What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-09 compared with 2022-08-09 · 339 added, 340 removed, 896 unchanged (43% of the section changed)

38 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 $232.4 million as of June 30, 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 $111.0 million or $1.27 per common share at June 30, 2022.

DTA (before valuation allowance) of $120.8 million or $1.39 per common share at September 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.

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Additionally, we provide reinsurance contracts to other (re)insurers to mitigate some of their risk of future adverse development (adverse development cover, or “ADC”) on insurance risks relating to prior accident years.

We believe the formation of GLS is highly complementary to our overall longer-term strategy.

and will produce risk-adjusted returns in excess of our debt cost of capital.

We believe the formation of GLS is highly complementary to our overall longer-term strategy and will produce risk-adjusted returns in excess of our debt cost of capital.

In addition, while we anticipate profitable growth from the GLS portfolio as it develops, we expect our required capital to continue to decline as insurance risk incurred by GLS will be more than offset by the run-off of insurance liabilities from our prior reinsurance strategies.

2 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 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 and its subsidiaries have completed additional transactions in 2022 and as of September 30, 2022, GLS and its subsidiaries have insurance related liabilities totaling $29.5 million which included total reserves of $16.3 million, derivative liability on retroactive reinsurance of $9.0 million, and deferred gains on retroactive reinsurance of $4.1 million.

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

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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.

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

On November 9, 2022, subject to the terms and conditions of the preference shares including the affirmative vote of two-thirds of our preference shareholders, we announced our plans to exchange all outstanding preference shares for our common shares.

As part of this transaction, we estimate that our book value per common share will increase by approximately $0.82 in the fourth quarter of 2022 subject to the determination of the final value of the preference shares and the exchange price of the common shares.

Please refer to "Notes to Condensed Consolidated Financial Statements - Note 14.

Subsequent Events" under Item 8 "Financial Statements and Supplementary Data" in Part I Item 1.

"Financial Information" for further information.

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

Shareholders' Equity" under Item 8 "Financial Statements and Supplementary Data" in Part I Item 1.

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

For the Three Months Ended June 30, 2022 2021 Change

Three and Nine Months Ended September 30, 2022 and 2021 Financial Highlights

For the Three Months Ended September 30, 2022 2021 Change

Summary Consolidated Statement of Income Data (unaudited):

($ in thousands except per share data)

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

Net loss $ (8,160) $ (3,140) $ (5,020)

Gain from repurchase of preference shares — 6,004 (6,004)

Net income attributable to Maiden common shareholders 25,752 26,826 (1,074)

Net (loss) income attributable to Maiden common shareholders (8,160) 2,864 (11,024)

Basic and diluted earnings per common share:

Net income attributable to common shareholders (2)

Net (loss) income attributable to common shareholders (2)

(0.09) 0.03 (0.12)

2 unchanged sentences

Net premiums earned 12,251 15,030 (2,779)

Underwriting (loss) income (3)

Underwriting loss (3)

(12,627) (3,649) (8,978)

Net investment income 7,667 7,278 389

Net investment results (13)

4,692 5,730 (1,038)

Non-GAAP measures:

Non-GAAP operating earnings (1)

Non-GAAP operating loss (1)

(21,060) (3,114) (17,946)

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

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

(0.24) (0.04) (0.20)

1 unchanged sentence

(32.6) % (4.5) % (28.1)

For the Six Months Ended June 30, 2022 2021 Change

For the Nine Months Ended September 30, 2022 2021 Change

Summary Consolidated Statement of Income Data (unaudited):

11 unchanged sentences

(19,412) 6,377 (25,789)

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

Net investment results (13)

21,576 37,521 (15,945)

Non-GAAP measures:

Non-GAAP operating earnings (1)

Non-GAAP operating (loss) earnings (1)

(11,362) 58,135 (69,497)

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

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

(0.13) 0.67 (0.80)

1 unchanged sentence

(5.9) % 32.3 % (38.2)

June 30, 2022 December 31, 2021 Change

September 30, 2022 December 31, 2021 Change

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

27 unchanged sentences

42.0 % 37.7 % 4.3

(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.

(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.

See " Key Financial Measures " for additional information.

(2) Please refer to " Notes to Condensed Consolidated Financial Statements (unaudited) Note 12.

Earnings per Common Share " for the calculation of basic and diluted income per common share.

Earnings per Common Share " for the calculation of basic and diluted income or loss per common share.

(3) Underwriting income or loss is a non-GAAP measure and is calculated as net premiums earned plus other insurance revenue less net loss and LAE, commission and other acquisition expenses and general and administrative expenses directly related to underwriting activities.

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(12) Accumulated dividends per common share includes the cumulative sum of dividends declared and paid in the past on the Company's issued common shares since inception.

(13) Net investment results include the sum of net investment income, net realized and unrealized gains (losses), and interest in income (loss) of equity method investments.

Key Financial Measures

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These non-GAAP financial measures are:

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

Non-GAAP operating earnings (loss) and non-GAAP diluted operating earnings (loss) 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.

2 unchanged sentences

GAAP net income.

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:

Non-GAAP operating earnings (loss) 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;

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"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 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.

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 nine months ended September 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.

