What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-08-09 compared with 2022-05-10 · 444 added, 305 removed, 792 unchanged (49% of the section changed)

23 unchanged sentences

("Maiden Reinsurance").

We are not currently underwriting reinsurance business on new prospective risks but are actively underwriting risks on a retroactive basis through GLS.

We are not currently underwriting reinsurance business on new prospective risks but are actively underwriting risks on a retroactive basis through Genesis Legacy Solutions ("GLS").

We also have various historic reinsurance programs underwritten by Maiden Reinsurance which are in run-off, including the liabilities associated with AmTrust Financial Services, Inc.

12 unchanged sentences

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, 2021 for further information on recent developments within the Company.

We believe Maiden Holdings North America, Ltd.'s ("Maiden NA") investments, including its ownership of Maiden Reinsurance and its active asset management strategy, will create opportunities to utilize net operating loss carry-forwards ("NOL") of $235.7 million as of March 31, 2022.

These NOL carryforwards, in combination with additional net deferred tax assets ("DTA") primarily related to our insurance liabilities result in a net U.S.

DTA (before valuation allowance) of $94.3 million or $1.08 per common share at March 31, 2022.

DTA (before valuation allowance) of $111.0 million or $1.27 per common share at June 30, 2022.

These net DTA are not presently recognized on the Company's consolidated balance sheet as a full valuation allowance is carried against them.

13 unchanged sentences

The returns expected to be produced by each pillar of our strategy are evaluated in relation to our cost of debt capital, which carries a weighted average effective interest rate of 7.6%.

To the extent our experience or belief indicates we cannot exceed the cost of debt capital, we expect to refrain from activities in those areas.

To the extent our experience or belief indicates we cannot exceed the cost of debt capital over a reasonable long-term investment horizon, we expect to refrain from activities in those areas.

As an example, our present assessment of the reinsurance marketplace along with our current operating profile continues to be that the risk-adjusted returns that may be produced via active reinsurance underwriting of new prospective risks are likely to be lower over the long-term than our cost of capital.

4 unchanged sentences

In recent years, we have invested approximately $250.6 million into alternative investments which include equity securities, other investments and equity method investments in a wide variety of asset classes and we believe these activities will exceed that benchmark cost of capital with adjustments as necessary if those returns do not emerge.

In November 2020, we formed Genesis Legacy Solutions (“GLS”) which specializes in providing a full range of legacy services to small insurance entities, particularly those in run-off or with blocks of reserves that are no longer core, working with clients to develop and implement finality solutions including acquiring entire companies that enable our clients to meet their capital and risk management objectives.

In November 2020, we formed GLS which specializes in providing a full range of legacy services to small insurance entities, particularly those in run-off or with blocks of reserves that are no longer core, working with clients to develop and implement finality solutions including acquiring entire companies that enable our clients to meet their capital and risk management objectives.

We acquire legacy liabilities and (re)insurance reserves from companies and provide retroactive reinsurance coverage for portfolios of (re)insurance business, primarily via loss portfolio transfer contracts (“LPT”).

6 unchanged sentences

Effective October 1, 2021, GLS completed its first loss portfolio transfer transaction which includes an ADC cover.

GLS and its subsidiaries have completed additional transactions in the first quarter of 2022 and as of March 31, 2022, GLS and its subsidiaries have insurance related liabilities totaling $37.1 million which included total reserves of $29.2 million and deferred gains on retroactive reinsurance of $7.9 million.

GLS and its subsidiaries have completed additional transactions in 2022 and as of June 30, 2022, GLS and its subsidiaries have insurance related liabilities totaling $36.3 million which included total reserves of $22.4 million, derivative liability on retroactive reinsurance of $9.3 million, and deferred gains on retroactive reinsurance of $4.6 million.

GLS continues to write additional retroactive reinsurance transactions consistent with its business plan.

4 unchanged sentences

Our current assessment is that losses have continued to stabilize sufficiently to continue the capital management initiatives we initiated in 2020, although we have approached these strategies in a deliberate fashion.

On March 3, 2021, the Company's Board of Directors approved the repurchase, including the repurchase by Maiden Reinsurance in accordance with its investment guidelines, of up to $100.0 million of the Company's preference shares from time to time at market prices in open market purchases or as may be privately negotiated.

On May 6, 2021, the Company's Board of Directors approved the additional repurchase, including the repurchase by Maiden Reinsurance in accordance with its investment guidelines, of up to $50.0 million of the Company's preference shares from time to time at market prices in open market purchases or as may be privately negotiated.

The authorizations approved on March 3, 2021 and May 6, 2021 as described above are collectively referred to as "2021 Preference Share Repurchase Program".

The Company has a remaining authorization of $10.7 million for preference share repurchases at March 31, 2022.

On March 3, 2021 and May 6, 2021, the Company's Board of Directors approved the repurchase, including the repurchase by Maiden Reinsurance in accordance with its investment guidelines, of up to $100.0 million and $50.0 million, respectively, of the Company's preference shares from time to time at market prices in open market purchases or as may be privately negotiated .

The authorizations are collectively referred to as the "2021 Preference Share Repurchase Program".

The Company has a remaining authorization of $3.9 million for preference share repurchases at June 30, 2022.

Please refer to "Notes to Condensed Consolidated Financial Statements - Note 6.

4 unchanged sentences

Please refer to the "Liquidity and Capital Resources" section for further information on our asset and capital management activities, in particular our various preference share repurchase measures.

Three Months Ended March 31, 2022 and 2021 Financial Highlights

For the Three Months Ended March 31, 2022 2021 Change

Three and Six Months Ended June 30, 2022 and 2021 Financial Highlights

For the Three Months Ended June 30, 2022 2021 Change

Summary Consolidated Statement of Income Data (unaudited):

($ in thousands except per share data)

Net (loss) income $ (1,949) $ 9,286 $ (11,235)

Net income $ 1,062 $ 8,112 $ (7,050)

Gain from repurchase of preference shares 24,690 18,714 5,976

10 unchanged sentences

Non-GAAP measures:

Non-GAAP operating (loss) earnings (1)

Non-GAAP operating earnings (1)

16,633 13,948 2,685

Non-GAAP basic and diluted operating (loss) earnings per common share (1)

Non-GAAP basic and diluted operating earnings per common share (1)

0.19 0.16 0.03

1 unchanged sentence

25.2 % 20.7 % 4.5

March 31, 2022 December 31, 2021 Change

For the Six Months Ended June 30, 2022 2021 Change

Summary Consolidated Statement of Income Data (unaudited):

($ in thousands except per share data)

Net (loss) income $ (887) $ 17,398 $ (18,285)

Gain from repurchase of preference shares 28,233 81,164 (52,931)

Net income attributable to Maiden common shareholders 27,346 98,562 (71,216)

Basic and diluted earnings per common share:

Net income attributable to Maiden common shareholders (2)

0.31 1.14 (0.83)

Gain from repurchase of preference shares per common share 0.33 0.95 (0.62)

Gross premiums written (6,831) 1,044 (7,875)

Net premiums earned 11,565 25,076 (13,511)

Underwriting (loss) income (3)

(6,785) 10,026 (16,811)

Net investment income 14,234 17,119 (2,885)

Non-GAAP measures:

Non-GAAP operating earnings (1)

9,698 61,249 (51,551)

Non-GAAP basic and diluted operating earnings per common share (1)

0.11 0.71 (0.60)

Annualized non-GAAP operating return on average common shareholders' equity (1)

7.2 % 50.9 % (43.7)

June 30, 2022 December 31, 2021 Change

Consolidated Financial Condition ($ in thousands except per share data)

27 unchanged sentences

40.3 % 37.7 % 2.6

(1) Non-GAAP operating earnings (loss), non-GAAP operating earnings (loss) per common share, and annualized non-GAAP operating return on average common shareholders' equity are non-GAAP financial measures.

(1) Non-GAAP operating earnings, non-GAAP operating earnings per common share, and annualized non-GAAP operating return on average common shareholders' equity are non-GAAP financial measures.

See " Key Financial Measures " for additional information.

16 unchanged sentences

1) the unamortized deferred gain on retroactive reinsurance arising from the LPT/ADC Agreement;

and 2) an adjustment which reflects the equity accounting related to the fair value of certain hedged liabilities within an equity method investment held by the Company wherein the ultimate realizable value of the asset supporting the hedged liabilities cannot currently be recognized at fair value.

and 2) an adjustment which reflects the equity method accounting related to the fair value of certain hedged liabilities within an equity method investment held by the Company wherein the ultimate realizable value of the asset supporting the hedged liabilities cannot currently be recognized at fair value.

The deferred gain arises from the LPT/ADC Agreement with Cavello relating to losses from the AmTrust Quota Share agreement.

10 unchanged sentences

These non-GAAP financial measures are:

Non-GAAP operating (loss) earnings and non-GAAP diluted operating (loss) earnings per common share :

Management believes that the use of non-GAAP operating (loss) earnings and non-GAAP diluted operating (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.

Non-GAAP operating earnings and non-GAAP diluted operating earnings per common share :

Management believes that the use of non-GAAP operating earnings and non-GAAP diluted operating 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 therefore 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 (loss) earnings should not be viewed as a substitute for U.S.

Non-GAAP operating earnings should not be viewed as a substitute for U.S.

GAAP net income.

Non-GAAP operating (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:

Non-GAAP operating 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;

1 unchanged sentence

(3) the portion of favorable or unfavorable prior year reserve development for which we have ceded the risk under the LPT/ADC Agreement;

and (4) interest in income of equity method investments.

We have excluded net realized gains on investment, interest in income of equity method investments and foreign exchange and other gains as we believe these are influenced by market opportunities and other factors.

and (4) interest in income (loss) of equity method investments.

We have excluded net realized gains on investment, interest in income (loss) of equity method investments and foreign exchange and other gains (losses) as we believe these are influenced by market opportunities and other factors.

We do not believe that ceded risks under the LPT/ADC Agreement are representative of our ongoing and future business which are different to retroactive reinsurance risks written by GLS that are representative of our ongoing and future business.

7 unchanged sentences

"Financial Statements" of this Quarterly Report on Form 10-Q.

The Company no longer presents certain non-GAAP measures such as combined ratio and its related components in this Quarterly Report on Form 10-Q for the three months ended March 31, 2022, as it believes that as the run-off of our reinsurance portfolios progresses, such ratios are increasingly not meaningful and of less value to readers as they evaluate the financial results of the Company, particularly compared to historical data.

The Company no longer presents certain non-GAAP measures such as combined ratio and its related components in this Quarterly Report on Form 10-Q for the three and six months ended June 30, 2022, as it believes that as the run-off of our reinsurance portfolios progresses, such ratios are increasingly not meaningful and of less value to readers as they evaluate the financial results of the Company, particularly compared to historical data.

While an important metric of success, underwriting income (loss) does not reflect all components of profitability, as it does 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 reportable segments.

Because we do not manage our cash and investments by segment, investment income and interest expense are not allocated to the reportable segments.

Certain general and administrative expenses are generally allocated to segments based on actual costs incurred.

9 unchanged sentences

This measure is calculated using the total principal amount of debt divided by the sum of total capital resources.

Non-GAAP underwriting income (loss):

Management has further adjusted underwriting income (loss), as defined above, by excluding the portion of favorable or unfavorable prior year reserve development for which we have ceded the risk under retroactive reinsurance agreements such as the LPT/ADC Agreement.

Non-GAAP underwriting income (loss) and Non-GAAP Net Loss and LAE:

Management has further adjusted underwriting income (loss), as defined above, as well as reported net loss and LAE by excluding the portion of favorable or unfavorable prior year reserve development for which we have ceded the risk under retroactive reinsurance agreements such as the LPT/ADC Agreement.

These losses are estimated to be fully recoverable from Cavello and management believes adjusting for this development shows the ultimate economic benefit of the LPT/ADC Agreement on our underwriting results.

We believe reflecting the economic benefit of this retroactive reinsurance agreement is helpful for understanding future trends in our operations.

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, Ratio of Debt to Adjusted Total Capital Resources and Adjusted Book Value per Common Share:

1 unchanged sentence

1) unamortized deferred gain on ceded retroactive reinsurance under the LPT/ADC Agreement;

The unamortized deferred gain on ceded retroactive reinsurance under the LPT/ADC Agreement includes the aggregate impact of:

14 unchanged sentences

Results of Operations

The following table sets forth our selected unaudited Condensed Consolidated Statement of Income data for the three months ended March 31, 2022 and 2021:

For the Three Months Ended March 31,

The following table sets forth our selected unaudited Condensed Consolidated Statement of Income data for the three and six months ended June 30, 2022 and 2021:

For the Three Months Ended June 30, For the Six Months Ended June 30,

($ in thousands) 2022 2021 2022 2021

6 unchanged sentences

Other insurance revenue

469 539 520 808

Net loss and LAE

9 unchanged sentences

Net investment income

Net realized and unrealized gains on investment 2,309 8,101

Foreign exchange and other gains 3,949 3,542

7,667 7,278 14,234 17,119

Net realized and unrealized investment gains 2,111 849 4,420 8,950

Foreign exchange and other gains (losses) 6,586 (1,588) 10,535 1,954

Interest and amortization expenses (4,833) (4,832) (9,665) (9,663)

Income tax expense (1,255) (49)

Interest in income of equity method investments 1,271 2,947

Net (loss) income (1,949) 9,286

Income tax benefit (expense) 713 257 (542) 208

Interest in (loss) income of equity method investments (3,041) 2,775 (1,770) 5,722

Net income (loss) 1,062 8,112 (887) 17,398

Gain from repurchase of preference shares 24,690 18,714 28,233 81,164

4 unchanged sentences

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

Net income available to Maiden common shareholders for the three months ended March 31, 2022 was $1.6 million compared to $71.7 million for the same period in 2021.

