and per share data)


	March 31, 2019			December 31, 2018			March 31, 2020			December 31, 2019
ASSETS	(Unaudited)			(Audited)			(Unaudited)			(Audited)
Investments:
Fixed maturities, available-for-sale, at fair value (amortized cost 2019 - $3,130,981; 2018 - $3,109,980)	$	3,131,934		$	3,051,568
Fixed maturities, held-to-maturity, at amortized cost (fair value 2018 - $998,012)	—			1,015,681
Other investments, at fair value	24,693			23,716
Fixed maturities, available-for-sale, at fair value (amortized cost 2020 - $1,530,689; 2019 - $1,813,426)							$	1,508,544		$	1,835,518
Other investments							34,088			31,748
Total investments	3,156,627			4,090,965			1,542,632			1,867,266
Cash and cash equivalents	89,521			200,841			60,059			48,197
Restricted cash and cash equivalents	42,334			130,148			117,903			59,081
Accrued investment income	27,788			27,824			19,897			18,331
Reinsurance balances receivable, net (includes $40,080 and $38,278 from related parties in 2019 and 2018, respectively)	72,867			67,308
Reinsurance balances receivable, net							14,560			12,181
Reinsurance recoverable on unpaid losses							620,882			623,422
Loan to related party	167,975			167,975			167,975			167,975
Deferred commission and other acquisition expenses (includes $146,276 and $370,037 from related parties in 2019 and 2018, respectively)	161,976			388,442
Funds withheld receivable (includes $625,661 from related parties in 2019)	652,087			27,039
Deferred commission and other acquisition expenses (includes $61,439 and $68,433 from related parties in 2020 and 2019, respectively)							69,109			77,356
Funds withheld receivable (includes $649,516 and $632,305 from related parties in 2020 and 2019, respectively)							696,076			684,441
Other assets	14,729			12,443			12,664			9,946
Assets held for sale	177,452			174,475
Total assets	$	4,563,356		$	5,287,460		$	3,321,757		$	3,568,196
LIABILITIES
Reserve for loss and loss adjustment expenses (includes $2,874,279 and $2,950,388 from related parties in 2019 and 2018, respectively)	$	2,980,113		$	3,055,976
Unearned premiums (includes $401,007 and $1,135,913 from related parties in 2019 and 2018, respectively)	455,175			1,200,419
Reinsurance balances payable, net (includes $116,176 and $50,975 from related parties in 2019 and 2018, respectively)	117,943			52,594
Accrued expenses and other liabilities	12,087			12,900
Reserve for loss and loss adjustment expenses (includes $2,095,411 and $2,272,418 from related parties in 2020 and 2019, respectively)							$	2,249,045		$	2,439,907
Unearned premiums (includes $171,113 and $189,797 from related parties in 2020 and 2019, respectively)							197,094			220,269
Deferred gain on retroactive reinsurance							112,950			112,950
Accrued expenses and other liabilities (includes $11,170 and $20,049 from related parties in 2020 and 2019, respectively)							22,708			32,444
Senior notes - principal amount	262,500			262,500			262,500			262,500
Less: unamortized debt issuance costs	7,753			7,806			7,538			7,592
Senior notes, net	254,747			254,694			254,962			254,908
Liabilities held for sale	159,002			155,961
Total liabilities	3,979,067			4,732,544			2,836,759			3,060,478
Commitments and Contingencies
EQUITY
Preference shares	465,000			465,000			465,000			465,000
Common shares ($0.01 par value; 88,054,315 and 87,938,537 shares issued in 2019 and 2018, respectively; 83,064,173 and 82,948,577 shares outstanding in 2019 and 2018, respectively)	881			879
Common shares ($0.01 par value; 88,983,171 and 88,161,638 shares issued in 2020 and 2019, respectively; 83,969,991 and 83,148,458 shares outstanding in 2020 and 2019, respectively)							890			882
Additional paid-in capital	750,670			749,418			751,862			751,327
Accumulated other comprehensive loss	(220		)	(65,616		)
Accumulated other comprehensive (loss) income							(26,288		)	17,836
Accumulated deficit	(600,527		)	(563,891		)	(674,933		)	(695,794		)
Treasury shares, at cost (4,990,142 and 4,989,960 shares in 2019 and 2018, respectively)	(31,515		)	(31,515		)
Total Maiden shareholders’ equity	584,289			554,275
Noncontrolling interests in subsidiaries	—			641
Total equity	584,289			554,916
Treasury shares, at cost (5,013,180 shares in 2020 and 2019, respectively)							(31,533		)	(31,533		)
Total shareholders’ equity							484,998			507,718
Total liabilities and equity	$	4,563,356		$	5,287,460		$	3,321,757		$	3,568,196

See accompanying notes to the unaudited Condensed Consolidated Financial Statements.

MAIDEN HOLDINGS, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(in thousands of U.S. dollars, except per share data)

For the Three Months Ended March 31,
2019
2018
Revenues
Gross premiums written $ (561,139 ) $ 623,328
Net premiums written $ (561,530 ) $ 622,651
Change in unearned premiums 744,632
(105,838 )
Net premiums earned 183,102
516,813
Other insurance revenue 750
3,726
Net investment income 32,022
32,869
Net realized (losses) gains on investment (11,101 ) 357
Total revenues 204,773
553,765
Expenses
Net loss and loss adjustment expenses 152,689
353,206
Commission and other acquisition expenses 69,617
166,628
General and administrative expenses 15,939
15,671
Interest and amortization expenses 4,829
4,829
Foreign exchange and other (gains) losses (4,979 ) 2,407
Total expenses 238,095
542,741
(Loss) income from continuing operations before income taxes (33,322 ) 11,024
Less: income tax benefit (38 ) (1,324 )
Net (loss) income from continuing operations (33,284 ) 12,348
(Loss) income from discontinued operations, net of income tax (3,352 ) 9,995
Net (loss) income (36,636 ) 22,343
Net income from continuing operations attributable to noncontrolling interests —
(71 )
Net (loss) income attributable to Maiden (36,636 ) 22,272
Dividends on preference shares —
(8,545 )
Net (loss) income attributable to Maiden common shareholders $ (36,636 ) $ 13,727
Basic (loss) earnings from continuing operations per share attributable to Maiden common shareholders $ (0.40 ) $ 0.05
Basic (loss) earnings from discontinued operations per share attributable to Maiden common shareholders (0.04 ) 0.12
Basic (loss) earnings per share attributable to Maiden common shareholders $ (0.44 ) $ 0.17
Diluted (loss) earnings from continuing operations per share attributable to Maiden common shareholders $ (0.40 ) $ 0.04
Diluted (loss) earnings from discontinued operations per share attributable to Maiden common shareholders (0.04 ) 0.12
Diluted (loss) earnings per share attributable to Maiden common shareholders $ (0.44 ) $ 0.16
Weighted average number of common shares - basic 82,965,156
83,040,413
Adjusted weighted average number of common shares and assumed conversions - diluted 82,965,156
83,318,542



	For the Three Months Ended March 31,
	2020			2019
Revenues
Gross premiums written	$	11,734		$	(561,139	)
Net premiums written	$	10,372		$	(561,530	)
Change in unearned premiums	20,843			744,632
Net premiums earned	31,215			183,102
Other insurance revenue	408			812
Net investment income	17,964			32,022
Net realized gains (losses) on investment	11,038			(11,101		)
Total other-than-temporary impairment losses	(1,506		)	—
Total revenues	59,119			204,835
Expenses
Net loss and loss adjustment expenses	21,086			152,689
Commission and other acquisition expenses	11,973			69,617
General and administrative expenses	8,550			16,619
Interest and amortization expenses	4,831			4,829
Foreign exchange and other gains	(8,197		)	(4,979		)
Total expenses	38,243			238,775
Income (loss) from continuing operations before income taxes	20,876			(33,940		)
Less: income tax expense (benefit)	15			(38		)
Income (loss) from continuing operations	20,861			(33,902		)
Loss from discontinued operations, net of income tax	—			(2,734		)
Net income (loss)	$	20,861		$	(36,636	)
Basic and diluted earnings (loss) from continuing operations per share attributable to common shareholders	$	0.25		$	(0.41	)
Basic and diluted loss from discontinued operations per share attributable to common shareholders	—			(0.03		)
Basic and diluted earnings (loss) per share attributable to common shareholders	$	0.25		$	(0.44	)
Weighted average number of common shares - basic and diluted	83,256,223			82,965,156

See accompanying notes to the unaudited Condensed Consolidated Financial Statements.

MAIDEN HOLDINGS, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(in thousands of U.S. dollars)

For the Three Months Ended March 31,
2019 2018
Net (loss) income $ (36,636 ) $ 22,343
Other comprehensive income (loss)
Net unrealized holdings gains (losses) on available-for-sale fixed maturities arising during period 49,030
(66,843 )
Adjustment for reclassification of net realized losses (gains) recognized in net (loss) income 12,488
(1,490 )
Foreign currency translation adjustment 3,998
(7,940 )
Other comprehensive income (loss), before tax 65,516
(76,273 )
Income tax (expense) benefit related to components of other comprehensive income (42 ) 15
Other comprehensive income (loss), after tax 65,474
(76,258 )
Comprehensive income (loss) 28,838
(53,915 )
Net income attributable to noncontrolling interests —
(71 )
Other comprehensive income attributable to noncontrolling interests (78 ) (11 )
Comprehensive income attributable to noncontrolling interests (78 ) (82 )
Comprehensive income (loss) attributable to Maiden $ 28,760
$ (53,997 )



	For the Three Months Ended March 31,
	2020			2019
Net income (loss)	$	20,861		$	(36,636	)
Other comprehensive (loss) income
Net unrealized holdings (losses) gains on fixed maturities arising during period	(40,203		)	49,030
Adjustment for reclassification of net realized (gains) losses recognized in net income (loss)	(4,033		)	12,488
Foreign currency translation adjustment	(3		)	3,998
Other comprehensive (loss) income, before tax	(44,239		)	65,516
Income tax benefit (expense) related to components of other comprehensive (loss) income	115			(42		)
Other comprehensive (loss) income, after tax	(44,124		)	65,474
Comprehensive (loss) income	(23,263		)	28,838
Comprehensive income attributable to noncontrolling interests	—			(78		)
Comprehensive (loss) income attributable to Maiden	$	(23,263	)	$	28,760

See accompanying notes to the unaudited Condensed Consolidated Financial Statements.

MAIDEN HOLDINGS, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited)

(in thousands of U.S. dollars)


For the Three Months Ended March 31,	2019			2018
							For the Three Months Ended March 31,
							2020			2019
Preference shares - Series A, C and D
Beginning balance	$	465,000		$	465,000		$	465,000		$	465,000
Ending balance	465,000			465,000			465,000			465,000
Common shares
Beginning balance	879			877			882			879
Exercise of options and issuance of shares	2			2			8			2
Ending balance	881			879			890			881
Additional paid-in capital
Beginning balance	749,418			748,113			751,327			749,418
Exercise of options and issuance of common shares	(2		)	(2		)	(8		)	(2		)
Share-based compensation expense	1,254			943			543			1,254
Ending balance	750,670			749,054			751,862			750,670
Accumulated other comprehensive loss
Beginning balance	(65,616		)	13,354			17,836			(65,616		)
Change in net unrealized gains (losses) on investment	61,476			(68,318		)
Change in net unrealized (losses) gains on investment							(44,121		)	61,476
Foreign currency translation adjustment	3,920			(7,951		)	(3		)	3,920
Ending balance	(220		)	(62,915		)	(26,288		)	(220		)
(Accumulated deficit) retained earnings
Accumulated deficit
Beginning balance	(563,891		)	35,472			(695,794		)	(563,891		)
Net (loss) income attributable to Maiden	(36,636		)	22,272
Dividends on preference shares	—			(8,545		)
Dividends on common shares	—			(12,472		)
Net income (loss)							20,861			(36,636		)
Ending balance	(600,527		)	36,727			(674,933		)	(600,527		)
Treasury shares
Beginning balance	(31,515		)	(30,642		)	(31,533		)	(31,515		)
Shares repurchased	—			(193		)
Ending balance	(31,515		)	(30,835		)	(31,533		)	(31,515		)
Noncontrolling interests in subsidiaries
Beginning balance	641			452			—			641
Disposal of subsidiaries	(719		)	—			—			(719		)
Net income attributable to noncontrolling interests	—			71
Foreign currency translation adjustment	78			11			—			78
Ending balance	—			534			—			—
Total equity	$	584,289		$	1,158,444
Total shareholders' equity							$	484,998		$	584,289

See accompanying notes to the unaudited Condensed Consolidated Financial Statements.

MAIDEN HOLDINGS, LTD.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in thousands of U.S. dollars)


For the Three Months Ended March 31,	2019			2018			2020			2019
Cash flows from operating activities
Net (loss) income	$	(36,636	)	$	22,343
Less: net loss (income) from discontinued operations	3,352			(9,995		)
Adjustments to reconcile net loss (income) to net cash provided by operating activities:
Net income (loss)							$	20,861		$	(36,636	)
Less: net loss from discontinued operations							—			2,734
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation, amortization and share-based compensation	2,062			2,131			1,761			2,062
Net realized losses (gains) on investment	11,101			(357		)
Foreign exchange and other (gains) losses	(4,979		)	2,407
Net realized (gains) losses on investment							(11,038		)	11,101
Total other-than-temporary impairment losses							1,506			—
Foreign exchange and other gains							(8,181		)	(4,964		)
Changes in assets – (increase) decrease:
Reinsurance balances receivable, net	(7,198		)	(151,462		)	(15,205		)	(7,198		)
Reinsurance recoverable on unpaid losses							2,256			(36		)
Accrued investment income	2			(311		)	(1,659		)	2
Deferred commission and other acquisition expenses	88,388			(29,830		)	7,438			88,388
Funds withheld receivable	(53,741		)	2,058			1,261			(53,741		)
Other assets	(6,481		)	6,545			(8,464		)	(3,462		)
Changes in liabilities – increase (decrease):
Reserve for loss and loss adjustment expenses	(67,641		)	91,380			(174,835		)	(67,641		)
Unearned premiums	(326,214		)	93,357			(20,479		)	(326,214		)
Reinsurance balances payable, net	65,349			(12,785		)
Accrued expenses and other liabilities	1,529			(933		)	(13,703		)	63,880
Net cash (used in) provided by continuing operations	(331,107		)	14,548
Net cash used in continuing operations							(218,481		)	(331,725		)
Net cash used in discontinued operations	(823		)	(46,689		)	—			(205		)
Net cash used in operating activities	(331,930		)	(32,141		)	(218,481		)	(331,930		)
Cash flows from investing activities:
Purchases of fixed-maturities – available-for-sale	(159,790		)	(218,805		)
Purchases of fixed maturities							(133,353		)	(159,790		)
Purchases of other investments	(1,528		)	—			(2,325		)	(1,528		)
Proceeds from sales of fixed-maturities – available-for-sale	84,361			80,240
Proceeds from sales of fixed maturities							224,471			84,361
Proceeds from maturities, paydowns and calls of fixed maturities	206,811			95,774			200,242			206,811
Proceeds from sale and redemption of other investments	406			275			92			406
Other, net	2,870			(1,622		)	(597		)	2,870
Net cash provided by (used in) investing activities for continuing operations	133,130			(44,138		)
Net cash (used in) provided by investing activities for discontinued operations	(3,349		)	66,166
Net cash provided by investing activities for continuing operations							288,530			133,130
Net cash used in investing activities for discontinued operations							—			(3,349		)
Net cash provided by investing activities	129,781			22,028			288,530			129,781
Cash flows from financing activities:
Repurchase of common shares	—			(193		)
Dividends paid – Maiden common shareholders	—			(12,452		)
Dividends paid – preference shares	—			(8,545		)
Net cash used in financing activities	—			(21,190		)
Effect of exchange rate changes on foreign currency cash, restricted cash and equivalents	(334		)	837			635			(334		)
Net decrease in cash, restricted cash and cash equivalents	(202,483		)	(30,466		)
Net increase (decrease) in cash, restricted cash and cash equivalents							70,684			(202,483		)
Cash, restricted cash and cash equivalents, beginning of period	337,102			191,503			107,278			337,102
Cash, restricted cash and cash equivalents, end of period	134,619			161,037			177,962			134,619
Less: cash, restricted cash and equivalents of discontinued operations, end of period	(2,764		)	(50,951		)	—			(2,764		)
Cash, restricted cash and cash equivalents of continuing operations, end of period	$	131,855		$	110,086		$	177,962		$	131,855
Reconciliation of cash, restricted cash and cash equivalents reported within Condensed Consolidated Balance Sheets that sum to the total shown above:
Reconciliation of cash and restricted cash reported within Condensed Consolidated Balance Sheets:
Cash and cash equivalents, end of period	$	89,521		$	48,352		$	60,059		$	89,521
Restricted cash and cash equivalents, end of period	42,334			61,734			117,903			42,334
Total cash, restricted cash and cash equivalents, end of period	$	131,855		$	110,086		$	177,962		$	131,855
Non-cash investing activities
Investments transferred out related to Partial Termination Amendment	$	280,670		$	—		$	—		$	280,670
Investments transferred out related to funds withheld arrangement with AmTrust	$	571,396		$	—		—			571,396

See accompanying notes to the unaudited Condensed Consolidated Financial Statements.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

1. 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"). They have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information 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 U.S. GAAP for complete financial statements. All significant intercompany 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 U.S. 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, ~~2018. Results of operations for~~2019. Certain prior year comparatives have been reclassified ~~for 2018~~ to conform to the ~~2019 presentation due to our discontinued operations as discussed below.~~current year presentation. The effect of these reclassifications had no impact on previously reported shareholders' equity or net ~~income.~~loss.

Strategic Review

Since 2018, the Company has engaged in a series of strategic measures that have dramatically reduced the regulatory capital required to operate our business, materially strengthened our solvency ratios, re-domiciled Maiden Reinsurance Ltd. ("Maiden Reinsurance") to Vermont in the U.S. and ceased active reinsurance underwriting. During that time, we significantly increased our estimate of ultimate losses and loss reserves while purchasing reinsurance protection against further loss reserve volatility and as a result, have improved the ultimate economic value of the Company. We believe these measures have given the Company the ability to more flexibly allocate capital to those activities most likely to produce the greatest returns for shareholders.

The ~~Company's business has undergone significant changes within the last year. Maiden Holdings's~~measures we ultimately have taken were initiated in early 2018, when our Board of Directors initiated a review of strategic alternatives ("Strategic Review") ~~in the first quarter of 2018~~ to evaluate ways to increase shareholder value asafter a ~~result~~period of continuing ~~significant operating losses~~higher than targeted combined ratios and lower returns on equity than ~~planned.~~ expected.

As part of the Strategic Review, a series of transactions were entered into ~~which are described herein.~~

In addition, as of September 30, 2018 and December 31, 2018, the Company and its wholly owned subsidiary Maiden Reinsurance Ltd. ("Maiden Bermuda") failed to meet their requirements to hold sufficient capital to cover their respective economic capital requirements (“ECR”). The Company had communicated such conditions to the Bermuda Monetary Authority ("BMA") and is following the guidelines of a reportable “event” as stipulated by Bermuda insurance law. The Company has taken the following actions to remediate the breach including: (1) completed the sale of Maiden Reinsurance North America, Inc. ("Maiden US") on December 27, 2018; (2) Maiden ~~Bermuda's~~Reinsurance's shareholders, Maiden Holdings and Maiden Holdings North America, Ltd. ("Maiden NA"), made capital injections of $125,000 on December 31, 2018 and $70,000 on January 18, 2019 to Maiden ~~Bermuda~~Reinsurance from the sale proceeds of Maiden US; (3) entered into a partial termination amendment ("Partial Termination Amendment") with AmTrust Financial Services, Inc. ("AmTrust") effective January 1, 2019 which amended the quota share reinsurance agreement (“AmTrust Quota Share”) between Maiden ~~Bermuda~~Reinsurance and AmTrust’s wholly owned subsidiary AmTrust International Insurance, Ltd. (“AII”) (as more fully described in "Note 8)10 - Related Party Transactions"); ~~and~~ (4) entered into amendments which terminated the AmTrust Quota Share and the European hospital liability ~~quota share reinsurance contract~~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") effective January 1, ~~2019.~~

~~As a result of these actions and pending finalization and regulatory approval of~~2019 (these transactions are broadly referred to herein as the ~~loss portfolio transfer and adverse development cover~~"Final AmTrust QS Terminations"); (5) entered into ~~by Maiden Bermuda~~the Loss Portfolio Transfer and Adverse Development Cover Agreement ("LPT/ADC Agreement") with Enstar Group Limited ("Enstar") ~~("New LPT/ADC MTA")~~pursuant to the revised Master Transaction Agreement entered into on March 1, 2019; and (6) entered into a Commutation and Release Agreement with AmTrust to commute certain workers' compensation business with AII as of January 1, 2019.

Please see 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, 2019 ~~it is anticipated that~~for further details on the ~~Company and Maiden Bermuda will have sufficient capital in excess of the respective ECR requirements and that this position should improve throughout 2019.~~above transactions.

Discontinued Operations

~~As part of the strategic review initiated by the Company's Board of Directors during 2018, the~~The Company made the strategic decision to divest its U.S. treaty reinsurance ~~treaty~~ operations through the sale of Maiden US which was completed on December 27, 2018. Except as explicitly described ~~as held for sale or~~ as discontinued operations, and unless otherwise noted, all discussions and amounts presented herein relate to the Company's continuing operations except for net ~~loss, net loss attributable~~income (loss).

Re-domestication of Maiden Reinsurance

Effective March 16, 2020, we re-domesticated our principal operating subsidiary, Maiden Reinsurance, to ~~Maiden and net loss attributable to Maiden common shareholders.~~

~~Sale~~the State of ~~U.S. Treaty Reinsurance Operations~~

~~The sale of the U.S. treaty reinsurance business occurred in two parts as described below:~~

(a) On August 29, 2018, the Company announced that it had entered into a Renewal Rights Agreement ("Renewal Rights"), dated as of August 29, 2018, with Transatlantic Reinsurance Company ("TransRe"), pursuant to which the Company agreed to sell, and TransRe agreed to purchase, Maiden US's rights to: (i) renew Maiden US’s treaty reinsurance agreements upon their expiration or cancellation, (ii) solicit renewals of and replacement coverages for the treaty reinsurance agreements and (iii) replicate and use the products and contract forms used in Maiden US’s business. The sale was consummated on August 29, 2018. The payment received for the sale of the Renewal Rights was $7,500 subject to potential additional amounts payableVermont in the ~~future~~United States, having made the necessary filings in ~~accordance with~~both Vermont and Bermuda in the ~~agreement. No additional amounts to the fee have been recognized to date, including the~~fourth quarter of 2019 and first quarter of ~~2019.~~

2020. Maiden Reinsurance is now subject to the statutes and regulations of Vermont in the ordinary course of business. We have determined that re-domesticating Maiden Reinsurance to Vermont enables us to better align our capital and resources with our liabilities, which originate mostly in the United States, resulting in a more efficient structure. The re-domestication, in combination with the transactions completed pursuant to the Strategic Review, will continue to strengthen the Company’s capital position and solvency ratios. While the Vermont Department of Financial Regulation ("Vermont DFR") will be the group supervisor for the Company, the re-domestication did not apply to the parent holding company which remains a Bermuda-based holding company. Securities issued by Maiden Holdings were not affected by the re-domestication of Maiden Reinsurance to Vermont. Concurrent with its re-domestication to Vermont on March 16, 2020, Maiden Holdings contributed as capital the remaining 65% of its ownership in Maiden Reinsurance to Maiden NA. Maiden NA now owns 100% of Maiden Reinsurance.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

1. Basis of Presentation (continued)

(b) On December 27, 2018, the Company announced that its subsidiary, Maiden NA, completed its sale agreement ("U.S. Sale Agreement") dated as of August 31, 2018, with Enstar Holdings (US) LLC ("Enstar Holdings"), pursuant to which Maiden NA sold Maiden US to Enstar Holdings.

~~Pursuant to and subject to the terms of the U.S. Sale Agreement:~~

~~(i)~~Maiden NA sold, and Enstar Holdings purchased, all of the outstanding shares of common stock of Maiden US (“Maiden US Sale”) for gross consideration of $286,375, which included estimated closing adjustments but subject to post-closing adjustments which are still being reviewed by the parties subject to the terms of the U.S. Sale Agreement;

~~(ii)~~Cavello Bay Reinsurance Limited ("Cavello"), Enstar’s Bermuda reinsurance affiliate, and Maiden Bermuda entered into an agreement pursuant to which certain quota share reinsurance contracts between Maiden US and Maiden Bermuda were novated to Cavello for a ceding commission paid by Maiden Bermuda of $12,250;

~~(iii)~~Cavello and Maiden Bermuda also entered into a retrocession agreement pursuant to which certain assets and liabilities associated with the U.S. treaty reinsurance business held by Maiden Bermuda were retroceded to Cavello in exchange for a $1,750 ceding commission; and

~~(iv)~~Maiden Bermuda provided Enstar with a reinsurance cover for loss reserve development, up to a maximum of $25,000, when losses are more than $100,000 in excess of the net loss and loss adjustment expenses recorded as of June 30, 2018, for no additional consideration.

The Company has determined that the sale of the U.S. treaty reinsurance operations represents a strategic shift that will have a major effect on its ongoing operations and financial results and that all of the held for sale criteria have been met. Accordingly, all transactions related to the U.S. treaty reinsurance operations are reported and presented as part of discontinued operations. Please refer to "~~Note 6. Discontinued Operations" for additional information regarding the effect of the reclassifications on the Company's Condensed Consolidated Financial Statements.~~

~~Reinsurance Agreements with Enstar~~

On March 1, 2019, the Company and Enstar terminated the Master Transaction Agreement between the parties dated as of November 9, 2018 (the “Old LPT MTA”) and simultaneously signed the New LPT/ADC MTA pursuant to which an Enstar subsidiary will assume liabilities for loss reserves as of December 31, 2018 associated with the quota share reinsurance agreements between Maiden Bermuda and AmTrust in excess of a $2,441,359 retention up to $675,000. The $2,441,359 retention will be subject to adjustment for paid losses subsequent to December 31, 2018. The New LPT/ADC MTA and associated reinsurance agreement, which is pending, will provide Maiden Bermuda with $175,000 in adverse development cover over its carried AmTrust reserves at December 31, 2018. The New LPT/ADC MTA will be accounted for as retroactive reinsurance. Cumulative ceded losses exceeding $500,000 would result in a deferred gain which would be recognized over the settlement period in proportion to cumulative losses collected over the estimated ultimate reinsurance recoverable. Consequently, cumulative adverse development subsequent to December 31, 2018, in excess of $500,000, may result in significant losses from operations until periods when the deferred gain is recognized as a benefit to earnings. The transaction, when finalized, is subject to regulatory approvals and other closing conditions.

Segments

As a result of the strategic decision to divest all of the Company's U.S. treaty reinsurance operations noted above, the Company ~~has~~ revised the composition of its reportable segments. As described in more detail under “Note 3. Segment Information”, the reportable segments include: (i) Diversified Reinsurance which consists of a portfolio of property and casualty reinsurance business focusing on regional and specialty property and casualty insurance companies located primarily in Europe; and (ii) AmTrust Reinsurance which includes all business ceded to Maiden ~~Bermuda~~Reinsurance from subsidiaries of AmTrust. In addition to these reportable segments, the results of operations of the former National General Holdings Corporation Quota Share ("NGHC Quota Share") segment, iswhich was commuted in November 2019, was previously included in the "Other" category.

COVID-19 Pandemic

The ~~prior period presented~~evolving COVID-19 global pandemic has caused significant disruption to the economy and financial markets globally, and the full extent of the potential impacts of COVID-19 are not yet known. Circumstances caused by the COVID-19 pandemic are complex, uncertain and rapidly evolving. Our results of operations, financial condition, and liquidity and capital resources have been adversely impacted by the COVID-19 pandemic, and the future impact of the pandemic on our financial condition or results of operations is difficult to predict.

As described herein, the Company is not currently engaged in active reinsurance underwriting and is running off the remaining unearned exposures it has ~~been reclassified~~reinsured. The Company's IIS unit does write limited primary insurance coverages that could be exposed to ~~conform~~COVID-19 claims. While we assess our exposure to ~~this new presentation.~~COVID-19 insurance and reinsurance claims on our existing insurance exposures and remaining reinsurance exposures as limited and immaterial, given the uncertainty surrounding the COVID-19 pandemic and its impact on the insurance industry, our preliminary estimates of losses and loss adjustment expenses and estimates of reinsurance recoverable arising from the COVID-19 pandemic may materially change. The Company has not received any COVID-19 claims to date. Unanticipated issues relating to claims and coverage may emerge, which could adversely affect our business by increasing the scope of coverage beyond our intent and/or increasing the frequency and severity of claims.

Due to the change in fair value of our investments caused by the COVID-19 pandemic, we and our reinsurance subsidiaries may need additional capital to maintain compliance with regulatory capital requirements and/or be required to post additional collateral under existing reinsurance arrangements, which could reduce our liquidity. In addition, the Company may experience a reduction in the amount of available distribution or dividend capacity from its regulated reinsurance subsidiaries, which would also reduce liquidity.

Due in large part to the uncertainty caused by the COVID-19 pandemic in global financial markets, during the three months ended March 31, 2020, the Company's investment portfolio experienced significant unrealized losses (largely due to widening credit spreads on fixed income investments), increased volatility, heightened credit risk, and declines in yields on its fixed income investments. The Company's investment portfolio may continue to be adversely impacted by unfavorable market conditions caused by the COVID-19 pandemic, which could cause continued volatility in our results of operations and negatively impact our financial condition.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

2. Significant Accounting Policies

There have been no material changes to ~~our~~the significant accounting policies as described in ~~our~~the Company's Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 except for the following:

Recently Adopted Accounting Standards Updates

~~Improvements~~Changes to ~~Non-employee Share-Based Payment Accounting~~the Disclosure Requirements for Fair Value Measurement

In ~~June~~August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ~~2018-07 guidance that simplifies~~2018-13 for changes to the ~~accounting~~disclosure framework related to Topic 820 which amends the disclosure requirements for ~~share-based payments granted to non-employees~~fair value measurement. The following disclosure requirements were removed from Topic 820: (i) amount of and reasons for ~~goods~~transfers between Level 1 and ~~services. Under the guidance, most~~Level 2 of the ~~guidance on such payments~~fair value hierarchy, (ii) policy for timing of transfers between levels, and (iii) valuation processes for Level 3 fair value measurements. The amendments clarify that the measurement uncertainty disclosure is to ~~non-employees~~communicate information about the uncertainty in measurement as of the reporting date. The following disclosure requirements were added to Topic 820: (i) changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period; and (ii) range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be ~~aligned with~~a more reasonable and rational method to reflect the ~~requirements for share-based payments granted~~distribution of unobservable inputs used to employees as the board viewed the awards to both employees and non-employees to be economically similar and that two different accounting models are not justified. The Company currently measures directors’ share-based payment awards atdevelop Level 3 fair value ~~as at their grant date; therefore the adoption of this standard on January 1, 2019 did not have any impact on the Company’s Condensed Consolidated Financial Statements.~~measurements.

~~Codification Improvements~~

In July 2018, the FASB issued ASU 2018-09 which includes clarifications to existing codifications or corrections of unintended application of guidance that is not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The amendments in this update include items raised for board consideration through the codification's feedback system that met the scope of this project, making due process necessary. The amendments affect a wide variety of topics in the codification. The amendments apply to all reporting entities within the scope of the affected accounting guidance. None of the topics deemed applicable upon adoption of this standard on January 1, 2019 have a material impact in the Company's interim consolidated financial statements.

~~Topic 842, Leases~~

In July 2018, the FASB issued ASU 2018-11 for targeted improvements related to ASU 2016-02 which provides entities with an additional transition method to apply the new standard. Under the new optional transition method, an entity initially applies Accounting Standards Codification ("ASC") 842 at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Topic 842 becameUpdate are effective for the Company during the first quarter of 2019 and was applied using a modified retrospective approach by electing the additional transition method permitted by ASU 2018-11. Under the additional transition method, the Company's reporting for the comparative periods presented in its financial statements will be in accordance with the pre-effective date lease accounting requirements under Topic 840.

The Company adopted Topic 842 effective on January 1, 2019, by electing as a package the practical expedients permitted under the transition guidance of Topic 842, and applied consistently to all leases that had commenced before the effective date of adoption. The package of practical expedients allowed the Company not to reassess the following: whether any expired or existing contracts are or contain leases; the lease classification for any expired or existing leases; and initial direct costs for any existing leases. In addition to electing the package of practical expedients, the Company made an accounting policy election to account for non-lease components separately from lease components. Furthermore, the Company made an accounting policy election not to record leases with an initial term of twelve months or less in the Company's Condensed Consolidated Balance Sheets. The Company did not enter into any new lease arrangements during the three months ended ~~March 31, 2019~~.

The Company's future lease obligations of approximately $2,998 was calculated based on the present value of future annual rental commitments excluding taxes, insurance and other operating costs for non-cancellable operating leases discounted using the Company's secured incremental borrowing rate. This amount has been recognized on the Company's Condensed Consolidated Balance Sheets as a lease liability of $2,998 within accrued expenses and other liabilities with an equivalent amount for the right-of-use asset presented as part of other assets. However, under this guidance, the Company has continued to recognize the related leasing expense on a straight-line basis over the lease term in the Company's Condensed Consolidated Statements of Income. For the three months ended ~~March 31, 2019~~, the Company recognized total lease expenses of $421 in the Company's Condensed Consolidated Statements of Income. The operating cash outflows from operating leases included in the measurement of the lease liability during the three months ended March 31, 2019 was $341. Therefore, the adoption of this standard on January 1, 2019 has impacted the Company’s Condensed Consolidated Balance Sheets but did not have any impact on its results of operations or cash flows.

~~Please refer to~~ ~~"Note 10. Commitments and Contingencies b) Operating Lease Commitments"~~ ~~for further disclosures regarding the impact of the adoption of Topic 842 in the first quarter of 2019.~~

~~Premium Amortization on Purchased Callable Debt Securities~~

In March 2017, the FASB issued ASU 2017-08 to amend the amortization period for certain purchased callable debt securities held at a premium. Current GAAP excludes certain callable debt securities from consideration of early repayment of principal even if the holder is certain that the call will be exercised. As a result, upon the exercise of a call on a callable debt security held at a premium, the unamortized premium is recorded as a loss in earnings.The amendments in ASU 2017-08 affect all entities that hold investments in callable debt securities that have an amortized cost basis in excess of the amount that is repayable by the issuer at the earliest call date. The amendments shorten the amortization period for certain callable debt securities held at a premium and require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. For public business entities, the amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, ~~2018.~~2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted upon issuance of this Update. An entity ~~should apply the amendments on a~~is permitted to early adopt any removed or modified ~~retrospective basis through a cumulative-effect adjustment directly to retained earnings as~~disclosures upon issuance of ~~the~~

~~MAIDEN HOLDINGS, LTD.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~(in thousands of U.S. dollars, except share~~this Update and ~~per share data)~~

~~2. Significant Accounting Policies (continued)~~

~~beginning~~delay adoption of the ~~period of adoption. Additionally,~~additional disclosures until their effective date. These amendments only impact disclosures made in ~~the period of adoption, an entity should provide disclosures about a change in accounting principle.~~

The Company holds a number of fixed maturities with callable features on its Condensed Consolidated Balance Sheets and this includes certain securities that have been purchased at a premium that are being amortized to their contractual maturity dates. The Company has always handled the amortization of any premiums by amortizing to the earliest effective maturity;"Note 5. Fair Value Measurements" therefore, the adoption of this ~~guidance~~standard on January 1, ~~2019~~2020 did not ~~have any~~ impact ~~on its Condensed Consolidated Financial Statements.~~the Company’s consolidated balance sheets, results of operations or cash flows.