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Results of Operations

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,

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

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2022 2021 2022 2021

19 unchanged sentences

6,637 7,477 20,871 24,596

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

Net realized and unrealized investment (losses) gains (1,572) (937) 2,848 8,013

Foreign exchange and other gains 8,586 4,116 19,121 6,070

Interest and amortization expenses (4,833) (4,832) (14,498) (14,495)

1 unchanged sentence

Interest in (loss) income of equity method investments (373) (810) (2,143) 4,912

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

Net (loss) income (8,160) (3,140) (9,047) 14,258

Gain from repurchase of preference shares — 6,004 28,233 87,168

Net income available to Maiden common shareholders $ 25,752 $ 26,826 $ 27,346 $ 98,562

Net (loss) income available to Maiden common shareholders $ (8,160) $ 2,864 $ 19,186 $ 101,426

(1) Underwriting related general and administrative expenses is a non-GAAP measure.

2 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 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.

Net loss available to Maiden common shareholders for the three months ended September 30, 2022 was $8.2 million compared to net income of $2.9 million for the same period in 2021.

The net income for the three months ended September 30, 2021 included a gain from repurchase of our preference shares of $6.0 million.

We did not repurchase any preference shares in the three months ended September 30, 2022;

excluding the gain on the repurchase of our preference shares for the same period in 2021, net loss was $3.1 million for the third quarter of 2021 compared to a net loss of $8.2 million for the third quarter of 2022.

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

• underwriting loss of $12.6 million for the three months ended September 30, 2022 compared to underwriting loss of $3.6 million in the same period in 2021 largely due to:

◦ adverse prior year loss development of $0.8 million in the third quarter of 2022 compared to favorable prior year loss development of $5.4 million during the same period in 2021;

◦ on a current accident year basis, underwriting loss of $11.8 million for the three months ended September 30, 2022 compared to an underwriting loss of $9.0 million for the same period in 2021.

• total income from investment activities was $4.7 million for the three months ended September 30, 2022 compared to $5.7 million for the same period in 2021 which was comprised of:

◦ net investment income decreased to $6.6 million for the three months ended September 30, 2022 compared to $7.5 million for the same period in 2021;

◦ realized and unrealized investment losses were $1.6 million for the three months ended September 30, 2022 compared to losses of $0.9 million for the same period in 2021;

◦ interest in loss of equity method investments was $0.4 million for the three months ended September 30, 2022 compared to loss of $0.8 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.

• corporate general and administrative expenses decreased to $4.1 million for the three months ended September 30, 2022 compared to $4.7 million for the same period in 2021;

• foreign exchange and other gains increased to $8.6 million for the three months ended September 30, 2022, compared to foreign exchange and other gains of $4.1 million for the same period in 2021.

Net income available to Maiden common shareholders for the nine months ended September 30, 2022 was $19.2 million compared to net income available to Maiden common shareholders of $101.4 million for the same period in 2021.

The net decrease in results for the nine months ended September 30, 2022 compared to the same period in 2021 was primarily due to lower gains in 2022 from the repurchase of our preference shares which were $28.2 million for the nine months ended September 30, 2022 compared to $87.2 million for the same period in 2021.

Excluding the gain on the repurchase of our Preference Shares, net loss for the nine months ended September 30, 2022 was $9.0 million compared to net income of $14.3 million for the same period in 2021.

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

• underwriting loss of $19.4 million in the nine months ended September 30, 2022 compared to underwriting income of $6.4 million in the same period in 2021 largely due to:

• favorable prior year loss development of $5.5 million for the nine months ended September 30, 2022 compared to favorable development of $23.7 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 $24.9 million for the nine months ended September 30, 2022 compared to an underwriting loss of $17.3 million for the same period in 2021 primarily due to results within the AmTrust Reinsurance segment as discussed below and further within the segment analysis;

• total income from investment activities were $21.6 million for the nine months ended September 30, 2022 compared to $37.5 million for the same period in 2021 which was comprised of:

• net investment income decreased to $20.9 million for the nine months ended September 30, 2022 compared to $24.6 million for the same period in 2021, primarily due to the decline in average fixed income assets of 29.0%;

• realized and unrealized investment gains decreased to $2.8 million for the nine months ended September 30, 2022 compared to gains of $8.0 million for the same period in 2021;

• interest in loss of equity method investments of $2.1 million for the nine months ended September 30, 2022 compared to an interest in income of equity method investments of $4.9 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.

• corporate general and administrative expenses decreased to $15.4 million for the nine months ended September 30, 2022 compared to $21.6 million for the same period in 2021;

• foreign exchange and other gains increased to $19.1 million for the nine months ended September 30, 2022 compared to foreign exchange and other gains of $6.1 million for the same period in 2021.

Net Premiums Written

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

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

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

($ in thousands) Total Total $

3 unchanged sentences

Total $ 5,222 $ 6,953 $ (1,731)

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

For the Nine Months Ended September 30, 2022 2021 Change in

($ in thousands) Total Total $

3 unchanged sentences

Total $ (1,915) $ 7,518 $ (9,433)

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.

Net premiums written for the three and nine months ended September 30, 2022 decreased to $5.2 million and $(1.9) million, respectively, compared to net premiums written of $7.0 million and $7.5 million for the same respective periods in 2021:

• Premiums written in the Diversified Reinsurance segment increased by $0.2 million and $6.0 million for the three and nine months ended September 30, 2022, respectively, compared to the same respective periods in 2021.

The growth for the third quarter of 2022 was largely due to direct premiums written by Maiden LF and Maiden GF which increased compared to the third quarter of 2021.

The growth for the nine months ended September 30, 2022 was 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, and direct premiums written by Maiden LF and Maiden GF which increased compared to 2021.