The net decrease in results for the three months ended March 31, 2022 compared to the same period in 2021 was primarily due to the gain from repurchase of our preference shares which was $3.5 million for the three months ended March 31, 2022 compared to $62.5 million for the same period in 2021.

Excluding the gain on the repurchase of our preference shares, net loss for the three months ended March 31, 2022 was $1.9 million compared to net income of $9.3 million for the same period in 2021.

The decrease in results as adjusted during the first quarter of 2022 compared to the first quarter of 2021 was primarily due to:

• underwriting loss of $1.7 million for the three months ended March 31, 2022 compared to underwriting income of $1.6 million in the same period in 2021 largely due to:

◦ significantly higher than expected negative premium adjustments in the AmTrust Reinsurance segment related to adjustments for estimated surcharges on Workers' Compensation policies and inuring AmTrust reinsurance for certain programs in Specialty Risk and Extended Warranty cessions (collectively the "AmTrust Cession Adjustments" which are discussed in greater detail in the AmTrust Reinsurance segment), net of commission and loss adjustments, which contributed an underwriting loss of $5.1 million to our reported results for the three months ended March 31, 2022;

◦ excluding the AmTrust Cession Adjustments, the Company had underwriting income of $3.4 million for the three months ended March 31, 2022 compared to underwriting income of $1.6 million for the same period in 2021 which consisted of the following:

◦ favorable prior year loss development of $2.2 million in the first quarter of 2022 (adjusted for the AmTrust Cession Adjustments) compared to favorable prior year loss development of $5.6 million during the same period in 2021;

◦ on a current accident year basis, underwriting income of $1.2 million for the three months ended March 31, 2022 compared to an underwriting loss of $4.0 million for the same period in 2021.

• total income from investment activities were $10.1 million for the three months ended March 31, 2022 compared to $20.9 million for the same period in 2021 which was comprised of:

◦ net investment income decreased to $6.6 million for the three months ended March 31, 2022 compared to $9.8 million for the same period in 2021 primarily due to the decline in average fixed income assets of 29.6%;

◦ realized and unrealized gains on investment were $2.3 million for the three months ended March 31, 2022 compared to net realized gains of $8.1 million for the same period in 2021;

◦ interest in income of equity method investments was $1.3 million for the three months ended March 31, 2022 compared to $2.9 million for the same period in 2021.

• corporate general and administrative expenses decreased to $8.3 million for the three months ended March 31, 2022 compared to $11.8 million for the same period in 2021 due to lower equity-based incentive compensation costs for employees;

• foreign exchange and other gains increased to $3.9 million for the three months ended March 31, 2022, compared to $3.5 million for the same period in 2021.

Net income available to Maiden common shareholders for the three months ended June 30, 2022 was $25.8 million compared to net income of $26.8 million for the same period in 2021.

The net income for the three months ended June 30, 2022 was primarily due to the gain from repurchase of our preference shares which was $24.7 million for the three months ended June 30, 2022 compared to $18.7 million for the same period in 2021.

Excluding the gain on the repurchase of our preference shares, net income for the three months ended June 30, 2022 was $1.1 million compared to net income of $8.1 million for the same period in 2021.

The decrease in results during the second quarter of 2022 compared to the second quarter of 2021 was primarily due to:

• underwriting loss of $5.1 million for the three months ended June 30, 2022 compared to underwriting income of $8.5 million in the same period in 2021 largely due to:

◦ adverse prior year loss development of $1.0 million in the second quarter of 2022 compared to favorable prior year loss development of $12.8 million during the same period in 2021;

◦ on a current accident year basis, underwriting loss of $4.2 million for the three months ended June 30, 2022 compared to an underwriting loss of $4.3 million for the same period in 2021.

• total income from investment activities was $6.7 million for the three months ended June 30, 2022 compared to $10.9 million for the same period in 2021 which was comprised of:

◦ net investment income increased to $7.7 million for the three months ended June 30, 2022 compared to $7.3 million for the same period in 2021;

◦ realized and unrealized investment gains were $2.1 million for the three months ended June 30, 2022 compared to net realized and unrealized investment gains of $0.8 million for the same period in 2021;

◦ interest in loss of equity method investments was $3.0 million for the three months ended June 30, 2022 compared to income of $2.8 million for the same period in 2021.

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

• corporate general and administrative expenses decreased to $3.0 million for the three months ended June 30, 2022 compared to $5.1 million for the same period in 2021;

• foreign exchange and other gains increased to $6.6 million for the three months ended June 30, 2022, compared to foreign exchange and other losses of $1.6 million for the same period in 2021.

Net income available to Maiden common shareholders for the six months ended June 30, 2022 was $27.3 million compared to net income available to Maiden common shareholders of $98.6 million for the same period in 2021.

The net decrease in results for the six months ended June 30, 2022 compared to the same period in 2021 was primarily due to gains from the repurchase of our preference shares which decreased by $52.9 million to $28.2 million for the six months ended June 30, 2022 compared to $81.2 million for the same period in 2021.

Excluding the gain on the repurchase of our Preference Shares, net loss for the six months ended June 30, 2022 was $0.9 million compared to net income of $17.4 million for the same period in 2021.

The most significant items affecting our financial performance during the six months ended June 30, 2022 on a comparative basis to 2021 included:

• underwriting loss of $6.8 million in the six months ended June 30, 2022 compared to underwriting income of $10.0 million in the same period in 2021 largely due to:

• favorable prior year loss development of $6.3 million for the six months ended June 30, 2022 compared to favorable development of $18.4 million during the same period in 2021 primarily related to the quota share reinsurance agreements in the AmTrust Reinsurance segment;

• on a current accident year basis, underwriting loss of $13.1 million for the six months ended June 30, 2022 compared to an underwriting loss of $8.3 million for the same period in 2021 primarily due to results within the AmTrust Reinsurance segment as discussed below:

• significantly higher than expected negative premium adjustments in the AmTrust Reinsurance segment related to adjustments for estimated surcharges on Workers' Compensation policies and inuring AmTrust reinsurance for certain programs in Specialty Risk and Extended Warranty cessions (collectively the "AmTrust Cession Adjustments" which are discussed in greater detail in the AmTrust Reinsurance segment), net of commission and loss adjustments, contributed an underwriting loss of $5.1 million to our reported results for the six months ended June 30, 2022.

• total income from investment activities were $16.9 million for the six months ended June 30, 2022 compared to $31.8 million for the same period in 2021 which was comprised of:

• net investment income decreased to $14.2 million for the six months ended June 30, 2022 compared to $17.1 million for the same period in 2021, primarily due to the decline in average fixed income assets of 28.5%;

• realized and unrealized investment gains decreased to $4.4 million for the six months ended June 30, 2022 compared to $9.0 million for the same period in 2021;

• interest in loss of equity method investments of $1.8 million for the six months ended June 30, 2022 compared to an interest in income of equity method investments of $5.7 million for the same period in 2021.

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

• corporate general and administrative expenses decreased to $11.3 million for the six months ended June 30, 2022 compared to $16.9 million for the same period in 2021;

• foreign exchange and other gains increased to $10.5 million for the six months ended June 30, 2022 compared to foreign exchange and other gains of $2.0 million for the same period in 2021.

Net Premiums Written

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, 2022 and 2021:

For the Three Months Ended March 31, 2022 2021 Change in

The tables below compare net premiums written by our reportable segments, reconciled to the total consolidated net premiums written for the three and six months ended June 30, 2022 and 2021:

For the Three Months Ended June 30, 2022 2021 Change in

($ in thousands) Total Total $

3 unchanged sentences

Total $ 3,186 $ 3,261 $ (75)

Net premiums written for the three months ended March 31, 2022 decreased to $(10.3) million compared to net premiums written of $(2.7) million for the same period in 2021 due to:

• Premiums written in the Diversified Reinsurance segment increased by $4.8 million for the three months ended March 31, 2022 compared to the same period in 2021 largely due to the prior year return of unearned premiums after the non-renewal of the German Auto Programs reinsurance contract in our IIS business on January 1, 2021.

• The negative written premiums are primarily related to the AmTrust Cession Adjustments in the AmTrust Reinsurance segment for the three months ended March 31, 2022.

For the Six Months Ended June 30, 2022 2021 Change in

($ in thousands) Total Total $

Diversified Reinsurance

$ 10,578 $ 4,784 $ 5,794

AmTrust Reinsurance (17,715) (4,219) (13,496)

Total $ (7,137) $ 565 $ (7,702)

Net premiums written for the three and six months ended June 30, 2022 decreased to $3.2 million and $(7.1) million, respectively, compared to net premiums written of $3.3 million and $0.6 million for the same respective periods in 2021:

• Premiums written in the Diversified Reinsurance segment increased by $1.0 million and $5.8 million for the three and six months ended June 30, 2022, respectively, compared to the same respective periods in 2021 largely due to the prior year return of unearned premiums after the non-renewal of the German Auto Programs reinsurance contract in our IIS business on January 1, 2021.

• The negative written premiums are primarily related to the AmTrust Cession Adjustments in the AmTrust Reinsurance segment for the three and six months ended June 30, 2022.

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 $10.6 million or 90.5% for the three months ended March 31, 2022 compared to the same period in 2021.

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, 2022 and 2021:

For the Three Months Ended March 31, 2022 2021 Change in

Net premiums earned decreased by $2.9 million or 21.6% and $13.5 million or 53.9% for the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021.

The tables below compare net premiums earned by our reportable segments, reconciled to the total consolidated net premiums earned, for the three and six months ended June 30, 2022 and 2021:

For the Three Months Ended June 30, 2022 2021 Change in

($ in thousands) Total Total $ %

4 unchanged sentences

$ 10,443 $ 13,312 $ (2,869) (21.6) %

Net premiums earned in the AmTrust Reinsurance segment for the three months ended March 31, 2022 decreased by $10.4 million compared to the same period in 2021 primarily due to the AmTrust Cession Adjustment s .

For the Six Months Ended June 30, 2022 2021 Change in

($ in thousands) Total Total $ %

Diversified Reinsurance

$ 13,080 $ 13,202 $ (122) (0.9) %

AmTrust Quota Share Reinsurance

(1,515) 11,874 (13,389) (112.8) %

$ 11,565 $ 25,076 $ (13,511) (53.9) %

Net premiums earned in the AmTrust Reinsurance segment for the three and six months ended June 30, 2022 decreased by $3.0 million and $13.4 million compared to the same periods in 2021 primarily due to the AmTrust Cession Adjustment s .

Please refer to the analysis of our AmTrust Reinsurance segment for further discussion.

Net premiums earned in the Diversified Reinsurance segment for the three months ended March 31, 2022 decreased by $0.3 million or 4.6% compared to the same period in 2021 largely due to the German Auto programs quota share reinsurance contract which went into run-off on January 1, 2021 in our IIS business.

Net premiums earned in the Diversified Reinsurance segment for the three and six months ended June 30, 2022 increased by $0.2 million or 2.3% and decreased by $0.1 million or 0.9% compared to the same periods in 2021, respectively.

Please refer to the analysis of our Diversified Reinsurance segment for further discussion.

3 unchanged sentences

Net Investment Income

Total net investment income decreased by $3.3 million or 33.3% for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to the decline in average aggregate fixed income assets of 29.6%.

The decline in fixed income assets is driven by the cessation of active reinsurance underwriting on prospective risks which has materially reduced our revenues, resulting in significant negative operating cash flows as we run-off our existing reinsurance liabilities.

Net investment income decreased partly due to the decline in annualized average book yields to 1.7% for the three months ended March 31, 2022 compared to 2.0% for the three months ended March 31, 2021, which was the result of both lower interest rates and shorter duration of assets in our fixed income portfolios.

The following table details our average aggregate fixed income assets (at cost) and annualized investment book yield for the three months ended March 31, 2022 and 2021:

For the Three Months Ended March 31,

Total net investment income increased by $0.4 million or 5.3% and decreased by $2.9 million or 16.9% for the three and six months ended June 30, 2022, respectively, compared to the same respective periods in 2021.

The decline in average aggregate fixed income assets of 26.8% and 28.5% for the three and six months ended June 30, 2022, respectively, was driven by the continued run-off of reinsurance liabilities previously written on prospective risks, resulting in significant negative operating cash flows as we run-off our existing reinsurance liabilities.

Net investment income was helped by an increase in annualized average book yields to 2.0% and 1.9% for the three and six months ended June 30, 2022, respectively, compared to 1.7% and 1.8% for the three and six months ended June 30, 2021, respectively.