Recently Issued Accounting Standards Not Yet Adopted

Accounting for Measurement of Credit Losses on Financial Instruments

In ~~April 2019,~~June 2016, the FASB issued ASU ~~2019-04 for targeted improvements related to ASU~~ 2016-13 ""Financial ~~Instruments -~~Instruments: Credit Losses (Topic 326) ~~- Measurement of Credit Losses on Financial Instruments~~" ~~" which replaces~~replacing the "incurred loss" impairment methodology with an approach based on "expected losses" to estimate credit losses on certain types of financial instruments and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The guidance requires financial assets ~~measured at amortized cost~~ to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the ~~amortized~~ cost of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. ~~The Update~~ASU 2016-13 also modified the accounting for available-for-sale ("AFS") debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial ~~Instruments—~~Instruments: Credit ~~Losses—~~Losses Available-for-Sale Debt Securities. Credit losses relating to AFS debt securities will be recorded through an allowance for credit ~~losses.~~losses rather than under the current other-than-temporarily impaired ("OTTI") methodology.

~~The codification~~In April 2019, the FASB issued ASU 2019-04 for targeted improvements inrelated to ASU ~~2019-04~~2016-13 which clarify that an entity should include all expected recoveries ~~when estimating~~in its estimate of the allowance for credit losses. The amendments specify that expected recoveries of amounts previously written off and expected to be written off should be included in the valuation account and should not exceed the aggregate of amounts previously written off and expected to be written off by the entity. In addition, for collateral dependent financial assets, the amendments ~~clarify~~mandate that an allowance for credit losses that is added to the amortized cost basis of the financial ~~asset(s)~~asset should not exceed amounts previously written off. ~~The amendment~~It also clarifies FASB’s intent to include all reinsurance recoverables ~~that are~~ within the scope of Topic 944 to be within the scope of Subtopic 326-20, regardless of the measurement basis of those ~~recoverables.The~~recoverables. The Company's reinsurance balances receivable and reinsurance recoverable on unpaid losses are its most significant financial assets within the scope of ASU 2016-13.

The guidance is effective for public business entities, excluding entities eligible to be smaller reporting companies ("SRCs") as defined by the SEC, for annual periods beginning after December 15, 2019, and interim periods therein. The guidance is effective for all other entities, including public entities eligible to be SRCs, for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. As of December 31, 2019, the Company qualified for SRC status, as determined on the last business day of its most recent second quarter, and is ~~currently evaluating~~thus eligible to follow the reporting deadlines and effective dates applicable to SRCs. Therefore Topic 326 will not be effective until the 2023 fiscal year. The Company continues to evaluate the impact of this guidance on its results of operations, financial condition and liquidity.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

3. Segment Information

The Company currently has ~~two~~2 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 located primarily in Europe. Our AmTrust Reinsurance segment includes all business ceded to ~~our wholly owned subsidiary,~~ Maiden ~~Bermuda, from~~Reinsurance by AmTrust, primarily the AmTrust Quota Share and the European Hospital Liability Quota ~~Share.~~Share, which are in run-off effective January 1, 2019. In addition to our reportable segments, the results of operations of the former NGHC Quota Share segment which was commuted in November 2019 and the remnants of our retroceded U.S. treaty business have been included in the "Other" category. Please refer to "Note 8.10. Related Party Transactions" for additional information.

~~As a result of the strategic decision to divest all of the Company's U.S. treaty reinsurance operations as discussed in "Note 1. Basis of Presentation" and "Note 6. Discontinued Operations~~", the Company revised the composition of its reportable segments. Previously, the underwriting results associated with the discontinued operations of the Company's U.S. treaty reinsurance business were included within the Diversified Reinsurance segment and the operating results associated with the remnants of the U.S. excess and surplus business were included within the Other category. These are now excluded and all prior periods presented have been reclassified to conform to this new presentation.

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~~applied; however general corporate expenses are not allocated 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, funds withheld receivable, ~~loans~~loan to related party and restricted cash ~~and cash equivalents~~ and investments. All remaining assets are allocated to Corporate.

As discussed in "Note 1. Basis of Presentation" and in "Note 8.10. Related Party Transactions", the Partial Termination Amendment and the termination of the remaining ~~quota share contracts~~business with AmTrust effective January 1, 2019 resulted toin a significant reduction in gross premiums ~~written~~written. This was due to the return of unearned premium on certain lines covered by the Partial Termination ~~Agreement~~Amendment, with no new business written ~~in 2019 due to~~since 2018 as a result of the termination of the ~~quota share contracts.~~

AmTrust Quota Share and the European Hospital Liability Quota Share. The following tables summarize ~~our reporting segment's~~the underwriting results of our reportable segments and the reconciliation of our reportable segments and Other category's underwriting results to ~~our~~ consolidated net income (loss) ~~income~~ from continuing operations:

For the Three Months Ended March 31, 2019 Diversified Reinsurance AmTrust Reinsurance Other Total
Gross premiums written $ 15,338
$ (576,477 ) $ —
$ (561,139 )
Net premiums written $ 14,947
$ (576,477 ) $ —
$ (561,530 )
Net premiums earned $ 25,292
$ 157,810
$ —
$ 183,102
Other insurance revenue 750
—
—
750
Net loss and loss adjustment expenses ("loss and LAE") (14,391 ) (138,070 ) (228 ) (152,689 )
Commission and other acquisition expenses (9,261 ) (60,356 ) —
(69,617 )
General and administrative expenses (3,031 ) (1,266 ) —
(4,297 )
Underwriting loss $ (641 ) $ (41,882 ) $ (228 ) (42,751 )
Reconciliation to net loss from continuing operations
Net investment income and realized losses on investment 20,921
Interest and amortization expenses (4,829 )
Foreign exchange and other gains 4,979
Other general and administrative expenses (11,642 )
Income tax benefit 38
Net loss from continuing operations $ (33,284 )

Net loss and LAE ratio⁽¹⁾
55.3 % 87.5 % 83.0 %
Commission and other acquisition expense ratio⁽²⁾
35.6 % 38.2 % 37.9 %
General and administrative expense ratio⁽³⁾
11.6 % 0.8 % 8.7 %
Expense ratio⁽⁴⁾
47.2 % 39.0 % 46.6 %
Combined ratio⁽⁵⁾
102.5 % 126.5 % 129.6 %



For the Three Months Ended March 31, 2020	Diversified Reinsurance			AmTrust Reinsurance			Total
Gross premiums written	$	11,734		$	—		$	11,734
Net premiums written	$	10,372		$	—		$	10,372
Net premiums earned	$	12,531		$	18,684		$	31,215
Other insurance revenue	408			—			408
Net loss and loss adjustment expenses ("loss and LAE")	(7,041		)	(14,045		)	(21,086		)
Commission and other acquisition expenses	(4,979		)	(6,994		)	(11,973		)
General and administrative expenses	(1,613		)	(644		)	(2,257		)
Underwriting loss	$	(694	)	$	(2,999	)	(3,693		)
Reconciliation to net income from continuing operations
Net investment income and realized gains on investment							29,002
Total other-than-temporary impairment losses							(1,506		)
Interest and amortization expenses							(4,831		)
Foreign exchange and other gains, net							8,197
Other general and administrative expenses							(6,293		)
Income tax expense							(15		)
Net income from continuing operations							$	20,861

Net loss and LAE ratio⁽¹⁾	54.4		%	75.2		%	66.7		%
Commission and other acquisition expense ratio⁽²⁾	38.5		%	37.4		%	37.9		%
General and administrative expense ratio⁽³⁾	12.5		%	3.5		%	27.0		%
Expense ratio⁽⁴⁾	51.0		%	40.9		%	64.9		%
Combined ratio⁽⁵⁾	105.4		%	116.1		%	131.6		%

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

3. Segment Information (continued)


For the Three Months Ended March 31, 2018	Diversified Reinsurance			AmTrust Reinsurance			Other		Total
For the Three Months Ended March 31, 2019												Diversified Reinsurance			AmTrust Reinsurance			Other			Total
Gross premiums written	$	49,400		$	573,928		$	—	$	623,328		$	15,338		$	(576,477	)	$	—		$	(561,139	)
Net premiums written	$	48,271		$	574,380		$	—	$	622,651		$	14,947		$	(576,477	)	$	—		$	(561,530	)
Net premiums earned	$	25,515		$	491,298		$	—	$	516,813		$	25,292		$	157,810		$	—		$	183,102
Other insurance revenue	3,726			—			—		3,726			812			—			—			812
Net loss and LAE	(15,899		)	(337,307		)	—		(353,206		)	(14,391		)	(138,070		)	(228		)	(152,689		)
Commission and other acquisition expenses	(9,312		)	(157,316		)	—		(166,628		)	(9,261		)	(60,356		)	—			(69,617		)
General and administrative expenses	(4,481		)	(920		)	—		(5,401		)	(3,031		)	(1,266		)	—			(4,297		)
Underwriting loss	$	(451	)	$	(4,245	)	$	—	(4,696		)	$	(579	)	$	(41,882	)	$	(228	)	(42,689		)
Reconciliation to net income from continuing operations
Net investment income and realized gains on investment									33,226
Reconciliation to net loss from continuing operations
Net investment income and realized losses on investment																					20,921
Interest and amortization expenses									(4,829		)										(4,829		)
Foreign exchange losses									(2,407		)
Foreign exchange and other gains, net																					4,979
Other general and administrative expenses									(10,270		)										(12,322		)
Income tax benefit									1,324												38
Net income from continuing operations									$	12,348
Net loss from continuing operations																					$	(33,902	)

Net loss and LAE ratio⁽¹⁾	54.4		%	68.7		%			67.9		%	55.1		%	87.5		%				83.0		%
Commission and other acquisition expense ratio⁽²⁾	31.8		%	32.0		%			32.0		%	35.5		%	38.2		%				37.9		%
General and administrative expense ratio⁽³⁾	15.3		%	0.2		%			3.0		%	11.6		%	0.8		%				9.0		%
Expense ratio⁽⁴⁾	47.1		%	32.2		%			35.0		%	47.1		%	39.0		%				46.9		%
Combined ratio⁽⁵⁾	101.5		%	100.9		%			102.9		%	102.2		%	126.5		%				129.9		%


(1)	Calculated by dividing net loss and LAE by the sum of net premiums earned and other insurance revenue.


(2)	Calculated by dividing commission and other acquisition expenses by the sum of net premiums earned and other insurance revenue.


(3)	Calculated by dividing general and administrative expenses by the sum of 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 net loss and LAE ratio and the expense ratio.



For the Three Months Ended March 31, 2020	Diversified Reinsurance	AmTrust Reinsurance	Other	Total



For the Three Months Ended March 31, 2019	Diversified Reinsurance	AmTrust Reinsurance	Other	Total



~~For the Three Months Ended March 31, 2018~~	~~Diversified Reinsurance~~	~~AmTrust Reinsurance~~	~~Other~~	~~Total~~

The following tables summarize the financial position of ~~our~~the Company's reportable segments including the reconciliation to ~~our~~the Company's consolidated total assets at March 31, ~~2019~~2020 and December 31, ~~2018:~~2019:


March 31, 2019	Diversified Reinsurance		AmTrust Reinsurance		Total
March 31, 2020							Diversified Reinsurance		AmTrust Reinsurance		Total
Total assets - reportable segments	$	192,179	$	3,844,444	$	4,036,623	$	163,684	$	2,643,073	$	2,806,757
Corporate assets	—		—		349,281		—		—		515,000
Assets held for sale	—		—		177,452
Total Assets	$	192,179	$	3,844,444	$	4,563,356	$	163,684	$	2,643,073	$	3,321,757

December 31, 2018	Diversified Reinsurance		AmTrust Reinsurance		Total
December 31, 2019							Diversified Reinsurance		AmTrust Reinsurance		Total
Total assets - reportable segments	$	190,437	$	4,495,740	$	4,686,177	$	167,845	$	2,843,802	$	3,011,647
Corporate assets	—		—		426,808		—		—		556,549
Assets held for sale	—		—		174,475
Total Assets	$	190,437	$	4,495,740	$	5,287,460	$	167,845	$	2,843,802	$	3,568,196

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

3. Segment Information (continued)

The following ~~table~~tables set forth financial information relating to net premiums written by major line of business and reportable segment for the three months ended March 31, ~~2019~~2020 and ~~2018:~~

For the Three Months Ended March 31, 2019 2018
Net premiums written Total Total
Diversified Reinsurance
International $ 14,947
$ 48,230
Other —
41
Total Diversified Reinsurance 14,947
48,271
AmTrust Reinsurance
Small Commercial Business (342,681 ) 367,754
Specialty Program (12,608 ) 89,131
Specialty Risk and Extended Warranty (221,188 ) 117,495
Total AmTrust Reinsurance (576,477 ) 574,380
Total Net Premiums Written $ (561,530 ) $ 622,651

2019:

~~For the Three Months Ended March 31, 2019 2018~~



For the Three Months Ended March 31,	2020		2019
Net premiums written	Total		Total
Diversified Reinsurance
International	$	10,372	$	14,947
Total Diversified Reinsurance	10,372		14,947
AmTrust Reinsurance
Small Commercial Business	—		(342,681		)
Specialty Program	—		(12,608		)
Specialty Risk and Extended Warranty	—		(221,188		)
Total AmTrust Reinsurance	—		(576,477		)
Total Net Premiums Written	$	10,372	$	(561,530	)



For the Three Months Ended March 31,	2020	2019

The following ~~table~~tables set forth financial information relating to net premiums earned by major line of business and reportable segment for the three months ended March 31, ~~2019~~2020 and ~~2018:~~2019:


For the Three Months Ended March 31,	2019				2018				2020				2019
Net premiums earned	Total		% of Total		Total		% of Total		Total		% of Total		Total		% of Total
Diversified Reinsurance
International	$	25,292	13.8	%	$	25,474	4.9	%	$	12,531	40.1	%	$	25,292	13.8	%
Other	—		—	%	41		—	%
Total Diversified Reinsurance	25,292		13.8	%	25,515		4.9	%	12,531		40.1	%	25,292		13.8	%
AmTrust Reinsurance
Small Commercial Business	39,455		21.6	%	315,709		61.1	%	939		3.0	%	39,455		21.6	%
Specialty Program	76,221		41.6	%	88,494		17.1	%	75		0.3	%	76,221		41.6	%
Specialty Risk and Extended Warranty	42,134		23.0	%	87,095		16.9	%	17,670		56.6	%	42,134		23.0	%
Total AmTrust Reinsurance	157,810		86.2	%	491,298		95.1	%	18,684		59.9	%	157,810		86.2	%
Total Net Premiums Earned	$	183,102	100.0	%	$	516,813	100.0	%	$	31,215	100.0	%	$	183,102	100.0	%

~~For the Three Months Ended March 31, 2019 2018~~



For the Three Months Ended March 31,	2020	2019

~~MAIDEN HOLDINGS, LTD.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~(in thousands of U.S. dollars, except share and per share data)~~

4. Investments


a)	Fixed Maturities

The original or amortized cost, estimated fair value and gross unrealized gains and losses of fixed maturities at March 31, ~~2019~~2020 and December 31, ~~2018~~2019 are as follows:


March 31, 2019	Original or amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
AFS fixed maturities:
March 31, 2020										Original or amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
U.S. treasury bonds	$	116,009	$	654	$	(1	)	$	116,662	$	84,959	$	1,185	$	(1	)	$	86,143
U.S. agency bonds – mortgage-backed	1,071,920		4,743		(13,341		)	1,063,322		495,747		19,510		(132		)	515,125
U.S. agency bonds – other	19,871		4		(95		)	19,780
Non-U.S. government and supranational bonds	34,120		158		(1,058		)	33,220		7,290		93		(200		)	7,183
Asset-backed securities	89,419		1,325		(379		)	90,365		187,255		495		(14,715		)	173,035
Corporate bonds	1,742,790		30,010		(21,106		)	1,751,694		755,438		9,336		(37,716		)	727,058
Municipal bonds	56,852		42		(3		)	56,891
Total fixed maturity investments	$	3,130,981	$	36,936	$	(35,983	)	$	3,131,934	$	1,530,689	$	30,619	$	(52,764	)	$	1,508,544

December 31, 2018 Original or amortized cost Gross unrealized gains Gross unrealized losses Fair value
AFS fixed maturities:
U.S. treasury bonds $ 138,625
$ 448
$ (1 ) $ 139,072
U.S. agency bonds – mortgage-backed 1,485,716
3,491
(36,073 ) 1,453,134
U.S. agency bonds – other 129,741
40
(548 ) 129,233
Non-U.S. government and supranational bonds 11,212
66
(1,206 ) 10,072
Asset-backed securities 216,072
425
(1,415 ) 215,082
Corporate bonds 1,128,614
6,525
(30,164 ) 1,104,975
Total AFS fixed maturities 3,109,980
10,995
(69,407 ) 3,051,568
HTM fixed maturities:
Corporate bonds 957,845
3,872
(20,990 ) 940,727
Municipal bonds 57,836
—
(551 ) 57,285
Total HTM fixed maturities 1,015,681
3,872
(21,541 ) 998,012
Total fixed maturity investments $ 4,125,661
$ 14,867
$ (90,948 ) $ 4,049,580

The Company has historically classified its fixed maturity investments as either AFS or held-to-maturity ("HTM"). The AFS portfolio is reported at fair value. The HTM portfolio at December 31, 2018 included securities for which we had the ability and intent to hold to maturity or redemption and was reported at amortized cost. When a security transferred from AFS to HTM, the fair value at the time of transfer, adjusted for subsequent amortization, becomes the security's amortized cost. When a security transferred from HTM to AFS, the security’s amortized cost basis carries over to the AFS category for the subsequent amortization of the historical premium or discount, comparisons of fair value and amortized cost for the purpose of determining unrealized holding gains and losses and required disclosures of amortized cost. The difference between the security’s amortized cost and fair value at the date of transfer into the AFS portfolio will be recognized as an unrealized gain or loss and recorded in accumulated other comprehensive income ("AOCI").

Due to the termination of both AmTrust Reinsurance quota share contracts effective January 1, 2019, the Company no longer believes that it has the positive ability to hold the securities in the HTM portfolio to maturity since this portfolio serves as part of the collateral for the AmTrust Reinsurance segment loss reserves. Therefore, the Company has reclassified and transferred all HTM securities to the AFS portfolio at their fair market value as at March 31, 2019. The carrying value of the HTM securities at the time of transfer was $1,011,878 and the related unrealized gains of $14,230 have been reported in the fair value of the AFS securities as well as reported as a component of AOCI as at March 31, 2019.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

4. Investments (continued)



December 31, 2019	Original or amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
U.S. treasury bonds	$	94,921	$	704	$	—		$	95,625
U.S. agency bonds – mortgage-backed	533,296		6,717		(1,291		)	538,722
Non-U.S. government and supranational bonds	11,796		294		(91		)	11,999
Asset-backed securities	187,881		821		(532		)	188,170
Corporate bonds	981,441		31,140		(15,725		)	996,856
Municipal bonds	4,091		55		—			4,146
Total fixed maturity investments	$	1,813,426	$	39,731	$	(17,639	)	$	1,835,518

The contractual maturities of our fixed maturities are shown in the table below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	AFS fixed maturities
March 31, 2019	Amortized cost		Fair value
Maturity
March 31, 2020					Amortized cost		Fair value
Due in one year or less	$	68,480	$	68,406	$	124,415	$	123,759
Due after one year through five years	940,251		942,670		527,356		508,288
Due after five years through ten years	958,614		964,887		195,916		188,337
Due after ten years	2,297		2,284
	1,969,642		1,978,247		847,687		820,384
U.S. agency bonds – mortgage-backed	1,071,920		1,063,322		495,747		515,125
Asset-backed securities	89,419		90,365		187,255		173,035
Total fixed maturities	$	3,130,981	$	3,131,934
Total fixed maturity investments					$	1,530,689	$	1,508,544

The following tables summarize fixed maturities 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:


	Less than 12 Months					12 Months or More					Total					Less than 12 Months					12 Months or More					Total
March 31, 2019	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
Fixed maturities
March 31, 2020																Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
U.S. treasury bonds	$	19,990	$	(1	)	$	—	$	—		$	19,990	$	(1	)	$	9,999	$	(1	)	$	—	$	—		$	9,999	$	(1	)
U.S. agency bonds – mortgage-backed	—		—			776,816		(13,341		)	776,816		(13,341		)	16,204		(132		)	—		—			16,204		(132		)
U.S. agency bonds – other	—		—			17,890		(95		)	17,890		(95		)
Non–U.S. government and supranational bonds	11,710		(156		)	5,107		(902		)	16,817		(1,058		)
Non-U.S. government and supranational bonds																2,307		(180		)	162		(20		)	2,469		(200		)
Asset-backed securities	22,302		(299		)	9,910		(80		)	32,212		(379		)	142,916		(12,976		)	16,154		(1,739		)	159,070		(14,715		)
Corporate bonds	174,356		(6,996		)	388,853		(14,110		)	563,209		(21,106		)	245,591		(18,440		)	115,797		(19,276		)	361,388		(37,716		)
Municipal bonds	—		—			6,197		(3		)	6,197		(3		)
Total temporarily impaired fixed maturities	$	228,358	$	(7,452	)	$	1,204,773	$	(28,531	)	$	1,433,131	$	(35,983	)	$	417,017	$	(31,729	)	$	132,113	$	(21,035	)	$	549,130	$	(52,764	)

At March 31, ~~2019,~~2020, there were ~~approximately 207~~184 securities in an unrealized loss position with a fair value of ~~$1,433,131~~$549,130 and unrealized losses of ~~$35,983.~~$52,764. Of these securities, there were ~~136~~50 securities that have been in an unrealized loss position for 12twelve months or greater with a fair value of ~~$1,204,773~~$132,113 and unrealized losses of ~~$28,531.~~$21,035.


	Less than 12 Months					12 Months or More					Total					Less than 12 Months					12 Months or More					Total
December 31, 2018	Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
Fixed maturities
U.S. treasury bonds	$	125	$	(1	)	$	—	$	—		$	125	$	(1	)
December 31, 2019																Fair value		Unrealized losses			Fair value		Unrealized losses			Fair value		Unrealized losses
U.S. agency bonds – mortgage-backed	416,147		(6,624		)	838,091		(29,449		)	1,254,238		(36,073		)	$	31,401	$	(257	)	$	85,008	$	(1,034	)	$	116,409	$	(1,291	)
U.S. agency bonds – other	26,838		(27		)	17,462		(521		)	44,300		(548		)
Non-U.S. government and supranational bonds	4,024		(252		)	3,770		(954		)	7,794		(1,206		)	1,824		(22		)	701		(69		)	2,525		(91		)
Asset-backed securities	74,801		(1,196		)	5,793		(219		)	80,594		(1,415		)	60,863		(240		)	17,594		(292		)	78,457		(532		)
Corporate bonds	1,052,765		(30,334		)	286,542		(20,820		)	1,339,307		(51,154		)	29,692		(305		)	159,216		(15,420		)	188,908		(15,725		)
Municipal bonds	20,379		(261		)	36,906		(290		)	57,285		(551		)
Total temporarily impaired fixed maturities	$	1,595,079	$	(38,695	)	$	1,188,564	$	(52,253	)	$	2,783,643	$	(90,948	)	$	123,780	$	(824	)	$	262,519	$	(16,815	)	$	386,299	$	(17,639	)

At December 31, 2019, there were 104 securities in an unrealized loss position with a fair value of $386,299 and unrealized losses of $17,639. Of these securities, there were 67 securities that have been in an unrealized loss position for twelve months or greater with a fair value of $262,519 and unrealized losses of $16,815.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

4. Investments (continued)

At December 31, 2018, there were approximately 348 securities in an unrealized loss position with a fair value of $2,783,643 and unrealized losses of $90,948. Of these securities, there were 103 securities that have been in an unrealized loss position for 12 months or greater with a fair value of $1,188,564 and unrealized losses of $52,253.

Other-than-temporarily impaired ("~~OTTI")~~

The Company performs quarterly reviews of its fixed maturities 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 March 31, ~~2019,~~2020, we ~~have~~ determined that ~~the~~ unrealized losses on fixed maturities were primarily due to changes in interest rates ~~rising~~ as well as the impact of foreign exchange rate changes on certain foreign currency denominated ~~AFS~~ fixed maturities since their date of purchase. All fixed maturity securities ~~in the investment portfolio~~ continue to pay the expected coupon payments under the contractual terms of the securities. Any credit-related impairment related to fixed maturity securities that the Company does not plan to sell and for which the Company is not more likely than not to be required to sell is recognized in net earnings, with the non-credit related impairment recognized in comprehensive earnings.

Based on our analysis, our fixed maturity portfolio is of high credit quality and we believe ~~we will recover~~ the amortized cost basis of ~~our fixed maturity securities. We~~the securities will ultimately be recovered. The Company continually ~~monitor~~monitors the credit quality of ~~our~~the fixed maturity investments to assess if it is probable that weit will receive ~~our~~ contractual or estimated cash flows in the form of principal and interest. ~~Therefore, there were no OTTI losses recognized in earnings on the fixed maturity portfolio in~~For the three months ended March 31, ~~2019 and March 31, 2018, respectively.~~2020, we recognized $1,506 (2019 - $0) in OTTI charges in earnings on 2 fixed maturity securities.

The following ~~summarizes~~tables summarize the credit ratings of our fixed ~~maturities:~~maturities as at March 31, 2020 and December 31, 2019:


Ratings⁽¹⁾ at March 31, 2019	Amortized cost		Fair value		% of Total fair value
March 31, 2020							Amortized cost		Fair value		% of Total fair value
U.S. treasury bonds	$	116,009	$	116,662	3.7	%	$	84,959	$	86,143	5.7	%
U.S. agency bonds	1,091,791		1,083,102		34.6	%	495,747		515,125		34.2	%
AAA	117,158		117,105		3.7	%	97,181		92,229		6.1	%
AA+, AA, AA-	163,617		163,396		5.2	%	87,667		82,028		5.4	%
A+, A, A-	917,597		923,146		29.5	%	357,080		343,162		22.8	%
BBB+, BBB, BBB-	678,411		679,438		21.7	%	382,271		371,173		24.6	%
BB+ or lower	46,398		49,085		1.6	%	25,784		18,684		1.2	%
Total fixed maturities(1)	$	3,130,981	$	3,131,934	100.0	%	$	1,530,689	$	1,508,544	100.0	%


Ratings⁽¹⁾ at December 31, 2018	Amortized cost		Fair value		% of Total fair value
December 31, 2019							Amortized cost		Fair value		% of Total fair value
U.S. treasury bonds	$	138,625	$	139,072	3.4	%	$	94,921	$	95,625	5.2	%
U.S. agency bonds	1,615,457		1,582,367		39.1	%	533,296		538,722		29.4	%
AAA	137,172		135,119		3.3	%	99,212		99,542		5.4	%
AA+, AA, AA-	183,142		178,674		4.4	%	101,491		101,467		5.5	%
A+, A, A-	1,132,993		1,113,710		27.5	%	540,002		549,479		29.9	%
BBB+, BBB, BBB-	866,043		848,348		21.0	%	438,731		445,202		24.3	%
BB+ or lower	52,229		52,290		1.3	%	5,773		5,481		0.3	%
Total fixed maturities(1)	$	4,125,661	$	4,049,580	100.0	%	$	1,813,426	$	1,835,518	100.0	%


(1)	~~Based~~Ratings above are based on Standard & Poor’s ("S&P"), or equivalent, ~~ratings~~ratings.


b)	Other Investments

The table below shows ~~our portfolio~~the fair value of the Company's other ~~investments:~~investments as at March 31, 2020 and December 31, 2019:


	March 31, 2019				December 31, 2018				March 31, 2020				December 31, 2019
	Fair value		% of Total fair value		Fair value		% of Total fair value		Fair value		% of Total fair value		Fair value		% of Total fair value
Investment in limited partnerships	$	3,281	13.3	%	$	3,833	16.2	%	$	3,092	63.2	%	$	3,077	63.1	%
Investment in special purpose vehicles focused on lending activities	19,612		79.4	%	18,383		77.5	%
Other	1,800		7.3	%	1,500		6.3	%	1,800		36.8	%	1,800		36.9	%
Total other investments	$	24,693	100.0	%	$	23,716	100.0	%	$	4,892	100.0	%	$	4,877	100.0	%

The Company also holds other investments made by special purpose vehicles related to lending activities of $29,196 at March 31, 2020 (December 31, 2019 - $26,871). These investments are carried at cost less impairment, if any, with any indication of impairment recognized in income when determined. Because these investments are carried at cost, they are not included in the table above. Please see "Note 5 - Fair Value Measurements" for additional information. The Company has remaining unfunded commitments on its investment in limited partnerships of $333 at March 31, 2020 (December 31, 2019 - $340). The Company also has a remaining

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

~~4. Investments (continued)~~

~~The Company has a remaining unfunded commitment on its investment in limited partnerships of approximately $414 at March 31, 2019 (December 31, 2018 - $414). The Company also has a remaining~~ unfunded commitment on its investment in special purpose vehicles focused on lending activities of ~~approximately $7,551~~$1,296 at March 31, ~~2019~~2020 (December 31, ~~2018~~2019 - ~~$7,359)~~$767).

4. Investments (continued)


c)	Net Investment Income

Net investment income was derived from the following sources:


For the Three Months Ended March 31,	2019			2018
							For the Three Months Ended March 31,
							2020			2019
Fixed maturities	$	26,220		$	32,128		$	12,651		$	26,220
Funds withheld interest	4,537			59			3,853			4,537
Loan to related party	1,822			1,428			1,365			1,822
Cash and cash equivalents and other	275			368			496			275
	32,854			33,983			18,365			32,854
Investment expenses	(832		)	(1,114		)	(401		)	(832		)
Net investment income	$	32,022		$	32,869		$	17,964		$	32,022


d)	Realized Gains (Losses) ~~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~~tables show the net realized gains (losses) ~~gains~~ on investment included in the Condensed Consolidated Statements of Income:


For the Three Months Ended March 31, 2019	Gross gains		Gross losses			Net
AFS fixed maturities	$	2,424	$	(13,380	)	$	(10,956	)
For the Three Months Ended March 31, 2020									Gross gains		Gross losses			Net
Fixed maturities									$	10,932	$	(1	)	$	10,931
Other investments	—		(145		)	(145		)	107		—			107
Net realized gains (losses) on investment	$	2,424	$	(13,525	)	$	(11,101	)	$	11,039	$	(1	)	$	11,038

For the Three Months Ended March 31, 2018	Gross gains		Gross losses			Net
AFS fixed maturities	$	652	$	(1,777	)	$	(1,125	)
For the Three Months Ended March 31, 2019									Gross gains		Gross losses			Net
Fixed maturities									$	2,424	$	(13,380	)	$	(10,956	)
Other investments	1,482		—			1,482			—		(145		)	(145		)
Net realized gains (losses) on investment	$	2,134	$	(1,777	)	$	357		$	2,424	$	(13,525	)	$	(11,101	)

Proceeds from sales of ~~AFS~~ fixed maturities were ~~$84,361~~$224,471 for the three months ended March 31, ~~2019, respectively (2018~~2020 (2019 - ~~$80,240)~~$84,361). ~~Net unrealized gains (losses) on investments, including those allocated to discontinued operations and classified as held for sale, were as follows:~~

March 31, 2019 December 31, 2018
Fixed maturities $ 1,789
$ (59,729 )
Other investments —
—
Total net unrealized gains (losses) 1,789
(59,729 )
Deferred income tax (75 ) (33 )
Net unrealized gains (losses), net of deferred income tax $ 1,714
$ (59,762 )
Change, net of deferred income tax $ 61,476
$ (81,651 )

~~The portion of~~Net unrealized (losses) gains ~~recognized in net (loss) income for the three months ended~~on investments were as follows at March 31, 2020 and December 31, 2019, respectively:



	March 31, 2020			December 31, 2019
Fixed maturities	$	(22,144	)	$	22,092
Deferred income tax	19			(96		)
Net unrealized gains (losses), net of deferred income tax	$	(22,125	)	$	21,996
Change, net of deferred income tax	$	(44,121	)	$	81,758


e)	Restricted Cash and Cash Equivalents and Investments

The Company is required to provide collateral for its reinsurance liabilities under various reinsurance agreements and ~~2018 that~~utilizes trust accounts to collateralize business with reinsurance counterparties. The assets in trust as collateral are ~~related to other investments still held at the end~~primarily cash and highly rated fixed maturities. The fair values of ~~the reporting period~~these restricted assets were as ~~follows:~~

For the Three Months Ended March 31, 2019 2018
Net (losses) gains recognized in net (loss) income on other investments during the period $ (145 ) $ 1,482
Net realized gains recognized on other investments divested during the period (2 ) (592 )
Net unrealized (losses) gains recognized on other investments still held at end of period $ (147 ) $ 890

follows at March 31, 2020 and December 31, 2019:

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

~~4. Investments (continued)~~


e)	~~Restricted Cash and Cash Equivalents and Investments~~

We are required to maintain assets on deposit to support our reinsurance operations and to serve as collateral for our reinsurance liabilities under various reinsurance agreements. We also utilize trust accounts to collateralize business with our reinsurance counterparties. These trust accounts generally take the place of letter of credit requirements. The assets in trust as collateral are primarily cash and highly rated fixed maturities. The fair value of our restricted assets was as follows:


	March 31, 2019		December 31, 2018		March 31, 2020		December 31, 2019
Restricted cash – third party agreements	$	21,265	$	21,420	$	21,454	$	21,447
Restricted cash – related party agreements	21,069		108,728		96,449		37,634
Total restricted cash	42,334		130,148		117,903		59,081
Restricted investments – in trust for third party agreements at fair value (amortized cost: 2019 – $90,804; 2018 – $88,841)	90,880		89,596
Restricted investments AFS – in trust for related party agreements at fair value (amortized cost: 2019 – $2,846,867; 2018 – $2,855,050)	2,854,343		2,806,203
Restricted investments HTM – in trust for related party agreements at fair value (amortized cost: 2018 – $1,015,681)	—		998,012
Restricted investments – in trust for third party agreements at fair value (amortized cost: 2020 – $66,307; 2019 – $65,539)					66,369		65,678
Restricted investments – in trust for related party agreements at fair value (amortized cost: 2020 – $1,121,189; 2019 – $1,366,873)					1,113,184		1,382,994
Total restricted investments	2,945,223		3,893,811		1,179,553		1,448,672
Total restricted cash and investments	$	2,987,557	$	4,023,959	$	1,297,456	$	1,507,753

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

5. Fair Value of Financial Instruments

(a) Fair Values of Financial Instruments

Fair Value Measurements — ~~ASC~~Accounting Standards Codification ("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 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:

•

Level 1 — Valuations based on unadjusted quoted market prices for identical assets or liabilities that we have the ability to access. ~~Since~~Because 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: 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: an investment in preference shares of a start-up insurance producer.