• Negative written premiums in the AmTrust Reinsurance segment are primarily related to $15.8 million of AmTrust Cession Adjustments for the nine months ended September 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 $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

Net premiums earned decreased by $2.8 million or 18.5% and $16.3 million or 40.6% for the three and nine months ended September 30, 2022, respectively, compared to the same respective 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 nine months ended September 30, 2022 and 2021:

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

($ in thousands) Total Total $ %

4 unchanged sentences

$ 12,251 $ 15,030 $ (2,779) (18.5) %

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

For the Nine Months Ended September 30, 2022 2021 Change in

($ in thousands) Total Total $ %

4 unchanged sentences

$ 23,816 $ 40,106 $ (16,290) (40.6) %

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 .

Net premiums earned in the AmTrust Reinsurance segment for the three and nine months ended September 30, 2022 decreased by $2.2 million and $15.6 million compared to the same respective 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 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.

Net premiums earned in the Diversified Reinsurance segment for the three and nine months ended September 30, 2022 decreased by $0.6 million or 7.8% and $0.7 million or 3.4% 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 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.

Total net investment income decreased by $0.8 million or 11.2% and decreased by $3.7 million or 15.1% for the three and nine months ended September 30, 2022, respectively, compared to the same respective periods in 2021.

The decline in average aggregate fixed income assets of 26.0% and 29.0% for the three and nine months ended September 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 2.2% and 2.0% for the three and nine months ended September 30, 2022, respectively, compared to 1.9% and 1.9% for the three and nine months ended September 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,

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

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2022 2021 2022 2021

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GAAP consolidated financial statements.

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.

Net Realized and Unrealized Investment Gains (Losses)

Net realized and unrealized investment losses of $1.6 million and gains of $2.8 million were recognized for the three and nine months ended September 30, 2022, respectively, compared to net realized and unrealized investment losses of $0.9 million and net realized and unrealized investment gains of $8.0 million for the same respective periods in 2021.

Realized gains for the nine months ended September 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 nine months ended September 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 losses and gains for the three and nine months ended September 30, 2021 included the recognition of $3.0 million in unrealized losses and $0.9 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,

The Company had interest in loss of equity method investments of $0.4 million and $2.1 million for the three and nine months ended September 30, 2022, respectively, compared to interest in loss of equity method investments of $0.8 million and an interest in income of $4.9 million for the same respective periods in 2021.

Equity method investments consist of hedge fund investments of $15.4 million, real estate investments of $44.9 million and other investments of $19.8 million as of September 30, 2022.

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

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2022 2021 2022 2021

4 unchanged sentences

Net Loss and LAE

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.

Net loss and LAE increased by $6.9 million and $14.5 million during the three and nine months ended September 30, 2022, respectively, compared to the same respective periods in 2021 due to net adverse prior year loss development in the AmTrust Reinsurance Segment (excluding the favorable impact of AmTrust Cession Adjustments) compared to favorable development 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 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.

Net loss and LAE for the third quarter of 2022 was impacted by net adverse prior year loss development of $0.8 million compared to net favorable prior year loss development of $5.4 million for the same period in 2021.

Net loss and LAE for nine months ended September 30, 2022 was impacted by net favorable prior year loss development of $5.5 million compared to net favorable prior year loss development of $23.7 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 primarily 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 $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.

Commission and other acquisition expenses decreased by $0.9 million or 14.5% and $6.3 million or 33.1% for the three and nine months ended September 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 $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,

Total general and administrative expenses decreased by $0.2 million, or 2.4% for the three months ended September 30, 2022, compared to the same period in 2021.

Total general and administrative expenses decreased by $4.9 million, or 16.5% for the nine months ended September 30, 2022, compared to the same period in 2021 primarily due to lower payroll and equity-based incentive staff compensation costs and lower regulatory and professional fees incurred.

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

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2022 2021 2022 2021

6 unchanged sentences

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 and $9.7 million for the three and six months ended June 30, 2022 and 2021, respectively.

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 $14.5 million for the three and nine months ended September 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 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.

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

Foreign Exchange and Other Gains

Net foreign exchange and other gains amounted to $8.6 million and $19.1 million during the three and nine months ended September 30, 2022, respectively, compared to net foreign exchange and other gains of $4.1 million and $6.1 million for the same respective periods in 2021.

At September 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 September 30, 2022 included net loss reserves of $281.7 million.

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

Our foreign currency asset exposures at September 30, 2022 included $185.3 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 $24.9 million of equity method real estate investments denominated in Canadian dollars.

Net foreign exchange gains of $8.6 million and $20.5 million for the three and nine months ended September 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 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.

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.

Net foreign exchange gains of $4.1 million and $6.3 million during the three and nine months ended September 30, 2021 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.

Underwriting Results by Reportable Segment

Diversified Reinsurance Segment

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,

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

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2022 2021 2022 2021

13 unchanged sentences

(1,901) (1,583) (7,007) (6,190)

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 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 $

International

$ 5,995 $ 5,028 $ 967

Total Diversified Reinsurance

$ 5,995 $ 5,018 $ 977

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

($ in thousands) Total Total $

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

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

Underwriting income $ 40 $ 2,061 $ 264 $ 595

Premiums — Gross premiums written increased by $0.5 million and $6.1 million for the three and nine months ended September 30, 2022, respectively, compared to the same respective periods in 2021.