The Company's shorter duration on its fixed income portfolio as well as floating rate investments held enabled it to take advantage of the higher interest rate environment by reinvesting at higher yields more quickly.

The following table details our average aggregate fixed income assets (at cost) and annualized investment book yield for the three and six months ended June 30, 2022 and 2021:

For the Three Months Ended June 30, For the Six Months Ended June 30,

($ in thousands) 2022 2021 2022 2021

5 unchanged sentences

GAAP consolidated financial statements.

Net Realized and Unrealized Gains on Investment

Net realized and unrealized gains on investment of $2.3 million were recognized for the three months ended March 31, 2022, compared to net realized and unrealized gains of $8.1 million for the same period in 2021.

Net realized and unrealized gains for the three months ended March 31, 2021 included the recognition of $4.5 million in unrealized gains related to an investment in an insurtech start-up company that was acquired by a special purpose acquisition company.

In addition, realized gains for the three months ended March 31, 2022 and 2021 primarily reflect sales of corporate bonds for the settlement of claim payments to AmTrust.

Interest in Income of Equity Method Investments

The Company had interest in income of equity method investments of $1.3 million for the three months ended March 31, 2022 compared to interest in income of equity method investments of $2.9 million for the three months ended March 31, 2021.

Equity method investments consist of hedge fund investments of $32.9 million, real estate investments of $52.2 million and other investments of $8.2 million as of March 31, 2022.

The following table details our interest in the income from equity method investments for the three months ended March 31, 2022 and 2021:

For the Three Months Ended March 31,

Net Realized and Unrealized Investment Gains

Net realized and unrealized investment gains of $2.1 million and $4.4 million were recognized for the three and six months ended June 30, 2022, respectively, compared to net realized and unrealized investment gains of $0.8 million and $9.0 million for the same periods in 2021.

Realized gains for the three and six months ended June 30, 2022 and 2021 primarily reflect sales of corporate bonds for the settlement of claim payments to AmTrust.

Net realized and unrealized investment gains for the three and six months ended June 30, 2022 included the recognition of $3.7 million in unrealized gains related to an increase in the valuation of an investment in an insurtech start-up company.

Net realized and unrealized investment gains for the three and six months ended June 30, 2021 included the recognition of $0.6 million in unrealized losses and $3.9 million in unrealized gains, respectively, related to an investment in an insurtech start-up company that was acquired by a special purpose acquisition company.

Interest in (Loss) Income of Equity Method Investments

The Company had interest in loss of equity method investments of $3.0 million and $1.8 million for the three and six months ended June 30, 2022, respectively, compared to interest in income of equity method investments of $2.8 million and $5.7 million for the same respective periods in 2021.

Equity method investments consist of hedge fund investments of $16.9 million, real estate investments of $52.4 million and other investments of $7.6 million as of June 30, 2022.

The following table details our interest in the loss or income from equity method investments for the three and six months ended June 30, 2022 and 2021:

For the Three Months Ended June 30, For the Six Months Ended June 30,

($ in thousands) 2022 2021 2022 2021

Hedge fund investments $ (3,476) $ 1,933 $ (3,544) $ 3,624

Real estate investments 18 — 18 —

Other investments 417 842 1,756 2,098

Interest in income from equity method investments $ 1,271 $ 2,947

Interest in (loss) income from equity method investments $ (3,041) $ 2,775 $ (1,770) $ 5,722

Net Loss and LAE

Net loss and LAE decreased by $4.6 million during the three months ended March 31, 2022 compared to the same period in 2021 due to favorable prior year loss development experienced in both of our reportable segments.

Net loss and LAE increased by $12.2 million and $7.6 million during the three and six months ended June 30, 2022, respectively, compared to the same respective periods in 2021 due to lower favorable prior year loss development experienced in our AmTrust Reinsurance segment compared to the same respective periods in 2021.

The cessation of active reinsurance underwriting on prospective risks included the termination of the AmTrust Quota Share and European Hospital Liability Quota Share effective January 1, 2019.

Net loss and LAE for the first quarter of 2022 was impacted by net favorable prior year reserve development of $7.3 million compared to net favorable prior year reserve development of $5.6 million for the same period in 2021.

The favorable loss development for the first quarter of 2022 and 2021 is discussed in greater detail in the individual segment discussion and analysis and is primarily associated with run-off of unearned premium for terminated reinsurance contracts in the AmTrust Reinsurance and Diversified Reinsurance segments.

Net loss and LAE for the second quarter of 2022 was impacted by net adverse prior year loss development of $1.0 million compared to net favorable prior year loss development of $12.8 million for the same period in 2021.

Net loss and LAE for six months ended June 30, 2022 was impacted by net favorable prior year loss development of $6.3 million compared to net favorable prior year loss development of $18.4 million during the same period in 2021.

This net loss development is discussed in greater detail in the individual segment discussion and analysis and is associated with run-off of unearned premium for terminated reinsurance contracts in the AmTrust Reinsurance and Diversified Reinsurance segments.

Commission and Other Acquisition Expenses

Commission and other acquisition expenses decreased by $3.4 million or 57.5% for the three months ended March 31, 2022 compared to the same period in 2021 largely due to negative earned premiums in the AmTrust Reinsurance segment which reduced commission costs due to the AmTrust Cession Adjustments.

Commission and other acquisition expenses decreased by $2.0 million or 29.2% and $5.4 million or 42.3% for the three and six months ended June 30, 2022, respectively, compared to the same respective periods in 2021 largely due to negative earned

premiums in the AmTrust Reinsurance segment which reduced commission costs due to the AmTrust Cession Adjustments.

Please see further discussion in the individual segment analysis below.

1 unchanged sentence

General and administrative expenses include both segment and corporate expenses segregated for analytical purposes as a component of underwriting income.

Total general and administrative expenses decreased by $3.1 million or 22.2% for the three months ended March 31, 2022 compared to the same period in 2021 largely due to lower equity-based incentive compensation paid to employees.

Excluding discretionary cash and equity-based incentive compensation expenses which are typically recorded in the first quarter of the calendar year, operating expenses were $6.5 million in the three months ended March 31, 2022 or 18.8% lower compared to $8.0 million for the same period in 2021.

General and administrative expenses for the three months ended March 31, 2022 and 2021 were comprised of:

For the Three Months Ended March 31,

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

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

General and administrative expenses for the three and six months ended June 30, 2022 and 2021 were comprised of:

For the Three Months Ended June 30, For the Six Months Ended June 30,

($ in thousands) 2022 2021 2022 2021

2 unchanged sentences

General and administrative expenses – corporate

3,011 5,098 11,314 16,918

Total general and administrative expenses

$ 7,294 $ 8,906 $ 18,180 $ 22,903

The Company incurred operating expenses of $0.4 million during the three months ended March 31, 2022 that are not considered part of our ongoing business operations, which are salary and related costs associated with headcount reductions.

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 ("Senior Notes") were $4.8 million for the three months ended March 31, 2022 and 2021.

The interest and amortization expenses related to the outstanding senior notes issued by Maiden Holdings in 2016 and Maiden NA in 2013 ("Senior Notes") were $4.8 million and $9.7 million for the three and six months ended June 30, 2022 and 2021, 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 7.6% for the three months ended March 31, 2022 and 2021, respectively.

Foreign Exchange and Other Gains

Net foreign exchange and other gains amounted to $3.9 million during the three months ended March 31, 2022 compared to net foreign exchange and other gains of $3.5 million for the same respective period in 2021.

Net foreign exchange gains of $3.9 million for the three months ended March 31, 2022 were attributable to the strengthening of the U.S.

The weighted average effective interest rate for the Senior Notes was 7.6% for the three and six months ended June 30, 2022 and 2021, respectively.

Foreign Exchange and Other Gains (losses)

Net foreign exchange and other gains amounted to $6.6 million and $10.5 million during the three and six months ended June 30, 2022, respectively, compared to net foreign exchange and other losses of $1.6 million and gains of $2.0 million for the same respective periods in 2021.

At June 30, 2022, net foreign exchange gains were primarily driven by exposures to euro, British pound and other non-USD denominated net loss reserves and insurance related liabilities in excess of foreign currency assets.

Our non-USD denominated liabilities at June 30, 2022 included net loss reserves of $354.5 million.

There was no new business written in non-USD currencies during the three and six months ended June 30, 2022.

Our foreign currency asset exposures at June 30, 2022 included $233.9 million of fixed maturity securities managed by our investment managers who have the discretion to hold foreign currency exposures as part of their total return strategy as well as $32.4 million of equity method real estate investments denominated in Canadian dollars.

We held $53.8 million of non-USD denominated funds withheld receivable at June 30, 2022.

Net foreign exchange gains of $7.9 million and $11.9 million for the three and six months ended June 30, 2022, respectively, were attributable to the strengthening of the U.S.

dollar on the re-measurement of net loss reserves and insurance related liabilities denominated in British pound and euro.

Net foreign exchange gains of $3.4 million during the three months ended March 31, 2021 were primarily due to the strengthening of the U.S.

Net foreign exchange losses of $1.2 million during the three months ended June 30, 2021 was due to the weakening of the U.S.

dollar on the re-measurement of net loss reserves and insurance related liabilities denominated in euro.

At March 31, 2022, net foreign exchange gains were primarily driven by exposures to euro, British pound and other non-USD denominated net loss reserves and insurance related liabilities in excess of foreign currency assets.

Our non-USD denominated liabilities at March 31, 2022 included net loss reserves of $382.6 million.

There was no new business written in non-USD currencies during the three months ended March 31, 2022.

Our foreign currency asset exposures at March 31, 2022 included $252.5 million of fixed maturity securities managed by our investment managers who have the discretion to hold foreign currency exposures as part of their total return strategy as well as equity method real estate investments denominated in Canadian dollars.

We also held $59.9 million of non-USD denominated funds withheld receivable at March 31, 2022.

Net foreign exchange gains of $2.2 million during the six months ended June 30, 2021 were primarily due to the strengthening of the U.S.

dollar on the re-measurement of net loss reserves and insurance related liabilities denominated in euro.

Underwriting Results by Reportable Segment

Diversified Reinsurance Segment

The underwriting results for our Diversified Reinsurance segment for the three months ended March 31, 2022 and 2021 were as follows:

For the Three Months Ended March 31,

The underwriting results for our Diversified Reinsurance segment for the three and six months ended June 30, 2022 and 2021 were as follows:

For the Three Months Ended June 30, For the Six Months Ended June 30,

($ in thousands) 2022 2021 2022 2021

Gross premiums written

$ 6,148 $ 5,191 $ 10,884 $ 5,263

Net premiums written

3 unchanged sentences

Other insurance revenue

469 539 520 808

Net loss and LAE

4 unchanged sentences

(3,008) (3,033) (5,106) (4,607)

Underwriting income (loss) $ 1,497 $ (235)

Premiums — Gross premiums written increased by $4.7 million for the three months ended March 31, 2022 compared to the same period in 2021.

Underwriting (loss) income $ (1,273) $ (1,231) $ 224 $ (1,466)

Premiums — Gross premiums written increased by $1.0 million and $5.6 million for the three and six months ended June 30, 2022, respectively, compared to the same respective periods in 2021.

This was primarily due to the prior year return of unearned premiums written in a German Auto quota share reinsurance contract in our IIS business which went into run-off on January 1, 2021.

Direct premiums written by Maiden LF and Maiden GF decreased by $0.3 million or 5.3% during the three months ended March 31, 2022 compared to the same period in 2021.

Net premiums written increased by $4.8 million during the three months ended March 31, 2022 compared to the same period in 2021 due to the prior year return of unearned premiums written in our German Auto quota share reinsurance contract which went into run-off on January 1, 2021.

The table below shows net premiums written by line of business for the three months ended March 31, 2022 and 2021:

For the Three Months Ended March 31, 2022 2021 Change in

Direct premiums written by Maiden LF and Maiden GF increased by $0.6 million or 11.3% and $0.4 million or 3.4% during the three and six months ended June 30, 2022, respectively, compared to the same respective periods in 2021.

Net premiums written increased by $1.0 million and $5.8 million during the three and six months ended June 30, 2022, respectively, compared to the same respective periods in 2021 due to the prior year return of unearned premiums written in our German Auto quota share reinsurance contract which went into run-off on January 1, 2021.

The tables below show net premiums written by line of business for the three and six months ended June 30, 2022 and 2021:

For the Three Months Ended June 30, 2022 2021 Change in

($ in thousands) Total Total $

Net Premiums Written

International

2 unchanged sentences

$ 5,995 $ 5,018 $ 977

Net premiums earned decreased by $0.3 million or 4.6% during the three months ended March 31, 2022 compared to the same period in 2021.

The table below shows net premiums earned by line of business for the three months ended March 31, 2022 and 2021:

For the Three Months Ended March 31, 2022 2021 Change in

For the Six Months Ended June 30, 2022 2021 Change in

($ in thousands) Total Total $

Net Premiums Earned

International

$ 10,578 $ 4,784 $ 5,794

Total Diversified Reinsurance

$ 10,578 $ 4,784 $ 5,794

Net premiums earned increased by $0.2 million or 2.3% and decreased by $0.1 million or 0.9% during the three and six months ended June 30, 2022, respectively, compared to the same respective periods in 2021.