The availability of observable inputs can vary 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 in the Level 1 hierarchy. The Company receives the quoted market prices from a third party nationally recognized 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 representative 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. 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.

~~MAIDEN HOLDINGS, LTD.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~(in thousands of U.S. dollars, except share and per share data)~~

~~5. Fair Value of Financial Instruments (continued)~~

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 March 31, ~~2019~~2020 and December 31, ~~2018.~~2019.

U.S. government and U.S. agency — Bonds issued by the U.S. Treasury, the Federal Home Loan Bank, the Federal Home Loan Mortgage Corporation, Government National Mortgage Association, Federal National Mortgage Association and the Federal Farm Credit Banks Funding Corporation. 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 securities are included in the Level 2 fair value hierarchy.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

5. Fair Value of Financial Instruments (continued)

Corporate and municipal bonds — Bonds issued by corporations, U.S. state and municipality entities or agencies that on acquisition are rated BBB-/Baa3 or higher. These securities are generally priced by independent pricing services. The credit spreads are sourced from broker/dealers, trade prices and the new issue market. Where pricing is unavailable from pricing services, ~~we obtain~~custodian pricing or non-binding quotes are obtained from ~~broker-dealers.~~broker-dealers to estimate fair values. As the significant inputs used to price corporate and municipal 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 included in the Level 2 fair value hierarchy.

Other investments — Includes unquoted investments comprised of investments in limited partnerships and other investments which includes investments in special purpose vehicles focused on lending activities as well as investments in start-up insurance entities. 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. The fair value of these investments are measured using the NAV practical expedient and therefore have not been categorized within the fair value hierarchy. If there is a reporting lag between the current period end and reporting date of the latest available fund valuation, ~~we estimate~~ fair values are estimated by starting with the most recently available valuation and adjusting for return estimates as well as any subscriptions and distributions that took place during the current period.

The ~~fair value of the~~ investments in special purpose vehicles focused on lending activities is initially at cost which approximates fair value. In some cases this initial period could be more than a year depending on the nature of the investment. Currently, all of our investments inmade by special purpose vehicles focused on lending activities are ~~held~~carried at cost ~~which approximates fair value. In subsequent measurement periods, the fair values~~less impairment, if any, with any indication of impairment recognized in income when determined. As these investments ~~may be determined using an internally developed discounted cash flow model. As the significant inputs used to price these securities~~ are ~~unobservable,~~carried at cost, they are not included in the fair value ~~of these investments are classified as Level 3.~~ hierarchy below.

The fair value of the ~~remaining other investments, primarily~~ start-up insurance entities ~~was~~are determined using recent private market transactions and as such, the fair value isof these investments are included in the Level 3 fair value hierarchy.

Cash and cash equivalents (including restricted amounts), accrued investment income, reinsurance balances receivable, and certain other assets and liabilities — The carrying values reported in the Condensed Consolidated Balance Sheets for these financial instruments approximate their fair value due to their short term nature and are classified aswithin the Level 2.2 fair value hierarchy.

Loan to related party, reinsurance recoverable on unpaid losses, and funds withheld receivable — The carrying ~~value reported in the Condensed Consolidated Balance Sheets for this financial instrument approximates its fair value and it is included in the Level 2 hierarchy.~~

~~Senior notes~~ —~~The amount~~values reported in the Condensed Consolidated Balance Sheets for these financial instruments approximate their fair value and are included in the Level 2 fair value hierarchy.

Senior notes —The carrying value for these financial instruments represents the ~~carrying~~principal value of the ~~notes.~~notes less any unamortized issuance costs. The fair values of the senior notes are based on indicative market pricing obtained from a third-party service provider and as such, are included in the Level 2 fair value hierarchy.

~~MAIDEN HOLDINGS, LTD.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~(in thousands of U.S. dollars, except share and per share data)~~

~~5. Fair Value of Financial Instruments (continued)~~

(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.

At March 31, ~~2019~~2020 and December 31, ~~2018, we~~2019, the Company classified ~~our~~its financial instruments measured at fair value on a recurring basis in the following valuation hierarchy:


March 31, 2019	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Fair Value Based on NAV Practical Expedient			Total Fair Value
AFS fixed maturities
March 31, 2020																Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Fair Value Based on NAV Practical Expedient			Total Fair Value
Fixed maturities
U.S. treasury bonds	$	116,662		$	—		$	—		$	—		$	116,662		$	86,143		$	—		$	—		$	—		$	86,143
U.S. agency bonds – mortgage-backed	—			1,063,322			—			—			1,063,322			—			515,125			—			—			515,125
U.S. agency bonds – other	—			19,780			—			—			19,780
Non-U.S. government and supranational bonds	—			33,220			—			—			33,220			—			7,183			—			—			7,183
Asset-backed securities	—			90,365			—			—			90,365			—			173,035			—			—			173,035
Corporate bonds	—			1,751,694			—			—			1,751,694			—			727,058			—			—			727,058
Municipal bonds	—			56,891			—			—			56,891
Other investments	—			—			21,412			3,281			24,693			—			—			1,800			3,092			4,892
Total	$	116,662		$	3,015,272		$	21,412		$	3,281		$	3,156,627		$	86,143		$	1,422,401		$	1,800		$	3,092		$	1,513,436
As a percentage of total assets	2.5		%	66.1		%	0.5		%	0.1		%	69.2		%	2.6		%	42.8		%	0.1		%	0.1		%	45.6		%

December 31, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value Based on NAV Practical Expedient Total Fair Value
AFS fixed maturities
U.S. treasury bonds $ 139,072
$ —
$ —
$ —
$ 139,072
U.S. agency bonds – mortgage-backed —
1,453,134
—
—
1,453,134
U.S. agency bonds – other —
129,233
—
—
129,233
Non-U.S. government and supranational bonds —
10,072
—
—
10,072
Asset-backed securities —
215,082
—
—
215,082
Corporate bonds —
1,104,975
—
—
1,104,975
Other investments —
—
19,883
3,833
23,716
Total $ 139,072
$ 2,912,496
$ 19,883
$ 3,833
$ 3,075,284
As a percentage of total assets 2.6 % 55.1 % 0.4 % 0.1 % 58.2 %
MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

5. Fair Value of Financial Instruments (continued)



December 31, 2019	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Fair Value Based on NAV Practical Expedient			Total Fair Value
Fixed maturities
U.S. treasury bonds	$	95,625		$	—		$	—		$	—		$	95,625
U.S. agency bonds – mortgage-backed	—			538,722			—			—			538,722
Non-U.S. government and supranational bonds	—			11,999			—			—			11,999
Asset-backed securities	—			188,170			—			—			188,170
Corporate bonds	—			996,856			—			—			996,856
Municipal bonds	—			4,146			—			—			4,146
Other investments	—			—			1,800			3,077			4,877
Total	$	95,625		$	1,739,893		$	1,800		$	3,077		$	1,840,395
As a percentage of total assets	2.7		%	48.8		%	0.1		%	0.1		%	51.7		%

The Company utilizes the Pricing Service to assist in determining the fair value of ~~our~~its investments; however, management is ultimately responsible for all fair values presented in the Company’s financial statements. This includes responsibility for monitoring the fair value process, ensuring objective and reliable valuation practices and pricing of assets and liabilities and pricing sources. The Company analyzes and reviews the information and prices received from the Pricing Service to ensure that the prices represent a reasonable estimate of the fair value.

The Pricing Service was utilized to estimate fair value measurements for ~~approximately 99.8%~~99.6% and ~~99.9%~~99.7% of our fixed maturities at March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively. The Pricing Service utilizes market quotations for fixed maturity securities that have quoted market prices in active markets. ~~Since~~Because fixed maturities other than U.S. treasury bonds generally do not trade actively 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.

~~MAIDEN HOLDINGS, LTD.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~(in thousands of U.S. dollars, except share and per share data)~~

~~5. Fair Value of Financial Instruments (continued)~~2 within the fair value hierarchy.

At March 31, ~~2019~~2020 and December 31, ~~2018, approximately 0.2%~~2019, 0.4% and ~~0.1%~~0.3%, respectively, of the Level 2 fixed maturities are valued using the market approach. At March 31, ~~2019~~2020 and December 31, ~~2018, one~~2019, 1 security or ~~$5,484~~$5,392 and ~~$5,676,~~$5,481, respectively, of Level 2 fixed maturities, was priced using a quotation from a broker and/or custodian as opposed to the Pricing Service due to lack of information available. At March 31, ~~2019~~2020 and December 31, ~~2018, we have~~2019, the Company has not adjusted any pricing provided to usit based on the review performed by ~~our~~its investment managers.

During the year ended December 31, 2019, the Company transferred its investment in special purpose vehicles focused on lending activities out of Level 3 within the fair value hierarchy due to a change in accounting policy to report these investments at cost less any impairment instead of fair market value. There were no ~~transfers between Level 1 and Level 2 and there were no~~other transfers to or from Level 3 during the periods represented by these Condensed Consolidated Financial Statements.

At March 31, ~~2019,~~2020, the Company has other investments of ~~$21,412~~$1,800 (December 31, ~~2018~~2019 - ~~$19,883)~~$1,800) which includes ~~investments in special purpose vehicles focused on lending activities as well as~~ investments in start-up insurance entities. The fair value of the investments in special purpose vehicles focused on lending activities is initially at cost which approximates fair value. In subsequent measurement periods, the fair values of these investments are determined using an internally developed discounted cash flow model. The fair value of investments in start-up insurance entities was determined using recent private market transactions. Due to ~~the~~ significant unobservable inputs in these valuations, the Company ~~includes the estimate of~~classifies the fair value ~~of each~~estimate of these other investments as Level 3.3 within the fair value hierarchy.

(d) Financial Instruments not measured at Fair Value

The following table presents the respective carrying value and fair value ~~and carrying value or principal amount of~~for the financial instruments not measured at fair ~~value:~~value on the Condensed Consolidated Balance Sheets as at March 31, 2020 and December 31, 2019, respectively:


	March 31, 2019				December 31, 2018				March 31, 2020				December 31, 2019
Financial Assets	Carrying Value		Fair Value		Carrying Value		Fair Value
HTM – corporate bonds	$	—	$	—	$	957,845	$	940,727
HTM – municipal bonds	—		—		57,836		57,285
Total financial assets	$	—	$	—	$	1,015,681	$	998,012
									Carrying Value		Fair Value		Carrying Value		Fair Value
Financial Liabilities
Senior Notes - MHLA – 6.625%	$	110,000	$	71,368	$	110,000	$	75,240	$	110,000	$	74,118	$	110,000	$	86,460
Senior Notes - MHNC – 7.75%	152,500		122,061		152,500		143,960		152,500		115,900		152,500		137,067
Total financial liabilities	$	262,500	$	193,429	$	262,500	$	219,200	$	262,500	$	190,018	$	262,500	$	223,527

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

6. Discontinued Operations

Sale of U.S. Treaty Reinsurance operations

As described in "~~Note 1. Basis~~Part II of ~~Presentation~~",our Annual Report on Form 10-K for the year ended December 31, 2019, the Company entered into a ~~Renewal Rights~~renewal rights transaction with ~~TransRe~~Transatlantic Reinsurance Company on August 29, ~~2018. The Company continued to earn premiums~~2018 and ~~remain liable for losses occurring subsequent to August 29, 2018 for any policies in force prior to and as of August 29, 2018, through~~subsequently sold Maiden US on December 27, 2018 ~~the date the sale of Maiden US was closed pursuant~~ to ~~the U.S. Sale Agreement with~~ Enstar.

Maiden US was a substantial portion of ~~our~~the Diversified Reinsurance ~~segment,~~segment; therefore the Company concluded that the sale represented a strategic shift that has a major effect on its ongoing operations and financial results and that all of the held for sale criteria ~~have been~~were met. Accordingly, all transactions related to the U.S. treaty reinsurance operations are reported and presented as part ~~of discontinued operations. Accordingly, all of~~ the assets and liabilities related to the sale of the U.S. treaty reinsurance operations are removed from the Condensed Consolidated Balance Sheets of the Company and any remaining assets and liabilities related to the retrocession agreement and true up of sale consideration, are classified as held for sale in the Condensed Consolidated Balance Sheets as at March 31, 2019 and December 31, 2018. The operations of the Company's U.S. treaty reinsurance business for the three months ended March 31, 2018 have been reclassified as part of incomeresults from discontinued operations in the Condensed Consolidated Statements of Income.

~~The Company estimated~~As described in Part II of our Annual Report on Form 10-K for the ~~fair value of~~year ended December 31, 2019, Cavello Bay Reinsurance Limited ("Cavello"), Enstar’s Bermuda reinsurance affiliate, and Maiden Reinsurance entered into a retrocession agreement pursuant to which certain assets and liabilities associated with the ~~net~~U.S. treaty reinsurance business held by Maiden Reinsurance were retroceded to Cavello on December 27, 2018. As at December 31, 2018, the assets and liabilities related to this business including the retrocession agreement were classified as held for sale, however, a decision was made to reclassify them as it is now considered unlikely that these reserves will be ~~based on~~novated in the ~~estimated selling price less costs to sell and was classified as Level 2 within the fair value hierarchy as of March 31, 2019. The classes of~~foreseeable future; therefore, there are no remaining assets and liabilities ~~to be sold and~~ classified as held for sale as ofat March 31, ~~2019~~2020 and December 31, ~~2018 comprise:~~

March 31, 2019 December 31, 2018
ASSETS
Fixed maturities, available-for-sale, at fair value $ 66,142
$ 63,560
Restricted cash and cash equivalents 2,764
6,113
Reinsurance balances receivable, net 689
689
Reinsurance recoverable on unpaid losses 70,158
70,158
Other assets 37,699
33,955
Total assets held for sale $ 177,452
$ 174,475
LIABILITIES
Reserve for loss and loss adjustment expenses $ 76,521
$ 76,521
Accrued expenses and other liabilities 82,481
79,440
Total liabilities held for sale $ 159,002
$ 155,961

2019.

The following table summarizes the major classes of ~~line~~ items constituting the ~~(loss) income~~net loss from discontinued operations for the three months ended March 31, 2019 ~~and 2018, respectively,~~ presented in the unaudited Condensed Consolidated Statements of Income:

For the Three Months Ended March 31,
2019 2018
Gross premiums written $ —
$ 229,312
Net premiums written $ —
$ 226,682
Net premiums earned —
168,619
Other revenue 62
—
Net investment income —
10,001
Net loss and loss adjustment expenses —
(120,118 )
Commission and other acquisition expenses —
(41,986 )
General and administrative expenses (1,017 ) (4,279 )
Amortization of intangible assets —
(462 )
(Loss) income from discontinued operations before income taxes (955 ) 11,775
Loss on disposal of discontinued operations (2,397 ) —
Income tax benefit (expense) —
(1,780 )
(Loss) income from discontinued operations, net of income tax $ (3,352 ) $ 9,995



For the Three Months Ended March 31,	2019
General and administrative expenses	$	(337	)
Expense from discontinued operations before income tax	(337		)
Loss on disposal of discontinued operations	(2,397		)
Loss from discontinued operations, net of income tax	$	(2,734	)

~~MAIDEN HOLDINGS, LTD.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~(in thousands of U.S. dollars, except share and per share data)~~

7. Long-Term Debt

Senior Notes

At March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, both Maiden Holdings and its wholly owned subsidiary, Maiden NA, have outstanding publicly-traded ~~debt offering of~~ senior notes which were issued in 2016 ("2016 Senior Notes") and 2013 ("2013 Senior Notes"), respectively ~~(the~~(collectively "Senior Notes"). The 2013 Senior Notes issued by Maiden NA are fully and unconditionally guaranteed by Maiden Holdings. The Senior Notes are unsecured and unsubordinated obligations of the Company.

The following ~~table details~~tables detail the ~~Company's~~issuances of Senior Notes ~~issuances~~ outstanding at March 31, ~~2019~~2020 and December 31, ~~2018:~~2019:


March 31, 2019	2016 Senior Notes			2013 Senior Notes			Total
March 31, 2020									2016 Senior Notes			2013 Senior Notes			Total
Principal amount	$	110,000		$	152,500		$	262,500	$	110,000		$	152,500		$	262,500
Less: unamortized issuance costs	3,599			4,154			7,753		3,553			3,985			7,538
Carrying value	$	106,401		$	148,346		$	254,747	$	106,447		$	148,515		$	254,962

December 31, 2018	2016 Senior Notes			2013 Senior Notes			Total
December 31, 2019									2016 Senior Notes			2013 Senior Notes			Total
Principal amount	$	110,000		$	152,500		$	262,500	$	110,000		$	152,500		$	262,500
Less: unamortized issuance costs	3,610			4,196			7,806		3,565			4,027			7,592
Carrying value	$	106,390		$	148,304		$	254,694	$	106,435		$	148,473		$	254,908

Other details:
Original debt issuance costs	$	3,715		$	5,054				$	3,715		$	5,054
Maturity date	June 14, 2046			Dec 1, 2043					June 14, 2046			December 1, 2043
Earliest redeemable date (for cash)	June 14, 2021			Dec 1, 2018					June 14, 2021			December 1, 2018
Coupon rate	6.625		%	7.75		%			6.625		%	7.75		%
Effective interest rate	7.07		%	8.04		%			7.07		%	8.04		%

The interest expense incurred on the Senior Notes for the three months ended March 31, ~~2019~~2020 was ~~$4,776 (2018~~$4,777 (2019 - ~~$4,777)~~$4,776), of which $1,342 was accrued at both March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively. The issuance costs related to the Senior Notes were capitalized and are being amortized over the effective life of the Senior Notes. The amortization expense for the three months ended March 31, ~~2019~~2020 was ~~$53 (2018~~$54 (2019 - ~~$52)~~$53).

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

7. Long-Term Debt (continued)

Under the terms of the 2013 Senior Notes, the 2013 Senior Notes can be redeemed, in whole or in part after December 1, 2018 at Maiden NA's option at any time and from time to time, until maturity at a redemption price equal to 100% of the principal amount of the notes to be redeemed plus accrued but unpaid interest on the principal amount being redeemed to, but not including, the redemption date. Maiden NA is required to give at least thirty and not more than sixty days notice prior to the redemption date. ~~However, as part~~

8. Reinsurance

The Company uses reinsurance and retrocessional agreements ("ceded reinsurance") to mitigate volatility, reduce its exposure to certain risks and provide capital support. Ceded reinsurance provides for the recovery of a portion of loss and LAE under certain circumstances without relieving the Company of its obligations to the policyholders. The Company remains liable to the extent that any of its reinsurers or retrocessionaires fails to meet their obligations. Loss and LAE incurred and premiums earned are reported after deduction for ceded reinsurance. In the event that one or more of our reinsurers or retrocessionaires are unable to meet their obligations under these agreements, the Company would not realize the full value of the reinsurance recoverable balances.

The effect of ceded reinsurance on net premiums written and earned and on net loss and LAE for the three months ended March 31, 2020 and 2019 was as follows:



For the Three Months Ended March 31,	2020			2019
Premiums written
Direct	$	5,193		$	3,778
Assumed	6,541			(564,917		)
Ceded	(1,362		)	(391		)
Net	$	10,372		$	(561,530	)
Premiums earned
Direct	$	4,761		$	3,024
Assumed	27,453			180,788
Ceded	(999		)	(710		)
Net	$	31,215		$	183,102
Loss and LAE
Gross loss and LAE	$	20,994		$	152,734
Loss and LAE ceded	92			(45		)
Net	$	21,086		$	152,689

The Company's ~~remediation measures~~reinsurance recoverable on unpaid losses balance as at March 31, 2020 was $620,882 (December 31, 2019 - $623,422) presented in the Condensed Consolidated Balance Sheets. At March 31, 2020 and December 31, 2019, the Company had no valuation allowance against reinsurance recoverable on unpaid losses.

As discussed in "Note 1. Organization", on December 27, 2018, Cavello and Maiden Reinsurance entered into a retrocession agreement pursuant to ~~improve its capital ratios~~which certain assets and ~~adequacy, Maiden has voluntarily undertaken~~liabilities associated with the ~~BMA~~U.S. treaty reinsurance business held by Maiden Reinsurance were retroceded to Cavello in exchange for a ceding commission. The balance of reinsurance recoverable on unpaid losses due from Cavello under this retrocession agreement was $60,281 at March 31, 2020 (December 31, 2019 - $62,699).

On July 31, 2019, Maiden Reinsurance and Cavello entered into the LPT/ADC Agreement, pursuant to which Cavello assumed the loss reserves as of December 31, 2018 associated with the AmTrust Quota Share in excess of a $2,178,535 retention up to $600,000, in exchange for a retrocession premium of $445,000. The $2,178,535 retention is subject to adjustment for paid losses subsequent to December 31, 2018. Please see "Note 1. Basis of Presentation" for further details.

The LPT/ADC Agreement provides Maiden Reinsurance with $155,000 in adverse development cover over its carried AmTrust Quota Share loss reserves at December 31, 2018. The LPT/ADC Agreement meets the criteria for risk transfer and is thus accounted for as retroactive reinsurance. Cumulative ceded losses exceeding $445,000 are recognized as a deferred gain liability and amortized into income over the settlement period of the ceded reserves in proportion to cumulative losses collected over the estimated ultimate reinsurance recoverable. The amount of the deferral is recalculated each period based on loss payments and updated estimates. Consequently, cumulative adverse development subsequent to December 31, 2018 may result in significant losses from operations until periods when the deferred gain is recognized as a benefit to earnings. As of March 31, 2020, the reinsurance recoverable on unpaid losses under the retroactive reinsurance agreement were $557,950 while the deferred gain liability was $112,950 (December 31, 2019 - $557,950 and $112,950, respectively). Amortization of the deferred gain will not ~~voluntarily redeem~~occur until paid losses have exceeded the ~~2013 Senior Notes without~~minimum retention under the LPT/ADC Agreement, which is estimated to be in 2024.

Cavello has provided collateral in the form of a letter of credit in the amount of $445,000 to AmTrust under the LPT/ADC Agreement and Cavello is subject to additional collateral funding requirements as explained in "Note 10. Related Party Transactions". Under the terms of the LPT/ADC Agreement, the covered losses associated with the Commutation and Release Agreement with AmTrust are eligible to be covered but recoverable only when such losses are paid or settled by AII or its ~~prior written approval.~~affiliates, provided such losses and other related amounts shall not exceed $312,786. Cavello's parent company, Enstar, has credit ratings of BBB from both Standard &Poor's and Fitch Ratings at March 31, 2020.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

~~8. 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. Based on each individual's most recent public filing, Leah Karfunkel (wife of Michael Karfunkel) owns or controls approximately 8.0% of the outstanding shares of the Company and Barry Zyskind (the Company's non-executive chairman) owns or controls approximately 7.5% of the outstanding shares of the Company. George Karfunkel owns or controls less than 5.0% of the outstanding shares of the Company. Leah Karfunkel and George Karfunkel are directors of AmTrust, and Barry Zyskind is the president, chief executive officer and chairman of AmTrust. Leah Karfunkel, George Karfunkel and Barry Zyskind own or control approximately 53.9% of the ownership interests of Evergreen Parent GP, LLC, the ultimate parent of AmTrust. AmTrust owns 1.5% of the issued and outstanding shares of National General Holdings Corporation ("NGHC"), and Leah Karfunkel, individually, through a grantor retained annuity trust and through the Michael Karfunkel 2005 Family Trust (which is controlled by Leah Karfunkel) owns 39.4% of the outstanding common shares of NGHC. Barry Zyskind is a director of NGHC.

~~AmTrust~~

~~The following describes transactions between the Company and AmTrust:~~

~~AmTrust Quota Share~~

Effective July 1, 2007, the Company and AmTrust entered into a master agreement, as amended (the "Master Agreement"), by which they caused Maiden Bermuda, a wholly owned subsidiary of the Company, and AmTrust's Bermuda reinsurance subsidiary, AmTrust International Insurance, Ltd. ("AII"), to enter into the AmTrust Quota Share by which 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 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 AmTrust Quota Share 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.

Effective July 1, 2018, the amount AmTrust Europe Limited ("AEL") cedes to the Company was reduced to 20%. 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% ("Loss Corridor"). Above and below the Loss Corridor, Maiden Bermuda will continue to reinsure losses at its proportional 40% share of the AmTrust Quota Share.

Effective January 1, 2019, Maiden Bermuda and AmTrust entered into the Partial Termination Amendment which amended the AmTrust Quota Share that was in-force and set to expire on June 30, 2019. The Partial Termination Amendment provided for the cut-off of the ongoing and unearned premium of AmTrust’s Small Commercial Business, comprising workers’ compensation, general liability, umbrella liability, professional liability (including cyber liability) insurance coverages, and U.S. Specialty Risk and Extended Warranty ("Terminated Business") as of December 31, 2018. Under the Partial Termination Amendment, the ceding commission payable by Maiden Bermuda for its remaining in-force business immediately prior to January 1, 2019 increased by five percentage points with respect to in-force remaining business (excluding Terminated Business) and related unearned premium as of January 1, 2019. Subsequently, on January 30, 2019, Maiden Bermuda and AII agreed to terminate the AmTrust Quota Share on a run-off basis effective as of January 1, 2019.

The Partial Termination Amendment resulted in Maiden Bermuda returning approximately $643,144 in unearned premium to AII, or approximately $433,483 net of applicable ceding commission and brokerage, subject to final adjustment. In January 2019, as part of this amendment, the Company transferred cash and investments of $480,000 to AII based on provisional estimates. On or before May 30, 2019, AII shall report to Maiden the actual unearned premium applicable to the Terminated Business as of December 31, 2018. In the event that the estimated unearned premium exceeds the actual unearned premium, AII shall return the excess to Maiden Bermuda. The estimated amount to be returned to Maiden Bermuda is approximately $46,517 as of March 31, 2019.

~~European Hospital Liability Quota Share~~

Effective April 1, 2011, Maiden Bermuda, entered into a quota share reinsurance contract with AEL and AmTrust International Underwriters DAC ("AIU DAC"), 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%.

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. Subsequently, on January 30, 2019, Maiden Bermuda, AEL and AIU DAC agreed to terminate the European Hospital Liability Quota Share on a run-off basis effective as of January 1, 2019.

On January 30, 2019, in connection with the termination of the reinsurance agreements described above, the Company and AmTrust entered into a second amendment to the Master Agreement between the parties, originally entered into on July 3, 2007, to remove the provisions requiring AmTrust to reinsure business with the Company.

~~MAIDEN HOLDINGS, LTD.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~(in thousands of U.S. dollars, except share and per share data)~~

~~8. Related Party Transactions (continued)~~

~~The table below shows the effect of both of these quota share arrangements with AmTrust on the Company's results of operations for the three months ended March 31, 2019 and 2018:~~

For the Three Months Ended March 31,
2019 2018
Gross and net premiums written $ (576,477 ) $ 573,928
Net premiums earned 158,130
503,799
Net loss and LAE (137,944 ) (344,529 )
Commission expenses (58,379 ) (155,850 )

~~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 AmTrust Quota Share 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 AmTrust Quota Share with AII. Maiden Bermuda satisfied its collateral requirements under the AmTrust Quota Share with AII as follows:

•

by lending funds in the amount of $167,975 at March 31, 2019 and December 31, 2018 pursuant to a loan agreement entered into between those parties. Advances under the loan are secured by promissory notes. This loan was assigned by AII to AmTrust effective December 31, 2014 and is carried at cost. Effective December 18, 2017, interest is payable at a rate equivalent to the Federal Funds Effective Rate ("Fed Funds") plus 200 basis points per annum. Please see ~~"Note 4. (c) Investments"~~ for the total amount of interest earned from this loan. On January 30, 2019, in connection with the termination of the reinsurance agreements described above, the Company and AmTrust entered into an amendment to the Loan Agreement between Maiden Bermuda, AmTrust and AII, originally entered into on November 16, 2007. The Amendment to the Loan Agreement provides for the extension of the maturity date to January 1, 2025 and acknowledges that due to the termination of the AmTrust Quota Share that no further loans or advances may be made pursuant to the Loan Agreement;

•

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 March 31, 2019 was approximately $2,609,197 (December 31, 2018 - $3,650,418) and the accrued interest was $17,895 (December 31, 2018 - $23,283). Please refer to ~~"Note 4. (e) Investments"~~ ~~for additional information; and~~

~~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. The amount of the collateral in reinsurance trust accounts at March 31, 2019 was approximately $253,937 (December 31, 2018 - $249,948) and the accrued interest was $1,849 (December 31, 2018 - $1,976). Please refer to ~~"Note 4. (e) Investments"~~ ~~for additional information.~~

In January 2019, AIU DAC requested that Maiden Bermuda provide collateral to secure its proportional share under the European Hospital Liability Quota Share agreement. Accordingly, Maiden Bermuda transferred cash of €45,113 ($51,244) to AIU DAC as a funds withheld receivable. AIU DAC will pay Maiden a fixed annual interest rate of 0.50%, on the average daily Funds Withheld balance, commencing on January 24, 2019, subject to annual adjustment. At March 31, 2019, the balance of funds withheld was €45,113 ($50,608) and the accrued interest was $53.

~~MAIDEN HOLDINGS, LTD.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~(in thousands of U.S. dollars, except share and per share data)~~

~~8. Related Party Transactions (continued)~~

~~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 AmTrust Quota Share and the European Hospital Liability Quota Share for a fee equal to 1.25% of the premium assumed. 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 $1,977 of reinsurance brokerage expense for the three months ended March 31, 2019 (2018 - $6,297) and deferred reinsurance brokerage of $5,013 at March 31, 2019 (December 31, 2018 - $14,199) as a result of this agreement. The brokerage agreement was terminated as of March 15, 2019.

~~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. Effective January 1, 2018, AIIM provides investment management services for a quarterly fee of 0.02125% of the average value of the account. Prior to that date, the fee was payable at a rate of 0.0375%. The agreement may be terminated upon 30 days written notice by either party. The Company recorded approximately $775 of investment management fees for the three months ended March 31, 2019 (2018 - $1,049) as a result of this 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 received notice from NGHC of the termination of the NGHC Quota Share effective on that date. The Company and NGHC mutually agreed that the termination is on a run-off basis.

9. Reserve for Loss and Loss Adjustment Expenses

The Company uses both historical experience and industry-wide loss development factors to provide a reasonable basis for estimating future losses. In the future, certain events may be beyond the control of management, such as changes in law, judicial interpretations of law, and rates of inflation, which may favorably or unfavorably impact the ultimate settlement of the Company’s loss and LAE reserves.

The anticipated effect of inflation is implicitly considered when estimating liabilities for loss and LAE. While anticipated changes in claim costs due to inflation are considered in estimating the ultimate claim costs, changes in average severity of claims are caused by a number of factors that vary with the individual type of policy written. Ultimate losses are projected based on historical trends adjusted for implemented changes in underwriting standards, claims handling, policy provisions, and general economic trends. Those anticipated trends are monitored based on actual development and are modified if necessary.

The reserving process begins with the collection and analysis of paid losses and incurred claims data for each of ~~our~~the Company's contracts. While reserves are mostly reviewed on a contract by contract basis, paid ~~losses~~loss and incurred claims data is also aggregated into reserving segments. The segmental data is disaggregated by reserving class and further disaggregated by either accident year (i.e. the year in which the loss event occurred) or by underwriting year (i.e. the year in which the contract generating the premium and losses incepted). The Company in some cases uses underwriting year information to analyze ~~our~~the Diversified Reinsurance segment and subsequently allocate reserves to the respective accident years. ~~Our~~The reserve for loss and LAE ~~comprises:~~consists of:


	March 31, 2019		December 31, 2018		March 31, 2020		December 31, 2019
Reserve for reported loss and LAE	$	1,548,160	$	1,571,217	$	1,194,204	$	1,271,358
Reserve for losses incurred but not reported ("IBNR")	1,431,953		1,484,759		1,054,841		1,168,549
Reserve for loss and LAE	$	2,980,113	$	3,055,976	$	2,249,045	$	2,439,907

The following table represents a reconciliation of our beginning and ending gross and net loss and LAE reserves:



For the Three Months Ended March 31,	2020			2019
Gross loss and LAE reserves, January 1	$	2,439,907		$	3,126,134
Less: reinsurance recoverable on unpaid losses, January 1	623,422			71,901
Net loss and LAE reserves, January 1	1,816,485			3,054,233
Net incurred losses related to:
Current year	21,619			145,431
Prior years	(533		)	7,258
	21,086			152,689
Net paid losses related to:
Current year	(214		)	(416		)
Prior years	(193,430		)	(219,950		)
	(193,644		)	(220,366		)
Effect of foreign exchange rate movements	(15,764		)	(8,260		)
Net loss and LAE reserves, March 31	1,628,163			2,978,296
Reinsurance recoverable on unpaid losses, March 31	620,882			71,975
Gross loss and LAE reserves, March 31	$	2,249,045		$	3,050,271

Prior period development arises from changes to loss estimates recognized in the current year that relate to loss reserves in previous calendar years. The favorable or unfavorable development reflects changes in management's best estimate of the ultimate losses under the relevant reinsurance policies after considerable review of changes in actuarial assessments. During the three months ended March 31, 2020, the Company recognized net favorable prior year loss development of $533 (2019 - adverse $7,258).

In the Diversified Reinsurance segment, net favorable prior year loss development was $533 for the three months ended March 31, 2020 (2019 - favorable $1,096) primarily due to favorable reserve development in German Auto Programs. The favorable loss development for the same period in 2019 was largely due to facultative reinsurance run-off lines.

In the AmTrust Reinsurance segment, there was 0 prior year loss development for the three months ended March 31, 2020, (2019 - adverse $8,126). The adverse development in the three months ended March 31, 2019 was primarily driven by Commercial Auto Liability in accident years 2014 to 2017, partly offset by favorable development in Workers Compensation.

The Other category incurred net adverse prior year loss development of $228 for the three months ended March 31, 2019 due to increased reserves in the run-off of the NGHC Quota Share which was commuted in November 2019.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

~~9. Reserve for Loss~~10. Related Party Transactions

The Founding Shareholders of the Company were Michael Karfunkel, George Karfunkel and ~~Loss Adjustment Expenses (continued)~~Barry Zyskind. Based on each individual's most recent public filing, Leah Karfunkel (wife of the late Michael Karfunkel) owns or controls approximately 8.1% of the outstanding shares of the Company and Barry Zyskind (the Company's non-executive chairman) owns or controls approximately 7.6% of the outstanding shares of the Company. George Karfunkel owns or controls less than 5.0% of the outstanding shares of the Company. Leah Karfunkel and George Karfunkel are directors of AmTrust, and Barry Zyskind is the president, chief executive officer and chairman of AmTrust. Leah Karfunkel, George Karfunkel and Barry Zyskind own or control approximately 53.4% of the ownership interests of Evergreen Parent LP, the ultimate parent of AmTrust.