Gross premiums written for the nine months ended September 30, 2022 increased 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 increased by $0.8 million or 14.9% and $1.2 million or 7.4% during the three and nine months ended September 30, 2022, respectively, compared to the same respective periods in 2021.

Net premiums written increased by $0.2 million and $6.0 million during the three and nine months ended September 30, 2022, respectively, compared to the same respective periods in 2021.

Net premiums written for the nine months ended September 30, 2022 increased primarily 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.

Net premiums earned decreased by $0.6 million or 7.8% and $0.7 million or 3.4% during the three and nine months ended September 30, 2022, respectively, compared to the same respective periods in 2021.

Other Insurance Revenue — Other insurance revenue increased by $0.2 million and decreased by $0.1 million for the three and nine months ended September 30, 2022, respectively, compared to the same respective periods in 2021.

Other insurance revenue includes fee related income earned from our GLS business, fair value changes in underwriting-related derivatives, and fee income derived from our IIS business not directly associated with premium revenue assumed by the Company as specified in the table below.

The decline of other insurance revenue from International business for the three and nine months ended September 30, 2022 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 nine months ended September 30, 2022 and 2021:

For the Three Months Ended September 30, 2022 2021 Change

($ in thousands)

3 unchanged sentences

Total Diversified Reinsurance $ 368 $ 138 $ 230

For the Six Months Ended June 30, 2022 2021 Change

For the Nine Months Ended September 30, 2022 2021 Change

($ in thousands)

3 unchanged sentences

Total Diversified Reinsurance $ 888 $ 946 $ (58)

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.

Net Loss and LAE — Net loss and LAE increased by $1.4 million and decreased by $0.3 million for the three and nine months ended September 30, 2022, respectively, compared to the same respective periods in 2021 primarily due to lower favorable prior year development on German Auto programs and adverse development in European Capital Solutions .

The net loss and LAE was impacted by net favorable prior year loss development of $0.6 million and $2.0 million for the three and nine months ended September 30, 2022 , respectively, compared to favorable prior year development of $1.7 million and $2.6 million for the same respective periods in 2021.

The net favorable loss development for the three and nine months ended September 30, 2022 was driven by German Auto and GLS partly offset by adverse development in European Capital Solutions.

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.

Commission and Other Acquisition Expenses — Commission and other acquisition expenses decreased by $0.1 million or 1.9% and $1.0 million or 8.4% for the three and nine months ended September 30, 2022, respectively, compared to the same respective periods in 2021.

The lower commission expense was largely related to an auto customer program that went into run-off on July 31, 2021.

General and Administrative Expenses — General and administrative expenses increased by $0.3 million or 20.1% for the three months ended September 30, 2022 and increased by $0.8 million or 13.2% for the nine months ended September 30, 2022, respectively, compared to the same respective periods in 2021.

AmTrust Reinsurance Segment

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;

The AmTrust Reinsurance segment reported an underwriting loss of $12.7 million and $19.7 million during the three and nine months ended September 30, 2022, respectively, compared to an underwriting loss of $5.7 million and underwriting income of $5.8 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 nine months ended September 30, 2022;

excluding these adjustments, the AmTrust Reinsurance segment had an underwriting loss of $14.6 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,

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

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2022 2021 2022 2021

12 unchanged sentences

Underwriting (loss) income $ (12,667) $ (5,710) $ (19,676) $ 5,782

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

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

For the Three Months Ended September 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

$ (805) $ 1,137 $ (1,942)

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

For the Nine Months Ended September 30, 2022 2021 Change in

($ in thousands) Total Total $

7 unchanged sentences

$ (18,520) $ (3,082) $ (15,438)

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:

The negative gross and net premiums written for the nine months ended September 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 and six months ended June 30, 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 nine months ended September 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 $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

Net premiums earned decreased by $2.2 million and $15.6 million for the three and nine months ended September 30, 2022, respectively, compared to the same respective periods in 2021 primarily due to the AmTrust Cession Adjustments as discussed above and due to termination of the AmTrust Quota Share and European Hospital Liability Quota Share as of January 1, 2019.

Excluding AmTrust Cession Adjustments of $15.8 million, net premiums earned were $19.6 million for the nine months ended September 30, 2022 compared to $19.4 million for the same period in 2021.

There were negative premiums earned for the three and nine months ended September 30, 2022 and 2021 in Small Commercial Business due to premium adjustments on such policies in the AmTrust Quota Share.

The tables below provide detail on net premiums earned for the three and nine months ended September 30, 2022 and 2021:

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

($ in thousands) Total Total $

7 unchanged sentences

$ 5,319 $ 7,509 $ (2,190)

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

For the Nine Months Ended September 30, 2022 2021 Change in

($ in thousands) Total Total $

7 unchanged sentences

$ 3,804 $ 19,383 $ (15,579)

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.

Net Loss and LAE — Net loss and LAE increased by $5.5 million and $14.7 million for the three and nine months ended September 30, 2022, respectively, compared to the same respective periods in 2021 primarily due to net adverse prior year loss development (excluding the favorable impact of AmTrust Cession Adjustments) in 2022 compared to favorable development in 2021 as discussed below.

Net adverse prior year loss development was $1.4 million during the three months ended September 30, 2022, compared to favorable prior year loss development of $3.7 million for the same period in 2021.

