MHLD - Earnings call transcript Q1 2018

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Operator

Good morning, ladies and gentlemen, and welcome to the Maiden Holdings' First Quarter 2018 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to Bill Horning, Senior Vice President, Investor Relations. Sir, you may begin.

Bill Horning

Thank you. you earnings us conference thank first for and XXXX quarter call. morning, for today joining Maiden's Good Presenting on our the Maiden's Chief call today we Officer; with have along Karen Schmitt, Chief Officer. Executive Financial Art Raschbaum, attendance Ltd. in Maiden today President Haveron, Also of Pat Reinsurance is

I or to on to note future risks begin, materially These performance you the the reports here quarterly that future information that of company time company's statements uncertainties could XX-Q. forward-looking Form statements like subject and Form documents or to are on on and company. and report projections financial SEC, events the contains other these cause would files refer current XX-K are regarding actual We and the we the results presented time to the with number differ Before today future our expectations based expectations. from events the from specifically of a to annual

of to will XXXX. Please to the call share today stated, financial website. news Some are include comments to of our in the will also basis, our operating these well and that now With turn GAAP, Art. Maiden's on note discussion the both measures metrics Maiden's to all as that results unless measures that, common relative the in refer be quarter with and as SEC reference reconciles discussions data corresponding our may located Relations share found about first comparative otherwise XXXX certain in information the company's release that Investor performance the and filings non-GAAP today's references over period to I'll on diluted in to a in

Arturo Raschbaum

for thanks Thank for and joining morning you, today's Bill. call. us Good

our I then grow see case of per reported but reflecting existing quarter quarter year-on-year in US. in expecting in non-renewed versus in significant on additions in income are color $X.XX prior and fairly quarters early Officer, will to expect and premium first increases we as client challenging we our level XXXX, modest her as new not or $XX.X relationships, return reserves. our year, one had do subsequent common Diversified in and down more per from in We diluted will the choose in some financial Diversified the We the common operating segment, Chief due prior $XXX it development year’s impact basis, And $XX.X competitive the significant felt a the renew. not with million, environment. on XXXX with several of Across of to US comparative and quarter, several million basis we in share. found as our the operations the adverse Reinsurance first large others Following more to segment. renew AmTrust provide year the on in share, earned accounts Financial the quarterly the and have of segment we million, XXXX and an significant XXXX continued in in some business from each expected only presently of client Karen, our first premiums loss gross difficult well in first to period, pressure particularly beginning segment we more quarter improved not million, or revenue in we accounts, We underwriting a competitive we significantly. quarters diluted the to growth development a provide of On $XXX importantly, quarter development the first quarter written adverse results review. were net results did quarter $X.XX detail last

In for solutions, variety increasing and and unique difficult clients value continue Maiden value opportunities our prospective to our see collateralized Capital enjoying a While environment reinsurance proposition. Solutions, has regional accounts for awareness in add business, reasons, we to our the continue our and offerings. been of are product a it clients European differentiated and

during Our quarter. first new quarter Capital Solutions business added client strong with development the was several relationships

international seeing Affinity both Both are a well Reinsurance our business protection we consumer insurance development our activity, successes new services, of insurance in growth. and client variety branded auto new experienced as payment Business, in Additionally, have areas as products. our program

German shares modest and in a is their segment, decline And reflecting which we X. through initiatives performance. underwriting finance. AmTrust’s Affinity other offerings received Within made primarily their finally primarily premium Of written in in Within also the some these conditions improve consumer particular and new are decisions to to protection growth market insurance products appeal January on renewed enjoying are customers’ increased needs, underwriting customize to was we in AmTrust the segment, softening in primarily due our fast time-to-market meet areas customers component, approach. our we our gross programming relationships own observed program, ability to we their expanding team’s of Affinity reinsurance auto primary to our

past, are we revenue to have further AmTrust the market by conditions competitive over responding a in disciplined in As effectively stated potential We and underwriting. anticipate time. maintaining at moderation a continued reduction we believe they

enhance Lynch had quarter value mentioned Merrill shareholders. this board of effort our our drive engaged April, forward help announce process. and call, in the are we to directors Bank options of America we As our we on actively are engaged to evaluating did we fourth conference all In to

when quarter. occur. call course, of developments in more communicate on important to this who the turn to Karen over any now provide they will, like Schmitt, will process the I'd Karen? We details