The tables below show net premiums earned by line of business for the three and six months ended June 30, 2022 and 2021:

For the Three Months Ended June 30, 2022 2021 Change in

($ in thousands) Total Total $

International $ 7,125 $ 6,972 $ 153

Total Diversified Reinsurance

$ 7,125 $ 6,962 $ 163

Other Insurance Revenue — Other insurance revenue decreased by $0.2 million or 81.0% for the three months ended March 31, 2022 compared to the same period in 2021.

Other insurance revenue includes $41.0 thousand of fee income earned from our GLS business for the three months ended March 31, 2022 as well as fee income derived from our IIS business that is not directly associated with premium revenue assumed by the Company for the three months ended March 31, 2022 and 2021 as specified in the table below.

The decline of $0.3 million in International was primarily due to the loss of fee income from an auto customer program that went into run-off on July 31, 2021.

The table below shows other insurance revenue by source for the three months ended March 31, 2022 and 2021:

For the Three Months Ended March 31, 2022 2021 Change

For the Six Months Ended June 30, 2022 2021 Change in

($ in thousands) Total Total $

International

$ 13,080 $ 13,202 $ (122)

Total Diversified Reinsurance

$ 13,080 $ 13,202 $ (122)

Other Insurance Revenue — Other insurance revenue decreased by $0.1 million and $0.3 million for the three and six months ended June 30, 2022, respectively, compared to the same respective periods in 2021.

Other insurance revenue for the three and six months ended June 30, 2022 includes $0.1 million of fee related income earned from our GLS business, $0.4 million for fair value changes in underwriting-related derivatives for the three and six months ended June 30, 2022, and fee income derived from our IIS business that is not directly associated with premium revenue assumed by the Company as specified in the table below.

The decline of $0.4 million and $0.6 million from International was due to the loss of fee income from an auto customer program that went into run-off on July 31, 2021.

The table below shows other insurance revenue by source for the three and six months ended June 30, 2022 and 2021:

For the Three Months Ended June 30, 2022 2021 Change

($ in thousands)

International $ 10 $ 384 $ (374)

Other income 41 — 41 NM

Changes in fair value of non-hedged derivatives on retroactive reinsurance 393 — 393

Other service fee income 66 155 (89)

Total Diversified Reinsurance $ 469 $ 539 $ (70)

NM - not meaningful

Net Loss and LAE — Net loss and LAE decreased by $2.8 million or 196.1% for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to the run-off of reinsurance liabilities associated with our German Auto programs .

The net loss and LAE was impacted by favorable prior year loss reserve development which was $2.2 million for the three months ended March 31, 2022 compared to adverse development of $14.0 thousand for the same period in 2021.

The favorable loss development for the three months ended March 31, 2022 was experienced in IIS and other run-off business while the adverse loss development in 2021 was experienced in European Capital Solutions and other run-off business.

Commission and Other Acquisition Expenses — Commission and other acquisition expenses increased by $16.0 thousand or 0.4% for the three months ended March 31, 2022 compared to the same period in 2021.

General and Administrative Expenses — General and administrative expenses increased by $0.5 million or 33.3% for the three months ended March 31, 2022 compared to the same period in 2021.

For the Six Months Ended June 30, 2022 2021 Change

($ in thousands)

International $ 20 $ 653 $ (633)

Changes in fair value of non-hedged derivatives on retroactive reinsurance 393 — 393

Other service fee income 107 155 (48)

Total Diversified Reinsurance $ 520 $ 808 $ (288)

Net Loss and LAE — Net loss and LAE increased by $1.1 million or 87.7% and decreased by $1.7 million or 63.2% for the three and six months ended June 30, 2022, respectively, compared to the same respective periods in 2021 primarily due to the run-off of reinsurance liabilities associated with our German Auto programs .

The net loss and LAE was impacted by net adverse prior year loss development of $0.8 million for the three months ended June 30, 2022 and net favorable prior year loss development of $1.4 million for the six months ended June 30, 2022, respectively, compared to favorable prior year development of $1.0 million and $0.9 million for the same respective periods in 2021.

The net adverse loss development for the three months ended June 30, 2022 was experienced in European Capital Solutions while the favorable development for the six months ended June 30, 2022 was driven by German Auto and GLS.

The favorable loss development for the same respective periods in 2021 was experienced in German Auto Programs, European Capital Solutions and other run-off business.

Commission and Other Acquisition Expenses — Commission and other acquisition expenses decreased by $0.9 million or 21.0% and $0.9 million or 11.2% for the three and six months ended June 30, 2022, respectively, compared to the same respective periods in 2021.

General and Administrative Expenses — General and administrative expenses remained flat at $3.0 million for the three months ended June 30, 2022 and increased by $0.5 million or 10.8% for the six months ended June 30, 2022, respectively, compared to the same respective periods in 2021.

AmTrust Reinsurance Segment

The AmTrust Reinsurance segment reported an underwriting loss of $3.2 million during the three months ended March 31, 2022 compared to underwriting income of $1.8 million for the same period in 2021.

The AmTrust Cession Adjustments contributed an underwriting loss of $5.1 million to the reported results during the three months ended March 31, 2022;

excluding these adjustments the AmTrust Reinsurance segment had underwriting income of $1.9 million on the run-off of unearned premium for terminated AmTrust reinsurance contracts.

The underwriting results for the AmTrust Reinsurance segment for the three months ended March 31, 2022 and 2021 were as follows:

For the Three Months Ended March 31,

The AmTrust Reinsurance segment reported an underwriting loss of $3.9 million and $7.0 million during the three and six months ended June 30, 2022, respectively, compared to underwriting income of $9.7 million and $11.5 million for the same respective periods in 2021.

The AmTrust Cession Adjustments contributed an underwriting loss of $5.1 million to the reported results during the six months ended June 30, 2022;

excluding these adjustments, the AmTrust Reinsurance segment had an underwriting loss of $1.9 million on the run-off of unearned premium for terminated AmTrust reinsurance contracts.

The underwriting results for the AmTrust Reinsurance segment for the three and six months ended June 30, 2022 and 2021 were as follows:

For the Three Months Ended June 30, For the Six Months Ended June 30,

($ in thousands) 2022 2021 2022 2021

6 unchanged sentences

Net loss and LAE

(4,534) 6,574 (3,611) 5,630

Commission and other acquisition expenses

1 unchanged sentence

General and administrative expenses

(1,275) (775) (1,760) (1,378)

Underwriting (loss) income $ (3,857) $ 9,702 $ (7,009) $ 11,492

Premiums — The table below shows net premiums written by category for the three months ended March 31, 2022 and 2021, respectively:

For the Three Months Ended March 31, 2022 2021 Change in

Premiums — The tables below show net premiums written by category for the three and six months ended June 30, 2022 and 2021, respectively:

For the Three Months Ended June 30, 2022 2021 Change in

($ in thousands) Total Total $

3 unchanged sentences

Specialty Program

(62) (4) (58)

Specialty Risk and Extended Warranty

2 unchanged sentences

$ (2,809) $ (1,757) $ (1,052)

The negative gross and net premiums written for the three months ended March 31, 2022 reflect the AmTrust Cession Adjustments which consist of higher than expected adjustments related to the following items:

For the Six Months Ended June 30, 2022 2021 Change in

($ in thousands) Total Total $

Net Premiums Written

Small Commercial Business

$ (14,371) $ (4,072) $ (10,299)

Specialty Program

Specialty Risk and Extended Warranty

(4,119) (118) (4,001)

Total AmTrust Reinsurance

$ (17,715) $ (4,219) $ (13,496)

The negative gross and net premiums written for the six months ended June 30, 2022 reflect the AmTrust Cession Adjustments which consist of higher than expected adjustments related to the following items:

• $11.0 million of premium reductions on Workers Compensation policy surcharges in Small Commercial Business subsequent to the termination of the AmTrust Quota Share;

• $4.8 million of premium reductions to AmTrust's inuring reinsurance for certain programs in Specialty Risk and Extended Warranty which reduced the amount of premium ceded to Maiden.

There were also negative gross and net premiums written for the three months ended March 31, 2021 reflecting premium adjustments on Small Commercial Business policies in the AmTrust Quota Share.

There were also negative gross and net premiums written for the three and six months ended June 30, 2021 reflecting premium adjustments on Small Commercial Business policies in the AmTrust Quota Share.

Furthermore, the termination of the AmTrust Quota Share and the European Hospital Liability Quota Share as of January 1, 2019 resulted in no new business written under these contracts since 2018.

Net premiums earned decreased by $10.4 million for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to the AmTrust Cession Adjustments as discussed above.

The tables below detail net premiums earned by category for the three months ended March 31, 2022 and 2021:

For the Three Months Ended March 31, 2022 2021 Change in

Net premiums earned decreased by $3.0 million and $13.4 million for the three and six months ended June 30, 2022, respectively, compared to the same respective periods in 2021 primarily due to the AmTrust Cession Adjustments as discussed above.

The tables below detail net premiums earned by category for the three and six months ended June 30, 2022 and 2021:

For the Three Months Ended June 30, 2022 2021 Change in

($ in thousands) Total Total $

7 unchanged sentences

$ 3,318 $ 6,350 $ (3,032)

Net Loss and LAE — Net loss and LAE decreased by $1.9 million for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to favorable prior year loss development of $5.1 million during the three months ended March 31, 2022 which included $5.3 million of favorable loss adjustments on the AmTrust Cession Adjustments.

There was favorable prior year loss development of $5.1 million during the three months ended March 31, 2022 compared to favorable prior year development of $5.6 million for the same period in 2021.

Prior year favorable development during the three months ended March 31, 2022 was primarily due to favorable development on the runoff of Workers Compensation business as well as AmTrust Cession Adjustments for Specialty Risk and Extended Warranty.

The net favorable prior year loss development for the three months ended March 31, 2021 was due to favorable development in Workers Compensation partly offset by adverse development in Hospital Liability.

Commission and Other Acquisition Expenses — Commission and other acquisition expenses decreased by $3.4 million for the three months ended March 31, 2022 compared to the same period in 2021 due to the AmTrust Cession Adjustments discussed above which resulted in negative earned premiums and a reduction to brokerage fees.

General and Administrative Expenses — General and administrative expenses decreased by $0.1 million or 19.6% for the three months ended March 31, 2022 compared to the same period in 2021 as a result of lower earned premiums due to terminating both quota share agreements with AmTrust as of January 1, 2019.

For the Six Months Ended June 30, 2022 2021 Change in

($ in thousands) Total Total $

Net Premiums Earned

Small Commercial Business

$ (14,359) $ (3,846) $ (10,513)

Specialty Program

Specialty Risk and Extended Warranty

12,068 15,736 (3,668)

Total AmTrust Reinsurance

$ (1,515) $ 11,874 $ (13,389)

Net Loss and LAE — Net loss and LAE increased by $11.1 million and $9.2 million for the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021 due to significant favorable development experienced in the prior year periods.

Net favorable prior year loss development of $4.9 million during the six months ended June 30, 2022 included $5.3 million of favorable loss reserve adjustments related to the AmTrust Cession Adjustments.

There was adverse prior year loss development of $0.1 million during the three months ended June 30, 2022 compared to favorable prior year loss development of $11.9 million for the same period in 2021.

Net adverse development during the three months ended June 30, 2022 was primarily due to modest deterioration in General Liability and Commercial Auto partly offset by continued favorable development on Workers Compensation.

The net favorable prior year loss development for the three months ended June 30, 2021 was due to favorable development in Workers Compensation and Commercial Auto Liability.

Net favorable prior year loss development was $4.9 million during the six months ended June 30, 2022, compared to net favorable prior year loss development of $17.4 million during the same period in 2021.

The favorable prior year loss development during the six months ended June 30, 2022 was due to favorable runoff of Workers Compensation business and AmTrust Cession Adjustments for Specialty Risk and Extended Warranty.

Prior year favorable development in 2021 was due to Workers Compensation and Commercial Auto Liability partly offset by adverse development within Hospital Liability.

Commission and Other Acquisition Expenses — Commission and other acquisition expenses decreased by $1.1 million and $4.5 million for the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021 due to the AmTrust Cession Adjustments which resulted in negative earned premiums and a reduction to brokerage fees.

General and Administrative Expenses — General and administrative expenses increased by $0.5 million or 64.5% and $0.4 million or 27.7% for the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021 primarily due to letter of credit fees associated with the LPT/ADC Agreement.

Liquidity and Capital Resources

2 unchanged sentences

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 and also place restrictions on the declaration and payment of dividends and other distributions.

As of March 31, 2022, the Company had investable assets of $1.6 billion compared to $1.7 billion as of December 31, 2021.

As of June 30, 2022, the Company had investable assets of $1.5 billion compared to $1.7 billion as of December 31, 2021.

Investable assets are the combined total of our investments, cash and cash equivalents (including restricted cash), loan to a related party and funds withheld receivable.

The decline in our investable assets is primarily the result of our cessation of active reinsurance underwriting of new prospective risks in 2018 and 2019 which subsequently resulted in negative operating cash flows to settle claim payments from the run-off of the liabilities from that reinsurance portfolio in 2022.