Net adverse prior year loss development for the three months ended September 30, 2022 was driven by unfavorable movements in European Hospital Liability due to higher than expected loss emergence in Italian Hospital Liability policies as well as the agreed exit cost of $3.7 million (€3.4 million) for the commutation of French Hospital Liability policies as described in "Note 10.

Related Party Transactions";

partly offset by favorable runoff of Workers Compensation business.

Net favorable prior year loss development for the three months ended September 30, 2021 was driven by favorable development in Workers Compensation and Commercial Auto Liability.

Net favorable prior year loss development was $3.5 million during the nine months ended September 30, 2022, compared to net favorable prior year loss development of $21.1 million for the same period in 2021.

Net favorable prior year loss development of $3.5 million during the nine months ended September 30, 2022 included $5.3 million of favorable loss reserve adjustments related to the AmTrust Cession Adjustments.

Excluding these adjustments, there was adverse development of $1.8 million for the nine months ended September 30, 2022 driven by unfavorable movements in European Hospital Liability due to higher than expected loss emergence in Italian Hospital Liability policies as well as the agreed exit cost of $3.7 million (€3.4 million) for the commutation of French Hospital Liability policies as described in "Note 10.

Related Party Transactions".

This was partly offset by favorable runoff of Workers Compensation business.

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

Commission and Other Acquisition Expenses — Commission and other acquisition expenses decreased by $0.8 million and $5.4 million for the three and nine months ended September 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.

Excluding AmTrust Cession Adjustments of $5.4 million, commission and other acquisition expenses were $7.5 million for the nine months ended September 30, 2022 compared to $7.5 million for the same period in 2021.

General and Administrative Expenses — General and administrative expenses increased by $0.1 million or 28.0% and $0.5 million or 27.8% for the three and nine months ended September 30, 2022, respectively, compared to the same respective periods in 2021 primarily due to higher 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 June 30, 2022, the Company had investable assets of $1.5 billion compared to $1.7 billion as of December 31, 2021.

As of September 30, 2022, the Company had investable assets of $1.4 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.

8 unchanged sentences

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.

Subsequent to that approval, Maiden Reinsurance has paid $12.5 million in dividends to Maiden NA during the nine months ended September 30, 2022.

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.

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.

5 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 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.

Our expanded asset management strategy can be impacted by both investment specific and broader financial market conditions and may not produce the expected liquidity and cash flows these investments are designed to achieve, or the timing thereof may also be impacted by those factors.

At September 30, 2022 and December 31, 2021, unrestricted cash and cash equivalents and unrestricted fixed maturity investments were $72.0 million and $81.1 million, respectively.

The decrease of $9.1 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,

• $40.0 million utilized for net purchases of other investments and equity securities, and

• $14.3 million for interest payments on the Senior Notes, partly offset by:

• $45.0 million of collateral released by AmTrust, and

• $5.8 million for net proceeds 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 six months ended June 30, 2022 and 2021:

For the Six Months Ended June 30, 2022 2021

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

For the Nine Months Ended September 30, 2022 2021

($ in thousands)

7 unchanged sentences

(2,152) (333)

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

Total increase (decrease) in cash, restricted cash and cash equivalents $ 6,411 $ (84,865)

Cash Flows used in Operating 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 used in operating activities for the nine months ended September 30, 2022 were $99.8 million compared to cash flows used in operating activities of $299.8 million for the nine months ended September 30, 2021, a decrease of $199.9 million from the settlement of balances due to AmTrust through reduction of funds held receivable rather than cash.

The operating cash flows used in operations for the nine months ended September 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 $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.

Net cash provided by investing activities was $119.4 million for the nine months ended September 30, 2022 compared to $344.2 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 nine months ended September 30, 2022 and 2021 as well as repurchase preference shares during the nine months ended September 30, 2022 and 2021.

For the nine months ended September 30, 2022, the proceeds from the sales, maturities and calls exceeded the purchases of fixed maturity securities by $153.6 million compared to net proceeds of $418.5 million for fixed maturity securities in the same period in 2021.

There was also net proceeds of equity method investments of $5.8 million partly offset by $40.0 million utilized for net purchases of other investments and equity securities during the nine months ended September 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.

Cash flows used in financing activities were $11.0 million for the nine months ended September 30, 2022 compared to $129.0 million during the nine months ended in 2021 due to the repurchase of the Company's preference shares.

During the nine months ended September 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 9,075,673 preference shares repurchased by the Company during the same period in 2021 for an aggregate total consideration of $132.2 million.

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

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

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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 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.

At September 30, 2022 and December 31, 2021, restricted cash and cash equivalents and fixed maturity investments used as collateral were $372.5 million and $582.1 million, respectively.

This collateral represents 83.8% and 87.8% of the fair value of total fixed maturity investments, cash, restricted cash and equivalents at September 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 June 30, 2022.

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

June 30, 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 September 30, 2022.

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

September 30, 2022 December 31, 2021

($ in thousands)

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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 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.

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

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

Cash & Cash Equivalents

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

At September 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 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)

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 September 30, 2022 and December 31, 2021, respectively:

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

Average duration (2)

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(2) Average duration in years.

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

During the nine months ended September 30, 2022, the yield on the 10-year U.S.

Treasury bond increased by 231 basis points to 3.83%.

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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 six months ended June 30, 2022, reflecting concerns about ongoing inflation emanating from the combination of:

Treasury yield curve experienced a material upward shift during the nine months ended September 30, 2022, reflecting concerns of the U.S.

Federal Reserve about ongoing inflation emanating from the combination of:

1) the strength of the U.S.

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federal government to support the economy;

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 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.

and 4) the anticipated monetary policy responses required to temper these factors.

Central banks globally have responded in similar fashion and continue to suggest additional interest rate increases may occur.

The movement in the market values of our fixed maturity portfolio during the nine months ended September 30, 2022 generated net unrealized losses of $62.1 million which reduced our book value per common share by $0.71 during that period.

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

and globally is underway and appear likely to continue for at least the near term.

and globally appears likely to continue for at least the near term.

Our investment portfolios, in particular our fixed maturity portfolio, may be adversely impacted by unfavorable market conditions caused by these measures, which could cause continued volatility in our results of operations and negatively impact our financial condition.

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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.

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

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.

As of September 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 $11.8 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 June 30, 2022 and December 31, 2021, these respective durations in years were as follows:

June 30, 2022 December 31, 2021

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

September 30, 2022 December 31, 2021

Fixed maturities and cash and cash equivalents

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Reserve for loss and LAE - net of LPT/ADC Agreement reserves 0.8 1.4

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.

During the nine months ended September 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 0.7 year to 5.1 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 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.

At September 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 September 30, 2022, the duration of our loss reserves net of the LPT/ADC Agreement was lower than the duration of our fixed maturity investment portfolio driven by the commutation of certain European Hospital Liability policies which were long-tailed in nature and were not subject to the LPT/ADC Agreement.

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 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

At September 30, 2022 and December 31, 2021, 28.2% and 23.6%, respectively, of our fixed income investments are comprised of floating rate securities.

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

September 30, 2022 December 31, 2021

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

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

At September 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 June 30, 2022 and December 31, 2021 were as follows:

June 30, 2022 December 31, 2021

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

September 30, 2022 December 31, 2021

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

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Agency MBS $ 66,192 100.0 % $ 98,790 100.0 %

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

agency MBS comprise 17.8% of our fixed maturity investment portfolio at September 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 June 30, 2022 and December 31, 2021, 98.9% and 97.8%, respectively, of our fixed maturity investments consisted of investment grade securities.

At September 30, 2022 and December 31, 2021, 98.8% 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.

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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 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

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

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

Corporate bonds

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(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 June 30, 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 September 30, 2022;

of which 100.0% are euro denominated, with 54.6% in the Consumer Sector and 19.3% in the Financial Institutions sector.

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

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

($ in thousands)

Electricite de France, 4.625%, Due 9/11/2024 $ 14,305 3.3 % BBB+

Anheuser-Busch INBEV NV, 2.875%, Due 9/25/2024 $ 9,795 2.6 % BBB+

Carlsberg Breweries A/S, 2.5%, Due 5/28/2024 10,561 2.4 % BBB

Chubb Ina Holdings Inc., 1.55%, Due 3/15/2028 5,655 1.5 % A

Kraft Heinz Foods Co., 1.5%, Due 5/24/2024 5,558 1.5 % BBB-

Glencore Finance (Europe) LTD, 1.875%, Due 9/13/2023 4,827 1.3 % BBB+

Santander Consumer Finance SA, 1.125%, Due 10/9/2023 4,806 1.3 % 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 4,800 1.3 % A-

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

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

America Movil SAB DE CV, 1.5%, Due 3/10/2024 4,789 1.3 % A-

Utah Acquisition Sub Inc., 2.25%, Due 11/22/2024 4,712 1.3 % BBB-

Molson Coors Beverage Co., 1.25%, Due 7/15/2024 4,674 1.2 % BBB-

PPG Industries Inc., 0.875%, Due 11/3/2025 4,481 1.2 % A-

$ 54,097 14.5 %

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

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

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

dollar denominated securities:

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

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

dollar denominated corporate bonds $ 117,569 50.3 % $ 147,740 55.9 %

dollar denominated collateralized loan obligations $ 90,514 48.9 % $ 113,399 42.9 %

dollar denominated corporate bonds 83,788 45.2 % 147,740 55.9 %

government bonds 10,981 5.9 % 3,275 1.2 %

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dollar denominated securities $ 185,283 100.0 % $ 264,414 100.0 %

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

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

At September 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 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.

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

At September 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.

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 June 30, 2022 and December 31, 2021:

June 30, 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 September 30, 2022 and December 31, 2021:

September 30, 2022 December 31, 2021

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

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The Company does not employ any credit default protection against any of the fixed maturities held in non-U.S.

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

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

Other Investments, Equity Securities and Equity Method Investments

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

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

Our allocation to alternative investments increased to 37.2% of our total cash and investments as of September 30, 2022 compared to 25.4% as of December 31, 2021;

and increased to 80.5% of our total shareholders' equity as of September 30, 2022 compared to 58.7% as of December 31, 2021.

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

September 30, 2022 December 31, 2021

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

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"Financial Information" of this Report on Form 10-Q.

C ertain of the Company's investments in limited partnerships are related to real estate joint ventures with interests in multi-property projects with varying strategies ranging from the development of properties to the ownership of income-producing properties.

In certain of these joint ventures, the Company has provided certain indemnities, guarantees and commitments to certain parties such that it may be required to make payments now or in the future.

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Investment Results

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,

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

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2022 2021 2022 2021

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$ 4,692 $ 5,730 $ 21,576 $ 37,521

Other comprehensive (loss) income:

Other comprehensive loss:

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

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GAAP consolidated financial statements.