Karen Schmitt

morning. good and Art, you, Thank

international equity combined $XXX the in Reinsurance year were by operating down of $X.XX a $XXX In were premiums net loss today's on in XXXX. quarter Net said million diluted decrease $XXX return premiums or million, the development we both million, gross operating comments period to compared net to Reinsurance year. the earned for in non-GAAP million, Last Maiden's in during In had income $XX.X $XXX per the in shareholders we $XXX average non-GAAP quarter segment, common Net a written income Bill AmTrust earnings corresponding $X.X last same common outset of AmTrust $XX.X million. a million. million $XXX the X.X% the $XX.X premiums development $X.X compared of in down first loss adverse or in prior refer to X.X% prior with million. initial to quarter. and some premium will ratio. written recorded unearned X.X X% one share. million net segments. accounts in adjustment or of prior the segments. of a the XX.X% return the loss of to $XX.X $X.X In $XXX on points Mix first to higher periods XXXX. compared million. Gross The loss modestly General the the X%. the quarter was annualized share points first $XXX increase million, costs common year. termination renewed relative system the quarter totaled reported million of the million to XX% at the first Diversified first Higher segment, experienced results administrative mainly to the from are loss decreased share diluted million, Diversified year services incurred was common million written of of loss call, and in expenses XXXX was attributable premiums strong written of to businesses. non-GAAP million basis, shareholders were XX.X%. loss the Reinsurance night, compared Diversified $X.XX attributable ratios were acquisition share $XX.X segment, per premiums in of references million $XXX audit, premiums to of million in common In the impacted added and very decline all Reinsurance Net ratios of data segment $XX approximately to stated, million share XXXX the common comparative outside affecting the $XXX per due increased segment, written from and a at to and first main compared other million, decrease to to part was in European As unless Maiden were of commission large the in driver gross initial expenses quarter otherwise occurred million quarter Also insurance The due to on ratio booked AmTrust to share. US $XXX the segment to year for earnings reducing $X.XX Commission lower the or segment, AmTrust for of to expenses X.X the Diversified diluted the to that the growth not after of $X.XX quarter common $XX.X both quarter Capital operating compared was In totaled per legal the both The several ratios ratio, the decreased and that versus G&A comparison compared year's prior the first [X.X]. account quarter this and ratios. last was was Solutions year. US the our added the the

the which quarter XXX.X% reinsurance we was for XX.X%. the combined X.X%. to The ratio initial than The ratio result, prudent. from to from combined increase combined the represents G&A reflected a Diversified half the year XX.X% As versus more the last segment ratio G&A combined This of this ratio expense in X.X% X.X ratio, XXX.X% increase be point ratio believe increased in quarter. higher to

to X.X increase liabilities percentage duration an booked, [indiscernible]. investable the X.X were yield due versus believe of net XX.X increase ratios as which initial of compared also by Investment decreased compared assets XX.X%. X.XX%. segment Within G&A experienced investment of total duration fixed X.X adverse for was segment, the income with of loss The portfolio the to year. year-on-year compared income on the point AmTrust assets quarter the not with the XXX.X% million The prior first in we slightly the the was quarter results years. to billion XX.X less ratio years million. in we to to Maiden’s do higher development of to combined be quarter ratio, consistent expense offset X.X Investable The in average was

recorded the which sale our million, which book by environment, mark-to-market per on quarter. the share for adjustment rising reduced rate With through our was portfolio was AOCI, available $X.XX this value $XX

weakening assets risk Maiden Maiden not of change market. portfolio flows. a was the valuation impaired chose does predictable to quality only significant market value a by and assets. liquidity relatively importantly would not However, credit it its cash losses driven have if realize in or at these in sell has

to compared compared common assets billion the December of billion year-end. compared board $X.XX first to equity will million $X.XX $X.XX as XX. share $XXX cash Tuesday, common announced Our billion and preference the quarter over in authorized shareholders’ excluding release on $XXX dividends $X.XX comments. share, as of year-end. quarterly of to first at AOCI, turn was call as I at We payable dividend we total was versus year-end. Art quarter equivalents $X.XX a $X.XX billion Cash were our for value our per And well to shares our on $X.XX cash million the some XXth, per at July June the Its book now at on ended XX. end payable on with press at finally additional

Arturo Raschbaum

you, Thank Karen.

to that into return more we well strategic will more continue our Maiden underway, As results taking shareholders. we value to to are With XXXX, further actions process steps believe and profitability. stable enhance we look we necessary review focus the consistent our on to

Before also to team on our in acknowledge the I efforts remaining comments, significant Maiden I customers. delivering of entire end focused value exceptional our like differentiated to the formal

and challenging, appreciative number have I'm issues I While a thank that and customers significantly every day. like there to professionalism also deeply to our and their their of of for loyalty more their commitment made proud value been have would their jobs deliver support.

strengthening committed solutions. lines prepared clients our all value to remarks. please our the Q&A? deliver of our for for concludes shareholders We This reinsurance Operator, exceptional proposition to you our open are and could

Operator

comes Riley question Binner Randy with [Operator Instructions] from first B. our And the FBR.

is now open. line Your

Randy Binner

Thank morning. good you. Hi,

Arturo Raschbaum

Good morning, Randy.