The decrease in our investable assets is primarily the result of our cessation of active reinsurance underwriting of new prospective risks in 2018 and 2019 which subsequently resulted in negative operating cash flows to settle claim payments from the run-off of the liabilities from that reinsurance portfolio in 2022.

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, 2021, that was filed with the SEC on March 14, 2022.

5 unchanged sentences

The Investment Policy, as approved and as amended, maintains our established investment management and governance practices.

During the second quarter of 2022, the Vermont DFR approved an annual dividend program to be paid by Maiden Reinsurance to Maiden NA, with notification to the Vermont DFR as dividends are paid.

Subsequent to that approval, Maiden Reinsurance has paid $6.3 million in dividends to Maiden NA.

We may experience continued volatility in our results of operations which could negatively impact our financial condition and create a reduction in the amount of available distribution or dividend capacity from our regulated reinsurance subsidiaries, which would also reduce liquidity.

6 unchanged sentences

As a result of these transactions, we are not engaged in active underwriting of new prospective risks thus our net premiums written will continue to be materially lower and investment income will become a significantly larger portion of our total revenues.

We are writing new retroactive risks through GLS, however this will be smaller in relation to the run-off of our prior reinsurance business.

Despite the initial inflow of new business from GLS, this has continued to cause significant negative operating cash flows as we run off the AmTrust Reinsurance segment reserves as shown in the cash flows table further below.

We are writing new retroactive risks through

GLS, however this will be smaller in relation to the run-off of our prior reinsurance business.

Despite the initial inflow of new business from GLS, the run-off of our prior reinsurance business has continued to cause significant negative operating cash flows as we run off the AmTrust Reinsurance segment reserves as shown in the cash flows table further below.

While the development of the GLS platform over time should further enhance our ability to pursue the asset and capital management pillars of our business strategy, we still expect the trend of negative overall cash flows to continue to reduce our asset base going forward through the remainder of 2022 and beyond.

4 unchanged sentences

While we continue to expect our cash flows to be sufficient to meet our cash requirements and to operate our business, our ability to execute our asset and capital management initiatives are dependent on maintaining adequate levels of unrestricted liquidity and cash flows.

At March 31, 2022 and December 31, 2021, unrestricted cash and cash equivalents and unrestricted fixed maturity investments were $74.6 million and $81.1 million, respectively.

The decrease of $6.5 million in unrestricted cash and fixed maturity investments during 2022 was primarily the result of $3.1 million utilized for the 2021 Preference Share Repurchase Program, $14.1 million utilized for net purchases of equity securities and other investments, $3.9 million utilized for net purchases of equity method investments, and $4.8 million for interest payments on the Senior Notes, partly offset by $15.0 million of excess collateral released by AmTrust.

At June 30, 2022 and December 31, 2021, unrestricted cash and cash equivalents and unrestricted fixed maturity investments were $79.7 million and $81.1 million, respectively.

The decrease of $1.4 million in unrestricted cash and fixed maturity investments during 2022 was primarily the result of $10.0 million utilized for the 2021 Preference Share Repurchase Program, $28.7 million utilized for net purchases of other investments and equity securities, and $9.6 million for interest payments on the Senior Notes, partly offset by $35.0 million of collateral released by AmTrust and net proceeds of $9.5 million from equity method investments.

Please see the related discussion on investing and financing cash flows below.

The table below summarizes our operating, investing and financing cash flows for the three months ended March 31, 2022 and 2021:

For the Three Months Ended March 31, 2022 2021

The table below summarizes our operating, investing and financing cash flows for the six months ended June 30, 2022 and 2021:

For the Six Months Ended June 30, 2022 2021

($ in thousands)

7 unchanged sentences

(1,213) (107)

Total increase (decrease) in cash, restricted cash and cash equivalents $ 5,799 $ (4,672)

Total decrease in cash, restricted cash and cash equivalents $ (4,619) $ (62,069)

Cash Flows used in Operating Activities

Cash flows used in operating activities for the three months ended March 31, 2022 were $76.1 million compared to cash flows used in operating activities of $102.8 million for the three months ended March 31, 2021, a decrease of $26.7 million.

The operating cash flows used in operations for the three months ended March 31, 2022 and 2021 were primarily the result of claims payments for the runoff of existing reserves for terminated AmTrust Quota Share and the European Hospital Liability Quota Share contracts as well as return of premiums due to AmTrust Cession Adjustments.

Cash Flows from Investing Activities

Cash flows used in operating activities for the six months ended June 30, 2022 were $88.8 million compared to cash flows used in operating activities of $185.8 million for the six months ended June 30, 2021, a decrease of $97.0 million due to the timing of settlement of balances due to AmTrust, which have been subsequently settled.

The operating cash flows used in operations for the six months ended June 30, 2022 and 2021 were primarily the result of claims payments for the runoff of existing reserves for terminated AmTrust Quota Share and the European Hospital Liability Quota Share contracts as well as return of premiums due to AmTrust Cession Adjustments.

Cash Flows provided by Investing Activities

Cash flows from investing activities consist primarily of proceeds from the sales and maturities of investments and payments for investments acquired.

Net cash provided by investing activities was $86.1 million for the three months ended March 31, 2022 compared to $199.2 million for the same period in 2021 due to proceeds from the sale of fixed maturity investments which were made primarily to settle claim payments during the three months ended March 31, 2022 and 2021 as well as repurchase preference shares during the three months ended March 31, 2022 and 2021.

For the three months ended March 31, 2022, the proceeds from the sales, maturities and calls exceeded the purchases of fixed maturity securities by $104.1 million compared to net proceeds of $205.1 million for the same period in 2021.

This was partly offset by $14.1 million utilized for net purchases of other investments and $3.9 million utilized for net purchases of equity method investments during the three months ended March 31, 2022.

Cash Flows from Financing Activities

Cash flows used in financing activities were $3.9 million for the three months ended March 31, 2022 compared to $99.9 million during 2021 due mainly to the repurchase of the Company's preference shares.

During the three months ended March 31, 2022, the Company paid $3.1 million for the repurchase of 274,861 preference shares pursuant to the 2021 Preference Share Repurchase Program as part of its recent capital management strategy compared to 6,614,493 preference shares repurchased by the Company during the first quarter of 2021 for aggregate total consideration of $97.4 million.

No dividends on common or preference shares were paid during the three months ended March 31, 2022 and 2021.

Net cash provided by investing activities was $96.3 million for the six months ended June 30, 2022 compared to $251.0 million for the same period in 2021 due to proceeds from the sale of fixed maturity investments which were made primarily to settle claim payments during the six months ended June 30, 2022 and 2021 as well as repurchase preference shares during the six months ended June 30, 2022 and 2021.

For the six months ended June 30, 2022, the proceeds from the sales, maturities and calls exceeded the purchases of fixed maturity securities by $115.5 million compared to net proceeds of $290.1 million for fixed maturity securities in the same period in 2021.

There was also net proceeds of equity method investments of $9.5 million partly offset by $28.7 million utilized for net purchases of other investments and equity securities during the six months ended June 30, 2022.

Cash Flows used in Financing Activities

Cash flows used in financing activities were $11.0 million for the six months ended June 30, 2022 compared to $127.2 million during the six months ended in 2021 due to the repurchase of the Company's preference shares.

During the six months ended June 30, 2022, the Company paid $10.0 million for the repurchase of 1,581,509 preference shares pursuant to the 2021 Preference Share Repurchase Program compared to 8,517,037 preference shares repurchased by the Company during the same period in 2021 for an aggregate total consideration of $124.7 million.

No dividends on common or preference shares were paid during the six months ended June 30, 2022 and 2021.

Our Board of Directors have not declared any common or preference share dividends since the third quarter of 2018.

1 unchanged sentence

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, 2021, that was filed with the SEC on March 14, 2022.

At March 31, 2022 and December 31, 2021, restricted cash and cash equivalents and fixed maturity investments used as collateral were $468.5 million and $582.1 million, respectively.

This collateral represents 86.3% and 87.8% of the fair value of our respective total fixed maturity investments, cash, restricted cash and cash equivalents at March 31, 2022 and December 31, 2021, respectively.

At June 30, 2022 and December 31, 2021, restricted cash and cash equivalents and fixed maturity investments used as collateral were $417.2 million and $582.1 million, respectively.

This collateral represents 84.0% and 87.8% of the fair value of total fixed maturity investments, cash, restricted cash and equivalents at June 30, 2022 and December 31, 2021, respectively.

Cash and Investments

The investment of our funds has generally been designed to ensure safety of principal while generating current income.

Accordingly, the majority of our funds have been invested in liquid, investment-grade fixed income securities which are all designated as AFS at March 31, 2022.

As of March 31, 2022 and December 31, 2021, our cash and investments consisted of:

March 31, 2022 December 31, 2021

Accordingly, the majority of our funds have been invested in liquid, investment-grade fixed income securities which are all designated as AFS at June 30, 2022.

As of June 30, 2022 and December 31, 2021, our cash and investments consisted of:

June 30, 2022 December 31, 2021

($ in thousands)

11 unchanged sentences

We categorize these investments as alternative investments which include " Other Investments ", "Equity Securities" , and "Equity Method Investments" as captioned on our condensed consolidated balance sheets.

Under this revised investment policy, we have increased the amount of alternative investments during 2022 and 2021, and we expect to continue to increase the amounts invested therein.

Under this revised investment policy, we increased the amount of alternative investments during 2022 and 2021, and we expect to continue to increase the amounts invested therein.

Under our investment policy, alternative investments could include, but are not limited to, privately held investments, private equities, private credit lending funds, fixed-income funds, hedge funds, equity funds, real estate (including joint ventures and limited partnerships) and other non-fixed-income investments.

13 unchanged sentences

The substantial majority of our current and future investments are held by Maiden Reinsurance, whose investment policy was approved by the Vermont DFR.

We may utilize a portion of Maiden Reinsurance's unrestricted assets to purchase affiliated securities and, during the three months ended March 31, 2022, we utilized $3.1 million in conjunction with the 2021 Preference Share Repurchase Program.

As of March 31, 2022, we have cumulatively invested $168.9 million in the preference shares of Maiden Holdings.

We may utilize a portion of Maiden Reinsurance's unrestricted assets to purchase affiliated securities and, during the six months ended June 30, 2022, we utilized $10.0 million in conjunction with the 2021 Preference

Share Repurchase Program.

As of June 30, 2022, Maiden Reinsurance cumulatively invested $175.8 million in the preference shares of Maiden Holdings.

Cash & Cash Equivalents

At March 31, 2022, we consider the levels of cash and cash equivalents held to be within our targeted ranges.

At June 30, 2022, we consider the levels of cash and cash equivalents held to be within our targeted ranges.

During periods when interest rates experience greater volatility, we have periodically maintained more cash and cash equivalents to better assess current market conditions and opportunities within our defined risk appetite, and may do so in future periods.

Fixed Maturity Investments

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 at March 31, 2022 and December 31, 2021, respectively:

March 31, 2022 Original or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Average yield (1)

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 at June 30, 2022 and December 31, 2021, respectively:

June 30, 2022 Original or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Average yield (1)

Average duration (2)

31 unchanged sentences

(2) Average duration in years.

During the three months ended March 31, 2022, the yield on the 10-year U.S.

During the six months ended June 30, 2022, the yield on the 10-year U.S.

Treasury bond increased by 146 basis points to 2.98%.

1 unchanged sentence

Treasury rate is the key risk-free determinant in the fair value of many of the fixed maturity securities in our portfolio.

Treasury yield curve experienced a material upward shift during the three months ended March 31, 2022, reflecting concerns about ongoing inflation emanating from the combination of:

Treasury yield curve experienced a material upward shift during the six months ended June 30, 2022, reflecting concerns about ongoing inflation emanating from the combination of:

1) the strength of the U.S.

4 unchanged sentences

and 4) the anticipated monetary policy responses by central banks globally in light of these other circumstances, which indicate measures which may increase interest rates broadly .

The movement in the market values of our fixed maturity portfolio during the three months ended March 31, 2022 generated net unrealized losses of $22.7 million which reduced our book value per common share by $0.26 during that period.

The movement in the market values of our fixed maturity portfolio during the six months ended June 30, 2022 generated net unrealized losses of $47.2 million which reduced our book value per common share by $0.54 during that period.

Current outlooks for global monetary policy indicate that substantial quantitative tightening by central banks in the U.S.

4 unchanged sentences

As noted, the fair value of our fixed maturity investments will fluctuate with changes in interest rates and credit spreads.

We attempt to maintain adequate liquidity in our fixed maturity investments portfolio with a strategy designed to emphasize the preservation of our invested assets and provide sufficient liquidity for the prompt payment of claims and contract liabilities.

Because we collateralize a significant portion of our insurance liabilities, unanticipated or

large increases in interest rates could require us to utilize significant amounts of unrestricted cash and fixed maturity securities to provide additional collateral, which could impact our asset and capital management strategy described herein.

of claims and contract liabilities.

Because we collateralize a significant portion of our insurance liabilities, unanticipated or large increases in interest rates could require us to utilize significant amounts of unrestricted cash and fixed maturity securities to provide additional collateral, which could impact our asset and capital management strategy described herein.