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:

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

Fixed Income Investments (1)

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

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2022 2021 2022 2021

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Net Investment Returns (0.1) % 0.3 % (1.2) % 0.6 %

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,

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

Alternative Investments (2)

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2022 2021 2022 2021

Gross investment income $ 403 $ (428) $ (23) $ 5,514

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

Net realized and unrealized (losses) gains (1,668) (2,728) 1,656 2,219

Change in AOCI (3)

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GAAP consolidated financial statements.

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.

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

Total returns on alternative investments were positive for the nine months ended September 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 nine months ended September 30, 2022 were higher compared to 2021 due to higher average invested alternative assets in 2022.

For the nine months ended September 30, 2021, gross investment returns included unrealized gains of $0.9 million from an investment in an insurtech start-up company that was acquired by a special purpose acquisition company which contributed 0.6% 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 June 30, 2022 and December 31, 2021:

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

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

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

Reinsurance balances receivable, net

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27,295 36,703 (9,408) (25.6) %

Funds withheld receivable

516,589 636,412 (119,823) (18.8) %

Reserve for loss and LAE

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147,591 44,542 103,049 231.4 %

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.

The Company's deferred commission and other acquisition expenses decreased by 25.6% and unearned premiums decreased by 26.3% primarily due to the termination of the remaining business under both quota share contracts with AmTrust which have been in run-off since January 1, 2019.

Reinsurance balances receivable decreased by 36.6% 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.

Funds withheld receivable decreased by 18.8% primarily due to lower funds withheld to be utilized as collateral for the AmTrust Reinsurance segment with the commutation of French Hospital Liability polices under the European Hospital Liability Quota Share during the third quarter of 2022 and settlement of reinsurance losses payable due under the AmTrust Quota Share.

Accrued expenses and other liabilities increased by 231.4% primarily due to the timing of settlement of reinsurance losses payable due to AmTrust, which have been subsequently settled;

it also increased due to the derivative liability on retroactive reinsurance of $9.0 million related to GLS policies that was recognized as of September 30, 2022.

The Company's reserve for loss and LAE decreased by 23.0% primarily due to the settlement of prior year loss claims as well as favorable loss development recognized for AmTrust Reinsurance contracts.

The favorable loss development on reserves covered by the LPT/ADC Agreement impacted the reinsurance recoverable on unpaid losses which decreased by $14.9 million or 2.6% as at September 30, 2022 compared to December 31, 2021.

Capital Resources

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.

During the nine months ended September 30, 2022, book value per common share decreased by 8.5% to $2.38 and diluted book value per common share decreased by 8.5% to $2.37, compared to December 31, 2021.

This was largely due to a net decrease in AOCI of $39.3 million partly offset by net income available to Maiden common shareholders of $19.2 million during the nine months ended September 30, 2022.

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

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 %

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

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

Preference shares

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$ 589,893 $ 646,757 $ (56,864) (8.8) %

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:

Total capital resources decreased by $56.9 million, or 8.8% at September 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;

(1) a gain on repurchase of preference shares of $28.2 million for the nine months ended September 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 $39.3 million which arose due to:

(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;

(1) net unrealized losses on investment of $57.4 million based on the decrease in the fair value of $62.1 million for our fixed income investment portfolio relating to market price movements due to rising interest rates during the nine months ended September 30, 2022, offset by $4.4 million increase for equity method investments and $0.3 million increase in deferred taxes;

partly offset by (2) an increase in cumulative translation adjustments of $18.1 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;

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

• net loss attributable to Maiden of $9.0 million for the nine months ended September 30, 2022;

and partly offset by:

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" 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 June 30, 2022 and December 31, 2021 were as follows:

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

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

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

Ending common shareholders’ equity

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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 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.

During the nine months ended September 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 June 30, 2022, the Company had a remaining authorization of $74.2 million for share repurchases.

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

Preference Shares

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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 and six months ended June 30, 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 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 - Note 14.

Subsequent Events" under Item 8 "Financial Statements and Supplementary Data" in Part I Item 1.

"Financial Information" for further information.

There were no changes in the Company’s Senior Notes at September 30, 2022 compared to December 31, 2021 and the Company did not enter into any short-term borrowing arrangements during the nine months ended September 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 June 30, 2022 and December 31, 2021 was computed as follows:

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

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

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

Senior notes - principal amount

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

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.

As discussed above, at September 30, 2022, guarantees of $41.3 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.

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

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

Non-GAAP operating loss was $21.1 million for the three months ended September 30, 2022 compared to a non-GAAP operating loss of $3.1 million for the same period in 2021.

The reduction in the Company's non-GAAP operating results was largely due to a non-GAAP underwriting loss of $18.9 million for the three months ended September 30, 2022, compared to a non-GAAP underwriting loss of $7.3 million partly offset by gains of $6.0 million for preference share repurchases for the same respective period in 2021.

Non-GAAP operating loss was $11.4 million for the nine months ended September 30, 2022, compared to non-GAAP operating earnings of $58.1 million in 2021.

The reduction in the Company's non-GAAP operating results was largely due to a non-GAAP underwriting loss of $30.1 million for the nine months ended September 30, 2022, compared to a non-GAAP underwriting loss of $17.9 million for the same respective period in 2021.

Underwriting performance was offset by gains of $28.2 million from the repurchase of preference shares at market values for the nine months ended September 30, 2022 compared to gains of $87.2 million for preference share repurchases during the same period in 2021.