AmTrust

The following ~~table represents a reconciliation of our beginning~~describes transactions between the Company and ~~ending gross~~AmTrust:

AmTrust Quota Share

Effective July 1, 2007, the Company and ~~net loss and LAE reserves:~~

For the Three Months Ended March 31, 2019 2018
Gross loss and LAE reserves, January 1 $ 3,055,976
$ 2,386,722
Less: reinsurance recoverable on unpaid losses, January 1 1,743
24,883
Net loss and LAE reserves, January 1 3,054,233
2,361,839
Net incurred losses related to:
Current year 145,431
343,421
Prior years 7,258
9,785
152,689
353,206
Net paid losses related to:
Current year (416 ) (44,317 )
Prior years (219,950 ) (218,176 )
(220,366 ) (262,493 )
Effect of foreign exchange rate movements (8,260 ) 13,960
Net loss and LAE reserves, March 31 2,978,296
2,466,512
Reinsurance recoverable on unpaid losses, March 31 1,817
25,490
Gross loss and LAE reserves, March 31 $ 2,980,113
$ 2,492,002

~~Commencing in 2015, Maiden Bermuda~~AmTrust entered into a ~~number~~master agreement, as amended ("Master Agreement"), by which they caused Maiden Reinsurance, and AmTrust's Bermuda reinsurance subsidiary, AII, to enter into the AmTrust Quota Share by which AII retroceded to Maiden Reinsurance an amount equal to 40% of ~~retrocessional quota share agreements with~~the premium written by subsidiaries of AmTrust, net of the cost of unaffiliated inuring reinsurance and 40% of losses. The Master Agreement further provided that AII receive a ~~highly rated global insurer~~ceding commission of 31% of ceded written premiums. On June 11, 2008, Maiden Reinsurance and AII amended the AmTrust Quota Share to ~~cede certain lines~~add Retail Commercial Package Business to the Covered Business. AII receives a ceding commission of ~~business from both of our reportable segments.~~34.375% on Retail Commercial Package Business. On July 1, 2016, the agreement was renewed through June 30, 2019. Effective July 1, 2018, the amount AEL ceded to Maiden ~~Bermuda commuted~~Reinsurance was reduced to 20%.

Effective July 1, 2013, for the Specialty Program portion of Covered Business only, AII was responsible for ultimate net loss otherwise recoverable from Maiden Reinsurance to the extent that the loss ratio to Maiden Reinsurance, 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% ("Loss Corridor"). Above and below the Loss Corridor, Maiden Reinsurance continued to reinsure losses at its proportional 40% share of the AmTrust Quota Share. Effective July 31, 2019, the Loss Corridor was amended such that the maximum amount covered is $40,500, the amount calculated by Maiden Reinsurance for the Loss Corridor coverage as of March 31, 2019. Any development above this maximum amount will be subject to the coverage of the LPT/ADC Agreement. Please refer to Note 1. "Basis of Presentation" for additional information.

Effective January 1, 2019, Maiden Reinsurance and AII entered into the Partial Termination Amendment which amended the AmTrust Quota Share. The Partial Termination Amendment provided for the cut-off of the ongoing and unearned premium of AmTrust’s Small Commercial Business, comprising workers’ compensation, general liability, umbrella liability, professional liability (including cyber liability) insurance coverages, and U.S. Specialty Risk and Extended Warranty ("Terminated Business") as of December 31, 2018. Under the Partial Termination Amendment, the ceding commission payable by Maiden Reinsurance for its remaining in-force business immediately prior to January 1, 2019 increased by 5 percentage points with respect to in-force remaining business (excluding Terminated Business) and related unearned premium as of January 1, 2019. The Partial Termination Amendment resulted in Maiden Reinsurance returning $647,980 in unearned premium to AII, or $436,760 net of applicable ceding commission and brokerage as calculated during the second quarter of 2019.

Subsequently, on January 30, 2019, Maiden Reinsurance and AII agreed to terminate the remaining business subject to the AmTrust Quota Share on a run-off basis effective as of January 1, 2019.

Effective July 31, 2019, Maiden Reinsurance and AII entered into a Commutation and Release Agreement which provided for AII to assume all ~~of these retrocessional quota~~reserves ceded by AII to Maiden Reinsurance with respect to its proportional 40% share ~~agreements.~~

Prior period development arises from changes to loss estimates recognized in the current year that relate to loss reserves in previous calendar years. The development reflects changes in management's best estimate of the ultimate ~~losses~~net loss under the ~~relevant reinsurance policies after review~~AmTrust Quota Share related to the Commuted Business. Please refer to Note 1 "Basis of ~~changes in actuarial assessments. During the three months ended March~~Presentation" for additional information.

AII and Maiden Reinsurance also agreed that, as of July 31, 2019, the AmTrust Quota Share shall be deemed amended as applicable so that the Commuted Business is no longer included as part of the Covered Business under the AmTrust Quota Share.

On January 30, 2019, in connection with the termination of the reinsurance agreement described above, the Company ~~recognized net adverse prior year development~~and AmTrust entered into a second amendment to the Master Agreement between the parties, originally entered into on July 3, 2007, to remove the provisions requiring AmTrust to reinsure business with the Company.

European Hospital Liability Quota Share

Effective April 1, 2011, Maiden Reinsurance entered into the European Hospital Liability Quota Share with AEL and AIU DAC, both wholly owned subsidiaries of ~~approximately $7,258 (2018 - $9,785).~~AmTrust. Pursuant to the terms of the European Hospital Liability Quota Share, Maiden Reinsurance 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 European Hospital Liability Quota Share 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 Reinsurance paid a ceding commission of 5% on contracts assumed under the European Hospital Liability Quota Share.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

10. Related Party Transactions (continued)

Effective July 1, 2016, the ~~Diversified~~European Hospital Liability Quota Share was amended such that Maiden Reinsurance ~~segment,~~assumes from AEL 32.5% of the ~~favorable prior year loss development was $1,096~~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. Subsequently, on January 30, 2019, Maiden Reinsurance, AEL and AIU DAC agreed to terminate the European Hospital Liability Quota Share on a run-off basis effective as of January 1, 2019.

The table below shows the effect of both of these quota share arrangements with AmTrust on the Company's unaudited Condensed Consolidated Income Statement for the three months ended March 31, 2020 and 2019, ~~(2018 - $1,266 adverse) primarily due~~respectively:



	For the Three Months Ended March 31,
	2020			2019
Gross and net premiums written	$	—		$	(576,477	)
Net premiums earned	18,684			158,130
Net loss and LAE	(14,045		)	(137,944		)
Commission expenses	(6,994		)	(60,356		)

Collateral provided to ~~favorable prior year loss development in facultative~~AmTrust

a) AmTrust Quota Share

To provide AmTrust's U.S. insurance subsidiaries with credit for reinsurance ~~run-off lines. The adverse development~~on their statutory financial statements, AII, as the direct reinsurer of AmTrust's insurance subsidiaries, established trust accounts ("Trust Accounts") for their benefit. Maiden Reinsurance has agreed to provide appropriate collateral to secure its proportional share under the AmTrust Quota Share of AII's obligations to the AmTrust subsidiaries to whom AII is required to provide collateral. This collateral may be in the ~~first quarter~~form of ~~2018 was largely due~~(a) assets loaned by Maiden Reinsurance to ~~higher than expected loss emergence emanating largely from run-off treaty contracts.~~

InAII for deposit into the Trust Accounts, pursuant to a loan agreement between those parties, (b) assets transferred by Maiden Reinsurance for deposit into the Trust Accounts, or (c) a letter of credit obtained by Maiden Reinsurance and delivered to an AmTrust subsidiary on AII's behalf. Maiden Reinsurance may provide any or a combination of these forms of collateral, provided that the aggregate value thereof equals Maiden Reinsurance's proportionate share of its obligations under the AmTrust Quota Share. Maiden Reinsurance ~~segment,~~satisfied its collateral requirements under the ~~adverse prior year loss development~~AmTrust Quota Share with AII as follows:

•

by lending funds in the amount of $167,975 at March 31, 2020 and December 31, 2019 pursuant to a loan agreement entered into between those parties. Advances under the loan are secured by promissory notes. This loan was assigned by AII to AmTrust effective December 31, 2014 and is carried at cost. Interest is payable at a rate equivalent to the Federal Funds Effective Rate ("Fed Funds") plus 200 basis points per annum. Please see "Note 4. (c) Investments" for the total amount of interest earned from this loan. The interest income on the loan was $1,365 for the three months ended March 31, 2020 (2019 - $1,822) and the effective yield was 3.3% for the same period (2019 - 4.3%). On January 30, 2019, in connection with the termination of the reinsurance agreements described above, the Company and AmTrust entered into an amendment to the Loan Agreement between Maiden Reinsurance, AmTrust and AII, originally entered into on November 16, 2007, extending the maturity date to January 1, 2025 and acknowledges that due to the termination of the AmTrust Quota Share, no further loans or advances may be made pursuant to the Loan Agreement;

•

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 March 31, 2020 was $998,535 (December 31, 2019 - $1,155,955) and the accrued interest was $4,897 (December 31, 2019 - $7,366). Please refer to "Note 4. (e) Investments" for additional information;

on January 11, 2019, a portion of the existing trust accounts used for collateral on the AmTrust Quota Share were converted to a funds withheld arrangement. The Company transferred cash and investments of $575,000 to AmTrust as a funds withheld receivable which initially had an annual interest rate of 3.5%, subject to annual adjustment. The annual interest rate was ~~$8,126~~adjusted to 2.65% for the three months ended March 31, 2020. At March 31, 2020, the balance of funds withheld was $575,000 (December 31, 2019 ~~(2018~~ - ~~$8,519)~~$575,000) and the accrued interest was $8,873 (December 31, 2019 - $5,073). The ~~adverse development in~~interest income on the ~~first quarter of 2019~~funds withheld receivable was primarily due to Commercial Auto Liability in accident years 2014 to 2017 offset by favorable development in Workers Compensation, whereas 2018 was due to General Liability, with a smaller contribution from Commercial Auto liability primarily driven by accident years 2015 and 2016.

~~The Other category also incurred adverse prior year loss development of $228~~$3,800 for the three months ended March 31, 2020 (2019 - $4,426).

Pursuant to the terms of the LPT/ADC Agreement, Maiden Reinsurance, Cavello and AmTrust and certain of its affiliated companies entered into a Master Collateral Agreement (“MCA”) to define and enable the operation of collateral provided under the AmTrust Quota Share. Under the MCA, Cavello provided letters of credit on behalf of Maiden Reinsurance to AmTrust in an amount representing Cavello’s obligations under the LPT/ADC Agreement. Because these letters of credit replaced other collateral previously provided directly by Maiden Reinsurance to AmTrust, the MCA coordinates the collateral protection that will be provided to AmTrust to ensure that no gaps in collateral funding occur by operation of the LPT/ADC Agreement and related MCA. As a result of entering into both the LPT/ADC Agreement and the MCA, certain post-termination endorsements (“PTE's”) to the AmTrust Quota Share between AII and Maiden Reinsurance were required. Effective July 31, 2019, ~~(2018 - $0) due~~the PTE's: i) enable the operation of both the LPT/ADC Agreement and MCA by making provision for certain forms of collateral, including letters of credit provided by Cavello on Maiden Reinsurance’s behalf, and further defines the permitted use and return of collateral; and ii) increase the required funding percentage for Maiden Reinsurance under the collateral arrangements between the parties to ~~increased reserves~~105% of its obligations, subject to a minimum excess funding requirement of $54,000, as may be mutually amended by the parties from time to time. Under certain defined conditions, Maiden Reinsurance may be required to increase this funding percentage to 110%.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

10. Related Party Transactions (continued)

Effective March 16, 2020, Maiden Reinsurance discontinued as a Bermuda company and completed its re-domestication to the State of Vermont. Bermuda is a Solvency II equivalent jurisdiction and the State of Vermont is not such a jurisdiction therefore, the collateral provided under the respective agreements with AmTrust subsidiaries was strengthened to reflect the impact of the re-domestication concurrent with the date of Maiden Reinsurance’s re-domestication to Vermont. Maiden Reinsurance and AmTrust agreed to: 1) amend the AmTrust Quota Share pursuant to Post Termination Endorsement No. 2 effective March 16, 2020; and 2) amend the European Hospital Liability Quota Share pursuant to Post Termination Endorsement No. 1 effective March 16, 2020.

Pursuant to the terms of Post Termination Endorsement No. 2 to the AmTrust Quota Share, Maiden Reinsurance will strengthen the collateral protection provided by Maiden Reinsurance to AII by increasing the required funding percentage for Maiden Reinsurance under the collateral arrangements between the parties to 110% of its obligations, subject to a minimum excess funding requirement of $54,000, as may be mutually amended by the parties from time to time. Post Termination Endorsement No. 2 also sets forth conditions by which the funding percentage will be reduced and the sequence of how collateral will be utilized as obligations as defined under the AmTrust Quota Share are satisfied.

Pursuant to the terms of Post Termination Endorsement No. 1 to the European Hospital Liability Quota Share, Maiden Reinsurance will strengthen the collateral protection provided by Maiden Reinsurance to AEL and AIU DAC by increasing the required funding percentage for Maiden Reinsurance under the collateral arrangements between the parties to the greater of 120% of the Exposure (as defined therein) and the amount of security required to offset the increase in the ~~run-off~~Solvency Capital Requirement (“SCR”) that results from the changes in the SCR which arise out of Maiden Reinsurance's re-domestication as compared to the SCR calculation if Maiden Reinsurance had remained domesticated in a Solvency II equivalent jurisdiction with a solvency ratio above 100% and provided collateral equivalent to 100% of the ~~NGHC~~Exposure.

b) European Hospital Liability Quota Share

Collateral has been provided to both AEL and AIU DAC under the European Hospital Liability Quota Share. For AEL, the amount of the collateral held in reinsurance trust accounts at March 31, 2020 was $200,150 (December 31, 2019 - $253,631) and the accrued interest was $1,696 (December 31, 2019 - $1,821). For AIU DAC, the Company utilizes funds withheld to satisfy its collateral requirements. At March 31, 2020, the amount of funds withheld was $74,516 (December 31, 2019 - $57,305) and the accrued interest was $71 (December 31, 2019 - $269). AIU DAC pays Maiden Reinsurance ~~Agreement.~~a fixed annual interest rate of 0.5%, on the average daily funds withheld balance which is subject to annual adjustment.The interest income on the funds withheld receivable was $71 for the three months ended March 31, 2020 (2019 - $53), respectively.

Brokerage Agreement

Maiden Reinsurance recorded $234 of reinsurance brokerage expense for the three months ended March 31, 2020 (2019 - $1,977) and deferred reinsurance brokerage of $2,139 at March 31, 2020 (December 31, 2019 - $2,372) 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 agreed to provide investment management services to the Company. Effective January 1, 2018, AIIM provides investment management services for a quarterly fee of 0.02125% of the average value of the account. The agreement may be terminated upon 30 days written notice by either party. The Company recorded $400 of investment management fees for the three months ended March 31, 2020 (2019 - $775) under this agreement.

Insurance Management Services Agreement

Effective August 31, 2019, the Company entered into an agreement with Risk Services - Vermont, Inc. ("Risk Services"), an affiliate of AmTrust. Pursuant to the agreement, Risk Services agreed to provide insurance management services to the Company including regulatory compliance services in connection with the re-domestication, licensing and operation of Maiden Reinsurance in the State of Vermont. The initial term of the agreement is three years and will automatically renew for an additional three years until either party gives written notice of its intention to terminate this agreement at least three months prior to the commencement of the next applicable period. The fee for this agreement was an initial $100 retainer for re-domestication services and $100 annually and reimbursement for reasonable out-of-pocket expenses incurred by Risk Services pursuant to the terms of the agreement. The Company recorded $25 of fees for the three months ended March 31, 2020.

~~10.~~

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

11. Commitments and Contingencies

There are no material changes from the commitments, contingencies and concentrations previously disclosed in the Company’s Form 10-K for the year ended December 31, 2019.


a)	Concentrations of Credit Risk

At March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, the Company’s assets where significant concentrations of credit risk may exist include investments, cash and cash equivalents, loan to related party, reinsurance balances receivable, ~~funds withheld receivable and~~ reinsurance recoverable on unpaid losses ~~(presented as part of other assets in~~and funds withheld receivable. Please refer to "Note 8. Reinsurance" for additional information regarding the ~~Condensed Consolidated Balance Sheets).~~

~~The~~ Company's credit risk exposure on its reinsurance ~~recoverable on unpaid losses balance at March 31, 2019 was $1,817 (December 31, 2018 - $1,743) presented as part of other assets in~~counterparties including the ~~Condensed Consolidated Balance Sheets. At March 31, 2019, 94.4% (December 31, 2018 - 96.2%)~~impact of the ~~reinsurance recoverable on unpaid losses was due from~~LPT/ADC Agreement effective January 1, 2019. The Company requires its reinsurers to have adequate financial strength. The Company evaluates the financial condition of its reinsurers and ~~retrocessionaires with~~monitors its concentration of credit ~~ratings from A.M Best~~risk on an ongoing basis. Provisions are made for amounts considered potentially uncollectible. Letters of ~~A+ or better. At March 31, 2019 and December 31, 2018, the Company had no valuation allowance against reinsurance~~credit are provided by its reinsurers for material amounts recoverable ~~on unpaid losses.~~as discussed further in "Note 8 — Reinsurance".

The Company manages concentration of credit risk in ~~the~~its investment portfolio through issuer and sector exposure limitations. The Company believes it bears minimal credit risk in its cash on deposit. The Company also monitors the credit risk related to the loan to related party and ~~its reinsurance balances receivable.~~funds withheld receivable, within which the largest balance is due from AmTrust. AmTrust has a financial strength/credit rating of A- from A.M. Best at March 31, 2020. To mitigate credit risk, wethe Company generally ~~have~~has a contractual right of offset thereby allowing usclaims to ~~settle claims~~be settled net of any premiums or loan ~~receivable or funds withheld~~ receivable. The Company believes these balances as at March 31, ~~2019~~2020 will be fully collectible.

~~MAIDEN HOLDINGS, LTD.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~(in thousands of U.S. dollars, except share and per share data)~~

~~10. Commitments and Contingencies (continued)~~


b)	Operating Lease Commitments

The Company leases office spaces, ~~an executive apartment,~~housing, office equipment and company vehicles under various operating leases expiring in various years through 2022. The Company did not enter into any new lease arrangements during the three months ended March 31, ~~2019~~2020. The Company's leases are all currently classified as operating leases and none of them have non-lease components. For operating leases that have a lease term of more than twelve months, the Company recognized a lease liability and a right-of-use asset in the Company's Condensed Consolidated Balance Sheets at the present value of the remaining lease payments until expiration. As the lease contracts generally do not provide an implicit discount rate, the Company used the weighted-average discount rate of 10%, representing its secured incremental borrowing rate, in calculating the present value of the lease liability. The exercise of lease renewal options is at the sole discretion of the Company and none of our current lease renewal options are deemed to be reasonably certain to be exercised. The Company has made an accounting policy election not to include renewal, termination, or purchase options that are not reasonably certain of exercise when determining the term of the borrowing. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company's weighted-average remaining lease term is ~~3.2~~2.4 years.

~~Operating~~At March 31, 2020, the Company's future lease ~~rentals are expensed~~obligations of $2,060 (December 31, 2019 - $2,342) was calculated based on the present value of future annual rental commitments excluding taxes, insurance and other operating costs for non-cancellable operating leases discounted using its secured incremental borrowing rate. This amount has been recognized on the Condensed Consolidated Balance Sheets as a lease liability of $2,060 within accrued expenses and other liabilities with an equivalent amount for the right-of-use asset presented as part of other assets. Under Topic 842, Leases, the Company continues to recognize the related leasing expense on a straight-line basis over the ~~life~~lease term in the unaudited Condensed Consolidated Statements of ~~the lease beginning on the commencement date.~~Income. The Company's total lease expense for the three months ended March 31, ~~2019~~2020 was ~~$421 (2018~~$410 (2019 - ~~$615)~~$421) which was recognized within net income consistent with the accounting treatment in prior periods under Topic 840. The operating cash outflows from operating leases included in the measurement of the lease liability during the three months ended March 31, ~~2019~~2020 was ~~$341.~~$340 (2019 - $341).

~~At March 31, 2019, the~~The scheduled maturity of the Company's operating lease liabilities are expected to be as follows:

March 31, 2019
Remainder of 2019 $ 1,005
2020 1,171
2021 741
2022 741
Discount for present value (660 )
Total discounted operating lease liabilities $ 2,998

~~At December 31, 2018, the Company's future minimum lease payments under non-cancellable operating leases were expected to be as follows:~~


	December 31, 2018		March 31, 2020
2019	$	1,442
2020	1,228		$	832
2021	772		741
2022	750		741
	$	4,192
Discount for present value			(254		)
Total discounted operating lease liabilities			$	2,060


c)	Legal Proceedings

Except as noted below, the Company is not a party to any material 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.

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

11. Commitments and Contingencies (continued)

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,~~Reinsurance, 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 that he was terminated for raising concerns regarding corporate governance with respect to the negotiation of the terms of the Trust Preferred Securities Offering. He seeks reinstatement as Chief Operating Officer, General Counsel and Secretary of Maiden Holdings and Maiden ~~Bermuda,~~Reinsurance, 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. 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 ~~the hearings~~ concluded in November 2018. The Company believes that it had good and sufficient reasons for terminating Mr. Turin's employment and that the claim is without merit. The Company will continue to vigorously defend itself against this claim.

~~MAIDEN HOLDINGS, LTD.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)~~

~~(in thousands of U.S. dollars, except share and per share data)~~

~~10. Commitments and Contingencies (continued)~~

A putative class action complaint was filed against Maiden Holdings, Arturo M. Raschbaum, Karen L. Schmitt, and John M. Marshaleck in the United States District Court for the District of New Jersey on February 11, ~~2019, alleging that Defendants violated~~2019. On February 19, 2020, the Court appointed lead plaintiffs, and on May 1, 2020, lead plaintiffs filed an amended class action complaint (the “Amended Complaint”).The Amended Complaint asserts violations of Section 10(b) of the Exchange Act and Rule 10b-5 (and Section 20(a) for control person liability) ~~by making misrepresentations about the Company and~~arising in large part from allegations that Maiden failed to take adequate loss reserves in connection with reinsurance provided to AmTrust. Plaintiffs further claim that certain of Maiden Holdings’ representations concerning its business, ~~including~~underwriting and financial statements were rendered false by the ~~Company’s risk management and underwriting policies and practices. Plaintiffs further claim~~allegedly inadequate loss reserves, that these misrepresentations inflated the price of Maiden Holdings' common stock, and that when the truth about the misrepresentations was revealed, the Company’s stock price fell, causing Plaintiffs to incur losses. ~~Maiden has not yet been served with the complaint, but believe~~The Company believes the claims are without merit and intends to vigorously defend itself. ~~There exist and the Company expects~~It is possible that additional lawsuits towill be filed against the Company, its subsidiaries and its respective officers due to the diminution in value of our securities as a result of our operating results and financial condition. It is currently uncertain as to the effect of such litigation on our business, operating results and financial ~~conditions.~~condition.

~~11.~~12. Earnings per Common Share

The following is a summary of the elements used in calculating basic and diluted earnings per common share:

For the Three Months Ended March 31, 2019 2018
Numerator:
Net (loss) income from continuing operations $ (33,284 ) $ 12,348
Net income from continuing operations attributable to noncontrolling interests —
(71 )
Net (loss) income attributable to Maiden from continuing operations (33,284 ) 12,277
Dividends on preference shares – Series A, C and D —
(8,545 )
Amount allocated to participating common shareholders⁽¹⁾
—
(5 )
(Loss) income attributable to Maiden common shareholders, before discontinued operations (33,284 ) 3,727
(Loss) income from discontinued operations, net of income tax expense (3,352 ) 9,995
Numerator for basic and diluted EPS - net (loss) income allocated to Maiden common shareholders $ (36,636 ) $ 13,722
Denominator:
Weighted average number of common shares – basic 82,965,156
83,040,413
Potentially dilutive securities:
Share options and restricted share units —
278,129
Adjusted weighted average number of common shares – diluted 82,965,156
83,318,542
Basic (loss) earnings from continuing operations per share attributable to Maiden common shareholders $ (0.40 ) $ 0.05
Basic (loss) earnings from discontinued operations per share attributable to Maiden common shareholders (0.04 ) 0.12
Basic (loss) earnings per share attributable to Maiden common shareholders: $ (0.44 ) $ 0.17
Diluted (loss) earnings from continuing operations per share attributable to Maiden common shareholders $ (0.40 ) $ 0.04
Diluted (loss) earnings from discontinued operations per share attributable to Maiden common shareholders (0.04 ) 0.12
Diluted (loss) earnings per share attributable to Maiden common shareholders: $ (0.44 ) $ 0.16



For the Three Months Ended March 31,	2020			2019
Numerator:
Net income (loss) from continuing operations	$	20,861		$	(33,902	)
Amount allocated to participating common shareholders⁽¹⁾	(247		)	—
Income (loss) attributable to common shareholders, before discontinued operations	20,614			(33,902		)
Loss from discontinued operations, net of income tax expense	—			(2,734		)
Net income (loss) allocated to common shareholders	$	20,614		$	(36,636	)
Denominator:
Weighted average number of common shares – basic and diluted⁽²⁾	83,256,223			82,965,156
Basic and diluted earnings (loss) from continuing operations per share attributable to common shareholders	$	0.25		$	(0.41	)
Basic and diluted loss from discontinued operations per share attributable to common shareholders	—			(0.03		)
Basic and diluted earnings (loss) per share attributable to common shareholders:	$	0.25		$	(0.44	)

~~For the Three Months Ended March 31, 2019 2018~~



For the Three Months Ended March 31,	2020	2019


(1)	This represents ~~earnings allocated to~~the share in net income using the two class method of the holders of non-vested restricted shares issued to the Company's employees under the ~~Amended and Restated 2007 Share~~2019 Omnibus Incentive Plan.

(2)

Please refer to "Note 13. Shareholders' Equity" and "Note 14. Share Compensation and Pension Plans" of the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, for the terms and conditions of securities that could potentially be dilutive in the future. For the three months ended March 31, 2020, there were 0 potentially dilutive securities.

~~At March 31, 2019, 570,249 share options and restricted share units (2018 - 3,774,222) were excluded from diluted earnings per common share as they were anti-dilutive.~~

MAIDEN HOLDINGS, LTD.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

(in thousands of U.S. dollars, except share and per share data)

~~12.~~13. Shareholders' Equity


a)	Common Shares

At March 31, ~~2019,~~2020, the aggregate authorized share capital of the Company is 150,000,000 shares from which the Company has issued ~~88,054,315~~88,983,171 common shares, of which ~~83,064,173~~83,969,991 common shares are outstanding, and 18,600,000 preference shares, all of which are outstanding. The remaining ~~43,345,685~~42,416,829 shares are undesignated at March 31, ~~2019.~~2020. 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, ~~2018.~~2019.


b)	Treasury Shares

During the three months ended March 31, 2019, the Company repurchased a total of 182 ~~(2018 - 29,391)~~ shares at an average price per share of $1.48 ~~(2018 - $6.57)~~ from employees, which represent withholdings in respect of tax obligations on the vesting of restricted shares and performance based shares.

~~During~~ There were 0 such repurchases during the three months ended March 31, ~~2019 and 2018, no shares were repurchased under the Company's share repurchase plan which~~2020.

The Company has a remaining authorization of $74,245 for share repurchases at March 31, ~~2019~~2020 (December 31, ~~2018~~2019 - $74,245). NaN repurchases were made during the three months ended March 31, 2020 and 2019 under the share repurchase plan.


c)	Accumulated Other Comprehensive ~~Loss~~Income (Loss)

The following tables set forth financial information regarding the changes in the balances of each component of AOCI:



For the Three Months Ended March 31, 2020	Change in net unrealized gains on investment			Foreign currency translation			Total
Beginning balance	$	21,996		$	(4,160	)	$	17,836
Other comprehensive loss before reclassifications	(40,088		)	(3		)	(40,091		)
Amounts reclassified from AOCI to net loss, net of tax	(4,033		)	—			(4,033		)
Net current period other comprehensive loss	(44,121		)	(3		)	(44,124		)
Ending balance, Maiden shareholders	$	(22,125	)	$	(4,163	)	$	(26,288	)

For the Three Months Ended March 31, 2019	Change in net unrealized gains on investment			Foreign currency translation			Total
Beginning balance	$	(59,762	)	$	(5,932	)	$	(65,694	)
Other comprehensive income before reclassifications	48,988			3,998			52,986
Amounts reclassified from AOCI to net loss, net of tax	12,488			—			12,488
Net current period other comprehensive income	61,476			3,998			65,474
Ending balance, Maiden shareholders	$	1,714		$	(1,934	)	$	(220	)

For the Three Months Ended March 31, 2019 Change in net unrealized gains on investment Foreign currency translation adjustments Total
Beginning balance $ (59,762 ) $ (5,932 ) $ (65,694 )
Other comprehensive income before reclassifications 48,988
3,998
52,986
Amounts reclassified from AOCI to net loss, net of tax 12,488
—
12,488
Net current period other comprehensive income 61,476
3,998
65,474
Ending balance, Maiden shareholders $ 1,714
$ (1,934 ) $ (220 )

For the Three Months Ended March 31, 2018 Change in net unrealized gains on investment Foreign currency translation adjustments Total
Beginning balance $ 21,889
$ (8,583 ) $ 13,306
Other comprehensive loss before reclassifications (66,828 ) (7,940 ) (74,768 )
Amounts reclassified from AOCI to net income, net of tax (1,490 ) —
(1,490 )
Net current period other comprehensive loss (68,318 ) (7,940 ) (76,258 )
Ending balance (46,429 ) (16,523 ) (62,952 )
Less: AOCI attributable to noncontrolling interest —
(37 ) (37 )
Ending balance, Maiden shareholders $ (46,429 ) $ (16,486 ) $ (62,915 )



For the Three Months Ended March 31, 2020	Change in net unrealized gains on investment	Foreign currency translation	Total

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (this "Form 10-Q" or this "Report"). References in this Form 10-Q to the terms "we", "us", "our", "the Company" or other similar terms mean the consolidated operations of Maiden Holdings, Ltd. and its subsidiaries, unless the context requires otherwise. References in this Form 10-Q to the term "Maiden Holdings" means Maiden Holdings, Ltd. only. Certain reclassifications have been made for ~~2018~~2019 to conform to the ~~2019~~2020 presentation and have no impact on consolidated net income and total equity previously reported.

Note on Forward-Looking Statements

This Quarterly Report on Form 10-Q includes projections concerning financial information and statements concerning future economic performance and events, plans and objectives relating to management, operations, products and services, and assumptions underlying these projections and statements. These projections and statements are forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 and are not historical facts but instead represent only our belief regarding future events, many of which, by their nature, are inherently uncertain and outside our control. These projections and statements may address, among other things, our strategy for growth, product development, financial results and reserves. Our actual results and financial condition may differ, possibly materially, from these projections and statements and therefore you should not place undue reliance on them. Factors that could cause our actual results and financial condition to differ, possibly materially, from those in the specific projections and statements are discussed throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations and in "Risk Factors" in Item 1A of Part I of our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC") on March ~~14, 2019,~~18, 2020, however, these factors should not be construed as exhaustive. Forward-looking statements speak only as of the date they are made and we undertake no obligation to update or revise any forward-looking statement that may be made from time to time, whether as a result of new information, future developments or otherwise, except as required by law.

Overview

~~We are~~Maiden Holdings is a Bermuda-based holding company, previously focused on serving the needs of regional and specialty insurers in the United States ("U.S."), Europe and select other global markets. We operate internationally providing branded auto and credit life insurance products through insurer partners to retail clients in the EU and other global markets through Maiden Global Holdings, Ltd. ("Maiden Global") ~~and its subsidiaries.~~. These products also produce reinsurance programs which are underwritten by Maiden Reinsurance Ltd. ("Maiden ~~Bermuda"~~Reinsurance"). Certain international credit life business is written on a primary basis by Maiden Life Försäkrings AB ("Maiden LF") and general insurance business is written on a primary basis by Maiden General Försäkrings AB ("Maiden GF"). We are also ~~presently~~ running off the liabilities associated with AmTrust Financial Services, Inc. ("AmTrust") contracts we terminated in early 2019 as discussed below. In addition, we are not actively underwriting reinsurance business. We have also entered into a retroactive reinsurance agreement and a commutation agreement that further reduces our exposure to and limits the potential volatility related to these AmTrust liabilities, which are discussed in "Note 1. Basis of Presentation" of the Notes to Condensed Consolidated Financial Statements included in Part I Item 1. "Financial Information".

As discussed in "Note 1. Basis of Presentation" of the Notes to Condensed Consolidated Financial Statements included in Part I Item 1. "Financial Information" and in Item 1. "Business" of our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March ~~14, 2019,~~18, 2020, the sale of Maiden Reinsurance North America, Inc. ("Maiden US")~~, the Partial Termination Amendment (as defined below)~~ and the termination of both of our quota share contracts with AmTrust have materially reduced our gross and net premiums written ~~in 2019.~~since 2018. We have significantly reduced our operating expenses and continue to ~~review the~~take steps ~~necessary~~ to reduce these costs ~~further commensurate~~further.

We expect to continue to re–evaluate our operating strategy during 2020 while leveraging the significant assets and capital we retain. In addition to restoring operating profitability, our strategic focus will center on creating the greatest risk-adjusted shareholder returns, whether via asset and capital management or active reinsurance underwriting, or a combination of both. Our present assessment of the reinsurance marketplace along with our current operating profile is that the ~~reduction in revenues.~~risk-adjusted returns that may be produced via active reinsurance underwriting are likely to present more limited opportunities compared to other strategic initiatives which may produce greater shareholder value.

Our business consists of two reportable segments: Diversified Reinsurance and AmTrust Reinsurance. As a result of the strategic decision to divest all of our U.S. treaty reinsurance operations ~~as discussed~~ in ~~more detail below,~~2018, we revised the composition of our reportable segments in the fourth quarter of 2018. Our Diversified Reinsurance segment now only consists of a portfolio of predominantly property and casualty reinsurance business focusing on regional and specialty property and casualty insurance companies located primarily in Europe. Our AmTrust Reinsurance segment includes the run-off of all business ceded by AmTrust to Maiden ~~Bermuda,~~Reinsurance, primarily the AmTrust Quota Share and the European Hospital Liability Quota Share.

Recent Developments

Effective March 16, 2020, we re-domesticated our principal operating subsidiary, Maiden Reinsurance, to the State of Vermont in the United States. Maiden Reinsurance is now subject to the statutes and regulations of Vermont in the ordinary course of business. We have determined that re-domesticating Maiden Reinsurance to Vermont enables us to better align our capital and resources with our liabilities, which originate mostly in the United States, resulting in a more efficient structure.The re-domestication, in combination with the transactions completed pursuant to the Strategic Review, will continue to strengthen the Company’s capital position and solvency ratios. While the Vermont DFR will be the group supervisor for the Company, the re-domestication did not apply to the parent holding company which remains a Bermuda-based holding company. Securities issued by Maiden Holdings were not affected by the re-domestication of Maiden Reinsurance to Vermont.