We also monitor the duration and structure of our investment portfolio as discussed below.

As of March 31, 2022, the aggregate hypothetical change in fair value from an immediate 100 basis points increase in interest rates, assuming credit spreads remain constant, in our fixed maturity investments portfolio would decrease the fair value of that portfolio by $15.7 million.

As of June 30, 2022, the aggregate hypothetical change in fair value from an immediate 100 basis points increase in interest rates, assuming credit spreads remain constant, in our fixed maturity investments portfolio would decrease the fair value of that portfolio by $14.2 million.

Actual shifts in interest rates may not change by the same magnitude across the maturity spectrum or on an individual security and, as a result, the impact on the fair value of our fixed maturity securities may be materially different from the resulting change in value described above.

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, 2022 and December 31, 2021, these respective durations in years were as follows:

March 31, 2022 December 31, 2021

At June 30, 2022 and December 31, 2021, these respective durations in years were as follows:

June 30, 2022 December 31, 2021

Fixed maturities and cash and cash equivalents

1 unchanged sentence

Reserve for loss and LAE - net of LPT/ADC Agreement reserves 1.5 1.4

During the three months ended March 31, 2022, the weighted average duration of our fixed maturity investment portfolio decreased 0.1 years to 1.4 years while the duration for the reserve for loss and LAE remained at 4.4 years.

During the six months ended June 30, 2022, the weighted average duration of our fixed maturity investment portfolio decreased by 0.1 year to 1.4 years while the duration for the reserve for loss and LAE increased by 0.6 year to 5.0 years.

The differential in duration between these assets and liabilities may fluctuate over time and in the case of fixed maturities, historically 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.

At March 31, 2022, the duration of our fixed maturity investment portfolio decreased compared to December 31, 2021 due to sales of fixed maturity investments primarily made to settle claim payments with AmTrust.

At March 31, 2022, the duration of our loss reserves net of the LPT/ADC Agreement was consistent with the duration of our fixed maturity investment portfolio.

At June 30, 2022, the duration of our fixed maturity investment portfolio decreased compared to December 31, 2021 due to continued sales of fixed maturity investments primarily made to settle claim payments with AmTrust.

At June 30, 2022, the duration of our loss reserves net of the LPT/ADC Agreement was relatively in line with the duration of our fixed maturity investment portfolio.

To limit our exposure to unexpected interest rate increases that could reduce the value of our fixed maturity securities and reduce our shareholders' equity, the Company holds floating rate securities whose fair values are less sensitive to interest rates.

At March 31, 2022 and December 31, 2021, 25.3% and 23.6%, respectively, of the Company’s fixed income investments are floating-rate securities.

The floating rate investment holdings at March 31, 2022 and December 31, 2021 were as follows:

March 31, 2022 December 31, 2021

At June 30, 2022 and December 31, 2021, 25.4% and 23.6%, respectively, of our fixed income investments are comprised of floating rate securities.

The floating rate investment holdings at June 30, 2022 and December 31, 2021 were as follows:

June 30, 2022 December 31, 2021

($ in thousands) Fair Value % of Total Fair Value % of Total

9 unchanged sentences

(1) Total fixed income investments at fair value include AFS fixed maturities, cash and restricted cash, funds withheld receivable, and loan to related party.

At March 31, 2022 and December 31, 2021, 100.0% of the Company’s U.S.

At June 30, 2022 and December 31, 2021, 100.0% of the Company’s U.S.

agency bond holdings are mortgage-backed.

Additional details on the Agency MBS holdings at March 31, 2022 and December 31, 2021 were as follows:

March 31, 2022 December 31, 2021

Additional details on the Agency MBS holdings at June 30, 2022 and December 31, 2021 were as follows:

June 30, 2022 December 31, 2021

($ in thousands) Fair Value % of Total Fair Value % of Total

5 unchanged sentences

Agency MBS $ 74,026 100.0 % $ 98,790 100.0 %

Agency MBS bonds comprise 17.7% of our fixed maturity investments at March 31, 2022.

agency MBS comprise 17.0% of our fixed maturity investment portfolio at June 30, 2022.

Given their relative size 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 reduce the total amount of investment income we earn.

At March 31, 2022 and December 31, 2021, 98.8% and 97.8%, respectively, of our fixed maturity investments consisted of investment grade securities.

At June 30, 2022 and December 31, 2021, 98.9% and 97.8%, 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.

1 unchanged sentence

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, 2022 and December 31, 2021 were as follows:

March 31, 2022 AAA A+, A, A- BBB+, BBB, BBB- BB+ or lower Fair Value % of Corporate bonds portfolio

The security holdings by sector and financial strength rating of our corporate bond holdings at June 30, 2022 and December 31, 2021 were as follows:

June 30, 2022 AAA A+, A, A- BBB+, BBB, BBB- BB+ or lower Fair Value % of Corporate bonds portfolio

Corporate bonds

25 unchanged sentences

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

The table below includes the Company’s ten largest corporate holdings at fair value and as a percentage of all fixed income securities held as at March 31, 2022;

The table below includes the Company’s ten largest corporate holdings at fair value and as a percentage of all fixed income securities held as at June 30, 2022;

of which 100.0% are euro denominated, with 51.0% in the Consumer Sector and 15.6% in the Financial Institutions sector.

March 31, 2022 Fair Value % of Holdings Rating (1)

June 30, 2022 Fair Value % of Holdings Rating (1)

($ in thousands)

3 unchanged sentences

Chubb Ina Holdings Inc., 1.55%, Due 3/15/2028 6,294 1.4 % A

Kraft Heinz Food Co., 1.5%, Due 5/24/2024 6,533 1.4 % BBB-

Utah Acquistion Sub, Inc., 2.25%, Due 11/22/2024 5,617 1.2 % BBB-

Kraft Heinz Foods Co., 1.5%, Due 5/24/2024 6,045 1.4 % BBB-

Santander Consumer Finance SA, 1.125%, Due 10/9/2023 5,198 1.2 % A

America Movil SAB DE CV, 1.5%, Due 3/10/2024 5,196 1.2 % A-

Volkswagen International Finance NV, 1.125%, Due 10/2/2023 5,191 1.2 % A-

Glencore Finance (Europe) LTD, 1.875%, Due 9/13/2023 5,156 1.2 % BBB+

FBD Insurance PLC, 5%, Due 10/9/2028 5,595 1.2 % NA

Santanger Consumer Finance SA, 1.125%, Due 10/9/2023 5,590 1.2 % A

Utah Acquistion Sub Inc., 2.25%, Due 11/22/2024 5,087 1.2 % BBB-

$ 73,697 16.9 %

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

At March 31, 2022 and December 31, 2021, respectively, we held the following non-U.S.

At June 30, 2022 and December 31, 2021, respectively, we held the following non-U.S.

dollar denominated securities:

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

($ in thousands) Fair Value % of Total Fair Value % of Total

5 unchanged sentences

$ 233,898 100.0 % $ 264,414 100.0 %

At March 31, 2022 and December 31, 2021, respectively, 100.0% of our non-U.S.

At June 30, 2022 and December 31, 2021, respectively, 100.0% of our non-U.S.

dollar denominated securities above were invested in euro.

The net decrease in non-U.S.

denominated fixed maturities is due to the relative depreciation of euro denominated corporate bonds during the three months ended March 31, 2022.

At March 31, 2022 and December 31, 2021, all of the Company's non-U.S.

denominated fixed maturities is largely due to the relative depreciation of euro denominated corporate bonds during the six months ended June 30, 2022.

At June 30, 2022 and December 31, 2021, all of the Company's non-U.S.

government issuers have a rating of AA- or higher by S&P.

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

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 at March 31, 2022 and December 31, 2021:

March 31, 2022 December 31, 2021

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 at June 30, 2022 and December 31, 2021:

June 30, 2022 December 31, 2021

($ in thousands) Fair Value % of Total Fair Value % of Total

6 unchanged sentences

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, 2022 and December 31, 2021, respectively.

denominated currencies at June 30, 2022 and December 31, 2021, respectively.

Other Investments, Equity Securities and Equity Method Investments

3 unchanged sentences

Private credit investments consist of loans and other debt securities of privately held entities or investment sponsors.

Our allocation to alternative investments increased to 31.6% of our total cash and investments as of March 31, 2022 compared to 25.4% as of December 31, 2021;

and increased to 68.1% of our total shareholders' equity as of March 31, 2022 compared to 58.7% as of December 31, 2021.

Our alternative investments as of March 31, 2022 and December 31, 2021 consist of the following asset classes:

March 31, 2022 December 31, 2021

Our allocation to alternative investments increased to 33.5% of our total cash and investments as of June 30, 2022 compared to 25.4% as of December 31, 2021;

and increased to 72.0% of our total shareholders' equity as of June 30, 2022 compared to 58.7% as of December 31, 2021.

Our alternative investments as of June 30, 2022 and December 31, 2021 consist of the following asset classes:

June 30, 2022 December 31, 2021

($ in thousands) Carrying Value % of Total Carrying Value % of Total

18 unchanged sentences

Investment Results

The following table summarizes our investment results for the three months ended March 31, 2022 and 2021, respectively:

For the Three Months Ended March 31,

The following table summarizes our investment results for the three and six months ended June 30, 2022 and 2021:

For the Three Months Ended June 30, For the Six Months Ended June 30,

($ in thousands) 2022 2021 2022 2021

6 unchanged sentences

Total net investment income 7,667 7,278 14,234 17,119

Net realized gains:

Net realized (losses) gains:

Fixed income assets (1)

(47) 1,109 1,096 4,003

Other investments, including equities (1,181) 266 477 982

Total net realized gains 2,801 3,610

Net unrealized (losses) gains:

Total net realized (losses) gains (1,228) 1,375 1,573 4,985

Net unrealized gains (losses):

Other investments, including equities 3,339 (526) 2,847 3,965

Total net unrealized (losses) gains (492) 4,491

Interest in income of equity method investments:

Interest in income of equity method investments 1,271 2,947

Total interest in income of equity method investments 1,271 2,947

Total net unrealized gains (losses) 3,339 (526) 2,847 3,965

Interest in (loss) income of equity method investments:

Interest in (loss) income of equity method investments (3,041) 2,775 (1,770) 5,722

Total interest in (loss) income of equity method investments (3,041) 2,775 (1,770) 5,722

Total investment return included in earnings (A)

$ 6,737 $ 10,902 $ 16,884 $ 31,791

Other comprehensive income (loss):

Unrealized losses on AFS and Equity Method Investments excluding foreign exchange (B)

Other comprehensive (loss) income:

Unrealized losses on AFS fixed maturities and equity method investments excluding foreign exchange (B)

$ (12,274) $ (4,603) $ (23,666) $ (17,387)

14 unchanged sentences

GAAP consolidated financial statements.

The following table details total investment returns for our fixed income investments and alternative investments for the three months ended March 31, 2022 and 2021, respectively:

The following table details total investment returns for our fixed income investments for the three and six months ended June 30, 2022 and 2021, respectively:

Fixed Income Investments (1)

Alternative Investments (2)

For the Three Months Ended March 31, For the Three Months Ended March 31,

For the Three Months Ended June 30, For the Six Months Ended June 30,

($ in thousands) 2022 2021 2022 2021

10 unchanged sentences

Net Investment Returns (0.4) % 0.4 % (1.0) % 0.4 %

The following table details total investment returns for our alternative investments for the three and six months ended June 30, 2022 and 2021, respectively:

For the Three Months Ended June 30, For the Six Months Ended June 30,

($ in thousands) 2022 2021 2022 2021

Gross investment income $ (2,077) $ 2,886 $ (206) $ 5,943

Net realized and unrealized gains 2,158 (260) 3,324 4,947

Change in AOCI (3)

— (2,407) 4,414 (3,419)

Gross investment returns $ 81 $ 219 $ 7,532 $ 7,471

Average invested assets, at fair value (4)

$ 250,483 $ 136,586 $ 238,011 $ 130,076

Gross Investment Returns — % 0.2 % 3.2 % 5.7 %

Investment expenses $ 50 $ 583 $ 107 $ 656

Net investment returns $ 31 $ (364) $ 7,425 $ 6,815

Net Investment Returns — % (0.3) % 3.1 % 5.2 %

Fixed income investments includes AFS securities as well as cash, restricted cash, funds withheld receivable, and loan to related party.

Alternative investments includes other investments, equity securities, and equity method investments.

Change in AOCI excludes unrealized foreign exchange gains and losses.

Change in accumulated other comprehensive income ("AOCI") excludes unrealized foreign exchange gains and losses.

Average invested assets is the average of the amounts disclosed in our quarterly U.S.

GAAP consolidated financial statements.

Total returns on fixed income investments were adversely impacted by the increase in interest rates during the three months ended March 31, 2022 compared to same period in 2021.

Total returns on alternative investments were positive for the three months ended March 31, 2022 partly due to the sale of an equity method investment which produced gross returns of $5.8 million which contributed 2.4% to the gross investment returns during the current period.

On a percentage basis however, the investment returns in 2022 were lower compared to the same period in 2021 due to higher average invested assets in 2022.