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

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

GAAP financial measure as follows:

For the Three Months Ended June 30, 2022 2021

For the Three Months Ended September 30, 2022 2021

($ in thousands except per share data)

Net income available to Maiden common shareholders $ 25,752 $ 26,826

Net (loss) income available to Maiden common shareholders $ (8,160) $ 2,864

Add (subtract):

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)

Net realized and unrealized investment losses 1,572 937

Foreign exchange and other gains (8,586) (4,116)

Interest in loss of equity method investments 373 810

Decrease in deferred gain on retroactive reinsurance under the LPT/ADC Agreement (6,259) (3,609)

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

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

Non-GAAP operating loss $ (21,060) $ (3,114)

Diluted (loss) earnings per share attributable to common shareholders $ (0.09) $ 0.03

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)

Net realized and unrealized investment losses 0.02 0.01

Foreign exchange and other gains (0.10) (0.05)

Interest in loss of equity method investments — 0.01

Decrease in deferred gain on retroactive reinsurance under the LPT/ADC Agreement (0.07) (0.04)

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

Non-GAAP diluted operating loss per share attributable to common shareholders

$ (0.24) $ (0.04)

For the Six Months Ended June 30, 2022 2021

For the Nine Months Ended September 30, 2022 2021

($ in thousands except per share data)

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Decrease in deferred gain on retroactive reinsurance under the LPT/ADC Agreement (10,722) (24,296)

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

Non-GAAP operating (loss) earnings $ (11,362) $ 58,135

Diluted earnings per share attributable to common shareholders $ 0.22 $ 1.17

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Decrease in deferred gain on retroactive reinsurance under the LPT/ADC Agreement (0.12) (0.28)

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

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

$ (0.13) $ 0.67

Non-GAAP Operating ROACE

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,

Non-GAAP Operating ROACE for the three and nine months ended September 30, 2022 and 2021 was as follows:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2022 2021 2022 2021

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

Non-GAAP operating (loss) earnings $ (21,060) $ (3,114) $ (11,362) $ 58,135

Opening adjusted common shareholders’ equity 269,658 277,082 274,990 208,447

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Non-GAAP Underwriting Results

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,

The non-GAAP underwriting results for the three and nine months ended September 30, 2022 and 2021 are as follows:

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2022 2021 2022 2021

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$ (18,886) $ (7,258) $ (30,134) $ (17,919)

(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.

(1) Non-GAAP underwriting loss and non-GAAP net loss and LAE for the three and nine months ended September 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 $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.

As shown in the table above, adjusted for the decrease in the deferred gain under the LPT/ADC Agreement of $6.3 million and $10.7 million during the three and nine months ended September 30, 2022, respectively, the non-GAAP underwriting loss was $18.9 million and $30.1 million, respectively.

This compared to a non-GAAP underwriting loss of $7.3 million and $17.9 million, respectively, when adjusted for the decrease in the deferred gain under the LPT/ADC Agreement of $3.6 million and $24.3 million during the three and nine months ended September 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 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.

Underwriting income in the Diversified Reinsurance segment for the three and nine months ended September 30, 2022 decreased by $2.0 million and $0.3 million compared to the three and nine months ended September 30, 2021, respectively.

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 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.

Adjusted for the decrease in the deferred gain for the LPT/ADC Agreement, the non-GAAP net loss and LAE for the three and nine months ended September 30, 2022 increased by $6.3 million and $10.7 million, respectively (2021 - $3.6 million and $24.3 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,

For the Three Months Ended September 30, For the Nine Months Ended September 30,

($ in thousands) 2022 2021 2022 2021

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$ 23,685 $ 14,123 $ 32,739 $ 31,842

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 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 six months ended June 30, 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 six months ended June 30, 2022 and improved the Company's shareholders' equity over the hedged contract period of the investment.

The Adjusted Shareholders' Equity, Adjusted Total Capital Resources and Adjusted Book Value per Common Share at September 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 $35.1 million at September 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 nine months ended September 30, 2022 is attributable to $10.7 million in loss and LAE recognized as favorable loss development in the Company's GAAP income statement for policies subject to the LPT/ADC Agreement.

We believe the inclusion of this unamortized deferred gain under 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.

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 during the nine months ended September 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 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 %

The following table computes adjusted shareholders' equity and adjusted total capital resources by recognizing the unamortized deferred gain under the LPT/ADC Agreement at September 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) September 30, 2022 December 31, 2021 Change Change %

Preference shares

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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 June 30, 2022 and December 31, 2021 was computed as follows:

June 30, 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 September 30, 2022 and December 31, 2021 was computed as follows:

September 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 June 30, 2022 and December 31, 2021 was computed as follows:

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

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

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

Senior notes - principal amount

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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 June 30, 2022, no such hedges or hedging strategies were in force or had been entered into.

At September 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 $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.

Net foreign exchange gains of $8.6 million and $20.5 million were generated during the three and nine months ended September 30, 2022, respectively, compared to net foreign exchange gains of $4.1 million and $6.3 million for the three and nine months ended September 30, 2021, respectively.

Our non-USD denominated liabilities at September 30, 2022 included reserve for net loss and LAE of $281.7 million.

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

Our foreign currency asset exposures at September 30, 2022 include $185.3 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 $24.9 million of equity method real estate investments denominated in Canadian dollars.

Effects of Inflation

4 unchanged sentences

Off-Balance Sheet Arrangements

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

At September 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