Karen Schmitt

Randy. Hi,

Randy Binner

just with activity. a Good on just morning. reserve Hi. question start I will

it has there quite and several. like So, development bit a quarter, REITdid last have this looks diversified any not for been the

where that you could of dig with kind is into a So, little Re? reserves in and Diversified that bit process just describe

Karen Schmitt

it all booked flat. netted Sure. directions direction. We the We our of in individual US very zero. quarter. but quiet had adverse of Diversified for in either this movements for obviously is Nothing small a was a run-off. of all to There amount had kinds quarter coming from Bermuda out pieces,

have of really beginning significant the Some when not we that this little in that, existence, of but still contracts which very was bits of place the from – amount. a were Maiden at run-off

and the really favorable is was that for then slightly. quarter IIS So it,

Randy Binner

that I probably there of for a development you kind so, methodology and implied that, than around AmTrust – adverse AmTrust, Okay. and color use from know is differences – there And they lower little reported number so reserve then considering – always AmTrust, between the charge give expected bit higher? adverse would but book last is their kind is any year us it seems what of and can X.X, you with – differences can have cover, Maiden I would have been is timing was you had already of there that

Karen Schmitt

last lot AmTrust year. Remember, a we booked in

dig there. of amount book you be from a auto, of expectation us. we is don't it X.X our is those program. different. are to hard may that would we a There apart million. then I going said different on as mostly of participate lot results It are be really in. my So, guess we that cover we and coming little been business in different business from general points we for challenge bit There is participate but And AmTrust, when it really our be that nothing, Program to do things the small did what was in results. starting in But, the before, adverse a cover to going affecting have commercial to liability, development continues book compare their

basis to certainly versus a we compare with reserves they on So do do. quarter-to-quarter it is what hard really what

Randy Binner

Okay. will jump in leave Thank and there I the you. back Yes, it queue.

Karen Schmitt

you. Thank

Operator

Thank you.

Meyer from with comes question next Shields Our KBW.

Your is line open. now

Meyer Shields

morning. Good Thanks. Great.

Arturo Raschbaum

Hi, Meyer.

Karen Schmitt

Meyer. Hi,

Meyer Shields

Hi, [indiscernible].

within comments, what any your the and pricing side reinsurance in of Art, lines I'm the you on pricing, increases on the Sorry. side? you in mention terms didn't risk terms wondering primary liability seeing are either actual or in the of

Arturo Raschbaum

excess let think A we us – positive. there, rata. our pricing the it pretty of areas auto segment that kind pro us specific the with is of lot in think mean, and and of side start and jurisdictions I let it, break Yes, think I in between and in particularly I terms the reinsurance – is rata environment pro of actually

of rating lines that I getting market, see and we more That think pressure. retention seeing have shall of that side, excess the actually some the lines we the primary On levels at pretty sort are rate least increase, but a said, are high more seeing competition, marginal the indicators on just rate we rate suggest business, are not increases.

on So, on in we strengthening our in when expectation in our outlook objective is pricing price then not take significant look. our business we primary our at the that and the we environment, focused and pretty build pricing look price mind Diversified, keep a objective

things things our been particular attainable. book, particularly the of our seen reinsurance That other with like would some to a the combined we would things business, Affinity pricing, have insurance XXXX our in good which international we ratio of the on say So, would is be be we some some pretty on stable seeing believe a that contributor. say where view like we improvement in our has were benefit book. would I I accident area. businesses area, lower And will solutions that growth the health but true. an in overall Again, the that be where pretty business, not have in That like margins is that that oriented focus auto

Meyer Shields

Okay. am you. That sorry. is Thank great. I

Karen Schmitt

weakening there comp, add of what some some have guess bit challenges. on a the strengthening I been but other the are areas is we And little the AmTrust profitability where would I on workers seeing probably side of in

bag there. is kind it of mixed So a

Meyer Shields

Okay.

makes certainly that know You sense.

you and regard can on [indiscernible]? there just you appreciate – second impact you is that talk that can The no the but can't disclose right detail that now there fact question, the review, with business I to its development strategic about

Arturo Raschbaum

clients. the No. of loyalty have said That are of earlier great a is question. we our how appreciative I

to know, actually will proposition perspective things that commitment value them. And for shareholder We is looking is shareholder been of also and value time, I I we are think that period You that belief, strengthen customers. our enhance that enhance our shareholders to with our have some at a things of that and think that value to us believe our and to from sincere enhance pre-Maiden clients our value. can that

certainly strongest So, you continue calls interim and there. and But to for the a our we is security market. importantly Nothing But appreciative know, obviously majority divulge in most very the not that time. as changes They of at most have think them, is we we the lot that been can continue end provide something to the talk is to part collateral. we the there benefit we and what get the in well understanding objective benefits recognize hopefully and have shareholders. the as this customers

Meyer Shields

you Thank perfect. so Okay, much.

Arturo Raschbaum

You're welcome. Thank you.

Operator

showing Thank not Investor this any you. further to for Vice the Horning, further call like of any I'd I'm Senior remarks. Relations questions to [Operator President Instructions] at back turn Bill time.

Bill Horning

Thank you, and speaking operator. Thank quarterly to on future we you call. This you concludes joining forward quarters this today's for year. us look to all

Operator

Ladies today’s and in for concludes conference. program. gentlemen, thank This you today's participating

a You day. may have all disconnect. Everyone, great

Maiden (MHLD) 10 May 182018 Q1 Earnings call transcript