For the three months ended March 31, 2021, gross investment returns included unrealized gains of $4.5 million from an investment in an insurtech start-up company that was acquired by a special purpose acquisition company which contributed 4.0% to the gross investment returns for the prior year period.

Total returns on fixed income investments were adversely impacted by the increase in interest rates during the six months ended June 30, 2022 compared to same period in 2021.

Total returns on alternative investments were positive for the six months ended June 30, 2022 partly due to the sale of an equity method investment which produced gross returns of $5.8 million which contributed 2.4% to the gross investment returns during the current period.

On a percentage basis however, the investment returns on alternative investments during the six months ended June 30, 2022 were lower compared to 2021 due to higher average invested assets in 2022.

For the six months ended June 30, 2021, gross investment returns included unrealized gains of $3.9 million from an investment in an insurtech start-up company that was acquired by a special purpose acquisition company which contributed 3.0% to the gross investment returns for the prior year period.

Other Balance Sheet Changes

The following table summarizes our other material balance sheet changes at March 31, 2022 and December 31, 2021:

($ in thousands) March 31, 2022 December 31, 2021 Change Change %

The following table summarizes our other material balance sheet changes at June 30, 2022 and December 31, 2021:

($ in thousands) June 30, 2022 December 31, 2021 Change Change %

Reinsurance balances receivable, net

$ 13,439 $ 19,507 $ (6,068) (31.1) %

Reinsurance recoverable on unpaid losses

6 unchanged sentences

81,129 100,131 (19,002) (19.0) %

Deferred gain on retroactive reinsurance

52,805 48,960 3,845 7.9 %

Accrued expenses and other liabilities

1 unchanged sentence

The Company's deferred commission and other acquisition expenses decreased by 18.4% and unearned premiums decreased by 19.0% primarily due to the Partial Termination Amendment with AmTrust on a cut-off basis and the termination of the remaining business under both quota share contracts with AmTrust which have been in run-off since January 1, 2019.

Accrued expenses and other liabilities increased by 46.4% as at March 31, 2022 compared to December 31, 2021 due to reinsurance balances payable as a result of claims incurred under the run-off of AmTrust reinsurance contracts.

The Company's reserve for loss and LAE decreased by 6.9% primarily due to the payment of prior year loss claims as well as favorable loss development recognized for the AmTrust Reinsurance segment.

The increase in deferred gains on retroactive reinsurance for the three months ended March 31, 2022 by 7.9% is attributable to new retroactive reinsurance business assumed by GLS partly offset by $1.0 million in loss and LAE recognized as favorable loss development in the AmTrust Reinsurance segment covered by the LPT/ADC Agreement.

The favorable loss development on reserves covered by the LPT/ADC Agreement also impacted the reinsurance recoverable on unpaid losses which decreased by $4.6 million or 0.8% as at March 31, 2022 compared to December 31, 2021.

Reinsurance balances receivable decreased by 31.1% with the collection of premiums receivable due from the European Hospital Liability Quota Share during the second quarter of 2022.

Accrued expenses and other liabilities increased by 238.0% as at June 30, 2022 compared to December 31, 2021 primarily due to the timing of settlement of reinsurance losses payable due to AmTrust, which have been subsequently settled.

Other liabilities also increased due to the derivative liability on retroactive reinsurance of $9.3 million that was recognized at June 30, 2022.

The Company's reserve for loss and LAE decreased by 14.4% primarily due to the settlement of prior year loss claims as well as favorable loss development recognized for the AmTrust Reinsurance segment.

The favorable loss development on reserves covered by the LPT/ADC Agreement impacted the reinsurance recoverable on unpaid losses which decreased by $8.0 million or 1.4% as at June 30, 2022 compared to December 31, 2021.

Capital Resources

During the three months ended March 31, 2022, book value per common share decreased by 5.0% to $2.47 and diluted book value per common share decreased by 5.0% to $2.46, compared to December 31, 2021.

This was largely due to a net loss of $1.9 million and net decrease in AOCI of $12.6 million during the three months ended March 31, 2022, partially offset by the $3.5 million gain on the 2021 Preference Share Repurchase Program during the first quarter which increased book value by $0.04 per common share.

During the six months ended June 30, 2022, book value per common share increased by 0.8% to $2.62 and diluted book value per common share increased by 0.4% to $2.60, compared to December 31, 2021.

This was largely due to net income available to Maiden common shareholders of $27.3 million partly offset by a net decrease in AOCI of $26.7 million during the six months ended June 30, 2022.

Capital resources consist of funds deployed in support of our operations.

The following table shows the movement in total capital resources at March 31, 2022 and December 31, 2021:

($ in thousands) March 31, 2022 December 31, 2021 Change Change %

The following table shows the movement in total capital resources at June 30, 2022 and December 31, 2021:

($ in thousands) June 30, 2022 December 31, 2021 Change Change %

Preference shares

8 unchanged sentences

$ 610,433 $ 646,757 $ (36,324) (5.6) %

Total capital resources decreased by $16.6 million, or 2.6% at March 31, 2022 compared to December 31, 2021 primarily due to the decrease in total shareholders'' equity as follows:

• net decrease of $3.1 million from the 2021 Preference Share Repurchase Program composed of a decline in preference share capital of $6.9 million partly offset by:

(1) a gain on repurchase of preference shares of $3.5 million for the three months ended March 31, 2022 which increased retained earnings;

Total capital resources decreased by $36.3 million, or 5.6% at June 30, 2022 compared to December 31, 2021 primarily due to the decrease in total shareholders' equity as follows:

• net decrease of $10.0 million from the 2021 Preference Share Repurchase Program composed of declines in preference share capital of $39.5 million partly offset by:

(1) a gain on repurchase of preference shares of $28.2 million for the six months ended June 30, 2022 which increased retained earnings;

and (2) a net increase in additional paid-in capital of $1.3 million relating to proportionate share in issuance costs of preference shares repurchased, which was previously recognized as a reduction in additional paid-in capital;

• net decrease in AOCI of $26.7 million which arose due to:

(1) net unrealized losses on investment of $18.2 million resulting largely from a decrease in the fair value of $22.7 million for our fixed income investment portfolio relating to market price movements due to rising interest rates during the three months ended March 31, 2022 offset by $4.4 million related to equity method investments;

less (2) an increase in cumulative translation adjustments of $5.6 million due to the strengthening of the U.S.

dollar on the remeasurement of net insurance-related liabilities denominated in euro during the three months ended March 31, 2022;

• net loss attributable to Maiden of $1.9 million for the three months ended March 31, 2022;

(1) net unrealized losses on investment of $42.6 million resulting largely from a decrease in the fair value of $47.2 million for our fixed income investment portfolio relating to market price movements due to rising interest rates during the six months ended June 30, 2022 offset by $4.4 million related to equity method investments;

partly offset by (2) an increase in cumulative translation adjustments of $15.8 million due to strengthening of the U.S.

dollar on the remeasurement of net insurance-related liabilities denominated in euro during the six months ended June 30, 2022;

• net loss attributable to Maiden of $0.9 million for the six months ended June 30, 2022;

and partly offset by:

3 unchanged sentences

" Financial Statements and Supplementary Data" of our Annual Report on Form 10-K for a discussion of the equity instruments issued by the Company as at December 31, 2021.

Book value and diluted book value per common share at March 31, 2022 and December 31, 2021 were as follows:

($ in thousands except share and per share data) March 31, 2022 December 31, 2021

Book value and diluted book value per common share at June 30, 2022 and December 31, 2021 were as follows:

($ in thousands except share and per share data) June 30, 2022 December 31, 2021

Ending common shareholders’ equity

14 unchanged sentences

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, 2022, the Company did not repurchase any common shares under its share repurchase authorization as it is precluded from repurchasing its common shares due to its failure to pay dividends on its preference shares.

During the six months ended June 30, 2022, the Company did not repurchase any common shares under its share repurchase authorization as it is precluded from repurchasing its common shares due to its failure to pay dividends on its preference shares.

Until such time as dividends on preference shares are paid, the Company will not be able to repurchase or pay dividends on its common shares.

At March 31, 2022, the Company had a remaining authorization of $74.2 million for share repurchases.

At June 30, 2022, the Company had a remaining authorization of $74.2 million for share repurchases.

Preference Shares

On March 3, 2021, the Company's Board approved the repurchase, including the repurchase by Maiden Reinsurance within its investment guidelines, of up to $100.0 million of the Company's preference shares.

On May 6, 2021, the Company's Board of Directors approved the additional repurchase, including the repurchase by Maiden Reinsurance in accordance with its investment guidelines (as may be amended), of up to $50.0 million of the Company's preference shares from time to time at market prices in open market purchases or as may be privately negotiated.

The authorizations that were approved on March 3, 2021 and May 6, 2021 are collectively referred to as the "2021 Preference Share Repurchase Program".

The authorizations are collectively referred to as the "2021 Preference Share Repurchase Program".

The principal purpose of the 2021 Preference Share Repurchase Program is to adjust our capital structure to reflect current operations and the amount of capital required to operate Maiden Reinsurance.

2 unchanged sentences

Please refer to "Notes to Consolidated Financial Statements - Note 6.

Shareholders' Equity" under Part 1 Item 1 "Financial Information" of this Quarterly Report on Form 10-Q for further information on our preference shares, including a summary of repurchases made of the Company's preference shares during the three months ended March 31, 2022.

The Company has a remaining authorization of $3.9 million for preference share repurchases.

There were no changes in the Company’s Senior Notes at March 31, 2022 compared to December 31, 2021 and the Company did not enter into any short-term borrowing arrangements during the three months ended March 31, 2022.

There were no changes in the Company’s Senior Notes at June 30, 2022 compared to December 31, 2021 and the Company did not enter into any short-term borrowing arrangements during the six months ended June 30, 2022.

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.

The ratio of Debt to Total Capital Resources at March 31, 2022 and December 31, 2021 was computed as follows:

($ in thousands) March 31, 2022 December 31, 2021

The ratio of Debt to Total Capital Resources at June 30, 2022 and December 31, 2021 was computed as follows:

($ in thousands) June 30, 2022 December 31, 2021

Senior notes - principal amount

13 unchanged sentences

The Company is not bound to such guarantees without its express authorization.

As discussed above, at March 31, 2022, guarantees of $36.2 million have been provided to lenders by the Company on behalf of the real estate joint venture, however, the likelihood of the Company incurring any losses pertaining to project level financing guarantees was determined to be remote.

As discussed above, at June 30, 2022, guarantees of $35.2 million have been provided to lenders by the Company on behalf of the real estate joint venture, however, the likelihood of the Company incurring any losses pertaining to project level financing guarantees was determined to be remote.

Therefore, no liability has been accrued under ASC 450-20.

3 unchanged sentences

The calculation, reconciliation to nearest GAAP measure and discussion of relevant non-GAAP measures used by management are as follows:

Non-GAAP operating loss was $6.9 million for the three months ended March 31, 2022 compared to non-GAAP operating earnings of $47.3 million for the same period in 2021.

The reduction in non-GAAP operating results was largely due to:

• gains of $3.5 million from the repurchase of preference shares at market values for the three months ended March 31, 2022 compared to gains of $62.5 million for preference share repurchases during the same period in 2021;

• underwriting loss of $1.7 million for the three months ended March 31, 2022 compared to underwriting income of $1.6 million for 2021 largely due to the AmTrust Cession Adjustments which contributed an underwriting loss of $5.1 million to the reported results during the three months ended March 31, 2022;

• lower net investment income which decreased by $3.3 million compared to 2021.

The Company's non-GAAP operating results included a non-GAAP underwriting loss of $2.7 million for the three months ended March 31, 2022 compared to an underwriting loss of $8.3 million for the same period in 2021, due to 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 (including the additional ceding commission paid under the Partial Termination Amendment) as well as claims related to the European Hospital Liability Quota Share.

Non-GAAP operating earnings were $16.6 million for the three months ended June 30, 2022 compared to non-GAAP operating earnings of $13.9 million for the same period in 2021.

The improvement in the Company's non-GAAP operating results was largely due to gains of $24.7 million from the repurchase of preference shares at market values for the three months ended June 30, 2022 compared to gains of $18.7 million for preference share repurchases during the same period in 2021.

Those improved results were partly offset by a non-GAAP underwriting loss of $8.6 million for the three months ended June 30, 2022 compared to a non-GAAP underwriting loss of $2.4 million for the same period in 2021.

Non-GAAP operating earnings were $9.7 million for the six months ended June 30, 2022, compared to non-GAAP operating earnings of $61.2 million in 2021.

The reduction in the Company's non-GAAP operating results was largely due to gains of $28.2 million from the repurchase of preference shares at market values for the six months ended June 30, 2022 compared to gains of $81.2 million for preference share repurchases during the same period in 2021.