Concurrent with its re-domestication to Vermont on March 16, 2020, Maiden Holdings contributed as capital the remaining 65% of its ownership in Maiden Reinsurance to Maiden NA. Maiden NA now owns 100% of Maiden Reinsurance. Maiden NA also maintains a portfolio of cash and short-term investments, along with other strategic investments of $48.5 million at March 31, 2020. We believe Maiden NA’s investments, including its ownership of Maiden Reinsurance, will create opportunities to utilize net operating loss carry-forwards ("NOLs") which total $222.7 million as of March 31, 2020. These NOLs are not presently recognized as deferred tax assets as a full valuation allowance is currently carried against them. For further details please see Note 16 — Taxation included under Item 8 "Financial Statements and Supplementary Data" in our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on March 18, 2020. Taken together, the Company believes these measures should generate additional income for Maiden NA in a tax-efficient manner while sharing in the improvement in profitability anticipated in Maiden Reinsurance as a result of the measures enacted in the Strategic Review.

In addition to these changes regarding Maiden Reinsurance, since the third quarter of 2018, we have engaged in a series of strategic measures that have dramatically reduced the regulatory capital required to operate our business, materially strengthened our solvency ratios, and ceased active reinsurance underwriting. During that time, we significantly increased our estimate of ultimate losses and loss reserves while purchasing reinsurance protection against further loss reserve volatility and as a result, have improved the ultimate economic value of the Company.

We believe these measures have given the Company the ability to more flexibly allocate capital to those activities most likely to produce the greatest returns for shareholders.

The measures we have taken were initiated in early 2018, when our Board of Directors initiated a review of strategic alternatives ~~(the "Strategic~~("Strategic Review") to evaluate ways to increase shareholder value asafter a ~~result~~period of continuing higher than targeted combined ratios and lower returns on equity than ~~planned.~~expected. This Strategic Review ~~has~~ resulted in a series of transactions that have transformed our operations and materially reduced the risk on our balance sheet. These transactions ~~include:~~

On August 29, 2018, we entered into a Renewal Rights Agreement (“Renewal Rights”) with Transatlantic Reinsurance Company ("TransRe"), pursuant to which we sold, and TransRe purchased, Maiden US's rights to: (i) renew its treaty reinsurance agreements upon their expiration or cancellation, (ii) solicit renewalscan be found in Part II of ~~and replacement coverages~~our Annual Report on Form 10-K for the treaty reinsurance agreements and (iii) replicate and use the products and contract forms used in Maiden US’s business. The sale was consummated on August 29, 2018. We continue to earn premiums and remain liable for losses occurring subsequent to August 29, 2018 for any policies in force prior to and as of August 29, 2018, until those policies expire. The payment received for sale of the Renewal Rights was $7.5 million, subject to further increases in accordance with the agreement.

On December 27, 2018, we completed the previously announced sale agreement (the "U.S. Sale Agreement"), with Enstar Holdings U.S. LLC ("Enstar"), pursuant to which Maiden Holdings North America, Ltd. ("Maiden NA") sold, and Enstar purchased, all of the outstanding shares of common stock of Maiden US for gross consideration of $286.4 million, including estimated closing adjustments but subject to post-closing adjustments. Also, pursuant to the terms of the U.S. Sale Agreement, Maiden Bermuda entered into a novation agreement and a retrocession agreement pursuant to which certain assets and liabilities associated with the U.S. treaty reinsurance business held by Maiden Bermuda were either novated or retroceded to Cavello Bay Reinsurance Limited (“Cavello”), Enstar’s Bermuda reinsurance affiliate in exchange for a ceding commission of $14.0 million, and Maiden Bermuda provided Enstar with a reinsurance cover for loss reserve development, up to a maximum of $25.0 million, when losses are more than $100.0 million in excess of the net loss and loss adjustment expenses recorded as of June 30, 2018.

As a result of the above decision to divest all of our U.S. treaty reinsurance operations, these operations are now classified as discontinued operations, and except as explicitly described as held for sale or as discontinued operations, and unless otherwise noted, all discussions and amounts presented herein relate to our continuing operations, except for net (loss) income, net (loss) income attributable to Maiden and net (loss) income attributable to Maiden common shareholders.

Effective January 1, 2019, Maiden Bermuda and AmTrust through AmTrust’s subsidiary, AmTrust International Insurance, Ltd. ("AII"), amended the quota share agreement between Maiden Bermuda and AII ("AmTrust Quota Share"), originally entered into on July 1, 2007 that was in-force and set to expire on June 30, 2019 (the "Partial Termination Amendment"). The Partial Termination Amendment provided for the cut-off of the ongoing and unearned premium of AmTrust’s Small Commercial Business and U.S. Specialty Risk and Extended Warranty business (the "Terminated Business") as of year ended December 31, ~~2018, with the remainder of the AmTrust Quota Share remaining in place.~~

~~The Partial Termination Amendment resulted in Maiden Bermuda returning approximately~~ ~~$643.1 million~~ in unearned premium to AII, or approximately $433.5 million net of applicable ceding commission and brokerage, subject to final adjustment. In January 2019, as part of this amendment, the Company transferred cash and investments of $480.0 million to AII based on provisional estimates. On or before May 30, 2019, AII shall report to Maiden the actual unearned premium applicable to the Terminated Business as of December 31, 2018. In the event that the estimated unearned premium exceeds the actual unearned premium, AII shall return the excess to Maiden Bermuda. The estimated amount to be returned to Maiden Bermuda is approximately $46.5 million as of March 31, 2019.

On January 30, 2019, Maiden Bermuda and AmTrust agreed to terminate on a run-off basis (i) the AmTrust Quota Share; and (ii) 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") effective January 1, 2019.

On March 1, 2019, the Company and Enstar terminated the Master Transaction Agreement between the parties dated as of November 9, 2018 (the "Old LPT MTA") and simultaneously signed the loss portfolio transfer and adverse development cover (the "New LPT/ADC MTA ") pursuant to which an Enstar subsidiary will assume liabilities for loss reserves as of ~~December 31, 2018~~ ~~associated with the quota share reinsurance agreements between Maiden Bermuda and AmTrust in excess of a~~ ~~$2.4 billion~~ ~~retention up to~~ ~~$675.0 million. The retention will be subject to adjustment for paid losses subsequent to~~ ~~December 31, 2018. The New LPT/ADC MTA and associated pending reinsurance agreement, which is pending, will provide Maiden Bermuda with~~ ~~$175.0 million~~ ~~in adverse development cover over its carried AmTrust reserves at~~ ~~December 31, 2018~~. Management has assessed that the associated reinsurance agreement to the New LPT/ADC MTA meets the criteria for risk transfer and will be accounted for as retroactive reinsurance. Cumulative ceded losses exceeding ~~$500.0 million~~ would result in a deferred gain which would be recognized over the settlement period in proportion to cumulative losses collected over the estimated ultimate reinsurance recoverable. Consequently, cumulative adverse development subsequent to ~~December 31, 2018~~ ~~in excess of~~ ~~$500.0 million~~ may result in significant losses from operations until periods when the deferred gain is recognized as a benefit to earnings. The transaction, when finalized, is subject to other closing conditions and regulatory approvals.

Please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" section included under Item 7 of our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 for further information.

COVID-19 Pandemic

The evolving COVID-19 global pandemic has caused significant disruption to the economy and financial markets globally, and the full extent of the potential impacts of COVID-19 are not yet known. Circumstances caused by the COVID-19 pandemic are complex, uncertain and rapidly evolving. Our results of operations, financial condition, and liquidity and capital resources have been adversely impacted by the COVID-19 pandemic, and the future impact of the pandemic on our financial condition or results of operations is difficult to predict.

As described herein, the Company is not engaged in active reinsurance underwriting and is running off the remaining unearned exposures it has reinsured. Our IIS unit does write limited primary insurance coverages that could be exposed to COVID-19 claims. While we assess our exposure to COVID-19 insurance and reinsurance claims on our existing insurance exposures and remaining reinsurance exposures as limited and immaterial, given the uncertainty surrounding the COVID-19 pandemic and its impact on the insurance industry, our preliminary estimates of loss and loss adjustment expenses ("loss and LAE") and estimates of reinsurance recoverable arising from the COVID-19 pandemic may materially change. We have not received any COVID-19 claims to date. Unanticipated issues relating to claims and coverage may emerge, which could adversely affect our business by increasing the scope of coverage beyond our intent and/or increasing the frequency and severity of claims.

Please refer to the Liquidity and Capital Resources section for a further discussion of the impact of the COVID-19 pandemic on our liquidity and investment portfolio.

Three Months Ended March 31, ~~2019~~2020 and ~~2018~~2019 Financial Highlights

For the Three Months Ended March 31, 2019 2018 Change
Summary Consolidated Statement of Income Data: ($ in thousands except per share data)
Net (loss) income from continuing operations $ (33,284 ) $ 12,348
$ (45,632 )
(Loss) income from discontinued operations, net of income tax (3,352 ) 9,995
(13,347 )
Net (loss) income (36,636 ) 22,343
(58,979 )
Net (loss) income attributable to Maiden common shareholders (36,636 ) 13,727
(50,363 )
Non-GAAP operating (loss) earnings⁽¹⁾
(26,934 ) 5,782
(32,716 )
Basic (loss) earnings per common share⁽⁹⁾:

Net (loss) income attributable to Maiden common shareholders⁽²⁾
(0.44 ) 0.17
(0.61 )
Non-GAAP operating (loss) earnings attributable to Maiden common shareholders⁽¹⁾
(0.32 ) 0.07
(0.39 )
Diluted earnings per common share:
Net income attributable to Maiden common shareholders⁽²⁾⁽⁹⁾
(0.44 ) 0.16
(0.6 )
Non-GAAP operating earnings attributable to Maiden common shareholders⁽¹⁾⁽⁹⁾
(0.32 ) 0.07
(0.39 )
Dividends per common share —
0.15
(0.15 )
Net premiums earned 183,102
516,813
(333,711 )
Underwriting loss⁽¹⁾⁽³⁾
(42,751 ) (4,696 ) (38,055 )
Net investment income 32,022
32,869
(847 )
Combined ratio⁽⁴⁾
129.6 % 102.9 % 26.7
Annualized non-GAAP operating return on average common shareholders' equity⁽¹⁾
(104.7 )% 3.2 % (107.9 )



For the Three Months Ended March 31,	2020			2019			Change
Summary Consolidated Statement of Income Data (unaudited):	($ in thousands except per share data)
Net income (loss) from continuing operations	$	20,861		$	(33,902	)	$	54,763
Loss from discontinued operations, net of income tax	—			(2,734		)	2,734
Net income (loss)	20,861			(36,636		)	57,497
Basic and diluted earnings (loss) per common share⁽⁹⁾:
Net income (loss) attributable to common shareholders⁽²⁾⁽⁹⁾	0.25			(0.44		)	0.69
Gross premiums written	11,734			(561,139		)	572,873
Net premiums earned	31,215			183,102			(151,887		)
Underwriting loss⁽³⁾	(3,693		)	(42,689		)	38,996
Net investment income	17,964			32,022			(14,058		)
Combined ratio⁽⁴⁾	131.6		%	129.9		%	1.7
Non-GAAP measures:
Non-GAAP operating earnings (loss)⁽¹⁾	$	3,132		$	(27,552	)	$	30,684
Non-GAAP operating earnings (loss) per share - attributable to common shareholders⁽¹⁾⁽⁹⁾	0.04			(0.33		)	0.37
Annualized non-GAAP operating return on average common shareholders' equity⁽¹⁾	40.2		%	(107.2		)%	147.4


	March 31, 2019			December 31, 2018			Change			March 31, 2020			December 31, 2019			Change
Consolidated Financial Condition	($ in thousands except per share data)									($ in thousands except per share data)
Total investments and cash and cash equivalents⁽⁵⁾	$	3,288,482		$	4,421,954		$	(1,133,472	)	$	1,720,594		$	1,974,544		$	(253,950	)
Total assets	4,563,356			5,287,460			(724,104		)	3,321,757			3,568,196			(246,439		)
Reserve for loss and loss adjustment expenses ("loss and LAE")	2,980,113			3,055,976			(75,863		)
Reserve for loss and LAE										2,249,045			2,439,907			(190,862		)
Senior notes - principal amount	262,500			262,500			—			262,500			262,500			—
Maiden common shareholders' equity	119,289			89,275			30,014
Maiden shareholders' equity	584,289			554,275			30,014
Common shareholders' equity										19,998			42,718			(22,720		)
Shareholders' equity										484,998			507,718			(22,720		)
Total capital resources⁽⁶⁾	846,789			816,775			30,014			747,498			770,218			(22,720		)
Ratio of debt to total capital resources	31.0		%	32.1		%	(1.1		)
Ratio of debt to total capital resources⁽¹²⁾										35.1		%	34.1		%	1.0
Book Value calculations:
Book value per common share⁽⁷⁾										$	0.24		$	0.51		$	(0.27	)
Accumulated dividends per common share										4.27			4.27			—
Book value per common share plus accumulated dividends										$	4.51		$	4.78		$	(0.27	)
Change in book value per common share plus accumulated dividends										(5.6		)%
Diluted book value per common share⁽⁸⁾										$	0.24		$	0.50		$	(0.26	)

Book Value
Book value per common share⁽⁷⁾	$	1.44		$	1.08		$	0.36
Diluted book value per common share⁽⁸⁾	1.40			1.08			0.32
Non-GAAP measures:
Adjusted book value per common share⁽¹⁰⁾										$	1.59		$	1.87		$	(0.28	)
Adjusted Maiden shareholders' equity⁽¹¹⁾										597,948			620,668			(22,720		)
Adjusted total capital resources⁽¹¹⁾										860,448			883,168			(22,720		)
Ratio of debt to adjusted total capital resources⁽¹³⁾										30.5		%	29.7		%	0.8


(1)	Non-GAAP operating earnings (loss) ~~earnings,~~, non-GAAP operating earnings (loss) ~~earnings~~ per common share, and annualized non-GAAP operating return on average common equity and underwriting loss are non-GAAP financial measures. See "Key Financial Measures" for additional ~~information and a reconciliation to the nearest U.S. GAAP financial measure net (loss) income.~~information.


(2)	Please refer to "Notes to Condensed Consolidated Financial Statements (unaudited) Note ~~11.~~12. Earnings per Common Share" for the calculation of basic and diluted ~~(loss) earnings~~income or loss per common share.


(3)	Underwriting loss is a non-GAAP measure and 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. See "Key Financial Measures" for additional information.


(4)	~~Calculated~~Combined ratio is calculated by adding together the net loss and LAE ratio and the 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 ~~Maiden~~ common shareholders’ equity (shareholders' equity excluding the aggregate liquidation value of our preference shares) divided by the number of common shares ~~outstanding.~~outstanding.See "Key Financial Measures" for additional information.


(8)	Diluted book value per common share is calculated by dividing ~~Maiden~~ 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~~shares (assuming exercise of all dilutive share based awards). See "Key Financial Measures" for additional information.


(9)	During a period of loss, the basic weighted average common shares outstanding is used in the denominator of the diluted loss per common share computation as the effect of including potential dilutive shares would be anti-dilutive.

~~as the effect of including potential dilutive shares would be anti-dilutive.~~


(10)	Adjusted book value per common share is a non-GAAP measure that is calculated using common shareholders' equity, adjusted for unamortized deferred gain on retroactive reinsurance, divided by the number of common shares outstanding. See "Key Financial Measures" for additional information.

(11)

Adjusted shareholders' equity and adjusted total capital resources are calculated by adding the unamortized deferred gain on retroactive reinsurance to the GAAP shareholders' equity and GAAP total capital resources, respectively. The deferred gain arises from the LPT/ADC Agreement with Cavello relating to losses from the AmTrust Quota Share agreement. Under U.S. GAAP, the deferred gain shall be amortized over the estimated remaining settlement period. See "Key Financial Measures" for additional information.


(12)	Ratio of debt to total capital resources is calculated using the total principal amount of debt divided by the sum of total capital resources.


(13)	Ratio of debt to adjusted total capital resources is calculated using the total principal amount of debt divided by the sum of adjusted total capital resources.

Key Financial Measures

In addition to the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Income and Comprehensive Income, management uses certain key financial measures, some of which are non-GAAP measures, to evaluate ~~its~~the Company's financial performance and the overall growth in value generated for the Company’s common shareholders. Management believes that these measures, which may be defined differently by other companies, explain the Company’s results to investors in a manner that allows for a more complete understanding of the underlying trends in the Company’s business. The non-GAAP measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. The calculation of some of these key financial measures including the reconciliation of non-GAAP measures to the nearest GAAP measure and relevant discussions are found within Item 2 - "Management's Discussion and Analysis of Financial Condition and Results of Operations" on page 49. These key financial measures are:

Non-GAAP operating earnings (loss) ~~earnings~~ and non-GAAP diluted operating earnings (loss) ~~earnings~~ per common share: Management believes that the use of non-GAAP operating earnings (loss) ~~earnings~~ and non-GAAP diluted operating earnings (loss) ~~earnings~~ per common share enables investors and other users of the Company’s financial information to analyze its performance in a manner similar to how management analyzes performance. Management also believes that these measures generally follow industry practice ~~and,~~ therefore ~~allow~~allowing the users of financial information to compare the Company’s performance with its industry peer group, and that the equity analysts and certain rating agencies which follow the Company, and the insurance industry as a whole, generally exclude these items from their analyses for the same reasons. Non-GAAP operating earnings (loss) ~~earnings~~ should not be viewed as a substitute for U.S. GAAP net income (loss) ~~income.~~.

Non-GAAP operating earnings (loss) ~~earnings~~ is an internal performance measure used by management as these measures focus on the underlying fundamentals of the Company's operations by excluding, on a recurring basis: (1) net realized gains or losses on investment; (2) total other-than-temporary impairment ("OTTI") losses; and (3) foreign exchange and other gains or losses; and ~~(3)~~(4) the portion of favorable or unfavorable prior year reserve development for which we have ceded the risk under retroactive reinsurance agreements and related changes in amortization of the deferred gain losses. It also excludes on a non-recurring basis: (1) loss from discontinued operations, net of income tax and; (2) loss and related activity from our NGHC Quota Share run-off ~~operations. It also excludes on a non-recurring basis the loss from discontinued~~ operations ~~net of income tax.~~which was commuted in November 2019. We exclude net realized gains or losses on investment, OTTI losses and foreign exchange and other gains or losses as we believe these are influenced by market opportunities and other factors. We do not believe ~~loss and related activity~~results from our NGHC Quota Share run-off operations ~~and loss~~commuted in November 2019, results from our discontinued operations, and ceded risks under retroactive reinsurance agreements are representative of our ongoing and future business. We believe all of these amounts are ~~largely~~substantially independent of our business and any potential future underwriting process ~~and~~therefore including them ~~distorts~~would distort the analysis of underlying trends in our operations.

Underwriting loss is a non-GAAP measure and 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. For purposes of these non-GAAP operating measures, the fee-generating business which is included in our Diversified Reinsurance segment, is considered part of the underwriting operations of the Company. Management believes that this measure is important in evaluating the underwriting performance of the Company and its segments. This measure is also a useful tool to measure the profitability of the Company separately from the investment results and is also a widely used performance indicator in the insurance industry. A reconciliation of the Company's underwriting results can be found in the ~~Company's~~ Condensed Consolidated Financial ~~Statements.~~Statements in the "Notes to Condensed Consolidated Financial Statements (unaudited) Note 3. Segment Information" included under Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q.

Combined ratio is commonly used in the insurance and reinsurance industry in conjunction with underwriting income (loss) as a measure of underwriting profitability. Management measures underwriting results on an overall basis and for each segment on the basis of the combined ratio. The combined ratio is the sum of the net loss and LAE ratio and the expense ratio and the computations of each component are described below. A combined ratio under 100% indicates underwriting profitability, as the net loss and LAE, commission and other acquisition expenses and general and administrative expenses are less than the net premiums earned and other insurance revenue on that business. Please refer to "Notes to Condensed Consolidated Financial Statements (unaudited) Note 3. Segment Information" included under Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q for further details.

~~Non-GAAPoperating (loss) earnings~~While an important metric of success, underwriting loss and ~~non-GAAP diluted operating (loss) earnings per common share can be reconciled~~combined ratio do not reflect all components of profitability, as they do not recognize the impact of investment income earned on premiums between the time premiums are received and the time loss payments are ultimately paid to clients. Because we do not manage our cash and investments by segment, investment income and interest expense are not allocated to the ~~nearest U.S. GAAP financial measure as follows:~~

For the Three Months Ended March 31, 2019 2018
($ in thousands except per share data)
Net (loss) income attributable to Maiden common shareholders $ (36,636 ) $ 13,727
Add (subtract):
Net realized losses (gains) on investment 11,101
(357 )
Foreign exchange and other (gains) losses (4,979 ) 2,407
Loss (income) from discontinued operations, net of income tax 3,352
(9,995 )
Loss from NGHC Quota Share run-off 228
—
Non-GAAP operating (loss) earnings attributable to Maiden common shareholders $ (26,934 ) $ 5,782

Diluted (loss) earnings per share attributable to Maiden common shareholders $ (0.44 ) $ 0.16
Add (subtract):
Net realized losses (gains) on investment 0.13
—
Foreign exchange and other (gains) losses (0.06 ) 0.03
Loss (income) from discontinued operations, net of income tax 0.04
(0.12 )
Loss from NGHC Quota Share run-off 0.01
—
Non-GAAP diluted operating (loss) earnings per common share
$ (0.32 ) $ 0.07
reportable segments. Certain general and administrative expenses are generally allocated to segments based on actual costs incurred.

~~Non-GAAP~~The "net loss and LAE ratio~~operating (loss) earnings attributable to Maiden common shareholders decreased~~" is derived by ~~$32.7 million for~~dividing net loss and LAE by the ~~three months ended March 31, 2019 compared to~~sum of net premiums earned and other insurance revenue. The "commission and other acquisition expense ratio" is derived by dividing commission and other acquisition expenses by the ~~same period in 2018. This was largely due to~~sum of net premiums earned and other insurance revenue. The "general and administrative expense ratio" is derived by dividing general and administrative expenses by the ~~deterioration in our underwriting results~~sum of ~~$38.1 million during~~net premiums earned and other insurance revenue. The "expense ratio" is the ~~three months ended March 31, 2019 compared to~~sum of the ~~same period in 2018 primarily in our AmTrust Reinsurance segment. The deterioration was primarily due to~~commission and other acquisition expense ratio and the ~~Partial Termination Amendment which caused changes in the mix of business being earned in 2019 compared to 2018. These changes resulted in a higher current year loss~~general and administrative expense ratio. In addition, underwriting results were impacted by higher ceding commission payable for the remaining in-force business immediately prior to January 1, 2019 which increased by five percentage points (excluding Terminated Business) and related unearned premium as of January 1, 2019 under the Partial Termination Amendment within the AmTrust Reinsurance Segment.

Non-GAAP Operating Return on Average Common Equity ("Non-GAAP Operating ROACE"): Management uses non-GAAP operating return on average common shareholders' equity as a measure of profitability that focuses on the return to common shareholders. It is calculated using non-GAAP operating earnings (loss) ~~earnings~~ available to common shareholders (as defined above) divided by average common shareholders' equity.

~~Non-GAAP Operating ROACE for the three months ended March 31, 2019 and 2018 was computed as follows:~~

For the Three Months Ended March 31,
($ in thousands) 2019 2018
Non-GAAP operating (loss) earnings attributable to Maiden common shareholders $ (26,934 ) $ 5,782
Opening Maiden common shareholders’ equity 89,275
767,174
Ending Maiden common shareholders’ equity 119,289
692,910
Average Maiden common shareholders’ equity 104,282
730,042
Non-GAAP Operating ROACE (104.7 )% 3.2 %

Book Value per Common Share and Diluted Book Value per Common ~~Share~~Share: :Book value per common share and diluted book value per common share are non-GAAP measures. Management uses growth in both of these metrics as a prime measure of the value we are generating for our common shareholders, asbecause management believes that growth in each metric ultimately results in growth in the Company’s common share price. These metrics are impacted by the Company’s net income and external factors, such as interest rates, which can drive changes in unrealized gains or losses on our investment ~~portfolio.~~

~~At March 31, 2019, book value per common~~portfolio, as well as share increased by 33.3% and diluted book value per common share increased by 29.6%, compared to December 31, 2018, primarily due to net unrealized gains on our investment portfolio reported in other comprehensive income during the three months ended March 31, 2019. These unrealized gains were partially offset by the net loss attributable to Maiden common shareholders during the first quarter of 2019. Please see "repurchases.~~Liquidity and Capital Resources - Investments"~~ ~~on page 49 for further information on the change in fair value of our fixed maturity investment portfolio.~~

~~Book value and diluted book value per common share at March 31, 2019 and December 31, 2018 were computed as follows:~~

March 31, 2019 December 31, 2018
($ in thousands except share and per share data)
Ending Maiden common shareholders’ equity $ 119,289
$ 89,275
Proceeds from assumed conversion of dilutive options —
362
Numerator for diluted book value per common share calculation $ 119,289
$ 89,637

Common shares outstanding 83,064,173
82,948,577
Shares issued from assumed conversion of dilutive options and restricted share units 1,941,961
398,390
Denominator for diluted book value per common share calculation 85,006,134
83,346,967

Book value per common share $ 1.44
$ 1.08
Diluted book value per common share $ 1.40
$ 1.08

Ratio of Debt to Total Capital Resources: Management uses this non-GAAP measure to monitor the financial leverage of the Company. This measure is calculated using the total principal amount of debt divided by the sum of total capital resources.

Non-GAAP underwriting income (loss), Non-GAAP loss and LAE ratio, and Non-GAAP combined ratio: Management has further adjusted underwriting loss, as defined above, as well as the reported loss and LAE ratios and reported combined ratios by recognizing into income the unamortized deferred gain arising from the LPT/ADC Agreement. The ~~ratio~~deferred gain represents amounts fully recoverable from Cavello and management believes adjusting for this shows the ultimate economic benefit of ~~Debt to~~the LPT/ADC Agreement on Maiden's underwriting income (loss). We believe reflecting the economic benefit of this retroactive reinsurance agreement is helpful for understanding future trends in our operations.

Adjusted Total Shareholders' Equity, Adjusted Total Capital Resources, ~~at March 31, 2019~~Ratio of debt to Adjusted Total Capital Resources and ~~December 31, 2018 was~~Adjusted Book Value per Common Share: Management has adjusted GAAP shareholders' equity by adding the unamortized deferred gain on retroactive reinsurance arising from the LPT/ADC Agreement to shareholders' equity. As a result, by virtue of this adjustment, management has also adjusted Total Capital Resources and computed ~~as follows:~~the Ratio of debt to Adjusted Capital Resources and Adjusted Book Value per Common Share. The deferred gain represents amounts fully recoverable from Cavello and management believes adjusting for this shows the ultimate economic benefit of the LPT/ADC Agreement. We believe reflecting the economic benefit of this retroactive reinsurance agreement is helpful to understand future trends in our operations, which will improve Maiden's shareholders' equity over the settlement period.

March 31, 2019 December 31, 2018
($ in thousands)
Senior notes - principal amount $ 262,500
$ 262,500
Maiden shareholders’ equity 584,289
554,275
Total capital resources $ 846,789
$ 816,775
Ratio of debt to total capital resources 31.0 % 32.1 %

Certain Operating Measures ~~and Relevant Factors~~

Refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" section included under Item 7 of our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 for a general discussion on "Certain Operating Measures" utilized by the ~~Company~~Company.~~and the "Relevant Factors"~~ ~~associated with these Certain Operating Measures.~~

Critical Accounting Policies and Estimates

The Company's critical accounting policies and estimates are discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations" section included under Item 7 of our Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, filed with the SEC on March ~~14, 2019.~~18, 2020. The critical accounting policies and estimates should be read in conjunction with "Part I, Item 1 - Notes to Condensed Consolidated Financial Statements (unaudited) Note 2. Significant Accounting Policies" included in this Form 10-Q and "Notes to Consolidated Financial Statements Note 2. Significant Accounting Policies" included within the audited Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, filed with the SEC on March ~~14, 2019.~~18, 2020. There have been no material changes in the application of our critical accounting estimates subsequent to that report.

Results of Operations

The following table sets forth our selected unaudited Condensed Consolidated Statement of Income data for each of the periods indicated:


	For the Three Months Ended March 31,						For the Three Months Ended March 31,
($ in thousands)	2019			2018			2020			2019
Gross premiums written	$	(561,139	)	$	623,328		$	11,734		$	(561,139	)
Net premiums written	$	(561,530	)	$	622,651		$	10,372		$	(561,530	)
Net premiums earned	$	183,102		$	516,813		$	31,215		$	183,102
Other insurance revenue	750			3,726			408			812
Net loss and LAE	(152,689		)	(353,206		)	(21,086		)	(152,689		)
Commission and other acquisition expenses	(69,617		)	(166,628		)	(11,973		)	(69,617		)
General and administrative expenses⁽¹⁾	(4,297		)	(5,401		)	(2,257		)	(4,297		)
Underwriting loss⁽²⁾	(42,751		)	(4,696		)	(3,693		)	(42,689		)
Other general and administrative expenses⁽¹⁾	(11,642		)	(10,270		)	(6,293		)	(12,322		)
Net investment income	32,022			32,869			17,964			32,022
Net realized (losses) gains on investment	(11,101		)	357
Foreign exchange and other gains (losses)	4,979			(2,407		)
Net realized gains (losses) on investment							11,038			(11,101		)
Total other-than-temporary impairment losses							(1,506		)	—
Foreign exchange and other gains							8,197			4,979
Interest and amortization expenses	(4,829		)	(4,829		)	(4,831		)	(4,829		)
Income tax benefit	38			1,324
Net (loss) income from continuing operations	(33,284		)	12,348
(Loss) income from discontinued operations, net of income tax	(3,352		)	9,995
Income attributable to noncontrolling interests	—			(71		)
Dividends on preference shares	—			(8,545		)
Net (loss) income attributable to Maiden common shareholders	$	(36,636	)	$	13,727
Income tax (expense) benefit							(15		)	38
Net income (loss) from continuing operations							20,861			(33,902		)
Loss from discontinued operations, net of income tax							—			(2,734		)
Net income (loss)							$	20,861		$	(36,636	)

Ratios
Net loss and LAE ratio⁽³⁾	83.0		%	67.9		%	66.7		%	83.0		%
Commission and other acquisition expense ratio⁽⁴⁾	37.9		%	32.0		%	37.9		%	37.9		%
General and administrative expense ratio⁽⁵⁾	8.7		%	3.0		%	27.0		%	9.0		%
Expense ratio⁽⁶⁾	46.6		%	35.0		%	64.9		%	46.9		%
Combined ratio⁽⁷⁾	129.6		%	102.9		%	131.6		%	129.9		%


(1)	Underwriting related general and administrative expenses is a non-GAAP measure. Please refer to "General and Administrative Expenses" below for additional information related to these corporate expenses and the reconciliation to those presented in our unaudited Condensed Consolidated Statements of Income.


(2)	Underwriting loss is a non-GAAP measure and 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.


(3)	Calculated by dividing net loss and LAE by the sum of net premiums earned and other insurance revenue.


(4)	Calculated by dividing commission and other acquisition expenses by the sum of net premiums earned and other insurance revenue.


(5)	Calculated by dividing general and administrative expenses by the sum of net premiums earned and other insurance revenue.


(6)	Calculated by adding together commission and other acquisition expense ratio and general and administrative expense ratio.


(7)	Calculated by adding together net loss and LAE ratio and the expense ratio.

Net Income (Loss) ~~Income~~

Net ~~loss attributable to Maiden common shareholders~~income for the three months ended March 31, ~~2019~~2020 was ~~$36.6~~$20.9 million compared to a net ~~income~~loss of ~~$13.7~~$36.6 million for the same period in ~~2018.~~2019. The net ~~decrease~~improvement in results for the three months ended March 31, ~~2019~~2020 compared to the same period in ~~2018~~2019 was primarily due to the following:

net income from continuing operations of $20.9 million compared to net loss from continuing operations of $33.9 million for the same period in 2019 largely due to the following factors:

underwriting loss of ~~$42.8~~$3.7 million compared to ~~$4.7~~$42.7 million in the same period in ~~2018.~~2019. The ~~deterioration~~reduction in the underwriting ~~result~~loss was ~~principally~~ due ~~to the impact of:~~to:


◦	~~higher initial~~the impact of lower loss ratios onfor current year premiums earned during the three months ended March 31, 2020 compared to the same period ~~within the AmTrust Reinsurance segment (which excludes the Terminated Business under the Partial Termination Amendment);~~


◦	higher ceding commission payable for the remaining in-force business immediately prior to January 1, 2019 which increased by five percentage points (excluding Terminated Business) and related unearned premium as of January 1, 2019 under the Partial Termination Amendment within the AmTrust Reinsurance Segment;in 2019; and


◦	favorable prior year loss development of $0.5 million or 1.7 percentage points in the first quarter of 2020 compared to adverse prior year loss development of $7.3 million or 3.9 ~~points in the first quarter of 2019 compared to $9.8 million or 1.9~~percentage points during the same period in ~~2018.~~2019 which had been incurred primarily within AmTrust Reinsurance Segment.

realized ~~losses~~gains on investment of ~~$11.1~~$11.0 million for the three months ended March 31, ~~2019~~2020 compared to realized ~~gains~~losses of ~~$0.4~~$11.1 million for the same period in ~~2018;~~2019; and

~~The unfavorable movements above were modestly offset by the following:~~

~~no dividends paid to preference shareholders~~foreign exchange and other gains of $8.2 million for the three months ended March 31, ~~2019~~2020 compared to ~~$8.5~~foreign exchange and other gains of $5.0 million for the same period in ~~2018 due~~2019.

net income from discontinued operations of $0.0 million compared to ~~our Board not declaring dividends on any~~a net loss from discontinued operations of ~~our Preference Shares series during~~$2.7 million for the ~~first quarter of 2019; and~~same period in 2019.

•

foreign exchange and other gains of $5.0 million for the three months ended March 31, 2019 compared to foreign exchange losses of $2.4 million for the same period in 2018 largely due to the proceeds from the sale of AVS Automotive VersicherungsService GmbH ("AVS") and its subsidiaries to Allianz Partners on January 10, 2019. Excluding the gain of ~~$4.3 million~~ ~~from the sale of AVS, net foreign exchange~~ ~~gains~~ of ~~$0.7 million~~ were realized during the three months ended March 31, 2019 due to the impact of the strengthening of the U.S. dollar on the re-measurement of net loss reserves and unearned premiums denominated in euro.

Net Premiums Written

~~Net premiums written decreased significantly for the three months ended March 31, 2019 compared to the same period in 2018.~~ The table below compares net premiums written by our reportable segments, reconciled to the total consolidated net premiums written for the three months ended March 31, ~~2019~~2020 and ~~2018:~~2019:


For the Three Months Ended March 31,	2019					2018				Change in					2020		2019			Change in
($ in thousands)	Total			% of Total		Total		% of Total		$			%		Total		Total			$			%
Diversified Reinsurance	$	14,947		(2.7	)%	$	48,271	7.7	%	$	(33,324	)	(69.0	)%	$	10,372	$	14,947		$	(4,575	)	(30.6	)%
AmTrust Reinsurance	(576,477		)	102.7	%	574,380		92.3	%	(1,150,857		)	(200.4	)%	—		(576,477		)	576,477			NM
Total	$	(561,530	)	100.0	%	$	622,651	100.0	%	$	(1,184,181	)	(190.2	)%	$	10,372	$	(561,530	)	$	571,902		(101.8	)%

NM - not meaningful

Net premiums written for the three months ended March 31, 2020 were $10,372 compared to net premiums written of $(561,530) in the same respective period in 2019 due to the following:

Premiums written in the Diversified Reinsurance segment decreased by $4.6 million or 30.6% for the three months ended March 31, 2020 compared to the same respective period in ~~2018 as follows:~~2019 due to lower premiums written in German Auto programs within our IIS business.

•

~~Premiums~~There were no new written inpremiums within the AmTrust Reinsurance segment ~~decreased significantly~~ due to the ~~recent~~ termination of both the AmTrust Quota Share and the European Hospital Liability Quota Share effective January 1, 2019. For the three months endedMarch 31, 2019 ~~therefore no new business has been~~, the negative premiums written ~~in this segment during 2019. Also,~~are primarily the result of the Partial Termination Amendment which resulted in Maiden ~~Bermuda~~Reinsurance returning approximately $~~643.1~~648.0 million in unearned premium to AII, or ~~$433.5~~$436.8 million net of applicable ceding commission and ~~brokerage, subject to final adjustment; and~~brokerage.

Premiums written in the Diversified Reinsurance segment also decreased significantly by $33.3 million or 69.0% largely due to non-renewals in our European Capital Solutions business combined with significant declines in German auto programs within our IIS business.

Please refer to the analysis below of our Diversified Reinsurance and AmTrust Reinsurance segments for further details.

Net Premiums Earned

Net premiums earned decreased by ~~$333.7~~$151.9 million or ~~64.6%~~83.0% for the three months ended March 31, ~~2019~~2020 compared to the same period in ~~2018.~~2019. The table below compares net premiums earned by our reportable segments, reconciled to the total consolidated net premiums earned, for the three months ended March 31, ~~2019~~2020 and ~~2018:~~2019:


For the Three Months Ended March 31,	2019				2018				Change in					2020				2019				Change in
($ in thousands)	Total		% of Total		Total		% of Total		$			%		Total		% of Total		Total		% of Total		$			%
Diversified Reinsurance	$	25,292	13.8	%	$	25,515	4.9	%	$	(223	)	(0.9	)%	$	12,531	40.1	%	$	25,292	13.8	%	$	(12,761	)	(50.5	)%
AmTrust Quota Share Reinsurance	157,810		86.2	%	491,298		95.1	%	(333,488		)	(67.9	)%	18,684		59.9	%	157,810		86.2	%	(139,126		)	(88.2	)%
Total	$	183,102	100.0	%	$	516,813	100.0	%	$	(333,711	)	(64.6	)%	$	31,215	100.0	%	$	183,102	100.0	%	$	(151,887	)	(83.0	)%

Net premiums earned in the AmTrust Reinsurance segment for the three months ended March 31, ~~2019~~2020 decreased by ~~$333.5~~$139.1 million or ~~67.9%~~88.2% compared to the same respective period in ~~2018~~2019 due to the ~~termination~~terminations of the AmTrust Quota Share and European Hospital Liability Quota Share effective January 1, 2019. Please refer to the analysis of our AmTrust Reinsurance segment on page 4540 for further discussion.

Net premiums earned in our Diversified Reinsurance segment for the three months ended March 31, ~~2019~~2020 decreased by ~~$0.2~~$12.8 million or ~~0.9%~~50.5% compared to the same respective period in ~~2018.~~2019 driven by non-renewals in our European Capital Solutions business combined with reductions in quota share cessions for German Auto Programs within our IIS business. Please refer to the analysis of our Diversified Reinsurance segment on page 4338 for further discussion.

Other Insurance Revenue

All of our Other Insurance Revenue is produced by our Diversified Reinsurance segment. Please refer to the analysis of our Diversified Reinsurance segment on page 4439 for further discussion.

Net Investment Income ~~and~~

Net ~~Realized (Losses) Gains on Investment~~

~~For~~investment income decreased by $14.1 million or 43.9% for the three months ended March 31, ~~2019, net investment income decreased by $0.8 million or 2.6%~~2020 compared to the same respective period in ~~2018~~2019, primarily due to the decline in average investable assets of 34.4% in those same periods. The decline in investable assets is largely due to the cessation of active reinsurance underwriting which materially reduced our revenues and is responsible for significant negative operating cash flows as we run-off our existing reinsurance liabilities. Lower investment income was also driven by the decline in average book ~~yield from 3.2%~~yields to ~~3.1%~~2.7% for the three months ended March 31, ~~2019~~2020 compared to 3.1% for the same period in 2019.

The following table details the Company's average investable assets and average book yield for the three months ended March 31, 2020 compared to the same period in ~~2018.~~2019:



	For the Three Months Ended March 31,
($ in thousands)	2020			2019
Average investable assets⁽¹⁾	$	2,705,803		$	4,123,188
Average book yield⁽²⁾	2.7		%	3.1		%


(1)	The average of our total investments, cash, restricted cash and cash equivalents, funds withheld receivable and loan to related party held at each quarter-end during the period.


(2)	Ratio of net investment income over average investable assets at fair value.

Net Realized Gains (Losses) on Investment

Net realized ~~losses~~gains on investment were ~~$11.1~~$11.0 million for the three months ended March 31, ~~2019,~~2020, compared to net realized ~~gains~~losses of ~~$0.4~~$11.1 million for the same respective period in ~~2018. This~~2019. The realized gains for the three months ended March 31, 2020 were primarily due to sales of corporate bonds during the first quarter of 2020 for the settlement of claim payments to AmTrust. The net realized losses of $11.1 million in 2019 was ~~primarily~~ driven by net investment losses realized on the non-cash transfer of corporate and other debt securities in the first quarter of 2019 related to the Partial Termination Amendment with AmTrust and the conversion of a portion of reinsurance trust assets held as collateral into a funds withheld receivable.

Net Impairment Losses Recognized in Earnings

The ~~following table details the Company's average investable assets and average book yield~~Company recognized $1.5 million of OTTI losses in earnings on two fixed maturity securities for the three months ended March 31, ~~2019 compared to~~2020. There were no OTTI losses recognized during the same period in ~~2018:~~2019.

For the Three Months Ended March 31,
($ in thousands) 2019 2018
Average investable assets⁽¹⁾
$ 4,123,188
$ 4,116,293
Average book yield⁽²⁾
3.1 % 3.2 %


~~(1)~~	~~The average of the Company's investments, cash and cash equivalents, restricted cash and cash equivalents, funds withheld and loan to related party at each quarter-end during the period, as adjusted.~~


~~(2)~~	~~Ratio of net investment income over average investable assets at fair value, as adjusted.~~

Net Loss and Loss Adjustment Expenses

Net loss and LAE decreased by ~~$200.5~~$131.6 million during the three months ended March 31, ~~2019~~2020 compared to the same respective period in ~~2018~~2019 largely due to the ~~significant drop in earned premiums as a result of the~~ termination of the AmTrust Reinsurance quota share agreements effective January 1, 2019.

The loss ratio for the first quarter of ~~2019~~2020 was ~~also~~ impacted by net favorable prior year reserve development of $0.5 million or 1.7 percentage points compared to net adverse prior year ~~loss~~reserve development of $7.3 million or 3.9 ~~points compared to adverse prior year loss development of $9.8 million or 1.9~~percentage points during the same period in ~~2018.~~ 2019. The prior year development is discussed in greater detail in the individual segment discussion and analysis.

The net loss and LAE ratios ~~increased~~decreased to ~~83.0%~~66.7% for the three months ended March 31, ~~2019~~2020 compared to ~~67.9%~~83.0% for the same respective period in ~~2018~~2019 primarily due to ~~changes~~significant reduction in adverse prior year loss development resulting mainly from the ~~mix~~termination of ~~business being earned in~~ the AmTrust Reinsurance ~~segment in 2019 compared to 2018 as a result of the business subject to the Partial Termination Amendment.~~quota share contracts effective January 1, 2019.

Commission and Other Acquisition Expenses

Commission and other acquisition expenses decreased by ~~$97.0~~$57.6 million or ~~58.2%~~82.8% for the three months ended March 31, ~~2019~~2020, compared to the same respective period in ~~2018~~2019 due to significantly lower earned ~~premiums.~~premiums in both of our reportable segments. The commission and other acquisition expense ratio ~~increased to~~was 37.9% for the three months ended March 31, ~~2019 compared to 32.0% for the same period in 2018 driven by an increase in ceding commission fees payable within the AmTrust Reinsurance segment as of January 1,~~2020 and 2019. ~~Under the Partial Termination Amendment, Maiden Bermuda agreed to pay AmTrust five additional percentage points of ceding commission on the remaining unearned premium over the term of the contract.~~

General and Administrative Expenses

General and administrative expenses include expenses which are segregated for analytical purposes as a component of underwriting income. General and administrative expenses comprise:


	For the Three Months Ended March 31,				For the Three Months Ended March 31,
($ in thousands)	2019		2018		2020		2019
General and administrative expenses – segments	$	4,297	$	5,401	$	2,257	$	4,297
General and administrative expenses – corporate	11,642		10,270		6,293		12,322
Total general and administrative expenses	$	15,939	$	15,671	$	8,550	$	16,619

Total general and administrative expenses ~~increased~~decreased by ~~$0.3~~$8.1 million, or ~~1.7%~~48.6% for the three months ended March 31, ~~2019~~2020, compared to the same period in 2018. The increased expenses for the three months ended March 31, 2019 compared to the prior period were largely due to approximately $3.0 million in non-recurring expenses including salary and related benefits associated with headcount reductions during 2019 as well as certain professional fees incurred.

2019. The general and administrative expense ratio increased to ~~8.7%~~27.0% for the three months ended March 31, ~~2019~~2020 from ~~3.0%~~9.0% for the three months ended March 31, ~~2018~~2019 as a result of significantly lower earned premiums compared to the prior period due to ~~the~~ termination of the AmTrust Reinsurance quota share contracts effective January 1, 2019 and non-renewals within our International ~~business.~~business in the Diversified Reinsurance segment.

The decreased corporate expenses for the three months ended March 31, 2020 compared to the same respective period in 2019 were largely due to lower salary, benefits and other corporate expenses associated with the Strategic Review and related headcount reductions since 2018.

Interest and Amortization Expenses

The interest and amortization expenses related to the outstanding senior notes issued by Maiden Holdings in 2016 and Maiden NA in 2013 ~~(the "Senior~~("Senior Notes") were ~~flat at~~ $4.8 million for the three months ended March 31, 2020 and 2019, ~~and 2018.~~

respectively. Please refer to "Notes to Condensed Consolidated Financial Statements (unaudited) Note 7. Long Term Debt" for further details on the Senior Notes. The weighted average effective interest rate for the Senior Notes was ~~7.64%~~7.6% for the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, respectively.

Foreign Exchange and Other Gains ~~(Losses)~~

Net foreign exchange and other gains amounted to ~~$5.0~~$8.2 million during the three months ended March 31, ~~2019~~2020 compared to net foreign exchange ~~losses~~and other gains of ~~$2.4~~$5.0 million for the same respective period in ~~2018 largely due to the proceeds from the sale of AVS and its related European subsidiaries to Allianz Partners on January 10,~~ 2019.

~~Excluding the gain of~~ ~~$4.3 million~~ ~~from the sale of AVS, net~~Net foreign exchange gains of $~~0.7~~8.4 million ~~were realized~~occurred during the three months ended March 31, ~~2019~~2020 due to ~~the impact of~~ the strengthening of the U.S. dollar on the re-measurement of net loss reserves and related liabilities denominated in British pound and euro. ~~Foreign~~

Net foreign exchange ~~losses~~and other gains of $5.0 million for the three months ended March 31, ~~2018~~2019 included $4.3 million of proceeds received from the sale of AVS and its related European subsidiaries to Allianz Partners on January 10, 2019. Excluding the gain of $4.3 million, net foreign exchange gains of $0.7 million were realized primarily attributable to the ~~impact of the weakening~~strengthening of the U.S. dollar on the re-measurement of net loss reserves and related liabilities mainly denominated in ~~pound sterling and~~ euro.

~~Income Tax Expense~~

~~The Company recorded an income tax benefit of $0.04 million for the three months ended March 31, 2019 compared to~~ ~~$1.3 million~~ for the same period in 2018. These amounts relate to income tax on the losses of our international subsidiaries. The effective rate of income tax was 0.1% for the three months ended March 31, 2019 compared to (12.0)% for the three months ended March 31, 2018.

~~Dividends on Preference Shares~~

For the three months ended March 31, 2019, no dividends were declared or paid to preference shareholders compared to $8.5 million of preferred dividends declared and paid during the same period in 2018.

~~Please refer to "Notes to Consolidated Financial Statements Note 14. Shareholders' Equity" included under Item 8 "Financial Statements and Supplementary Data" of our Annual Report on Form 10-K for the year ended December 31, 2018 for details on the Company’s preference shares.~~

Underwriting Results by Reportable Segment

Diversified Reinsurance Segment

The underwriting results and associated ratios for our Diversified Reinsurance segment for the three months ended March 31, ~~2019~~2020 and ~~2018~~2019 were as follows:


	For the Three Months Ended March 31,						For the Three Months Ended March 31,
($ in thousands)	2019			2018			2020			2019
Gross premiums written	$	15,338		$	49,400		$	11,734		$	15,338
Net premiums written	14,947			48,271			$	10,372		$	14,947
Net premiums earned	25,292			25,515			$	12,531		$	25,292
Other insurance revenue	750			3,726			408			812
Net loss and LAE	(14,391		)	(15,899		)	(7,041		)	(14,391		)
Commission and other acquisition expenses	(9,261		)	(9,312		)	(4,979		)	(9,261		)
General and administrative expenses	(3,031		)	(4,481		)	(1,613		)	(3,031		)
Underwriting loss	$	(641	)	$	(451	)	$	(694	)	$	(579	)
Ratios
Net loss and LAE ratio	55.3		%	54.4		%	54.4		%	55.1		%
Commission and other acquisition expense ratio	35.6		%	31.8		%	38.5		%	35.5		%
General and administrative expense ratio	11.6		%	15.3		%	12.5		%	11.6		%
Expense ratio	47.2		%	47.1		%	51.0		%	47.1		%
Combined ratio	102.5		%	101.5		%	105.4		%	102.2		%

The combined ratio for the three months ended March 31, ~~2019~~2020 increased to ~~102.5%~~105.4% compared to ~~101.5%~~102.2% for the same comparative period in ~~2018 primarily due to~~2019. Please see the ~~decline in other insurance revenue of $3.0 million which contributed to higher~~respective sections on net loss, commissions and administrative expenses for factors that have impacted the combined ratios ~~compared to~~in the ~~prior period despite earned premiums which remained in line with the prior period and lower losses and expenses.~~discussion below.

Premiums — Gross premiums written decreased by ~~$34.1~~$3.6 million or ~~69.0%~~23.5% for the three months ended March 31, ~~2019~~2020 compared to the same respective period in ~~2018~~2019. This was primarily due to ~~non-renewals in our European Capital Solutions business resulting from the downgrade and subsequent withdrawal of Maiden Bermuda's credit rating combined with~~ lower premiums ~~and a lower cession percentage from~~written in German Auto Programs in our IIS business during the three months ended March 31, ~~2019.~~2020.

Net premiums written decreased by ~~$33.3~~$4.6 million or ~~69.0%~~30.6% during the three months ended March 31, ~~2019~~2020 compared to the same period in ~~2018~~2019 mainly due to ~~non-renewals in our European Capital Solutions business combined with~~ lower net premiums written in our German Auto programs within our IIS ~~business.~~business as discussed above.

The table below shows net premiums written by line of business for the three months ended March 31, ~~2019~~2020 and ~~2018:~~2019:


For the Three Months Ended March 31,	2019				2018				Change in					2020		2019		Change in
	Total		% of Total		Total		% of Total		$			%
($ in thousands)														Total		Total		$			%
Net Premiums Written	($ in thousands)				($ in thousands)				($ in thousands)
International	$	14,947	100.0	%	$	48,230	99.9	%	$	(33,283	)	(69.0	)%	$	10,372	$	14,947	$	(4,575	)	(30.6	)%
Other	—		—	%	41		0.1	%	(41		)	(100.0	)%
Total Diversified Reinsurance	$	14,947	100.0	%	$	48,271	100.0	%	$	(33,324	)	(69.0	)%	$	10,372	$	14,947	$	(4,575	)	(30.6	)%

Net premiums earned decreased by ~~$0.2~~$12.8 million or ~~0.9%~~50.5% during the three months ended March 31, ~~2019~~2020 compared to the same period in ~~2018.~~2019 primarily due to lower earned premiums from German Auto programs and non-renewals in our European Capital Solutions business since 2019. The table below shows net premiums earned by line of business for the three months ended March 31, ~~2019~~2020 and ~~2018:~~2019:

For the Three Months Ended March 31, 2019 2018 Change in
Total % of Total Total % of Total $ %
Net Premiums Earned ($ in thousands) ($ in thousands) ($ in thousands)
International $ 25,292
100.0 % $ 25,474
99.8 % $ (182 ) (0.7 )%
Other —
— % 41
0.2 % (41 ) (100.0 )%
Total Diversified Reinsurance $ 25,292
100.0 % $ 25,515
100.0 % $ (223 ) (0.9 )%

Net premiums earned decreased slightly for the three months ended March 31, 2019 compared to the same period in 2018 due to lower earned premiums from German Auto programs slightly offset by an increase in earned premiums in our European Capital Solutions business during the three months ended March 31, 2019 as a result of underwriting initiatives taken in 2018.



For the Three Months Ended March 31,	2020		2019		Change in
($ in thousands)	Total		Total		$			%
Net Premiums Earned
International	$	12,531	$	25,292	$	(12,761	)	(50.5	)%
Total Diversified Reinsurance	$	12,531	$	25,292	$	(12,761	)	(50.5	)%

Other Insurance Revenue — Other insurance revenue, which represents fee income from our IIS business that is not directly associated with premium revenue assumed by the Company as well as other income earned from transitional services relating to the sale of Maiden US, decreased by ~~$3.0~~$0.4 million or 49.8% for the three months ended March 31, ~~2019~~2020 compared to the same period in ~~2018~~2019. This was due to the sale of AVS and its subsidiaries on January 10, 2019 as a substantial portion of our fee income was generated by AVS and its subsidiaries in Germany and Austria through its point of sale producers in select OEM's dealerships.

The table below shows other insurance revenue by source for the three months ended March 31, 2020 and 2019:



For the Three Months Ended March 31,	2020		2019		Change
	($ in thousands)							%
International	$	353	$	736	$	(383	)	(52.0	)%
Other income	55		76		(21		)	(27.6	)%
Total Diversified Reinsurance	$	408	$	812	$	(404	)	(49.8	)%

Net Loss and Loss Adjustment Expenses — Net loss and LAE decreased by ~~$1.5~~$7.4 million, or ~~9.5%~~51.1% for the three months ended March 31, ~~2019~~2020 compared to the same respective period in ~~2018.~~2019. Net loss and LAE ~~ratios increased~~ratio decreased to ~~55.3%~~54.4% for the three months ended March 31, ~~2019~~2020 compared with ~~54.4%~~55.1% during the same period in ~~2018.~~2019. During the three months ended March 31, ~~2019,~~2020, the net loss and LAE ratio ~~increased~~decreased by ~~0.9~~0.7 percentage points compared to the same period in ~~2018 due to higher initial~~2019.

The 2020 loss ~~ratios on current year premiums earned during the period factoring in both market conditions and recent loss trends and experience.~~

~~This~~ratio was ~~partially offset~~impacted by favorable prior year loss reserve development which was ~~$1.1~~$0.5 million or ~~(4.2)~~4.1 percentage points during the three months ended March 31, ~~2019,~~2020, compared to ~~adverse~~the impact of favorable development of ~~$1.3~~$1.1 million or ~~4.4~~4.2 percentage points ~~for~~on the ~~same period~~loss ratio in ~~2018.~~2019. The ~~2019 favorable~~loss development in 2020 was driven ~~from~~by favorable experience in German Auto programs, while the favorable loss development in 2019 was due to favorable experience from facultative reinsurance run-off lines. ~~Adverse development in 2018 was due to higher than expected loss emergence emanating largely from run-off treaty contracts.~~

The impact on the net loss and LAE ratios should be considered in conjunction with the commission and other acquisition expense ratio as changes to either ratio can be effected by ~~the~~ changes in the mix of business and the impact of ~~the increase~~increases in the commission and other acquisition expense rates on pro-rata contracts with loss sensitive features. As a result of these factors, as well as the ~~impacts~~impact on the loss ratio described above, the combined ratio increased by ~~1.0 point~~3.2 percentage points for the three months ended March 31, ~~2019~~2020 compared to the same respective period in ~~2018.~~2019.

Commission and Other Acquisition Expenses — Commission and other acquisition expenses decreased by ~~$0.1~~$4.3 million or ~~0.5%~~46.2% for the three months ended March 31, ~~2019~~2020 compared to the same respective period in ~~2018.~~2019. The commission and other acquisition expense ratio for the three months ended March 31, ~~2019~~2020 increased to ~~35.6%~~38.5% compared to ~~31.8%~~35.5% for the same period in ~~2018,~~2019, reflecting ~~the impact of lower other insurance revenue which decreased by $3.0 million compared to the same period last year.~~

~~The variation in ratios for the three months ended March 31, 2019 was primarily due to~~ the change in the mix of pro rata versus excess of loss premiums written ~~during~~compared to the ~~period.~~same period in 2019. Please refer to the ~~reasons~~preceding paragraph for ~~the changes in~~other factors that can impact the combined ~~ratio discussed in the preceding paragraph.~~ratio.

General and Administrative Expenses — General and administrative expenses decreased by ~~$1.5~~$1.4 million or ~~32.4%~~46.8% for the three months ended March 31, ~~2019~~2020 compared to the same respective period in ~~2018.~~2019. The general and administrative expense ratio ~~decreased~~increased to ~~11.6%~~12.5% for the three months ended March 31, ~~2019~~2020 compared to ~~15.3%~~11.6% for the same period in ~~2018, as a result of the sale of AVS and its subsidiaries on January 10, 2019 which caused lower compensation costs, legal and other professional fees incurred compared to the prior period.~~ 2019.

The overall expense ratio (including commission and other acquisition expenses) for the three months ended March 31, ~~2019 was 47.2%~~2020 increased to 51.0% compared to 47.1% for the same respective period in ~~2018.~~2019 largely as a result of lower revenue compared to the prior year period.

AmTrust Reinsurance Segment

The AmTrust Reinsurance segment reported an underwriting loss of ~~$41.9~~$3.0 million during the three months ended March 31, ~~2019~~2020 compared to ~~$4.2~~$41.9 million in the ~~comparative~~same period in ~~2018. This~~2019. The lower underwriting loss was primarily ~~due to~~driven by a lower combined ratio on significantly lower earned premiums ~~combined with the impact of higher initial current year loss ratios and higher commissions paid for premiums earned~~ during the three months ended March 31, ~~2019.~~ 2020 compared to the prior period.

The underwriting results and associated ratios for the AmTrust Reinsurance segment for the three months ended March 31, ~~2019~~2020 and ~~2018~~2019 were as follows:


	For the Three Months Ended March 31,						For the Three Months Ended March 31,
($ in thousands)	2019			2018			2020			2019
Gross premiums written	$	(576,477	)	$	573,928		$	—		$	(576,477	)
Net premiums written	(576,477		)	574,380			$	—		$	(576,477	)
Net premiums earned	157,810			491,298			$	18,684		$	157,810
Net loss and LAE	(138,070		)	(337,307		)	(14,045		)	(138,070		)
Commission and other acquisition expenses	(60,356		)	(157,316		)	(6,994		)	(60,356		)
General and administrative expenses	(1,266		)	(920		)	(644		)	(1,266		)
Underwriting loss	$	(41,882	)	$	(4,245	)	$	(2,999	)	$	(41,882	)
Ratios
Net loss and LAE ratio	87.5		%	68.7		%	75.2		%	87.5		%
Commission and other acquisition expense ratio	38.2		%	32.0		%	37.4		%	38.2		%
General and administrative expense ratio	0.8		%	0.2		%	3.5		%	0.8		%
Expense ratio	39.0		%	32.2		%	40.9		%	39.0		%
Combined ratio	126.5		%	100.9		%	116.1		%	126.5		%

The combined ratio ~~increased 25.6~~decreased 10.4 percentage points to ~~126.5%~~116.1% for the three months ended March 31, ~~2019~~2020 compared to ~~100.9%~~126.5% for the same period in ~~2018~~2019 due to the ~~following factors:~~

~~higher~~absence of prior year loss ~~ratios for current year premiums earned~~development during the ~~period primarily due~~first quarter of 2020 compared to the ~~Partial Termination Amendment which caused changes in the mix of business being earned in 2019 compared to 2018. These changes resulted in a higher current year loss ratio;~~

increase in the ceding commission payable for the remaining in-force business immediately prior to January 1, 2019 which increased by five percentage points (excluding Terminated Business) and related unearned premium as of January 1, 2019 under the Partial Termination Amendment; and

impact of adverse prior year ~~loss~~ development ~~which was~~of $8.1 million or 5.2 ~~points during the first quarter of 2019 compared to $8.5 million or 1.8~~percentage points for the same period in ~~2018.~~2019. Prior year adverse development in 2019 was primarily due to Commercial Auto Liability in accident years 2014 to 2017, partly offset by favorable development in Workers ~~Compensation, whereas 2018 was largely due to General Liability, with a smaller contribution from Commercial Auto Liability, primarily driven by accident years 2015 and 2016.~~Compensation.

Premiums — ~~Gross~~There were no gross premiums written ~~decreased significantly~~ for the three months ended March 31, ~~2019 compared to the same period in 2018~~2020 reflecting the ~~recent~~ termination of both the AmTrust Quota Share and the European Hospital Liability Quota Share ~~effective~~as of January 1, 2019, astherefore no new business has been written under these contracts ~~in the first quarter of 2019. Also,~~during 2020. In 2019, the Partial Termination Amendment resulted in Maiden ~~Bermuda~~Reinsurance returning approximately ~~$643.1~~$648.0 million in unearned premium to AII, or approximately ~~$433.5~~$436.8 million net of applicable ceding commission and brokerage, ~~subject to final adjustment.~~which caused negative gross premiums written for the three months ended March 31, 2019.

The table below shows net premiums written by category for the three months ended March 31, ~~2019~~2020 and ~~2018:~~2019:


For the Three Months Ended March 31,	2019					2018				Change in					2020		2019
	Total			% of Total		Total		% of Total		$			%
($ in thousands)															Total		Total
Net Premiums Written	($ in thousands)					($ in thousands)				($ in thousands)
Small Commercial Business	$	(342,681	)	59.4	%	$	367,754	64.0	%	$	(710,435	)	(193.2	)%	$	—	$	(342,681	)
Specialty Program	(12,608		)	2.2	%	89,131		15.5	%	(101,739		)	(114.1	)%	—		(12,608		)
Specialty Risk and Extended Warranty	(221,188		)	38.4	%	117,495		20.5	%	(338,683		)	(288.3	)%	—		(221,188		)
Total AmTrust Reinsurance	$	(576,477	)	100.0	%	$	574,380	100.0	%	$	(1,150,857	)	(200.4	)%	$	—	$	(576,477	)

~~Net~~There were no net premiums written in our AmTrust Reinsurance segment for the three months ended March 31, ~~2019 decreased significantly compared to the same period in 2018~~2020 due to the ~~recent~~ termination of both the AmTrust Quota Share and ~~the~~ European Hospital

Liability Quota Share ~~effective~~as of January 1, 2019. As mentioned above, the Partial Termination Amendment resulted in Maiden Bermuda returning approximately $643.1 million in unearned premium to AII, or approximately $433.5 million net of applicable ceding commission and brokerage, which has caused the negative written premiums in the first quarter of 2019 ~~subject to final adjustment.~~as discussed above.

Net premiums earned decreased by ~~$333.5~~$139.1 million or ~~67.9%~~88.2% for the three months ended March 31, ~~2019~~2020 compared to the same respective period in ~~2018~~2019 due to the ~~termination~~terminations of the AmTrust Quota Share and European Hospital Liability Quota Share ~~effective~~as of January 1, 2019.

The table below details net premiums earned by category for the three months ended March 31, ~~2019~~2020 and ~~2018:~~2019:


For the Three Months Ended March 31,	2019				2018				Change in					2020				2019				Change in
	Total		% of Total		Total		% of Total		$			%
($ in thousands)														Total		% of Total		Total		% of Total		$			%
Net Premiums Earned	($ in thousands)				($ in thousands)				($ in thousands)
Small Commercial Business	$	39,455	25.0	%	$	315,709	64.3	%	$	(276,254	)	(87.5	)%	$	939	5.0	%	$	39,455	25.0	%	$	(38,516	)	(97.6	)%
Specialty Program	76,221		48.3	%	88,494		18.0	%	(12,273		)	(13.9	)%	75		0.4	%	76,221		48.3	%	(76,146		)	(99.9	)%
Specialty Risk and Extended Warranty	42,134		26.7	%	87,095		17.7	%	(44,961		)	(51.6	)%	17,670		94.6	%	42,134		26.7	%	(24,464		)	(58.1	)%
Total AmTrust Reinsurance	$	157,810	100.0	%	$	491,298	100.0	%	$	(333,488	)	(67.9	)%	$	18,684	100.0	%	$	157,810	100.0	%	$	(139,126	)	(88.2	)%

Net Loss and Loss Adjustment Expenses — Net loss and LAE decreased by ~~$199.2~~$124.0 million or ~~59.1%~~89.8% for the three months ended March 31, ~~2019~~2020 compared to the same respective period in ~~2018~~2019 due to significantly lower earned premiums as a result of the ~~recent~~ termination of both quota share agreements with AmTrust. Net loss and LAE ratios ~~increased~~decreased to ~~87.5%~~75.2% for the three months ended March 31, ~~2019~~2020 compared to ~~68.7%~~87.5% for the same respective period in ~~2018.~~2019.

During the three months ended March 31, ~~2019,~~2020, the net loss and LAE ratio ~~increased~~decreased by ~~18.8~~12.3 percentage points compared to the same period in ~~2018~~2019 primarily due to the following factors:

the Partial Termination Amendment ~~which~~ caused significant changes in the mix of business being earned in ~~2019~~2020 compared to ~~2018.~~2019. These changes resulted in a ~~higher~~ current year loss ~~ratio.~~ratio which decreased relative to the same period in 2019 for the remaining in-force business; and

~~The~~there was no impact of prior year loss development during the three months ended March 31, 2020 on the loss ratio, ~~also increased due~~compared to the impact of adverse prior year loss development which was $8.1 million or 5.2 ~~points during the three months ended March 31, 2019, compared to $8.5 million or 1.8~~percentage points for the same period in ~~2018.~~2019. Prior year adverse development in 2019 was due to adverse development in Commercial Auto Liability in accident years 2014 to 2017, partly offset by favorable development in Workers ~~Compensation whereas 2018 was due to General Liability, with a smaller contribution from Commercial Auto Liability, primarily driven by accident years 2015 and 2016.~~Compensation.

Commission and Other Acquisition Expenses — Commission and other acquisition expenses decreased by ~~$97.0~~$53.4 million or ~~61.6%~~88.4% for the three months ended March 31, ~~2019~~2020 compared to the same respective period in ~~2018~~2019 due to significantly lower earned premiums as a result of the ~~recent termination~~terminations of both quota share agreements with ~~AmTrust.~~AmTrust effective as of January 1, 2019.

The commission and other acquisition expense ratio ~~increased~~decreased to ~~38.2%~~37.4% for the three months ended March 31, ~~2019~~2020 compared to ~~32.0%~~38.2% for the same respective period in 2018 driven by the increase in ceding commission payable for the remaining in-force business immediately prior to January 1, 2019 which increased by five percentage points (excluding Terminated Business) and related unearned premium as of January 1, 2019 under the Partial Termination Amendment.

The fluctuations in the ratios during the three months ended March 31, 2019 compared to the comparative period in 2018 reflects the change in the mix of business and is also affected by the commission associated with the retrocession premium ceded during the three months ended March 31, 2019 compared to the same period in 2018.2019.

General and Administrative Expenses — General and administrative expenses ~~increased slightly~~decreased by ~~$0.3~~$0.6 million or ~~37.6%~~49.1% for the three months ended March 31, ~~2019~~2020 compared to the same respective period in ~~2018.~~2019. The general and administrative expense ~~ratio~~ratios increased to ~~0.8%~~3.5% for the three months ended March 31, ~~2019~~2020 compared to ~~0.2%~~0.8% for the same respective period in ~~2018~~2019 as a result of significantly lower earned premiums due to the ~~recent~~ termination of ~~the~~both quota share agreements with ~~AmTrust.~~ AmTrust as of January 1, 2019.

The overall expense ratio (including commission and other acquisition expenses) increased to ~~39.0%~~40.9% for the three months ended March 31, ~~2019~~2020 compared to ~~32.2%~~39.0% for the same respective period in ~~2018~~2019 primarily due to ~~the increase in ceding commission payable~~significantly lower earned premiums as discussed above.

Liquidity and Capital Resources

Liquidity

Maiden Holdings is a holding company and transacts no business of its own. We therefore rely on cash flows in the form of dividends, advances, loans and other permitted distributions from our subsidiary companies to pay expenses and make dividend payments on our common and preference shares. The jurisdictions in which our operating subsidiaries are licensed to write business impose regulations requiring companies to maintain or meet statutory solvency and liquidity ~~requirements. Some jurisdictions~~requirements and also place restrictions on the declaration and payment of dividends and other distributions.

As ~~discussed previously in the~~ ~~"Overview to Critical Accounting Policies", the Partial Termination Amendment was effective as~~ of ~~January 1, 2019. In January 2019, as part of this amendment,~~March 31, 2020, the Company ~~transferred cash and investments~~had investable assets of ~~$480.0 million~~$2.6 billion compared to ~~AII based on provisional estimates. On or before May 30, 2019, AII shall report to Maiden the actual unearned premium applicable to the Terminated Business~~$2.8 billion as of December 31, ~~2018. In~~2019. Investable assets are the ~~event that~~combined total of our investments, cash and cash equivalents (including restricted), loan to a related party and funds withheld receivable. The decrease in investable assets is primarily the ~~estimated unearned premium exceeds the actual unearned premium, AII shall return the excess to Maiden Bermuda. The estimated amount to be returned to Maiden Bermuda is approximately $46.5 million as~~result of significant negative operating cash flows during three months ended March 31, ~~2019.~~2020, particularly as a result of certain contract terminations that occurred in 2019 that require the disbursement of cash and investments to settle claim payments in 2020.

The regulatory and liquidity requirements of the Company's operating segments are discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations" section included under Item 7 of our Annual Report on Form 10- K for the year ended December 31, ~~2018,~~2019, filed with the SEC on March ~~14, 2019.~~

Pursuant to Bermuda law, the Company must ensure that the value of the group's assets exceeds the amount of the group's liabilities by the aggregate minimum margin of solvency of each qualifying member of the group ("Group MSM"). Since December 31, 2013, we have been required to maintain available group capital and surplus at a level equal to or in excess of the Group Enhanced Capital Requirement ("Group ECR") which is established by reference to either the Group Bermuda Solvency Capital Requirement ("Group BSCR") model or an approved group internal capital model. As discussed previously in "~~Note 1. Basis of Presentation" and "Overview to Critical Accounting Policies~~", the transactions contemplated by the New LPT/ADC MTA with Enstar, which are pending, are expected to close in the second quarter of 2019 subject to regulatory approvals and customary closing conditions. At such time, the Group is expected to exceed both the Group ECR and the Group MSM.18, 2020.

As ofpreviously indicated, Maiden Reinsurance re-domesticated to Vermont on March ~~31, 2019, the Company does not meet the Group ECR standards established by the Bermuda Monetary Authority (“BMA”) while the the Group MSM is expected~~16, 2020. We expect to be ~~met. The Company has communicated such condition to the BMA and is following the guidelines of a reportable “event” as stipulated by Bermuda insurance law. Consistent~~actively engaged with the ~~continuing recovery of our capital base, we remain actively engaged in ongoing discussions with the BMA~~Vermont DFR regarding the formulation of ~~our~~Maiden Reinsurance's longer term business plan, which ~~will~~may require prior regulatory approval as stipulated by Vermont law or the ~~approval of the BMA~~Vermont DFR for any ~~new~~active underwriting, capital management or other strategic initiatives.

Due to the change in fair value of our investments caused by the COVID-19 pandemic, we and our insurance subsidiaries may need additional capital to maintain compliance with regulatory capital requirements and/or be required to post additional collateral

under existing reinsurance ~~business. Finally,~~arrangements, which could reduce our liquidity. In addition, we may experience a reduction in the amount of ~~dividends that can be distributed~~available distribution or dividend capacity from ~~Maiden Bermuda is, under certain circumstances, limited under Bermuda law~~our regulated reinsurance subsidiaries, which would also reduce liquidity.

Operating, investing and Bermuda regulatory requirements, which requires our Bermuda operating subsidiary to maintain certain measures of solvency and liquidity in accordance with the BSCR. Presently, we have voluntarily undertaken with the BMA not to make any capital distributions of any kind, including the payment of any common or preferred dividends, without the express consent of the BMA.financing cash flows

Our sources of funds historically have consisted of premium receipts net of commissions and brokerage, investment income, net proceeds from capital raising activities, ~~which may include the issuance of debt and common and preference shares,~~ and proceeds from sales, maturities, ~~paydowns~~pay downs and redemption of investments. Cash is currently used primarily to pay loss and LAE, ceded reinsurance premium, general and administrative expenses, and interest expense, ~~and dividends,~~ with the remainder in excess of our operating requirements, made available to our investment managers for investment in accordance with our investment policy.

Our business has undergone significant changes in the ~~last year.~~past two years. As previously noted, the Strategic Review ~~has~~ resulted in a series of transactions that have materially reduced ~~the risk on~~ our balance sheet risk and ~~are transforming~~have transformed our operations. As a result of the transactions entered into from the Strategic Review, ~~the Company's gross and~~we are not engaged in any active underwriting of reinsurance business thus our net premiums written will continue to be materially lower in ~~2019~~2020 and investment income will become a significantly larger portion of our total revenues. This has ~~significantly lowered our~~caused significant negative operating cash flow, particularly as ~~detailed~~we run off the AmTrust Reinsurance reserves as shown in the table below. We expect this trend to continue ~~during 2019.~~ going forward for the rest of 2020 and beyond.

We expect to use funds from cash and investment portfolios, collected premiums on reinsurance contracts in force or being run-off, investment income and proceeds from investment sales and redemptions ~~of investments~~ to meet our expected claims payments and operational expenses. Claim payments will be principally from the run-off of existing reserves for losses and loss adjustment expenses. A significant portion of those liabilities are collateralized and claim payments will be funded by using ~~the~~this collateral ~~and this~~which should provide sufficient funding to fulfill those ~~obligations.We~~obligations. We generally expect negative operating cash flows to be ~~met or exceeded~~partly offset by positive investing cash flows. Overall, we continue to expect our cash flows ~~together with our existing capital base and unrestricted cash and investments~~ to be sufficient to meet our cash requirements and to operate our business.

At March 31, 2020 and December 31, 2019, unrestricted cash and cash equivalents and unrestricted fixed maturity investments were $389.1 million and $435.0 million, respectively. The table below summarizes our operating, investing and financing cash flows for the three months ended March 31, ~~2019~~2020 and ~~2018:~~2019:


For the Three Months Ended March 31,	2019			2018			2020			2019
	($ in thousands)						($ in thousands)
Operating activities	$	(331,930	)	$	(32,141	)	$	(218,481	)	$	(331,930	)
Investing activities	129,781			22,028			288,530			129,781
Financing activities	—			(21,190		)
Effect of exchange rate changes on foreign currency cash	(334		)	837			635			(334		)
Total decrease in cash, restricted cash and cash equivalents	(202,483		)	(30,466		)
Total increase (decrease) in cash, restricted cash and cash equivalents							70,684			(202,483		)
Less: change in cash, restricted cash and cash equivalents of discontinued operations	(3,349		)	8,823			—			(3,349		)
Total decrease in cash, restricted cash and cash equivalents of continuing operations	$	(199,134	)	$	(39,289	)
Total change in cash, restricted cash and cash equivalents of continuing operations							$	70,684		$	(199,134	)

Cash Flows used in Operating Activities

Cash flows used in operating activities for the three months ended March 31, ~~2019~~2020 were ~~$331.9~~$218.5 million compared to ~~$32.1 million for the three months ended March 31, 2018, an increase of $299.8 million. Cash~~cash flows used in ~~discontinued operations were $0.8~~operating activities of $331.9 million for the three months ended March 31, 2019, a decrease of $113.4 million. Cash flows used in discontinued operations were $0.0 million for the three months ended March 31, 2020 compared to ~~$46.7~~$0.2 million in the three months ended March 31, ~~2018.~~2019. Cash flows used in continuing operating activities were ~~$331.1~~$218.5 million for the three months ended March 31, ~~2019~~2020 compared to cash flows ~~provided by~~used in continuing operations of ~~$14.5~~$331.7 million for the three months ended March 31, ~~2018.The decrease in~~2019.

The operating cash flows ~~from~~used in continuing operations ~~was~~for the three months ended March 31, 2020 and 2019 were primarily the result of ~~certain non-recurring transactions. This includes~~ the ~~new funds withheld arrangement,~~termination of the AmTrust Quota Share including both the Partial Termination Amendment and the ~~terminations~~Commutation and Release Agreement, and the termination of the ~~AmTrust Quota Share and~~ European Hospital Liability Quota Share, which significantly decreased gross premiums written during both respective periods while claim payments have been principally from the ~~three months ended March 31, 2019 compared to the same period in 2018. A total~~run-off of ~~$260.3 million cash~~existing reserves for loss and ~~cash equivalents was transferred to AmTrust as a result of these transactions during 2019.~~loss adjustment expenses.

Cash Flows from Investing Activities

Cash flows from investing activities consist primarily of proceeds from the sales and maturities of investments and payments for investments acquired. ~~The Company continues to deploy available cash for longer-term investments as investment conditions permit and to maintain, where possible, cash and cash equivalents balances at low levels.~~ Net cash provided by investing activities was ~~$129.8~~$288.5 million for the three months ended March 31, ~~2019~~2020 compared to ~~$22.0~~$129.8 million for the same period in ~~2018.~~2019 primarily due to proceeds from the sale of fixed maturity investments which were made to settle claim payments during the three months ended March 31, 2020.

Cash flows used in discontinued operations was ~~$3.3~~$0.0 million for the three months ended March 31, ~~2019~~2020 compared to cash flows ~~provided by~~used in discontinued operations of ~~$66.2~~$3.3 million for the same period in ~~2018.~~2019. Cash flows provided by continuing operations was ~~$133.1~~$288.5 million during the three months ended March 31, ~~2019~~2020 compared to cash flows ~~used in~~provided by continuing operations of ~~$44.1~~$133.1 million for the same period in ~~2018~~2019 as the purchases of fixed maturity securities were lower and the proceeds from maturities and sales of fixed maturities were higher during the three months ended March 31, 2019 compared to the same period in 2018. During the three months ended March 31, 2019, the proceeds from the sales, maturities and calls exceeded the purchases of fixed maturity securities by ~~$131.4~~$291.4 million compared to an ~~outflow~~inflow of ~~$42.8~~$131.4 million for the same period in ~~2018.~~2019.

~~Cash Flows from Financing Activities~~

Cash flows used in financing activities were $0.0 million for the three months ended March 31, 2019 compared to $21.2 million for the same period in 2018. No dividends on common or preference shares were paid during the first quarter of 2019 due to the non declaration of dividends by the Board of Directors in the last quarter of 2018. The cash outflow during the three months ended March 31, 2018 primarily relates to dividends paid to holders of preference shares of $8.5 million and dividends paid to holders of common shares of $12.5 million.

~~The Company did not have any major capital transactions during the three months ended March 31, 2019 and March 31, 2018.~~

Restrictions, Collateral and Specific Requirements

The Company's restrictions, collateral and specific requirements are discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations" section included under Item 7 of our Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, filed with the SEC on March ~~14, 2019.~~18, 2020.

At March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, restricted cash and cash equivalents and fixed maturity investments used as collateral were ~~$3.0~~$1.3 billion and ~~$4.0~~$1.5 billion, respectively. This collateral represents ~~91.5%~~76.9% and ~~91.9%~~77.6% of the fair value of our total fixed maturity investments and cash, ~~and cash equivalents (including~~ restricted cash and cash ~~equivalents)~~equivalents at March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively.

Investments

The investment of our funds is designed to ensure safety of principal while generating current income. Accordingly, our funds are invested in liquid, investment-grade fixed income securities which are all designated as available-for-sale ~~("AFS")~~ at March 31, ~~2019.~~2020. Please see "Notes to Condensed Consolidated Financial Statements (unaudited) Note 4. Investments" included under Part I Item 1 "Financial Information" of this Form 10-Q.

During the three months ended March 31, ~~2019,~~2020, the yield on the 10-year U.S. Treasury bond decreased by 28122 basis points to ~~2.41%~~0.7%. The 10-year U.S. Treasury rate is the key risk-free determinant in the fair value of many of the securities in our ~~AFS~~ portfolio. The ~~downward shift in the~~ U.S. Treasury yield curve experienced a material downward shift during the three months ended March 31, ~~2019 reflects a potentially~~

~~more accommodative~~2020, reflecting significant global financial and economic volatility from the COVID-19 pandemic which spread during the first quarter of 2020. The global nature of the pandemic resulted in an abrupt downturn in economic activity both globally and in the U.S., and financial markets experienced unprecedented volatility during this period. The U.S. Federal Reserve, along with central bankers globally, implemented multiple rounds of rapid and aggressive monetary measures to provide liquidity to financial markets and to relieve imbalances that rapidly formed in those markets in the face of the pandemic and its economic and financial impacts. Government policymakers in the U.S. and globally have additionally implemented an ongoing series of unprecedented fiscal policy ~~for~~measures to provide immediate and near-term economic relief to affected populations.

Due in large part to the ~~remainder~~uncertainty caused by the COVID-19 pandemic in global financial markets during the three months ended March 31, 2020, our investment portfolio experienced significant unrealized losses (largely due to widening credit spreads on fixed income investments), increased volatility, heightened credit risk, and declines in yields on our fixed income investments. Our investment portfolios may continue to be adversely impacted by unfavorable market conditions caused by the COVID-19 pandemic, which could cause continued volatility in our results of ~~2019~~operations and ~~is indicative that investors are looking for relatively risk free investments amid concerns regarding future global economic growth.~~negatively impact our financial condition.

The movement in the market values of our ~~AFS~~ fixed maturity portfolio induring the ~~first quarter of~~ ~~2019~~three months ended March 31, 2020 generated net unrealized ~~gains~~losses of ~~$59.4~~$44.2 million, primarily due to the recent ~~trend of lower long-term interest rates along with lower inflation expectations as~~COVID-19 pandemic which has caused widening credit spreads, a ~~result of slower~~surging demand for liquidity and a sudden stop to global economic ~~growth, both~~activity, all of which have ~~increased~~decreased bond prices during the three months ended March 31, ~~2019. Please see "Liquidity and Capital Resources - Capital Resources"~~ ~~on page 53 for further information.~~2020.

At March 31, ~~2019,~~2020, we consider the levels of cash and cash equivalents we are holding to be within our targeted ranges. During periods when interest rates experience greater volatility, we have periodically maintained more cash and cash equivalents in order to better assess current market conditions and opportunities within our defined risk appetite, and may do so in future periods. ~~In order to~~To limit our exposure to unexpected interest rate increases which would reduce the value of our fixed income securities and reduce our shareholders' equity, we attempt to maintain the duration of our fixed maturity investment portfolio combined with our cash and cash equivalents, both restricted and unrestricted, within a reasonable range of the duration of our loss reserves.

At March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, these respective durations in years were as follows:


	March 31, 2019	December 31, 2018	March 31, 2020	December 31, 2019
Fixed maturities and cash and cash equivalents	4.4	4.2	2.7	3.0
Reserve for loss and LAE(1)	4.1	4.5	4.2	4.2

(1) The duration regarding our reserve for loss and LAE at March 31, 2020 is gross of LPT/ADC Agreement reserves.

During the three months ended March 31, ~~2019,~~2020, the weighted average duration of our fixed maturity investment portfolio ~~increased~~decreased by ~~0.2~~0.3 years to ~~4.4~~2.7 years and the duration for the reserve for loss and LAE ~~decreased by 0.4 years to 4.1~~remained at 4.2 years. The differential in duration between these assets and liabilities may fluctuate over time and in the case of fixed maturities, ishistorically has been affected by factors such as market conditions, changes in asset mix and prepayment speeds in the case of both our agency mortgage-backed securities ("Agency MBS") and commercial mortgage-backed ~~securities ("CMBS").~~securities. At March 31, 2020, the duration of our fixed maturity investment portfolio decreased compared to December 31, 2019 due to sales of fixed maturities primarily as a result of settling claim payments with AmTrust.

The average yield and average duration of our fixed maturities, by asset class, and our cash and cash equivalents (restricted and unrestricted) are as ~~follows:~~follows at March 31, 2020 and December 31, 2019, respectively:


March 31, 2019	Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Average yield⁽¹⁾		Average duration⁽²⁾
AFS fixed maturities	($ in thousands)
March 31, 2020													Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Average yield⁽¹⁾		Average duration⁽²⁾
													($ in thousands)
U.S. treasury bonds	$	116,009	$	654	$	(1	)	$	116,662	2.7	%	1.3	$	84,959	$	1,185	$	(1	)	$	86,143	2.5	%	0.5
U.S. agency bonds – mortgage-backed	1,071,920		4,743		(13,341		)	1,063,322		3.0	%	5.7	495,747		19,510		(132		)	515,125		2.9	%	3.7
U.S. agency bonds – other	19,871		4		(95		)	19,780		3.1	%	2.0
Non-U.S. government and supranational bonds	34,120		158		(1,058		)	33,220		3.4	%	3.4	7,290		93		(200		)	7,183		1.4	%	6.8
Asset-backed securities	89,419		1,325		(379		)	90,365		3.8	%	3.7	187,255		495		(14,715		)	173,035		3.5	%	0.8
Corporate bonds	1,742,790		30,010		(21,106		)	1,751,694		3.3	%	4.2	755,438		9,336		(37,716		)	727,058		2.9	%	3.4
Municipal bonds	56,852		42		(3		)	56,891		3.2	%	3.6
Total AFS fixed maturities	3,130,981		36,936		(35,983		)	3,131,934		3.2	%	4.6
													1,530,689		30,619		(52,764		)	1,508,544		2.9	%	3.1
Cash and cash equivalents	131,855		—		—			131,855		2.5	%	0.0	177,962		—		—			177,962		0.6	%	0.0
Total	$	3,262,836	$	36,936	$	(35,983	)	$	3,263,789	3.1	%	4.4	$	1,708,651	$	30,619	$	(52,764	)	$	1,686,506	2.7	%	2.7


December 31, 2018	Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Average yield⁽¹⁾		Average duration⁽²⁾
AFS fixed maturities	($ in thousands)
December 31, 2019													Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Average yield⁽¹⁾		Average duration⁽²⁾
													($ in thousands)
U.S. treasury bonds	$	138,625	$	448	$	(1	)	$	139,072	2.6	%	1.1	$	94,921	$	704	$	—		$	95,625	2.5	%	0.7
U.S. agency bonds – mortgage-backed	1,485,716		3,491		(36,073		)	1,453,134		3.0	%	5.8	533,296		6,717		(1,291		)	538,722		2.9	%	4.1
U.S. agency bonds – other	129,741		40		(548		)	129,233		2.8	%	1.0
Non-U.S. government and supranational bonds	11,212		66		(1,206		)	10,072		3.4	%	5.1	11,796		294		(91		)	11,999		1.2	%	4.6
Asset-backed securities	216,072		425		(1,415		)	215,082		4.2	%	2.4	187,881		821		(532		)	188,170		3.8	%	0.9
Corporate bonds	1,128,614		6,525		(30,164		)	1,104,975		3.0	%	4.3	981,441		31,140		(15,725		)	996,856		2.9	%	3.4
Total AFS fixed maturities	3,109,980		10,995		(69,407		)	3,051,568		3.1	%	4.6
HTM fixed maturities
Corporate bonds	957,845		3,872		(20,990		)	940,727		3.7	%	4.4
Municipal bonds	57,836		—		(551		)	57,285		3.2	%	4.0	4,091		55		—			4,146		4.6	%	1.4
Total HTM fixed maturities	1,015,681		3,872		(21,541		)	998,012		3.7	%	4.4
													1,813,426		39,731		(17,639		)	1,835,518		3.0	%	3.2
Cash and cash equivalents	330,989		—		—			330,989		2.1	%	0.0	107,278		—		—			107,278		0.6	%	0.0
Total	$	4,456,650	$	14,867	$	(90,948	)	$	4,380,569	3.1	%	4.2	$	1,920,704	$	39,731	$	(17,639	)	$	1,942,796	2.8	%	3.0


(1)	Average yield is calculated by dividing annualized investment income for each sub-component of ~~AFS and HTM~~fixed maturity securities and cash and cash equivalents (including amortization of premium or discount) by amortized cost.


(2)	Average duration in years.

~~The following table summarizes the Company's fixed maturity investment portfolio holdings by contractual maturity at March 31, 2019 and December 31, 2018:~~

March 31, 2019 December 31, 2018
($ in thousands) AFS fixed maturities HTM fixed maturities AFS fixed maturities HTM fixed maturities
Fair Value Amortized cost Fair Value Amortized Cost
Due in one year or less $ 68,406
$ —
$ 130,756
$ 2,020
Due after one year through five years 942,670
—
703,347
394,875
Due after five years through ten years 964,887
—
549,249
618,786
Due after ten years 2,284
—
—
—
1,978,247
—
1,383,352
1,015,681
U.S. agency bonds – mortgage-backed 1,063,322
—
1,453,134
—
Asset-backed securities 90,365
—
215,082
—
Total fixed maturities $ 3,131,934
$ —
$ 3,051,568
$ 1,015,681

At March 31, ~~2019, 98.2%~~2020, 100.0% of the Company’s U.S. agency bond holdings are mortgage-backed. Additional details on the Agency MBS at March 31, ~~2019~~2020 and December 31, ~~2018~~2019 were as follows:


	March 31, 2019				December 31, 2018				March 31, 2020				December 31, 2019
	Fair Value		% of Total		Fair Value		% of Total
($ in thousands)									Fair Value		% of Total		Fair Value		% of Total
U.S. agency bonds - mortgage-backed	($ in thousands)				($ in thousands)
Residential mortgage-backed ("RMBS")
GNMA – fixed rate	$	111,222	10.3	%	$	152,626	9.6	%	$	31,010	6.0	%	$	33,079	6.1	%
GNMA – variable rate	7,927		0.7	%	10,773		0.7	%	7,087		1.4	%	7,075		1.3	%
FNMA – fixed rate	545,833		50.4	%	742,749		46.9	%	225,375		43.8	%	241,905		44.9	%
FHLMC – fixed rate	398,340		36.8	%	546,986		34.6	%	251,653		48.8	%	256,663		47.7	%
Total U.S. agency bonds - mortgage-backed	1,063,322		98.2	%	1,453,134		91.8	%
U.S. agency bonds - fixed rate	19,780		1.8	%	129,233		8.2	%
Total U.S. agency bonds	$	1,083,102	100.0	%	$	1,582,367	100.0	%	$	515,125	100.0	%	$	538,722	100.0	%

Our Agency MBS portfolio is ~~34.0%~~34.1% of our fixed maturity investments at March 31, ~~2019.~~2020. Given the relative size of this portfolio to our total investments, if faster prepayment patterns were to occur over an extended period of time, this could potentially

limit the growth in our investment income in certain circumstances or ~~even potentially~~ reduce the total amount of investment income we earn.

At March 31, ~~2019~~2020 and December 31, ~~2018, 98.4%~~2019, 98.8% and ~~98.7%~~99.7%, respectively, of our fixed maturity investments consisted of investment grade securities. We define a security as being below investment grade if it has an S&P credit rating of BB+, or equivalent, or less. Please see "Part I, Item 1 - Notes to Condensed Consolidated Financial Statements (unaudited) Note 4. Investments" for additional information on the credit rating of our fixed income portfolio.

The security holdings by sector and financial strength rating of our corporate bond holdings at March 31, ~~2019~~2020 and December 31, ~~2018~~2019 were as follows:


	Ratings⁽¹⁾														Ratings⁽¹⁾
March 31, 2019	AAA		AA+, AA, AA-		A+, A, A-		BBB+, BBB, BBB-		BB+ or lower		Fair Value		% of Corporate bonds portfolio
March 31, 2020															AAA, AA+, AA, AA-		A+, A, A-		BBB+, BBB, BBB-		BB+ or lower		Fair Value		% of Corporate bonds portfolio
Corporate bonds											($ in thousands)												($ in thousands)
Basic Materials	—	%	—	%	0.9	%	2.4	%	0.5	%	$	65,793	3.8	%	—	%	—	%	2.3	%	—	%	$	16,878	2.3	%
Communications	—	%	1.1	%	2.8	%	4.1	%	—	%	140,326		8.0	%	—	%	0.6	%	6.1	%	—	%	48,837		6.7	%
Consumer	—	%	0.3	%	13.9	%	12.9	%	0.3	%	479,762		27.4	%	0.1	%	3.5	%	23.7	%	1.1	%	206,395		28.4	%
Energy	—	%	1.5	%	4.6	%	2.6	%	0.9	%	168,033		9.6	%	0.3	%	7.9	%	2.0	%	0.7	%	79,562		10.9	%
Financial Institutions	0.1	%	3.4	%	27.7	%	10.5	%	0.3	%	734,916		42.0	%	3.8	%	27.5	%	13.0	%	0.8	%	327,853		45.1	%
Industrials	—	%	—	%	1.3	%	3.9	%	—	%	92,389		5.2	%	—	%	0.4	%	2.3	%	—	%	19,316		2.7	%
Technology	—	%	0.7	%	1.5	%	1.0	%	0.8	%	70,475		4.0	%	—	%	2.3	%	1.6	%	—	%	28,217		3.9	%
Total	0.1	%	7.0	%	52.7	%	37.4	%	2.8	%	$	1,751,694	100.0	%	4.2	%	42.2	%	51.0	%	2.6	%	$	727,058	100.0	%


	Ratings⁽¹⁾														Ratings⁽¹⁾
December 31, 2018	AAA		AA+, AA, AA-		A+, A, A-		BBB+, BBB, BBB-		BB+ or lower		Fair Value		% of Corporate bonds portfolio
December 31, 2019															AAA, AA+, AA, AA-		A+, A, A-		BBB+, BBB, BBB-		BB+ or lower		Fair Value		% of Corporate bonds portfolio
Corporate bonds											($ in thousands)												($ in thousands)
Basic Materials	—	%	—	%	0.8	%	2.1	%	0.7	%	$	73,696	3.6	%	—	%	0.6	%	1.4	%	—	%	$	19,517	2.0	%
Communications	—	%	0.9	%	2.7	%	5.0	%	—	%	175,924		8.6	%	—	%	2.4	%	4.0	%	—	%	64,159		6.4	%
Consumer	—	%	0.2	%	13.0	%	16.0	%	0.3	%	602,756		29.5	%	0.2	%	8.3	%	19.6	%	—	%	279,940		28.1	%
Energy	—	%	1.4	%	3.9	%	3.6	%	0.7	%	195,259		9.6	%	0.9	%	6.1	%	3.8	%	—	%	107,369		10.8	%
Financial Institutions	0.1	%	3.1	%	26.8	%	9.8	%	0.3	%	822,245		40.1	%	3.1	%	30.1	%	10.7	%	0.6	%	443,983		44.5	%
Industrials	—	%	—	%	1.3	%	3.7	%	—	%	103,349		5.0	%	—	%	1.8	%	3.5	%	—	%	53,279		5.3	%
Technology	—	%	0.7	%	1.4	%	0.9	%	0.6	%	72,473		3.6	%	—	%	1.7	%	1.2	%	—	%	28,609		2.9	%
Total	0.1	%	6.3	%	49.9	%	41.1	%	2.6	%	$	2,045,702	100.0	%	4.2	%	51.0	%	44.2	%	0.6	%	$	996,856	100.0	%


(1)	Ratings as assigned by S&P, or equivalent

At March 31, ~~2019,~~2020, the Company’s ten largest corporate holdings, ~~90.2%~~80.4% of which are U.S. dollar denominated, 46.0% of which are in the Consumer Sector and ~~51.3%~~42.5% of which are in the Financial Institutions sector, at fair value and as a percentage of all fixed income securities were as follows:

March 31, 2019 Fair Value % of Holdings
Based on Fair
Value of All
Fixed Income
Securities
Rating⁽¹⁾
($ in thousands)
Gilead Sciences Inc, 3.65% Due 3/1/2026 $ 20,392
0.7 % A
Brookfield Asset Management Inc, 4.00%, Due 1/15/2025 20,195
0.6 % A-
BNP Paribas, 5.00% Due 1/15/2021 19,837
0.6 % A
Rabobank Nederland Utrec, 3.875% Due 2/8/2022 19,643
0.6 % A+
Nissan Motor Acceptance Corp, 3.875%, Due 9/21/2023 18,439
0.6 % A-
Electricite de France, 4.625%, Due 9/11/2024 17,745
0.6 % A-
UBS Group Funding (Jersey) LTD, 2.65% Due 2/1/2022 16,848
0.5 % A-
Bank of New York Mellon Corp, 3.00%, Due 2/24/2025 15,996
0.5 % A
Pepsico Inc., 3.60%, Due 3/1/2024 15,664
0.5 % A+
Pepsico Inc., 3.50%, Due 7/17/2025 15,570
0.5 % A+
Total $ 180,329
5.7 %



March 31, 2020	Fair Value		% of Holdings		Rating⁽¹⁾
	($ in thousands)
Rabobank Nederland Utrec, 3.875% Due 2/8/2022	$	19,727	1.3	%	A+
UBS Group Funding (Jersey) Ltd, 2.65% Due 2/1/2022	16,735		1.1	%	A-
Electricite de France, 4.625%, Due 9/11/2024	16,529		1.1	%	A-
Allergan Funding SCS, 3.80%, Due 3/15/2025	15,358		1.0	%	BBB
BAT International Finance PLC, 3.95%, Due 6/15/2025	14,716		1.0	%	BBB+
Goldman Sachs Group Inc., 3.625%, Due 1/22/2023	12,869		0.9	%	BBB+
Daimler Finance North America LLC, 3.30%, Due 5/19/2025	12,393		0.8	%	BBB+
Bayer US Finance LLC, 3.375% Due 10/8/2024	12,314		0.8	%	BBB
Brookfield Asset Management Inc., 4.00% Due 1/15/2025	12,149		0.8	%	A-
Anheuser-Busch INBEV NV, 2.875% Due 9/25/2024	11,770		0.8	%	A-
Total	$	144,560	9.6	%


(1)	Ratings as assigned by S&P, or equivalent

At March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, we hold the following non-U.S. dollar denominated securities:


	March 31, 2019				December 31, 2018				March 31, 2020				December 31, 2019
($ in thousands)	Fair Value		% of Total		Fair Value		% of Total		Fair Value		% of Total		Fair Value		% of Total
Non-U.S. dollar denominated corporate bonds	$	327,741	95.4	%	$	338,712	97.1	%	$	262,960	97.3	%	$	310,323	96.3	%
Non-U.S. government and supranational bonds	15,914		4.6	%	10,072		2.9	%	7,183		2.7	%	11,999		3.7	%
Total non-U.S. dollar denominated AFS securities	$	343,655	100.0	%	$	348,784	100.0	%
Total non-U.S. dollar denominated securities									$	270,143	100.0	%	$	322,322	100.0	%

At March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, these non-U.S. securities are invested in the following currencies:


	March 31, 2019				December 31, 2018				March 31, 2020				December 31, 2019
($ in thousands)	Fair Value		% of Total		Fair Value		% of Total		Fair Value		% of Total		Fair Value		% of Total
Euro	$	274,102	79.8	%	$	284,440	81.6	%	$	229,182	84.8	%	$	272,493	84.5	%
British Pound	42,714		12.4	%	37,469		10.7	%	34,728		12.9	%	42,342		13.1	%
Australian Dollar	19,666		5.7	%	19,170		5.5	%
Canadian Dollar	5,228		1.5	%	5,658		1.6	%	4,973		1.8	%	5,364		1.7	%
All other	1,945		0.6	%	2,047		0.6	%
Total non-U.S. dollar denominated AFS securities	$	343,655	100.0	%	$	348,784	100.0	%
All other currencies									1,260		0.5	%	2,123		0.7	%
Total non-U.S. dollar denominated securities									$	270,143	100.0	%	$	322,322	100.0	%

The net decrease in non-U.S. denominated fixed maturities is primarily due to ~~sales~~the depreciation of ~~euro-denominated~~Euro denominated corporate bonds during the three months ended March 31, ~~2019.~~2020. At March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, all of the Company's non-U.S. government and supranational issuers have a rating of A or higher by S&P.

For our non-U.S. dollar denominated corporate bonds, the following table summarizes the composition of the fair value of our fixed maturity investments at the dates indicated by ratings:


Ratings⁽¹⁾	March 31, 2019				December 31, 2018				March 31, 2020				December 31, 2019
($ in thousands)	Fair Value		% of Total		Fair Value		% of Total		Fair Value		% of Total		Fair Value		% of Total
AAA	$	2,290	0.7	%	$	2,258	0.7	%	$	467	0.2	%	$	481	0.2	%
AA+, AA, AA-	32,304		9.8	%	28,725		8.5	%	14,860		5.6	%	21,231		6.8	%
A+, A, A-	139,152		42.5	%	148,204		43.7	%	109,080		41.5	%	137,584		44.3	%
BBB+, BBB, BBB-	143,295		43.7	%	148,672		43.9	%	127,969		48.7	%	145,546		46.9	%
BB+ or lower	10,700		3.3	%	10,853		3.2	%	10,584		4.0	%	5,481		1.8	%
Total non-U.S. dollar denominated corporate bonds	$	327,741	100.0	%	$	338,712	100.0	%	$	262,960	100.0	%	$	310,323	100.0	%


(1)	Ratings as assigned by S&P, or equivalent

The Company does not employ any credit default protection against any of the fixed maturities held in non-U.S. denominated currencies at March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively.

Other Balance Sheet Changes

The following table summarizes the Company's other material balance sheet changes at March 31, ~~2019~~2020 and December 31, ~~2018:~~2019:


($ in thousands)	March 31, 2019		December 31, 2018		Change			Change %		March 31, 2020		December 31, 2019		Change			Change %
Deferred commission and other acquisition expenses	$	161,976	$	388,442	$	(226,466	)	(58.3	)%	$	69,109	$	77,356	$	(8,247	)	(10.7	)%
Funds withheld receivable	652,087		27,039		625,048			2,311.7	%	696,076		684,441		11,635			1.7	%
Reserve for loss and LAE										2,249,045		2,439,907		(190,862		)	(7.8	)%
Unearned premiums	455,175		1,200,419		(745,244		)	(62.1	)%	197,094		220,269		(23,175		)	(10.5	)%
Reinsurance balances payable	117,943		52,594		65,349			124.3	%
Accrued expenses and other liabilities										22,708		32,444		(9,736		)	(30.0	)%

The ~~lower amount of~~Company's deferred commission and other acquisition expenses decreased by 10.7% and unearned premiums ~~as at March 31, 2019 compared to December 31, 2018 was due to the decline in business underwritten~~decreased by ~~the Company during the three months ended March 31, 2019. The decline in business was~~10.5% primarily ~~within the AmTrust Reinsurance segment~~ due to the Partial Termination Amendment with AmTrust on a cut-off basis and the ~~terminations~~termination of the remaining business under both quota share contracts with AmTrust ~~as of~~which are now in run-off with no new business written beginning January 1, 2019. In addition, the Diversified Reinsurance Segment experienced lower premiums written due to non-renewals in the European Capital Solutions business and decreases in the premium written produced by the IIS business.

Funds withheld receivable increased by ~~$625.0 million~~1.7% primarily due to ~~the conversion of a portion of the existing trust accounts used for collateral on the AmTrust Quota Share~~insurance balances receivable that were converted into a funds withheld ~~arrangement and the establishment of a funds withheld arrangement on the AIU DAC portion of~~to be utilized as collateral for the European Hospital Liability Quota ~~Share, which are a permitted collateral option under each respective agreement, during the three months ended~~Share.

Accrued expenses and other liabilities decreased by 30.0% as at March 31, ~~2019. Reinsurance~~2020 compared to December 31, 2019 due to reductions in the reinsurance balances payable ~~increased by $65.3 million~~

as a result of the ~~recent quota share terminations with~~aforementioned termination of both AmTrust ~~which is being run-off with no further written premiums~~reinsurance contracts effective January 1, 2019. The Company's reserve for loss and LAE decreased by 7.8% primarily due to the recent commutation of workers' compensation reserves during 2019 in the AmTrust Reinsurance segment.

Capital Resources

Capital resources consist of funds deployed in support of our operations. In the three months ended March 31, ~~2019,~~2020, our total capital resources ~~increased~~decreased by ~~$30.0~~$22.7 million, or ~~3.7%~~2.9% compared to December 31, ~~2018~~2019 due to ~~the favorable movement in~~ unrealized ~~gains~~losses on our investment portfolio partly offset by a net ~~loss~~income attributable to common shareholders. The Company’s management believes its current sources of liquidity are adequate to meet its cash requirements for the next 12twelve months. The following table shows the movement in total capital resources at March 31, ~~2019~~2020 and December 31, ~~2018:~~2019:


($ in thousands)	March 31, 2019		December 31, 2018		Change		Change %		March 31, 2020		December 31, 2019		Change			Change %
Preference shares	$	465,000	$	465,000	$	—	—	%	$	465,000	$	465,000	$	—		—	%
Common shareholders' equity	119,289		89,275		30,014		33.6	%	19,998		42,718		(22,720		)	(53.2	)%
Total Maiden shareholders' equity	584,289		554,275		30,014		5.4	%
Total shareholders' equity									484,998		507,718		(22,720		)	(4.5	)%
Senior Notes - principal amount	262,500		262,500		—		—	%	262,500		262,500		—			—	%
Total capital resources	$	846,789	$	816,775	$	30,014	3.7	%	$	747,498	$	770,218	$	(22,720	)	(2.9	)%

The major factors contributing to the net ~~increase~~decrease in capital resources were as follows:

~~Maiden shareholders'~~Shareholders' equity

Total shareholders' equity at March 31, ~~2019 increased~~2020 decreased by ~~$30.0~~$22.7 million, or ~~5.4%,~~4.5% compared to December 31, ~~2018 primarily~~2019 due to the following factors:

net ~~increase~~decrease in AOCI of ~~$65.4~~$44.1 million which arose due ~~to: 1) an increase in~~to net unrealized ~~gains~~losses on investment ~~of $61.5 million~~ resulting from the net ~~increase~~decrease in the fair value of our investment portfolio relating to market price movements due to ~~declining interest rates~~widening credit spreads and unfavorable economic conditions during the three months ended March 31, ~~2019;~~2020; partly offset by:

net income attributable to Maiden of $20.9 million for the three months ended March 31, 2020; and 2) an increase in cumulative translation adjustments of $3.9 million due to the effect of the recent depreciation of the euro and British pound relative to the original currencies on our non-U.S. dollar net liabilities (excluding non-U.S. dollar denominated AFS fixed maturities);

net increase in share based transactions of ~~$1.2 million; and partly offset by~~ $0.5 million.


•	~~net loss attributable to Maiden of $36.6 million. Please see "Results of Operations" on page 39 for a discussion of the Company’s net loss for the three months ended March 31, 2019.~~

On February 21, 2017, the Company's Board of Directors approved the repurchase of up to $100.0 million of the Company's common shares from time to time at market prices. During the three months ended March 31, ~~2019,~~2020, the Company did not repurchase any common shares under its share repurchase authorization. At March 31, ~~2019,~~2020, the Company has a remaining authorization of $74.2 million for share repurchases.

Please refer to "Notes to ~~Condensed~~ Consolidated Financial Statements ~~(unaudited)~~ Note ~~12.~~13. Shareholders' Equity" included under Part III Item 18. "Financial ~~Information"~~Statements and Supplementary Data" of ~~this~~our Annual Report on Form ~~10-Q~~10-K for a discussion of the equity instruments issued by the Company as at December 31, 2019.

On October 25, 2019, the Company transferred the listing of its common shares from the NASDAQ Global Select Market to the NASDAQ Capital Market. The NASDAQ Capital Market is a continuous trading market that operates in substantially the same manner as the NASDAQ Global Select Market and listed companies must meet certain financial requirements and comply with the NASDAQ Stock Market LLC’s (“NASDAQ”) corporate governance requirements. The Company’s common shares continue to trade under the symbol “MHLD”.

On April 17, 2020, the Company received a letter from NASDAQ stating that the Company had not regained compliance during the Compliance Period and that the Company’s securities would be delisted from the Capital Market by the opening of business on April 28, 2020 unless the Company requests an appeal of NASDAQ’s determination to a Hearings Panel. On April 24, 2020, the Company filed a Hearing Request Form to appeal NADSAQ’s determination with the Hearings Panel which stays the de-listing until a decision is rendered subsequent to the appeal hearing. The NASDAQ Hearings Department has scheduled an appeal hearing to take place on July 23, 2020.

Book value and diluted book value per common share at March 31, ~~2019~~2020 and December 31, ~~2018.~~2019 were computed as follows:



	March 31, 2020		December 31, 2019
($ in thousands except share and per share data)
Ending common shareholders’ equity	$	19,998	$	42,718
Numerator for diluted book value per common share calculation	$	19,998	$	42,718

Common shares outstanding	83,969,991		83,148,458
Shares issued from assumed conversion of dilutive options and restricted shares	997,264		1,818,797
Denominator for diluted book value per common share calculation	84,967,255		84,967,255

Book value per common share	$	0.24	$	0.51
Diluted book value per common share	0.24		0.50

At March 31, 2020, book value per common share decreased by 52.9% and diluted book value per common share decreased by 52.0%, compared to December 31, 2019. This was primarily due to net unrealized losses on our investment portfolio of $44.1 million reported in other comprehensive loss for the three months ended March 31, 2020, partly offset by our net income attributable to common shareholders of $20.9 million during the three months ended March 31, 2020.

Please see "Liquidity and Capital Resources - Investments" on page 43 for further information on the change in fair value of our fixed maturity investment portfolio.

Senior Notes

There were no changes in the Company’s Senior Notes at March 31, ~~2019~~2020 compared to December 31, ~~2018~~2019 and the Company did not enter into any short-term borrowing arrangements during the three months ended March 31, ~~2019.~~2020. Please refer to "Notes to Condensed Consolidated Financial Statements (unaudited) Note 7. Long Term Debt" included under Part I Item 1 "Financial Information" of this Form 10-Q for a discussion of the Company’s Senior Notes.

~~We have funded a portion~~The ratio of ~~our capital requirements through issuances of senior securities, including secured~~Debt to Total Capital Resources at March 31, 2020 and unsecured debt securities, or issuances of common or preference shares. For flexibility, we have a current universal shelf registration statement that allows for the public offering and sale of our debt securities, common shares, preference shares and warrants to purchase such securities. Our ability to fund a portion of our capital requirements through the issuance of debt or equity securities will depend on future market conditions, funding needs, our financial condition and other factors and there can be no assurance that any such issuance will occur or be successful or at terms Maiden or our regulator considers acceptable.December 31, 2019 was computed as follows:



	March 31, 2020			December 31, 2019
($ in thousands)
Senior notes - principal amount	$	262,500		$	262,500
Maiden shareholders’ equity	484,998			507,718
Total capital resources	$	747,498		$	770,218
Ratio of debt to total capital resources	35.1		%	34.1		%

Financial Strength Ratings

~~In February 2019, we requested from A.M. Best to withdraw our~~The Company does not have a financial strength ~~rating. On February 28, 2019, A.M. Best approved~~rating from any nationally recognized statistical rating organization.

Non-GAAP Measures

As defined and described in Key Financial Measures on page 33, management uses certain key financial measures, some of which are non-GAAP measures, to evaluate the ~~withdrawal with~~Company's financial performance and the overall growth in value generated for the Company’s common shareholders. Management believes that these measures, which may be defined differently by other companies, explain the Company’s results to investors in a ~~final rating as "B++" (Good) with negative outlook and implications as previously disclosed in the "Financial Strength Ratings~~"manner that allows for a more complete understanding of the ~~Company's Annual Report on Form 10-K for the year ended December 31, 2018.~~

~~Aggregate Contractual Obligations~~

~~In the normal course of business, the Company is a party to a variety of contractual obligations as summarized~~underlying trends in the Company’s ~~Annual Report~~business.

For the three months ended March 31, 2020 and 2019, respectively, certain defined non-GAAP measures and the calculation of these non-GAAP measures, specifically non-GAAP underwriting income (loss), non-GAAP loss and LAE ratio, and non-GAAP combined ratio are not presented herein as those figures and ratios are the same in the periods presented on ~~Form 10-K~~a GAAP basis. However, these non-GAAP measures could differ in future periods. The calculation, reconciliation to nearest GAAP measure and discussion of relevant non-GAAP measures used by management are as follows:

Non-GAAP operating earnings (loss) and Non-GAAP diluted operating earnings (loss) per share attributable to common shareholders

Non-GAAPoperating earnings (loss) and non-GAAP diluted operating earnings (loss) per share attributable to common shareholders can be reconciled to the nearest U.S. GAAP financial measure as follows:



For the Three Months Ended March 31,	2020			2019
	($ in thousands except per share data)
Net income (loss)	$	20,861		$	(36,636	)
Add (subtract):
Net realized (gains) losses on investment	(11,038		)	11,101
Total other-than-temporary impairment losses	1,506			—
Foreign exchange and other gains	(8,197		)	(4,979		)
Loss from discontinued operations, net of income tax	—			2,734
Loss from NGHC Quota Share run-off	—			228
Non-GAAP operating earnings (loss)	$	3,132		$	(27,552	)

Diluted earnings (loss) per share attributable to common shareholders	$	0.25		$	(0.44	)
Add (subtract):
Net realized (gains) losses on investment	(0.13		)	0.13
Total other-than-temporary impairment losses	0.02			—
Foreign exchange and other gains	(0.10		)	(0.06		)
Loss from discontinued operations, net of income tax	—			0.03
Loss from NGHC Quota Share run-off	—			0.01
Non-GAAP diluted operating earnings (loss) per share attributable to common shareholders	$	0.04		$	(0.33	)

Non-GAAPoperating earnings was $3.1 million for the ~~year~~three months ended March 31, 2020, compared to a non-GAAP operating loss of $27.6 million for the same period in 2019. The Company's non-GAAP operating results included an underwriting loss of $3.7 million for the three months ended March 31, 2020, compared to an underwriting loss of $42.7 million for the same period in 2019, which was primarily the result of underwriting results not covered by the LPT/ADC Agreement, specifically the run-off of the AmTrust Quota Share with losses occurring after December 31, ~~2018. These contractual obligations are considered by~~2018 (including the ~~Company when assessing its liquidity requirements~~additional ceding commission paid under the Partial Termination Amendment) as well as claims related to the European Hospital Liability Quota Share.

Non-GAAP Operating ROACE

The improvement in Non-GAAP Operating ROACE for the three months ended March 31, 2020 relative to the same period in 2019 reflects the reflective improvement in non-GAAP operating earnings and ~~the Company is confident in its ability~~was computed as follows:



	For the Three Months Ended March 31,
($ in thousands)	2020			2019
Non-GAAP operating earnings (loss)	$	3,132		$	(27,552	)
Opening common shareholders’ equity	42,718			89,275
Ending common shareholders’ equity	19,998			119,289
Average common shareholders’ equity	31,358			104,282
Non-GAAP Operating ROACE	40.2		%	(107.2		)%

Adjusted Shareholders' Equity, Adjusted Total Capital Resources and Adjusted Book Value per Common Share, Ratio of Debt to ~~meet all of its obligations. As a result of the adoption of~~ ~~Topic 842~~ accounting standard for leases on January 1, 2019, the Company’s contractual operating lease obligations have been capitalized at the net present value of future lease payments on the Company's Condensed Consolidated Balance SheetTotal Adjusted Capital Resources

The Adjusted Shareholders' Equity, Adjusted Total Capital Resources and Adjusted Book Value per Common Share at March 31, ~~2019. Please refer to "Notes to Condensed Consolidated Financial Statements (unaudited) Note 10. Commitments and Contingencies" included under Part I Item 1 "Financial Information"~~ ~~of this Form 10-Q for a discussion~~2020 reflect the addition of the ~~Company’s~~

~~Operating Lease Obligations. There are no other material changes from what was disclosed~~unamortized deferred gain on retroactive reinsurance to the GAAP shareholders' equity as depicted in the ~~Company’s~~computations below. The deferred gain of $113.0 million arises from the LPT/ADC Agreement with Cavello relating to losses subject to that agreement which are fully recoverable from Cavello. The inclusion of the unamortized deferred gain in these metrics better reflects the ultimate economic benefit of the LPT/ADC Agreement, which will improve Maiden's shareholders' equity over the settlement period under the terms of the agreement.

Reconciliation of shareholders' equity to Adjusted shareholders' equity and Adjusted Total Capital Resources

The following table computes adjusted shareholders' equity and adjusted total capital resources by recognizing the unamortized deferred gain on retroactive reinsurance at March 31, 2020 and December 31, 2019:



($ in thousands)	March 31, 2020		December 31, 2019		Change			Change %
Preference shares	$	465,000	$	465,000	$	—		—	%
Common shareholders' equity	19,998		42,718		(22,720		)	(53.2	)%
Total shareholders' equity	484,998		507,718		(22,720		)	(4.5	)%
Unamortized deferred gain on retroactive reinsurance	112,950		112,950		—			—	%
Adjusted shareholders' equity	597,948		620,668		(22,720		)	(3.7	)%
Senior Notes - principal amount	262,500		262,500		—			—	%
Adjusted total capital resources	$	860,448	$	883,168	$	(22,720	)	(2.6	)%

Reconciliation of ~~contractual obligations included~~Book Value per Common Share to Adjusted Book Value per Common Share

The adjusted book value per common share as reconciled for the recognition of the unamortized deferred gain on retroactive reinsurance at March 31, 2020 and December 31, 2019 was computed as follows:



	March 31, 2020		December 31, 2019
($ in thousands except per share data)
Book value per common share	$	0.24	$	0.51
Unamortized deferred gain on retroactive reinsurance	1.35		1.36
Adjusted book value per common share	$	1.59	$	1.87

Ratio of Debt to Adjusted Total Capital Resources

Management uses this non-GAAP measure to monitor the financial leverage of the Company. This measure is calculated using the total principal amount of debt divided by the sum of adjusted total capital resources as computed in the ~~Company’s Annual Report on Form 10-K for the year ended~~table above. The ratio of Debt to Adjusted Total Capital Resources at March 31, 2020 and December 31, ~~2018.~~2019 was computed as follows:



	March 31, 2020			December 31, 2019
($ in thousands)
Senior notes - principal amount	$	262,500		$	262,500
Adjusted shareholders’ equity	597,948			620,668
Adjusted total capital resources	$	860,448		$	883,168
Ratio of debt to adjusted total capital resources	30.5		%	29.7		%

Currency and Foreign Exchange

We conduct business in a variety of foreign (non-U.S.) currencies, the principal exposures being the euro and the British ~~pound, the Australian dollar, the Canadian dollar and the Swedish krona.~~pound. Assets and liabilities denominated in foreign currencies are exposed to changes in currency exchange rates. Our reporting currency is the U.S. dollar, and exchange rate fluctuations relative to the U.S. dollar may materially impact our results and financial position. Our principal exposure to foreign currency risk is our obligation to settle claims in foreign currencies. In addition, in order to minimize this risk, we maintain and expect to continue to maintain a portion of our investment portfolio in investments denominated in currencies other than the U.S. dollar. We may employ various strategies (including hedging) to manage our exposure to foreign currency exchange risk. To the extent that these exposures are not fully hedged or the hedges are ineffective, our results of operations or equity may be adversely affected. At March 31, ~~2019,~~2020, no such hedges or hedging strategies were in force or had been entered into. We measure monetary assets and liabilities denominated in foreign currencies at period end exchange rates, with the resulting foreign exchange gains and losses recognized in the unaudited Condensed Consolidated Statements of Income. Revenues and

expenses in foreign currencies are converted at average exchange rates during the period. The effect of the translation adjustments for foreign operations is included in AOCI.

Net foreign exchange gains amounted to ~~$0.7~~$8.4 million during the three months ended March 31, ~~2019,~~2020, compared to ~~net~~ foreign exchange ~~losses~~gains of ~~$2.4~~$0.7 million for the ~~same period in 2018.~~three months ended March 31, 2019.

Effects of Inflation

The anticipated effects of inflation are considered explicitly in the pricing of the insured exposures, which are used as the initial estimates of reserves for loss and LAE. In addition, inflation is also implicitly accounted for in subsequent estimates of loss and LAE reserves, as the expected rate of emergence is in part predicated upon the historical levels of inflation that impact ultimate claim costs. To the extent inflation causes these costs, particularly medical treatments and litigation costs, to vary from the assumptions made in the pricing or reserving estimates, the Company will be required to change the reserve for loss and LAE with a corresponding change in its earnings in the period in which the variance is identified. The actual effects of inflation on the results of operations of the Company cannot be accurately known until claims are ultimately settled.

Off-Balance Sheet Arrangements

At March 31, ~~2019,~~2020, we did not have any off-balance sheet arrangements as defined by Item 303(a) (4) of Regulation S-K.

Recent Accounting Pronouncements

See "Part I, Item 1 - Notes to Condensed Consolidated Financial Statements (unaudited) Note 2. Significant Accounting Policies" for a discussion on recently issued accounting pronouncements not yet adopted.

~~Item 3. Quantitative and Qualitative Disclosures about Market Risk.~~

~~Quantitative and Qualitative Disclosures About Market Risk~~

Market risk is the risk that we will incur losses in our investments due to adverse changes in market rates and prices. Market risk is directly influenced by the volatility and liquidity in the market in which the related underlying assets are invested. We believe that we are principally exposed to three types of market risk: changes in interest rates, changes in credit quality of issuers of investment securities and reinsurers and changes in foreign exchange rates.

~~Interest Rate Risk~~

Interest rate risk is the risk that we may incur economic losses due to adverse changes in interest rates. The primary market risk to the investment portfolio is interest rate risk associated with investments in fixed maturity securities. Fluctuations in interest rates have a direct impact on the market valuation of these securities. At March 31, 2019, we had AFS fixed maturity securities with a fair value of $3.1 billion that are subject to interest rate risk.

The table below summarizes the interest rate risk associated with our fixed maturity securities by illustrating the sensitivity of the fair value and carrying value of our fixed maturity securities at March 31, 2019 to selected hypothetical changes in interest rates, and the associated impact on our shareholders’ equity. Temporary changes in the fair value of our fixed maturity securities that are held as AFS do impact the carrying value of these securities and are reported in our shareholders’ equity as a component of AOCI. The selected scenarios in the table below are not predictions of future events, but rather are intended to illustrate the effect such events may have on the fair value of our AFS fixed maturity securities and on our shareholders’ equity at March 31, 2019:

Hypothetical Change in Interest Rates Fair Value Estimated Change in Fair Value Hypothetical % (Decrease) Increase in Shareholders’ Equity
($ in thousands)
200 basis point increase $ 2,843,335
$ (288,599 ) (49.4 )%
100 basis point increase 2,987,641
(144,293 ) (24.7 )%
No change 3,131,934
—
— %
100 basis point decrease 3,271,483
139,549
23.9 %
200 basis point decrease 3,403,629
271,695
46.5 %

The interest rate sensitivity on the $168.0 million loan to related party means that a change in interest rates would impact our earnings and cash flows but would not affect the carrying value of the loan, which is carried at cost. Effective December 18, 2017, the loan carries an interest rate equivalent to the Federal Funds Effective Rate plus 200 basis points per annum. Therefore, an increase of 100 and 200 basis points in the Federal Funds Effective Rate would increase our earnings and cash flows by $1.7 million and $3.4 million, respectively, on an annual basis.

~~Counterparty Credit Risk~~

The concentrations of the Company’s counterparty credit risk exposures have not changed materially compared to December 31, 2018. The Company has exposure to credit risk primarily as a holder of fixed income securities. The Company controls this exposure by emphasizing investment grade credit quality in the fixed income securities it purchases. The table below summarizes the credit ratings by major rating category of the Company's fixed maturity investments at March 31, 2019 and December 31, 2018:

Ratings⁽¹⁾
March 31, 2019 December 31, 2018
AA+ or better 42.6 % 46.3 %
AA, AA-, A+, A, A- 34.1 % 31.4 %
BBB+, BBB, BBB- 21.7 % 21.0 %
BB+ or lower 1.6 % 1.3 %
100.0 % 100.0 %


~~(1)~~	~~Ratings as assigned by S&P, or equivalent~~

The Company believes this high quality concentration reduces its exposure to credit risk on fixed income investments to an acceptable level. At March 31, 2019, the Company is not exposed to any significant credit concentration risk on its investments, excluding securities issued by the U.S. government and agencies which are rated AA+ (please see "~~Liquidity and Capital Resources - Investments"~~ ~~on page 49), with the largest corporate issuer and the top 10 corporate issuers accounting for only 0.7% and 5.7% of the Company’s total fixed income securities, respectively.~~

The Company is subject to the credit risk of its cedants in the event of their insolvency or their failure to honor the value of the funds withheld balances due to the Company for any other reason. However, the Company’s credit risk in some jurisdictions is mitigated by a mandatory right of offset of amounts payable by the Company to a cedant against amounts due to the Company. In certain other jurisdictions, the Company is able to mitigate this risk, depending on the nature of the funds withheld arrangements,

to the extent that the Company has the contractual ability to offset any shortfall in the payment of the funds held balances with amounts owed by the Company to cedants for losses payable and other amounts contractually due. Funds withheld balances for which the Company receives an investment return based upon either the results of a pool of assets held by the cedant or the investment return earned by the cedant on its investment portfolio are exposed to an additional layer of credit risk.

On January 11, 2019, a portion of the existing trust accounts used for collateral on the AmTrust Quota Share were converted to a funds withheld arrangement. The Company transferred cash and investments of $575.0 million to AmTrust as a funds withheld receivable which bears an interest rate of 3.5%, subject to annual adjustment. At March 31, 2019, the balance of funds withheld was $575.0 million and the accrued interest was $4.4 million. Also, in January 2019, AIU DAC requested that Maiden Bermuda provide collateral to secure its proportional share under the European Hospital Liability Quota Share agreement. Accordingly, Maiden Bermuda transferred cash of €45.1 million ($51.2 million) to AIU DAC as a funds withheld receivable. AIU DAC will pay Maiden a fixed annual interest rate of 0.50%, on the average daily Funds Withheld balance, commencing on January 24, 2019, subject to annual adjustment. At March 31, 2019, the balance of funds withheld was €45.1 million ($50.6 million) and the accrued interest was $0.1 million. We are subject to the credit risk that AII and/or AmTrust will fail to reimburse Maiden Bermuda for these funds that AmTrust’s U.S. insurance company subsidiaries retain and the income on those assets.

The Company also has exposure to credit risk as it relates to its reinsurance balances receivable. Reinsurance balances receivable from the Company’s clients at March 31, 2019 were $72.9 million, including balances both currently due and accrued. We are also subject to the credit risk that AII and/or AmTrust will fail to perform their obligations to pay interest on and repay the principal pursuant to its loan agreement with Maiden Bermuda, and to reimburse Maiden Bermuda for any assets or other collateral of Maiden that AmTrust’s U.S. insurance company subsidiaries apply or retain, and income on those assets.

The Company believes that credit risk related to these balances is mitigated by several factors, including but not limited to, credit checks performed as part of the underwriting process and monitoring of aged receivable balances. In addition, as the vast majority of its reinsurance agreements permit the Company the right to offset reinsurance balances receivable and funds withheld from losses payable to them, the Company believes that the credit risk in this area is substantially reduced. Provisions are made for amounts considered potentially uncollectible. There was no allowance for uncollectible reinsurance balances receivable at March 31, 2019.

~~Foreign Currency Risk~~

The Company is generally able to match foreign currency denominated assets against its net reinsurance liabilities both by currency and duration to protect the Company against foreign exchange and interest rate risks. However, a natural offset does not exist for all currencies.

We may employ various strategies to manage our exposure to foreign currency exchange risk. To the extent that these exposures are not fully hedged or the hedges are ineffective, our results of operations or equity may be reduced by fluctuations in foreign currency exchange rates and could materially adversely affect our financial condition and results of operations. At March 31, 2019, no hedging instruments have been entered into. Our principal foreign currency exposure is to the euro and British pound, however, assuming all other variables remain constant and disregarding any tax effects, a strengthening (weakening) of the U.S. dollar exchange rate of 10% or 20% relative to the non-U.S. currencies held by the Company would result in a decrease (increase) in the Company's net assets of $18.7 million and $37.4 million, respectively.

Item 4. Controls and Procedures

Our management, with the participation and under the supervision of our Chief Executive Officer and Chief Financial Officer, have evaluated the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by SEC rules and forms and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow for timely decisions regarding required disclosures. Our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, such disclosure controls and procedures were effective. Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide an absolute assurance that all control issues and instances of fraud, if any, within our Company have been detected.

During the most recent fiscal quarter, there were no changes in the Company's internal controls over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

See "Part I, Item 1 - Notes to Condensed Consolidated Financial Statements (unaudited) Note ~~10.~~11. Commitments and Contingencies" for an update on legal matters. Except as disclosed above, there are no material changes from the legal proceedings previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

Item 1A. Risk Factors

Our business is subject to a number of risks, including those identified in Item 1A. of Part I of our Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2019, that could have a material adverse effect on our business, results of operations, financial condition and/or liquidity and that could cause our operating results to vary significantly from period to period. The risks described in our ~~2018~~2019 Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also could have a material adverse effect on our business, results of operations, financial condition and/or liquidity.

~~There~~Circumstances caused by the COVID-19 pandemic are ~~no material changes from~~complex, uncertain and rapidly evolving. We therefore may not be able to accurately predict the ~~risk factors previously disclosed~~longer-term effects that the COVID-19 pandemic may have on our financial condition or results of operations. To the extent the COVID-19 pandemic adversely affects our financial condition or results of operations, it may also have the effect of heightening additional risks described in Part I, Item 1A, Risk Factors, of our Annual Report on Form 10-K for the year ended December 31, ~~2018.~~2019.

The impact of COVID-19 and related risks has adversely affected, and is expected to continue to adversely affect, our business, results of operations, financial condition, and liquidity and capital resources, and any future impact on our business is difficult to predict at this time.

The evolving COVID-19 global pandemic has caused significant disruption to the economy and financial markets globally, and the full extent of the potential impacts of COVID-19 are not yet known. Our results of operations, financial condition, and liquidity and capital resources have been adversely impacted by the COVID-19 pandemic, and the future impact of the pandemic is difficult to predict. In particular, we believe we are subject to the following risks related to the COVID-19 pandemic:

Investments. Due in large part to the uncertainty caused by the COVID-19 pandemic in global financial markets, our investment portfolio has experienced significant unrealized losses (largely due to widening credit spreads on fixed income investments), increased volatility, heightened credit risk, and declines in yields on our fixed income investments. Our investment portfolios may continue to be adversely impacted by unfavorable market conditions caused by the COVID-19 pandemic, which could cause continued volatility in our results of operations and negatively impact our financial condition.

Debt and Equity Financing. As a result of the economic conditions caused by the COVID-19 pandemic, capital and credit markets continue to experience volatility that could negatively impact our ability to raise additional capital through the debt or equity markets or through bank or other debt financing. If we are unable to obtain adequate capital on suitably attractive terms, or at all, we may be unable to implement our future operating plans and our business, financial condition, and results of operations could be materially adversely affected.

Liquidity. Due to the change in fair value of our investments caused by the COVID-19 pandemic, we and our reinsurance subsidiaries may need additional capital to maintain compliance with regulatory capital requirements and/or be required to post additional collateral under existing reinsurance arrangements, which could reduce our liquidity. In addition, we may experience a reduction in the amount of available distribution or dividend capacity from our regulated reinsurance subsidiaries, which would also reduce liquidity.

Operational Disruptions. We rely on the continued productivity of our senior executive team, our employees, and our agents, brokers, third party administrators, suppliers and outsourcing providers to carry out our operations. If any of these people are unable to continue to work productively, or at all, due to illness, government restrictions, remote working conditions, or other disruptions related to the COVID-19 pandemic, our ability to conduct our operations may be adversely affected. In addition, like many other companies, the vast majority of our employees are working remotely, and we are therefore more dependent on our information technology systems and the continued access by our employees and service providers to reliable internet and telecommunications systems. We will be adversely affected if these systems do not function effectively or are disrupted due to heightened demand, cybersecurity attacks and data security incidents, or for any other related reason. These types of operational disruptions that impact our people and/or systems and others we may not foresee, would negatively impact our ability to settle claims efficiently, complete acquisitions, integrate our acquired businesses, manage our investments, provide or submit timely filing requirements with the SEC and other regulators or otherwise conduct our business.

Claims. As described herein, the Company is not engaged in active reinsurance underwriting currently and is running off the remaining unearned exposures it has reinsured. Our IIS unit does write limited primary insurance coverages that could be exposed to COVID-19 claims. While we assess our exposure to COVID-19 insurance and reinsurance claims on our existing insurance exposures and remaining reinsurance exposures as limited and immaterial, given the uncertainty surrounding the COVID-19 pandemic and its impact on the insurance industry, our preliminary estimates of losses and loss adjustment expenses and estimates of reinsurance recoverable arising from the COVID-19 pandemic may materially change. Unanticipated issues relating to claims and coverage may emerge, which could adversely affect our business by increasing the scope of coverage beyond our intent and/or increasing the frequency and severity of claims.

Item 2. Unregistered Sales of Equity and Use of Proceeds

Items 2. (a) and (b) are not applicable.

2. (c) Share Repurchases

On February 21, 2017, the Company's Board of Directors approved the repurchase of up to $100.0 million of the Company's common shares from time to time at market prices. The Company has a remaining authorization of $74,245 for share repurchases at March 31, 2020. There were no share repurchases ~~made~~ during the three months ended March 31, ~~2019~~2020 under the share repurchase authorization.

For the Three Months Ended March 31, 2019 Total number of shares repurchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs (a) Dollar amount still available under trading plan
($ in thousands)
January 1, 2019 - January 31, 2019 —
—
—
$ 74,245
February 1, 2019 - February 28, 2019 182
$ 1.48
—
$ 74,245
March 1, 2019 - March 31, 2019 —
—
—
$ 74,245
Total 182
$ 1.48
—
$ 74,245

Subsequent to the three months ended March 31, ~~2019~~2020 and through the period ended May ~~10, 2019,~~15, 2020, the Company repurchased ~~an additional 23,038~~834 common shares which represent withholdings in respect of tax obligations on the vesting of performance based shares.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Executive Ownership and Sales

From time to time, some of the Company’s directors and executives may determine that it is advisable to diversify their investments for personal financial planning reasons, or may seek liquidity for other reasons, and may sell common shares of the Company in the open market, in private transactions or to the Company. To effect such sales, some of the Company’s directors and executives have previously entered into, and may in the future enter into, trading plans designed to comply with the Company’s Insider Trading and Outside Investments Policy and the provisions of Rule 10b5-1 under the Securities Exchange Act of 1934. The trading plans will not reduce any of the executives’ ownership of the Company’s shares below the applicable executive stock ownership guidelines. The Company does not undertake any obligation to report Rule 10b5-1 plans that may be adopted by any employee or director of the Company in the future, or to report any modifications or termination of any publicly announced plan.

Item 6. Exhibits.



Exhibit No.		Description
10.1		Amended Termination Endorsement No. 2 between Maiden Reinsurance Ltd. and AmTrust Europe Limited and AmTrust International Underwriters DAC to the Quota Share Reinsurance Contract, dated April 1, 2020
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 for the quarter ended March 31, 2020, formatted in ~~XBRL (eXtensive~~iXBRL (Inline 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.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



	MAIDEN HOLDINGS, LTD.
	By:
May ~~10, 2019~~15, 2020		/s/ Lawrence F. Metz
		Lawrence F. Metz President and ~~Chief~~Co-Chief Executive Officer

		/s/ Patrick J. Haveron
		Patrick J. Haveron Co-Chief Executive Officer and Chief Financial Officer

		~~/s/ Michael J. Tait~~
		~~Michael J. Tait~~ ~~Chief Accounting Officer~~

6057



	March 31, 2019
Remainder of 2019	$	1,005
2020	1,171
2021	741
2022	741
Discount for present value	(660		)
Total discounted operating lease liabilities	$	2,998



For the Three Months Ended March 31, 2019	Change in net unrealized gains on investment			Foreign currency translation adjustments			Total
Beginning balance	$	(59,762	)	$	(5,932	)	$	(65,694	)
Other comprehensive income before reclassifications	48,988			3,998			52,986
Amounts reclassified from AOCI to net loss, net of tax	12,488			—			12,488
Net current period other comprehensive income	61,476			3,998			65,474
Ending balance, Maiden shareholders	$	1,714		$	(1,934	)	$	(220	)

For the Three Months Ended March 31, 2018	Change in net unrealized gains on investment			Foreign currency translation adjustments			Total
Beginning balance	$	21,889		$	(8,583	)	$	13,306
Other comprehensive loss before reclassifications	(66,828		)	(7,940		)	(74,768		)
Amounts reclassified from AOCI to net income, net of tax	(1,490		)	—			(1,490		)
Net current period other comprehensive loss	(68,318		)	(7,940		)	(76,258		)
Ending balance	(46,429		)	(16,523		)	(62,952		)
Less: AOCI attributable to noncontrolling interest	—			(37		)	(37		)
Ending balance, Maiden shareholders	$	(46,429	)	$	(16,486	)	$	(62,915	)



March 31, 2019	Fair Value		% of Holdings Based on Fair Value of All Fixed Income Securities		Rating⁽¹⁾
	($ in thousands)
Gilead Sciences Inc, 3.65% Due 3/1/2026	$	20,392	0.7	%	A
Brookfield Asset Management Inc, 4.00%, Due 1/15/2025	20,195		0.6	%	A-
BNP Paribas, 5.00% Due 1/15/2021	19,837		0.6	%	A
Rabobank Nederland Utrec, 3.875% Due 2/8/2022	19,643		0.6	%	A+
Nissan Motor Acceptance Corp, 3.875%, Due 9/21/2023	18,439		0.6	%	A-
Electricite de France, 4.625%, Due 9/11/2024	17,745		0.6	%	A-
UBS Group Funding (Jersey) LTD, 2.65% Due 2/1/2022	16,848		0.5	%	A-
Bank of New York Mellon Corp, 3.00%, Due 2/24/2025	15,996		0.5	%	A
Pepsico Inc., 3.60%, Due 3/1/2024	15,664		0.5	%	A+
Pepsico Inc., 3.50%, Due 7/17/2025	15,570		0.5	%	A+
Total	$	180,329	5.7	%



Hypothetical Change in Interest Rates	Fair Value		Estimated Change in Fair Value			Hypothetical % (Decrease) Increase in Shareholders’ Equity
	($ in thousands)
200 basis point increase	$	2,843,335	$	(288,599	)	(49.4	)%
100 basis point increase	2,987,641		(144,293		)	(24.7	)%
No change	3,131,934		—			—	%
100 basis point decrease	3,271,483		139,549			23.9	%
200 basis point decrease	3,403,629		271,695			46.5	%



For the Three Months Ended March 31, 2019	Total number of shares repurchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs (a)	Dollar amount still available under trading plan
					($ in thousands)
January 1, 2019 - January 31, 2019	—	—		—	$	74,245
February 1, 2019 - February 28, 2019	182	$	1.48	—	$	74,245
March 1, 2019 - March 31, 2019	—	—		—	$	74,245
Total	182	$	1.48	—	$	74,245