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

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

Non-GAAP operating earnings and non-GAAP diluted operating earnings 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, 2022 2021

For the Three Months Ended June 30, 2022 2021

($ in thousands except per share data)

1 unchanged sentence

Add (subtract):

Net realized and unrealized gains on investment (2,309) (8,101)

Net realized and unrealized investment gains (2,111) (849)

Foreign exchange and other (gains) losses (6,586) 1,588

Interest in loss (income) of equity method investments 3,041 (2,775)

Decrease in deferred gain on retroactive reinsurance under the LPT/ADC Agreement (3,463) (10,842)

Non-GAAP operating earnings $ 16,633 $ 13,948

Diluted earnings per share attributable to common shareholders $ 0.29 $ 0.31

Add (subtract):

Net realized and unrealized investment gains (0.02) (0.01)

Foreign exchange and other (gains) losses (0.08) 0.02

Interest in loss (income) of equity method investments 0.04 (0.03)

Decrease in deferred gain on retroactive reinsurance under the LPT/ADC Agreement (0.04) (0.13)

Non-GAAP diluted operating earnings per share available to common shareholders

$ 0.19 $ 0.16

For the Six Months Ended June 30, 2022 2021

($ in thousands except per share data)

Net income available to Maiden common shareholders $ 27,346 $ 98,562

Add (subtract):

Net realized and unrealized investment gains (4,420) (8,950)

Foreign exchange and other gains (10,535) (1,954)

Interest in income of equity method investments (1,271) (2,947)

Interest in loss (income) of equity method investments 1,770 (5,722)

Decrease in deferred gain on retroactive reinsurance under the LPT/ADC Agreement (4,463) (20,687)

Non-GAAP operating (loss) earnings $ (6,935) $ 47,301

Non-GAAP operating earnings $ 9,698 $ 61,249

Diluted earnings per share attributable to common shareholders $ 0.31 $ 1.14

Add (subtract):

Net realized and unrealized gains on investment (0.03) (0.09)

Net realized and unrealized investment gains (0.05) (0.10)

Foreign exchange and other gains (0.12) (0.02)

Interest in income of equity method investments (0.01) (0.03)

Interest in loss (income) of equity method investments 0.02 (0.07)

Decrease in deferred gain on retroactive reinsurance under the LPT/ADC Agreement (0.05) (0.24)

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

Non-GAAP diluted operating earnings per share available to common shareholders

$ 0.11 $ 0.71

Non-GAAP Operating ROACE

Non-GAAP Operating ROACE for the three months ended March 31, 2022 and 2021 was computed as follows:

For the Three Months Ended March 31,

Non-GAAP Operating ROACE for the three and six months ended June 30, 2022 and 2021 was computed as follows:

For the Three Months Ended June 30, For the Six Months Ended June 30,

($ in thousands) 2022 2021 2022 2021

Non-GAAP operating (loss) earnings $ (6,935) $ 47,301

Non-GAAP operating earnings $ 16,633 $ 13,948 $ 9,698 $ 61,249

Opening adjusted common shareholders’ equity 260,195 262,759 274,990 208,447

4 unchanged sentences

Non-GAAP Underwriting Results

The following summarizes our non-GAAP underwriting results for the three months ended March 31, 2022 and 2021:

For the Three Months Ended March 31,

The following summarizes our non-GAAP underwriting results for the three and six months ended June 30, 2022 and 2021:

For the Three Months Ended June 30, For the Six Months Ended June 30,

($ in thousands) 2022 2021 2022 2021

9 unchanged sentences

$ (8,593) $ (2,371) $ (11,248) $ (10,661)

(1) Non-GAAP underwriting loss and non-GAAP net loss and LAE for the three months ended March 31, 2022 are adjusted for prior year reserve development subject to the LPT/ADC Agreement.

(1) Non-GAAP underwriting loss and non-GAAP net loss and LAE for the three and six months ended June 30, 2022 and 2021 are adjusted for prior year reserve development subject to the LPT/ADC Agreement.

Please see "Key Financial Measures" section for the definitions of Non-GAAP underwriting loss and net loss and LAE.

The non-GAAP underwriting results include the impact of favorable prior year loss reserve development under the AmTrust Quota Share which is fully recoverable from Cavello under the LPT/ADC Agreement to show the ultimate economic benefit to the Company.

As shown in the table above, adjusted for the decrease in the deferred gain under the LPT/ADC Agreement of $1.0 million during the three months ended March 31, 2022, the non-GAAP underwriting loss was $2.7 million.

This compared to a non-GAAP underwriting loss of $8.3 million when adjusted for the decrease in the deferred gain under the LPT/ADC Agreement of $9.8 million during the three months ended March 31, 2021.

As shown in the table above, adjusted for the decrease in the deferred gain under the LPT/ADC Agreement of $3.5 million and $4.5 million during the three and six months ended June 30, 2022, respectively, the non-GAAP underwriting loss was $8.6 million and $11.2 million, respectively.

This compared to a non-GAAP underwriting loss of $2.4 million and $10.7 million, respectively, when adjusted for the decrease in the deferred gain under the LPT/ADC Agreement of $10.8 million and $20.7 million during the three and six months ended June 30, 2021, respectively.

The non-GAAP underwriting results above were due to underwriting results in the AmTrust Reinsurance segment not covered by the LPT/ADC Agreement, specifically the run-off of the AmTrust Quota Share with losses occurring after December 31, 2018 (including the additional ceding commission paid under the Partial Termination Amendment) as well as claims related to the European Hospital Liability Quota Share.

Underwriting income in the Diversified Reinsurance segment during the three months ended March 31, 2022 increased by $1.7 million compared to the same period in 2021.

Underwriting results in the Diversified Reinsurance segment during the three and six months ended June 30, 2022 were generally stable compared to the same periods in 2021.

Non-GAAP Net Loss and LAE

Adjusted for the decrease in the deferred gain for the LPT/ADC Agreement, the non-GAAP net loss and LAE for the three months ended March 31, 2022 increased by $1.0 million (2021 - $9.8 million), as these amounts included favorable loss experience for AmTrust reserves subject to the LPT/ADC Agreement which are ultimately recoverable from Cavello.

This adjustment is reflected in the calculation of non-GAAP Loss and LAE as shown below:

For the Three Months Ended March 31,

Adjusted for the decrease in the deferred gain for the LPT/ADC Agreement, the non-GAAP net loss and LAE for the three and six months ended June 30, 2022 increased by $3.5 million and $4.5 million, respectively (2021 - $10.8 million and $20.7 million, respectively), due to favorable loss experience for AmTrust reserves subject to the LPT/ADC Agreement which are ultimately recoverable from Cavello.

This adjustment is reflected in the calculation of non-GAAP Loss and LAE below:

For the Three Months Ended June 30, For the Six Months Ended June 30,

($ in thousands) 2022 2021 2022 2021

1 unchanged sentence

$ 6,874 $ (5,327) $ 4,591 $ (2,968)

decrease in deferred gain on retroactive reinsurance for the LPT/ADC Agreement (1,000) (9,845)

favorable prior year loss development subject to the LPT/ADC Agreement

(3,463) (10,842) (4,463) (20,687)

Non-GAAP net loss and LAE

$ 10,337 $ 5,515 $ 9,054 $ 17,719

Adjusted for the impact of favorable prior year loss development on AmTrust reserves subject to the LPT/ADC Agreement of $1.0 million during the three months ended March 31, 2022 (2021 - $9.8 million), non-GAAP net loss and LAE was $(1.3) million (2021 - $12.2 million).

Adjusted for the impact of favorable prior year loss development on AmTrust reserves subject to the LPT/ADC Agreement of $3.5 million and $4.5 million during the three and six months ended June 30, 2022, respectively (2021 - $10.8 million and $20.7 million, respectively), non-GAAP net loss and LAE was $10.3 million and $9.1 million, respectively (2021 - $5.5 million and $17.7 million, respectively).

Adjusted Shareholders' Equity, Adjusted Total Capital Resources, Adjusted Book Value per Common Share, and Ratio of Debt to Total Adjusted Capital Resources

The Adjusted Shareholders' Equity, Adjusted Total Capital Resources and Adjusted Book Value per Common Share at March 31, 2022 and December 31, 2021 reflect the addition of the unamortized deferred gain under the LPT/ADC Agreement to the GAAP shareholders' equity as depicted in the computations below.

The deferred gain under the LPT/ADC Agreement was $44.9 million at March 31, 2022 compared to $45.9 million at December 31, 2021, and relates to loss reserves subject to that agreement that are fully recoverable from Cavello.

The decrease in the unamortized deferred gain under the LPT/ADC Agreement for the three months ended March 31, 2022 is attributable to $1.0 million in loss and LAE recognized as favorable loss development in the Company's GAAP income statement subject to the LPT/ADC Agreement.

The Adjusted Shareholders' Equity, Adjusted Total Capital Resources and Adjusted Book Value per Common Share at June 30, 2022 and December 31, 2021 reflect the addition of the unamortized deferred gain under the LPT/ADC Agreement to the GAAP shareholders' equity as depicted in the computations below.

The deferred gain under the LPT/ADC Agreement was $41.4 million at June 30, 2022 compared to $45.9 million at December 31, 2021, and relates to loss reserves subject to that agreement that are fully recoverable from Cavello.

The decrease in the unamortized deferred gain under the LPT/ADC Agreement for the six months ended June 30, 2022 is attributable to $4.5 million in loss and LAE recognized as favorable loss development in the Company's GAAP income statement subject to the LPT/ADC Agreement.

We believe the inclusion of this unamortized deferred gain in these metrics better reflects the ultimate economic benefit of the LPT/ADC Agreement, which will improve the Company's shareholders' equity over the settlement period under the terms of the agreement.

The Adjusted Shareholders' Equity, Adjusted Total Capital Resources and Adjusted Book Value per Common Share at December 31, 2021 also reflected the LP Investment Adjustment of $4.1 million, which pertained to the equity accounting related to the fair value of certain hedged liabilities in an equity method investment held by the Company wherein the ultimate realizable value of the asset supporting the hedged liabilities was not recognized at fair value until its sale in the three months

ended March 31, 2022.

We believe that this adjustment recognized the future realizable value and reflected the ultimate economic benefit of this investment which was sold at a realized gain in the three months ended March 31, 2022 and improved the Company's shareholders' equity over the hedged contract period of the investment.

We believe that this adjustment recognized the future realizable value and reflected the ultimate economic benefit of this investment which was sold at a realized gain in the six months ended June 30, 2022 and improved the Company's shareholders' equity over the hedged contract period of the investment.

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 under the LPT/ADC Agreement at March 31, 2022 and December 31, 2021 as well as the LP Investment Adjustment for realizable value of intangible asset in a limited partnership investment at December 31, 2021:

($ in thousands) March 31, 2022 December 31, 2021 Change Change %

The following table computes adjusted shareholders' equity and adjusted total capital resources by recognizing the unamortized deferred gain under the LPT/ADC Agreement at June 30, 2022 and December 31, 2021 as well as the LP Investment Adjustment for realizable value of intangible asset in a limited partnership investment at December 31, 2021:

($ in thousands) June 30, 2022 December 31, 2021 Change Change %

Preference shares

12 unchanged sentences

Reconciliation of 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 under the LPT/ADC Agreement as well as the LP Investment Adjustment for realizable value of intangible asset in limited partnership investment at March 31, 2022 and December 31, 2021 was computed as follows:

March 31, 2022 December 31, 2021

The adjusted book value per common share as reconciled for the recognition of the unamortized deferred gain under the LPT/ADC Agreement as well as the LP Investment Adjustment for realizable value of intangible asset in limited partnership investment at June 30, 2022 and December 31, 2021 was computed as follows:

June 30, 2022 December 31, 2021

Book value per common share

7 unchanged sentences

This measure is calculated using the total principal amount of debt divided by the sum of adjusted total capital resources as computed in the table above.

The ratio of Debt to Adjusted Total Capital Resources at March 31, 2022 and December 31, 2021 was computed as follows:

($ in thousands) March 31, 2022 December 31, 2021

The ratio of Debt to Adjusted Total Capital Resources at June 30, 2022 and December 31, 2021 was computed as follows:

($ in thousands) June 30, 2022 December 31, 2021

Senior notes - principal amount

15 unchanged sentences

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, 2022, no such hedges or hedging strategies were in force or had been entered into.

At June 30, 2022, 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.

1 unchanged sentence

The effect of the translation adjustments for foreign operations is included in AOCI.

Net foreign exchange gains of $3.9 million were generated during the three months ended March 31, 2022 compared to net foreign exchange gains of $3.4 million for the three months ended March 31, 2021.

Net foreign exchange gains of $7.9 million and $11.9 million were generated during the three and six months ended June 30, 2022, respectively, compared to net foreign exchange losses of $1.2 million and gains of $2.2 million for the three and six months ended June 30, 2021, respectively.

Our non-USD denominated liabilities at June 30, 2022 included reserve for net loss and LAE of $354.5 million.

There was no new business written in non-USD currencies during the three and six months ended June 30, 2022.

We held $53.8 million of non-USD denominated funds withheld receivable at June 30, 2022.

Effects of Inflation

4 unchanged sentences

Off-Balance Sheet Arrangements

At March 31, 2022, we did not have any off-balance sheet arrangements as defined by Item 303(a) (4) of Regulation S-K.

At June 30, 2022, we did not have any off-balance sheet arrangements as defined by Item 303(a) (4) of Regulation S-K.

Recent Accounting Pronouncements

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis