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Item 2. Management’s Discussion and Analysis

2023-05-09 compared with 2022-11-09 · 468 added, 536 removed, 699 unchanged (59% of the section changed)

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We expect our legacy solutions business to contribute to our active asset and capital management strategies.

Short-term income protection business is written on a primary basis by our wholly owned subsidiaries Maiden Life Försäkrings AB ("Maiden LF") and Maiden General Försäkrings AB ("Maiden GF") in the Scandinavian and Northern European markets.

Insurance support services are provided to Maiden LF and Maiden GF through our wholly owned subsidiary, Maiden Global Holdings, Ltd.

("Maiden Global") which is also a licensed intermediary in the United Kingdom.

Maiden Global had previously operated internationally by providing branded auto and credit life insurance products through insurer partners, particularly those in Europe and other global markets.

These products also produced reinsurance programs which were underwritten by our wholly owned subsidiary Maiden Reinsurance Ltd.

("Maiden Reinsurance").

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

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"Financial Information" .

In addition, we have a Loss Portfolio Transfer and Adverse Development Cover Agreement ("LPT/ADC Agreement") with Cavello Bay Reinsurance Limited ("Cavello") and a commutation agreement that further reduces our exposure to and limits the potential volatility related to these AmTrust liabilities in run-off, as discussed in " Note 8.

In addition, we have a Loss Portfolio Transfer and Adverse Development Cover Agreement ("LPT/ADC Agreement") with Cavello Bay Reinsurance Limited ("Cavello") and a commutation agreement that further reduces our exposure to and limits the potential volatility related to our AmTrust liabilities in run-off, as discussed in " Note 8.

Reinsurance " of the Notes to Condensed Consolidated Financial Statements in Part I Item 1.

"Financial Information" .

Insurance support services are provided to Maiden LF and Maiden GF through our wholly owned subsidiary, Maiden Global Holdings, Ltd.

("Maiden Global") which is also a licensed intermediary in the United Kingdom.

Maiden Global had previously operated internationally by providing branded auto and credit life insurance products through insurer partners, particularly those in Europe and other global markets.

These products also produced reinsurance programs which were underwritten by our wholly owned subsidiary Maiden Reinsurance Ltd.

("Maiden Reinsurance").

Our business currently consists of two reportable segments:

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Our AmTrust Reinsurance segment includes all business ceded to Maiden Reinsurance by AmTrust, primarily the quota share reinsurance agreement (“AmTrust Quota Share”) between Maiden Reinsurance and AmTrust’s wholly owned subsidiary, AmTrust International Insurance, Ltd.

(“AII”) and the European hospital liability quota share reinsurance contract ("European Hospital Liability Quota Share") with AmTrust’s wholly owned subsidiaries AmTrust Europe Limited ("AEL") and AmTrust International Underwriters DAC ("AIU DAC"), both of which are in run-off effective January 1, 2019.

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 $262.1 million as of September 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 $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.

At this time, while positive evidence in support of reducing the valuation allowance is accumulating, the Company believes it is necessary to maintain its full valuation allowance against the net U.S.

DTA due to insufficient accumulation of evidence at this time regarding the utilization of these losses.

As our profitability continues to improve, we will continuously evaluate the amount of the valuation allowance held against the net U.S.

For further details, please see "Note 13.

Income Taxes" included under Item 8 "Financial Statements and Supplementary Data" in our Annual Report on Form 10-K for the year ended December 31, 2021.

Taken together, we believe these measures should generate additional income for Maiden NA in a tax-efficient manner, while sharing in the improvement in profitability anticipated in Maiden Reinsurance as a result of the measures enacted as described above.

(“AII”) and the European hospital liability quota share reinsurance contract ("European Hospital Liability Quota Share") with AmTrust’s wholly owned subsidiaries, AmTrust Europe Limited ("AEL") and AmTrust International Underwriters DAC ("AIU DAC"), both of which are in run-off effective as of January 1, 2019.

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, 2022 that was filed on March 15, 2023 for further information on recent developments within the Company.

Business Strategy

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

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

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

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

However, as interest rates have increased and moved towards historically observed levels, risk-adjusted returns for active reinsurance underwriting of new prospective risks may become more attractive and while we have no immediate plans to resume such underwriting, we continue to evaluate if such a strategy would produce suitable value for shareholders.

The measures implemented in recent years have allowed us to more flexibly allocate capital to those activities most likely to produce the greatest returns for shareholders, and we are actively engaged in evaluating and deploying funds in all pillars of the strategies as discussed herein.

We also believe that these areas of strategic focus will enhance our profitability through increased returns, which we believe also increase the likelihood of fully utilizing the significant NOL carryforwards described above which would create additional common shareholder value.

We also believe that these areas of strategic focus will enhance our profitability through increased returns, which should also increase the likelihood of fully utilizing the significant net operating loss ("NOL") carryforwards as described further below which would create additional common shareholder value.

Our ability to execute our asset and capital management initiatives is dependent on maintaining adequate levels of unrestricted liquidity and cash flows.

Further, there can be no assurance that our insurance liabilities will run-off at levels that will permit further capital management activities, which we continually review as part of our strategy.

As our insurance liabilities run-off and our other strategies potentially develop along timelines longer than initially anticipated, we may allocate capital to other insurance activities that produce more consistent levels of revenue and profit as we seek to create longer-term shareholder value.

Please refer to the "Liquidity and Capital Resources" section for further information on our asset and capital management activities.

Asset Management

As part of our expanded asset management activities, we have evaluated and continue to consider investing in various initiatives in the insurance industry across a variety of segments which we believe will produce appropriate risk-adjusted returns while maintaining the option to consider underwriting activities in the future.

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In recent years, we have invested approximately $263.5 million into alternative investments which include equity securities, other investments and equity method investments in a wide variety of asset classes and we believe these activities will exceed that benchmark cost of capital with adjustments as necessary if those returns do not emerge.

Recent development and trends in financial markets, particularly the rapid rise in interest rates and heightened risk of economic recession, indicate that it may take longer than expected to achieve those returns and we expect that to factor into future capital allocation decisions.

In particular, as interest rates have risen to more historically observed levels, we have focused on investing in assets that produce higher levels of current income as opposed to longer-term gains, in order to increase returns to shareholders and increase the opportunity to recognize our deferred tax assets discussed below.

Legacy Underwriting

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

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

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.

Additionally, we provide reinsurance contracts to other (re)insurers to mitigate some of their risk of future adverse development (an 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.

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We believe GLS not only enhances our profitability through both fee income and effective claims management services, but it will also increase our asset base through the addition of blocks of reserves or companies that can be successfully wound down.

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 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.

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

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

In addition to producing returns that exceed the target cost of capital, we expect the business produced through GLS should further enhance our ability to pursue the asset and capital management pillars of our business strategy.

In addition to producing long-term returns that may exceed the target cost of capital, we expect the business produced through GLS should further enhance our ability to pursue the asset and capital management pillars of our business strategy.

The nature of GLS business plan is that it may take a sustained period of growth in insurance liabilities to produce the targeted returns.

In addition, early stage initiatives such as GLS may take a period of time to reach profitability.

Finally, the nature of legacy transactions which GLS seeks to execute may be inconsistent as to their timing and not predictable as regards how many transactions may be completed in any fiscal period.

As of March 31, 2023, GLS and its subsidiaries hold insurance related liabilities of $31.7 million including total reserves of $25.0 million, an underwriting-related derivative liability of $4.0 million, net deferred gains on retroactive reinsurance of $2.3 million and reinsurance losses payable of $0.4 million.

Capital Management

Our capital management strategy is significantly informed by the required capital needed to operate our business in a prudent manner and our ongoing analysis of our loss development trends.

Recent trends continue to increase our confidence in our recorded ultimate losses for our insurance liabilities in run-off, however, a prudent assessment dictates that the run-off portfolio still requires additional maturity to fully emerge.

While there is no guarantee that these recent loss development trends will persist, as our confidence has increased it has enabled us to pursue continued capital management initiatives, primarily the repurchase of our preference shares, which we believe provide the greatest risk-adjusted returns to our common shareholders.

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

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

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

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

"Financial Information" for recent repurchases and further detail on our preference shares.

Our ability to execute our asset and capital management initiatives is dependent on maintaining adequate levels of unrestricted liquidity and cash flows.

Further, there can be no assurance that our insurance liabilities will run-off at levels that will permit further capital management activities, which we continually review as part of our strategy.

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 Nine Months Ended September 30, 2022 and 2021 Financial Highlights

For the Three Months Ended September 30, 2022 2021 Change

Trends in recent years have increased our confidence in our recorded ultimate losses for our insurance liabilities in run-off, however a prudent assessment dictates that the run-off portfolio still requires additional maturity to fully emerge, as evidenced by the adverse loss development we experienced in 2022.

While there is no assurance that these recent positive long-term loss development trends will persist, as our confidence has increased, it has enabled us to pursue continued capital management initiatives, primarily the repurchase of our preference shares and the subsequent exchange of those shares for common shares ("Exchange"), which we believe provided the greatest risk-adjusted returns to our common shareholders.

Please refer to "Notes to Consolidated Financial Statements - Note 6 — Shareholders' Equity" under Item 8 "Financial Statements and Supplementary Data" of the Annual Report on Form 10-K for the year ended December 31, 2022 for further information on the Exchange.

Completion of the Exchange represented a significant milestone in our capital management plan and we continue to evaluate other capital management options that may be available to us, and our Board has recently authorized the repurchase of up to $100.0 million of our senior notes.

Please refer to " Notes to Condensed Consolidated Financial Statements (unaudited) Note 14.

Subsequent Events " included under Item 1.

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

However, there can be no assurance that we will pursue such initiatives, or that they will provide appropriate risk-adjusted returns.

We believe Maiden NA’s investments, including its ownership of Maiden Reinsurance and its active asset management strategy, will create opportunities to utilize NOL carryforwards of $296.8 million at March 31, 2023.

The NOL carryforwards combined with additional net deferred tax assets ("DTA") primarily related to our insurance liabilities result in net U.S.

DTA (before valuation allowance) of $120.3 million or $1.18 per common share at March 31, 2023.

DTA of $120.3 million is not presently recognized on the Company's condensed consolidated balance sheets as a full valuation allowance is carried against it.

At this time, while positive evidence in support of reducing the valuation allowance is growing, the Company believes it is necessary to maintain a full valuation allowance against the net U.S.

DTA as more evidence is needed regarding the utilization of these losses.

As circumstances further develop, we will continuously evaluate the amount of the valuation allowance held against the net U.S.

For further details please see " Note 13 — Income Taxes " included under Item 8 " Financial Statements and Supplementary Data " of the Annual Report on Form 10–K for the year ended December 31, 2022.

Three Months Ended March 31, 2023 and 2022 Financial Highlights

For the Three Months Ended March 31, 2023 2022 Change

Summary Consolidated Statement of Income Data (unaudited):

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(9.9) % (10.5) % 0.6

For the Nine Months Ended September 30, 2022 2021 Change

Summary Consolidated Statement of Income Data (unaudited):

($ in thousands except per share data)

Net (loss) income $ (9,047) $ 14,258 $ (23,305)

Gain from repurchase of preference shares 28,233 87,168 (58,935)

Net income attributable to Maiden common shareholders 19,186 101,426 (82,240)

Basic and diluted earnings per common share:

Net income attributable to Maiden common shareholders (2)

0.22 1.17 (0.95)

Gain from repurchase of preference shares per common share 0.32 1.01 (0.69)

Gross premiums written (1,451) 7,865 (9,316)

Net premiums earned 23,816 40,106 (16,290)

Underwriting (loss) income (3)

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

Net investment results (13)

21,576 37,521 (15,945)

Non-GAAP measures:

Non-GAAP operating (loss) earnings (1)

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

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

(0.13) 0.67 (0.80)

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

(5.9) % 32.3 % (38.2)

September 30, 2022 December 31, 2021 Change

March 31, 2023 December 31, 2022 Change

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

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Senior notes - principal amount 262,500 262,500 —

Common shareholders' equity 207,721 225,047 (17,326)

Shareholders' equity 270,794 284,579 (13,785)

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(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 or loss per common share.

Earnings per Common Share " for the calculation of basic and diluted income (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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See " Key Financial Measures " for additional information.

(6) Book value per common share is calculated using common shareholders’ equity (shareholders' equity excluding the aggregate liquidation value of our preference shares) divided by the number of common shares outstanding.

(6) Book value per common share is calculated using shareholders’ equity divided by the number of common shares outstanding.

See " Key Financial Measures " for additional information.

(7) Diluted book value per common share is calculated by dividing common shareholders' equity, adjusted for assumed proceeds from the exercise of dilutive options, by the number of outstanding common shares plus dilutive options and restricted shares (assuming exercise of all dilutive share based awards).

(7) Diluted book value per common share is calculated by dividing shareholders' equity, adjusted for assumed proceeds from the exercise of dilutive options, by the number of outstanding common shares plus dilutive options and restricted shares (assuming exercise of all dilutive share based awards).

See " Key Financial Measures " for additional information.

(8) Adjusted book value per common share is a non-GAAP measure that is calculated using common shareholders' equity, adjusted by adding the following items to shareholders' equity:

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

and 2) an adjustment which reflects the equity method accounting related to the fair value of certain hedged liabilities within an equity method investment in a limited partnership investment held by the Company wherein the ultimate realizable value of the asset supporting the hedged liabilities cannot currently be recognized at fair value, divided by the number of common shares outstanding.

(8) Adjusted book value per common share is a non-GAAP measure that is calculated using shareholders' equity, adjusted by adding to shareholders' equity the unamortized deferred gain on retroactive reinsurance arising from the LPT/ADC Agreement, divided by the number of common shares outstanding.

See " Key Financial Measures " for additional information.

(9) Adjusted shareholders' equity and adjusted total capital resources are calculated by adding the following items to shareholders' equity:

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

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

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

(9) Adjusted shareholders' equity and adjusted total capital resources are calculated by adding to shareholders' equity the unamortized deferred gain on retroactive reinsurance arising from the LPT/ADC Agreement with Cavello relating to losses from the AmTrust Quota Share agreement.

GAAP, the deferred gain shall be amortized over the estimated remaining settlement period.

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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;

(2) foreign exchange and other gains or losses;

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

(1) net realized investment gains (losses);

(2) foreign exchange and other gains (losses);

(3) the portion of favorable or unfavorable prior year reserve development for which we have ceded the risk under the LPT/ADC Agreement and related changes in amortization of the deferred gain liability;

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

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

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

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

We believe all of these amounts are substantially independent of our business and any potential future underwriting process, and therefore including them would distort the analysis of underlying trends in our operations.

We believe all of these amounts are substantially independent of our business and any potential future underwriting process, therefore including them would distort the analysis of underlying trends in our operations.

Underwriting income (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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"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 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.

The Company no longer presents certain non-GAAP measures such as combined ratio and its related components in this Quarterly Report on Form 10-Q for the three months ended March 31, 2023, 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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Certain general and administrative expenses are generally allocated to segments based on actual costs incurred.

Non-GAAP Operating Return on Average Adjusted Common Equity ("Non-GAAP Operating ROACE"):

Management uses non-GAAP operating return on average adjusted common shareholders' equity as a measure of profitability that focuses on the return to common shareholders.

It is calculated using non-GAAP operating earnings (loss) available to common shareholders (as defined above) divided by average adjusted common shareholders' equity.

Non-GAAP Operating Return on Average Adjusted Shareholders' Equity ("Non-GAAP Operating ROACE"):

Management uses non-GAAP operating return on average adjusted shareholders' equity as a measure of profitability that focuses on the return to common shareholders.

It is calculated using non-GAAP operating earnings (loss) available to common shareholders (as defined above) divided by average adjusted shareholders' equity.

Book Value per Common Share and Diluted Book Value per Common Share:

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Management uses growth in both of these metrics as a prime measure of the value we are generating for our common shareholders, because management believes that growth in each metric ultimately results in growth in the Company’s common share price.

These metrics are impacted by the Company’s net income and external factors, such as interest rates, which can drive changes in unrealized gains or losses on our fixed income investment portfolio, as well as common or preference share repurchases.

Ratio of Debt to Total Capital Resources:

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

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

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

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

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

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

Management has adjusted GAAP shareholders' equity by adding the following items to shareholders' equity:

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

Management has adjusted GAAP shareholders' equity by adding to shareholders' equity the unamortized deferred gain on ceded retroactive reinsurance under the LPT/ADC Agreement.

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

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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 nine months ended September 30, 2022 and 2021:

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

The following table sets forth our selected unaudited Condensed Consolidated Statement of Income data for the three months ended March 31, 2023 and 2022:

For the Three Months Ended March 31,

($ in thousands) 2023 2022

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$ 9,002 $ 1,122

Other insurance revenue

368 138 888 946

Other insurance (expense) revenue, net (59) 51

Net loss and LAE

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(3,146) (2,583)

Underwriting (loss) income (2)

Underwriting loss (2)

(8,253) (1,655)

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Net investment income

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

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

Net realized and unrealized investment gains 1,005 2,309

Foreign exchange and other (losses) gains (2,816) 3,949

Interest and amortization expenses (3,824) (4,832)

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Interest in (loss) income of equity method investments (51) 1,271

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

Net loss (11,328) (1,949)

Gain from repurchase of preference shares — 3,543

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

Net (loss) income (attributable) available to Maiden common shareholders $ (11,328) $ 1,594

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

Please refer to "General and Administrative Expenses" below for additional information related to these corporate expenses and the reconciliation to those presented in our unaudited Condensed Consolidated Statements of Income.

(2) Underwriting income (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.

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

(3) 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 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 $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;

• 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 nine months ended September 30, 2022.

• 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 $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 loss attributable to Maiden common shareholders for the three months ended March 31, 2023 was $11.3 million compared to net income available to Maiden common shareholders of $1.6 million for the same respective period in 2022.

Net income available to Maiden common shareholders for the three months ended March 31, 2022 included gains from repurchase of our preference shares of $3.5 million.

Excluding the gain on the repurchase of our preference shares in 2022, there was a net loss of $11.3 million for the first quarter of 2023 compared to a net loss of $1.9 million for the first quarter of 2022, primarily due to the following:

• underwriting loss of $8.3 million for the three months ended March 31, 2023 compared to underwriting loss of $1.7 million in the same period in 2022 largely due to:

◦ adverse prior year loss development of $3.7 million in the first quarter of 2023 compared to favorable prior year loss development of $7.3 million during the same period in 2022;

◦ on a current accident year basis, underwriting loss of $4.6 million for the three months ended March 31, 2023 compared to an underwriting loss of $8.9 million for the same period in 2022, largely due to lower negative premium adjustments reported by AmTrust in the first quarter of 2023 as compared to the same period in 2022.

• foreign exchange and other losses were $2.8 million for the three months ended March 31, 2023, compared to foreign exchange and other gains of $3.9 million for the same period in 2022.

These unfavorable movements were partly offset by the following favorable results:

• total income from investment activities was $10.5 million for the three months ended March 31, 2023 compared to $10.1 million for the same period in 2022 which was comprised of:

◦ net investment income increased to $9.5 million for the three months ended March 31, 2023 compared to $6.6 million for the same period in 2022;

◦ realized and unrealized investment gains were $1.0 million for the three months ended March 31, 2023 compared to gains of $2.3 million for the same period in 2022;

◦ interest in loss of equity method investments was $0.1 million for the three months ended March 31, 2023 compared to income of $1.3 million for the same period in 2022.

• corporate general and administrative expenses decreased to $7.0 million for the three months ended March 31, 2023 compared to $8.3 million for the same period in 2022.

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 nine months ended September 30, 2022 and 2021:

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

($ in thousands) Total Total $

Diversified Reinsurance

$ 6,027 $ 5,816 $ 211

AmTrust Reinsurance (805) 1,137 (1,942)

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

For the Nine Months Ended September 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 months ended March 31, 2023 and 2022:

For the Three Months Ended March 31, 2023 2022 Change in

($ in thousands) Total Total $

3 unchanged sentences

Total $ 760 $ (10,323) $ 11,083

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.

Net premiums written for the three months ended March 31, 2023 increased to $0.8 million, compared to net premiums written of $(10.3) million for the same respective period in 2022:

• Premiums written in the Diversified Reinsurance segment increased by $2.2 million for the three months ended March 31, 2023, compared to the same respective period in 2022 due to growth in direct premiums for Credit Life programs written by Maiden LF and Maiden GF.

• Premiums written in the AmTrust Reinsurance segment increased by $8.9 million for the three months ended March 31, 2023 compared to the same respective period in 2022 largely due to lower negative cession adjustments made in the first quarter of 2023 compared to the same period in 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 $2.8 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 $ %

Diversified Reinsurance

$ 6,932 $ 7,521 $ (589) (7.8) %

AmTrust Quota Share Reinsurance

5,319 7,509 (2,190) (29.2) %

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

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

Net premiums earned increased by $7.9 million for the three months ended March 31, 2023, compared to the same respective period in 2022.

The table below compares net premiums earned by our reportable segments, reconciled to the total consolidated net premiums earned, for the three months ended March 31, 2023 and 2022:

For the Three Months Ended March 31, 2023 2022 Change in

($ in thousands) Total Total $

4 unchanged sentences

$ 9,002 $ 1,122 $ 7,880

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 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.

Net premiums earned in the Diversified Reinsurance segment for the three months ended March 31, 2023 increased by $1.5 million or 25.5% compared to the same respective period in 2022 mainly due to growth in Credit Life programs written by Maiden LF and Maiden GF.

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

Net premiums earned in the AmTrust Reinsurance segment for the three months ended March 31, 2023 increased by $6.4 million compared to the same respective period in 2022 primarily due to significant negative earned premium adjustments in the first quarter of 2022.

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

Other Insurance Revenue

2 unchanged sentences

Net Investment Income

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 nine months ended September 30, 2022 and 2021:

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

Total net investment income increased by $3.0 million or 45.3% for the three months ended March 31, 2023, compared to the same respective period in 2022.

Net investment income experienced an increase in annualized average book yields to 3.7% for the three months ended March 31, 2023 compared to 1.7% in 2022 due to the following factors:

• shorter duration on our fixed income portfolio combined with 32.3% of our fixed income investments as of March 31, 2023 are floating rate investments which enabled us to take advantage of a higher interest rate environment by reinvesting at higher yields more quickly;

• higher crediting interest rate on our funds withheld balance with AmTrust which increased to 3.5% in 2023 from 2.1% in 2022, which had an average ending balance of $384.2 million during the three months ended March 31, 2023;

• higher weighted average interest rate on our loan to related party of $168.0 million which increased to 6.4% during the three months ended March 31, 2023 compared to 2.1% for the same respective period in 2022.

Average aggregate fixed income assets at March 31, 2023 experienced a decline of 33.1% compared to March 31, 2022 due to continued run-off of reinsurance liabilities previously written on prospective risks, resulting in negative operating cash flows as we run-off our existing reinsurance liabilities.

The following table details our average aggregate fixed income assets (at cost) and annualized investment book yield for the three months ended March 31, 2023 and 2022:

For the Three Months Ended March 31,

($ in thousands) 2023 2022

2 unchanged sentences

Annualized investment book yield 3.7 % 1.7 %

(1) Fixed income assets include available-for-sale ("AFS") securities, cash and restricted cash, funds held receivable, and loan to related party.

(1) Fixed income assets include available-for-sale ("AFS") securities, cash and restricted cash, funds withheld receivable, and loan to related party.

These amounts are an average of the amounts disclosed in our quarterly U.S.

GAAP consolidated financial statements.

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.

Net Realized and Unrealized Investment Gains

Net realized and unrealized investment gains of $1.0 million were recognized for the three months ended March 31, 2023, compared to net realized and unrealized investment gains of $2.3 million for the same respective period in 2022.

Total net realized and unrealized investment gains for the three months ended March 31, 2023 and 2022 are summarized in the table below by investment category:

For the Three Months Ended March 31, 2023 2022

Net realized gains:

($ in thousands)

Fixed income assets (1)

Other investments, including equity securities 176 79

Total net realized gains 176 1,222

Net unrealized gains:

Other investments, including equity securities 829 1,087

Total net unrealized gains 829 1,087

Total net realized and unrealized investment gains $ 1,005 $ 2,309

(1) Fixed income assets includes AFS securities as well as cash, restricted cash, funds withheld receivable, and loan to related party.

Interest in (Loss) Income of Equity Method Investments

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,

The Company had interest in loss of equity method investments of $0.1 million for the three months ended March 31, 2023, compared to interest in income of equity method investments of $1.3 million for the same respective period in 2022.

Equity method investments consist of hedge fund investments of $0.5 million, real estate investments of $41.1 million and other investments of $30.3 million as of March 31, 2023.

Interest in (loss) income of equity method investments for the three months ended March 31, 2023 and 2022 is detailed by investment category in the following table:

For the Three Months Ended March 31,

($ in thousands) 2023 2022

2 unchanged sentences

Other investments — 1,339

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

Interest in (loss) income of equity method investments $ (51) $ 1,271

Net Loss and LAE

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.

Net loss and LAE increased by $12.1 million during the three months ended March 31, 2023, compared to the same respective period in 2022 largely due to adverse prior year loss development in both reporting segments.

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 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.

Net loss and LAE for the first quarter of 2023 was primarily impacted by net adverse prior year loss development of $3.7 million compared to net favorable prior year loss development of $7.3 million for the same period in 2022.

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 $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.

Commission and other acquisition expenses increased by $1.7 million or 67.5% for the three months ended March 31, 2023, compared to the same respective period in 2022 driven by lower earned premium adjustments in the AmTrust Reinsurance segment during the first quarter of 2023 compared to the same respective period in 2022 which resulted in a corresponding increase in commission costs and brokerage fees.

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 $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,

Total general and administrative expenses decreased by $0.8 million, or 7.1% for the three months ended March 31, 2023, compared to the same respective period in 2022 primarily due to lower stock-based incentive compensation costs incurred.

General and administrative expenses for the three months ended March 31, 2023 and 2022 were comprised of:

For the Three Months Ended March 31,

($ in thousands) 2023 2022

2 unchanged sentences

General and administrative expenses – corporate

4,069 4,660 15,383 21,578

Total general and administrative expenses

1 unchanged sentence

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 $14.5 million for the three and nine months ended September 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 $3.8 million for the three months ended March 31, 2023 compared to $4.8 million for the same respective period in 2022.

This included interest expense incurred on the Senior Notes for the three months ended March 31, 2023 and 2022 of $4.8 million, respectively.

The issuance costs related to the Senior Notes were capitalized and are amortized over their effective life using the effective interest method of amortization.

Due to a change in the amortization method for the 2013 Senior Notes at March 31, 2023, there was amortization income of $1.0 million for the three months ended March 31, 2023 compared to amortization expense of $0.1 million for the same respective period in 2022.

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 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.

The weighted average effective interest rate for the Senior Notes was 7.6% for the three months ended March 31, 2023 and 2022, respectively.

Foreign Exchange and Other (Losses) Gains

Net foreign exchange and other losses amounted to $2.8 million during the three months ended March 31, 2023, compared to net foreign exchange and other gains of $3.9 million for the same respective period in 2022.

At March 31, 2023, net foreign exchange losses were primarily driven by exposures to euro, British pound and other non-USD denominated net loss reserves and insurance related liabilities in excess of foreign currency assets.

Our non-USD denominated liabilities at March 31, 2023 included net loss reserves of $328.4 million.

Our foreign currency asset exposures at March 31, 2023 included $208.6 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 $21.1 million of equity method real estate investments denominated in Canadian dollars.

Net foreign exchange losses of $2.0 million for the three months ended March 31, 2023 were attributable to the weakening of the U.S.

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

Net foreign exchange gains of $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.

Net foreign exchange gains of $3.9 million during the three months ended March 31, 2022 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.

1 unchanged sentence

Diversified Reinsurance Segment

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,

The underwriting results for our Diversified Reinsurance segment for the three months ended March 31, 2023 and 2022 were as follows:

For the Three Months Ended March 31,

($ in thousands) 2023 2022

5 unchanged sentences

$ 7,471 $ 5,955

Other insurance revenue

368 138 888 946

Other insurance (expense) revenue, net (59) 51

Net loss and LAE

4 unchanged sentences

(2,589) (2,098)

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

Underwriting (loss) income $ (1,989) $ 1,497

Underwriting results in the Diversified Reinsurance segment decreased for the three months ended March 31, 2023 compared to 2022.

This was primarily due to results from GLS operations, which reported an underwriting loss of $1.1 million for the three months ended March 31, 2023 compared to $0.1 million in 2022, driven by general and administrative expenses of $0.9 million and a decrease in the fair value of underwriting-related derivatives of $0.2 million due to the acceleration of covered payments which triggered coverage in excess of the contracts risk margin.

Underwriting (loss) income by business unit is detailed in the table below for the Diversified Reinsurance segment for the three months ended March 31, 2023 and 2022, respectively:

For the Three Months Ended March 31,

($ in thousands) 2023 2022

International $ (180) $ 753

Changes in fair value of non-hedged derivatives on retroactive reinsurance 306 — 306

Other service fee income 38 77 (39)

Total Diversified Reinsurance $ 368 $ 138 $ 230

For the Nine Months Ended September 30, 2022 2021 Change

GLS (1,064) (140)

Treaty business (Motors) (123) —

Other run-off lines (622) 884

Underwriting (loss) income $ (1,989) $ 1,497

Premiums — Gross premiums written increased by $2.1 million or 44.6% for the three months ended March 31, 2023, compared to the same respective period in 2022.

Net premiums written increased by $2.2 million or 47.8% during the three months ended March 31, 2023, compared to the same respective period in 2022.

Net premiums earned increased by $1.5 million or 25.5% during the three months ended March 31, 2023, compared to the same respective period in 2022.

The written and earned premium growth was driven by new Credit Life programs written by Maiden LF and Maiden GF in the three months ended March 31, 2023.

Other Insurance (Expense) Revenue, Net — Total other insurance (expense) revenue, net includes fee related income earned from our GLS business, fair value changes in underwriting-related derivatives related to certain coverages on retroactive reinsurance contracts written by GLS, and fee income derived from our IIS business not directly associated with premium revenue assumed by the Company as specified in the table below.

Total other insurance (expense) revenue, net decreased by $0.1 million for the three months ended March 31, 2023, compared to the same respective period in 2022 primarily due to fair value changes in non-hedged underwriting-related derivatives on GLS contracts.

The table below shows other insurance revenue by source for the three months ended March 31, 2023 and 2022:

For the Three Months Ended March 31, 2023 2022 Change

($ in thousands)

International $ 97 $ 10 $ 87

Changes in fair value of non-hedged derivatives on retroactive reinsurance 699 — 699

Changes in fair value of non-hedged underwriting-related derivatives (212) — (212)

Other service fee income 56 41 15

Total Diversified Reinsurance $ 888 $ 946 $ (58)

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 $0.1 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.

Total other insurance (expense) revenue, net $ (59) $ 51 $ (110)

Net Loss and LAE — Net loss and LAE increased by $4.5 million for the three months ended March 31, 2023, compared to the same respective period in 2022 primarily due to new premium growth in Credit Life programs written by Maiden LF and Maiden GF as well as adverse prior year development experienced in the current year period .

The net loss and LAE was impacted by net adverse prior year loss development of $0.8 million for the three months ended March 31, 2023 , compared to favorable prior year development of $2.2 million for the same respective period in 2022.

The net adverse loss development for the three months ended March 31, 2023 was due to unfavorable reserve development in other runoff business and also included the recognition of expected credit losses on reinsurance recoverable on unpaid losses.

The favorable loss development in 2022 was experienced in German Auto Programs and other run-off business.

Commission and Other Acquisition Expenses — Commission and other acquisition expenses decreased by $0.1 million or 3.0% for the three months ended March 31, 2023, compared to the same respective period in 2022.

General and Administrative Expenses — General and administrative expenses increased by $0.5 million or 23.4% for the three months ended March 31, 2023 compared to the same respective period in 2022.

AmTrust Reinsurance Segment

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 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,

The AmTrust Reinsurance segment reported an underwriting loss of $6.3 million during the three months ended March 31, 2023, compared to an underwriting loss of $3.2 million for the same respective period in 2022.

The decrease in underwriting results for the three months ended March 31, 2023 was primarily due to adverse prior year loss development of $2.9 million during the three months ended March 31, 2023, which is detailed herein, compared to net favorable prior year loss development of $5.1 million for the same respective period in 2022.

The underwriting results for the AmTrust Reinsurance segment for the three months ended March 31, 2023 and 2022 were as follows:

For the Three Months Ended March 31,

($ in thousands) 2023 2022

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Net loss and LAE

(15,461) (9,960) (19,072) (4,330)

Commission and other acquisition expenses

(2,004) (2,852) (2,127) (7,486)

General and administrative expenses

(521) (407) (2,281) (1,785)

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 nine months ended September 30, 2022 and 2021, respectively:

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

Underwriting loss $ (6,264) $ (3,152)

Premiums — The table below shows net premiums written by category for the three months ended March 31, 2023 and 2022, respectively:

For the Three Months Ended March 31, 2023 2022 Change in

($ in thousands) Total Total $

3 unchanged sentences

Specialty Program

Specialty Risk and Extended Warranty

156 837 (681)

Total AmTrust Reinsurance

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

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

($ in thousands) Total Total $

Net Premiums Written

Small Commercial Business

$ (15,007) $ (5,381) $ (9,626)

Specialty Program

Specialty Risk and Extended Warranty

2 unchanged sentences

$ (6,013) $ (14,906) $ 8,893

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:

The negative gross and net premiums written for the three months ended March 31, 2023 and 2022 above reflect cession adjustments on Specialty Risk and Extended Warranty and Small Commercial Business policies in the AmTrust Quota Share ("AmTrust Cession Adjustments").

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.

The negative gross and net premiums written for the three months ended March 31, 2023 reflect cession adjustments of $6.1 million due to the cancellation of cases in a certain program within Specialty Risk and Extended Warranty.

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

• $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 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 $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

The table below shows the AmTrust Cession Adjustments by category for the three months ended March 31, 2023 and 2022, respectively:

For the Three Months Ended March 31, 2023 2022 Change in

($ in thousands) Total Total $

Net Premiums Earned

Net Premiums Written

Small Commercial Business

$ — $ (11,006) $ 11,006

Specialty Program

Specialty Risk and Extended Warranty

2 unchanged sentences

$ (6,135) (15,792) $ 9,657

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

Net premiums earned increased by $6.4 million for the three months ended March 31, 2023, compared to the same period in 2022 primarily due to lower negative premium adjustments during the first quarter of 2023 compared to significantly higher AmTrust Cession Adjustments made in the first quarter of 2022, due to negative premiums earned in Small Commercial Business policies.

The table below provides detail on net premiums earned in the three months ended March 31, 2023 and 2022:

For the Three Months Ended March 31, 2023 2022 Change in

($ in thousands) Total Total $

3 unchanged sentences

Specialty Program

156 838 (682)

Specialty Risk and Extended Warranty

2 unchanged sentences

$ 1,531 $ (4,833) $ 6,364

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.

Net Loss and LAE — Net loss and LAE increased by $7.6 million for the three months ended March 31, 2023, compared to the same respective period in 2022 driven by adverse prior year loss development in the current quarter compared to favorable development in 2022.

Net adverse prior year loss development was $2.9 million during the three months ended March 31, 2023, compared to favorable prior year loss development of $5.1 million for the same period in 2022.

Net adverse prior year loss development for the three months ended March 31, 2023 was driven by unfavorable movements in General Liability, Auto Liability and Specialty Risk & Extended Warranty partly offset by continued favorable development in Workers Compensation.

Net favorable prior year loss development for the three months ended March 31, 2022 was driven by favorable development on the runoff of Workers Compensation business as well as AmTrust Cession Adjustments for Specialty Risk and Extended Warranty.

Commission and Other Acquisition Expenses — Commission and other acquisition expenses increased by $1.8 million for the three months ended March 31, 2023, compared to the same respective period in 2022 due to lower negative earned premium adjustments in the first quarter of 2023.

This was the result of lower AmTrust Cession Adjustments made in the first quarter of 2023 compared to the same period in 2022 which resulted in a corresponding increase in commission costs and brokerage fees.

General and Administrative Expenses — General and administrative expenses increased by $0.1 million or 14.8% for the three months ended March 31, 2023, compared to the same respective period in 2022.

Liquidity and Capital Resources

Maiden Holdings is a holding company and transacts no business of its own.

We therefore rely on cash flows in the form of dividends, advances, loans and other permitted distributions from our subsidiary companies to pay expenses and make dividend payments on our common and preference shares.

The jurisdictions in which our operating subsidiaries are licensed to write business impose regulations requiring companies to maintain or meet statutory solvency and liquidity requirements and also place restrictions on the declaration and payment of dividends and other distributions.

As of September 30, 2022, the Company had investable assets of $1.4 billion compared to $1.7 billion as of December 31, 2021.

As of March 31, 2023, the Company had investable assets of $1.16 billion compared to $1.24 billion as of December 31, 2022.

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

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

The decrease in our investable assets is due to the cessation of active reinsurance underwriting of new prospective risks which results in negative operating cash flows as we settle claim payments from the run-off of our reinsurance portfolio liabilities.

The regulatory and liquidity requirements of the Company's operating segments are discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations" section included under Item 7 of our Annual Report on Form 10- K for the year ended December 31, 2022, that was filed with the SEC on March 15, 2023.

As previously indicated, Maiden Reinsurance re-domesticated from Bermuda to Vermont on March 16, 2020.

We continue to be actively engaged with the Vermont Department of Financial Regulation ("Vermont DFR") regarding the formulation of Maiden Reinsurance's longer term business plan, including its investment policy, changes to which require prior regulatory approval as stipulated by Vermont law or the Vermont DFR for any active underwriting, capital management or other strategic initiatives.

Maiden Reinsurance re-domesticated from Bermuda to Vermont on March 16, 2020.

We continue to be actively engaged with the Vermont Department of Financial Regulation ("Vermont DFR") regarding Maiden Reinsurance's longer term business plan, including its investment policy, changes to which require prior regulatory approval as stipulated by Vermont law or the Vermont DFR for any active underwriting, capital management or other strategic initiatives.

Maiden Reinsurance has received all necessary approvals required to date by the Vermont DFR, including its activities via GLS and its investment policy which includes:

1) the expansion of approved asset classes for investment reflecting not only Maiden Reinsurance’s solvency position but the material reduction in required capital necessary to operate its business as discussed further in Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations – Liquidity & Capital Resources – Cash and Investments ;

and 2) the purchase of affiliated securities as demonstrated in the recent preference share tender offers.

and 2) the purchase of affiliated securities as demonstrated in previous preference share tender offers and the recently completed Exchange.

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

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

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

During 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 $25.0 million in dividends to Maiden NA with $6.3 million paid during the three months ended March 31, 2023.

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.

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Our business has undergone significant changes since 2018.

We have entered into a series of transactions that have materially reduced our balance sheet risk and transformed our operations.

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.

As previously noted, we engaged in a series of transactions that have materially reduced our balance sheet risk and transformed our operations.

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

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

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

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

While the development of the GLS platform over time should further enhance our ability to pursue the asset and capital management pillars of our business strategy, we continue to expect a trend of negative overall cash flows to continue to reduce our asset base going forward through the remainder of 2023 and beyond.

We expect to use funds from cash and investment portfolios, collected premiums on reinsurance contracts in force or being run-off, investment income and proceeds from investment sales and redemptions to meet our expected claims payments and operational expenses.

4 unchanged sentences

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.

At March 31, 2023 and December 31, 2022, unrestricted cash, cash equivalents and fixed maturity investments were $68.9 million and $64.3 million, respectively.

The increase of $4.6 million in unrestricted cash and fixed maturity investments during the three months ended 2023 was primarily the result of $9.0 million of net proceeds from sales and redemption of alternative investments including equity method investments, partly offset by $4.8 million for interest payments on the Senior Notes.

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 nine months ended September 30, 2022 and 2021:

For the Nine Months Ended September 30, 2022 2021

The table below summarizes our operating, investing and financing cash flows for the three months ended March 31, 2023 and 2022:

For the Three Months Ended March 31, 2023 2022

($ in thousands)

6 unchanged sentences

Effect of exchange rate changes on foreign currency cash

(2,152) (333)

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

Total (decrease) increase in cash, restricted cash and cash equivalents $ (5,263) $ 5,799

Cash Flows used in Operating Activities

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 used in operating activities for the three months ended March 31, 2023 were $20.3 million compared to cash flows used in operating activities of $76.1 million for the three months ended March 31, 2022, a decrease of $55.7 million due to settlement of claim payments to AmTrust using the funds withheld receivable in the current year period whereas cash was primarily used in the prior year period.

The operating cash flows used in operations for the three months ended March 31, 2023 and 2022 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.

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 $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 provided by investing activities consist primarily of proceeds from the sales and maturities of investments net of payments for investments acquired.

Net cash provided by investing activities was $15.3 million for the three months ended March 31, 2023 compared to $86.1 million for the same period in 2022.

Cash flows provided by investing activities included net proceeds of $9.0 million from alternative investments including equity method investments during the three months ended March 31, 2023 compared to net purchases of $18.0 million for the same respective period in 2022.

For the three months ended March 31, 2023, the proceeds from the sales, maturities and calls exceeded the purchases of fixed maturity securities by $6.3 million compared to net proceeds of $104.1 million for the same respective period in 2022.

Cash Flows used in Financing Activities

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.

Cash flows used in financing activities were $0.3 million for the three months ended March 31, 2023 compared to $3.9 million during the same respective period in 2022.

The Company repurchased 274,861 preference shares during the first quarter of 2022 for an aggregate total consideration of $3.1 million which represent tax withholding in respect of tax obligations on the vesting of both non-performance-based and discretionary performance-based restricted shares.

No dividends on common shares were paid during the three months ended March 31, 2023 and 2022.

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

Restrictions, Collateral and Specific Requirements

The Company's restrictions, collateral and specific requirements are discussed in " Management's Discussion and Analysis of Financial Condition and Results of Operations " section included under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022, that was filed with the SEC on March 15, 2023.

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.

At March 31, 2023 and December 31, 2022, restricted cash and cash equivalents and fixed maturity investments used as collateral were $285.8 million and $296.8 million, respectively.

This collateral represents 80.6% and 82.2% of the fair value of total fixed maturity investments, cash, restricted cash and equivalents at March 31, 2023 and December 31, 2022, 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 September 30, 2022.

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

September 30, 2022 December 31, 2021

Historically, the investment of our funds had generally been designed to ensure safety of principal while generating current income.

Accordingly, the majority of our funds had been invested in liquid, investment-grade fixed income securities which are all designated as AFS at March 31, 2023.

As our insurance liabilities continue to run-off and the required capital to operate our business for regulatory purposes decreases, we have modified Maiden Reinsurance’s investment policy (which has been approved by the Vermont DFR as noted) and have expanded the range of asset classes we invest in to enhance the income and total returns our investment portfolio produces.

We categorize these investments as alternative investments which include " Other Investments ", "Equity Securities" , and "Equity Method Investments" on our Condensed Consolidated Balance Sheets.

As of March 31, 2023 and December 31, 2022, our cash and investments consisted of:

March 31, 2023 December 31, 2022

($ in thousands)

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Investments " included under Part I Item 1 " Financial Information" of this Form 10-Q for further discussion on our AFS fixed income securities.

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

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

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

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

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In addition, costs associated with evaluating, analyzing and monitoring these investments may require additional expenditures than traditional marketable securities.

During 2022, our investment expenses associated with our alternative investments have decreased compared to 2021.

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 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.

Prior to the Exchange, we cumulatively invested $176.4 million in the preference shares of Maiden Holdings which have since been extinguished and exchanged for 41,439,348 common shares of the Company pursuant to the Exchange.

As a result of the Exchange, there are no preference shares outstanding.

The market value of our common shares held by Maiden Reinsurance was $86.6 million at March 31, 2023.

Cash & Cash Equivalents

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

At March 31, 2023, 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 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)

The average yield and average duration of our fixed maturities, by asset class, and our cash and cash equivalents (restricted and unrestricted) are as follows at March 31, 2023 and December 31, 2022, respectively:

March 31, 2023 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 nine months ended September 30, 2022, the yield on the 10-year U.S.

Treasury bond increased by 231 basis points to 3.83%.

During the three months ended March 31, 2023, the yield on the 10-year U.S.

Treasury bond decreased by 40 basis points to 3.48%.

The 10-year U.S.

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 nine months ended September 30, 2022, reflecting concerns of the U.S.

Federal Reserve about ongoing inflation emanating from the combination of:

Treasury yield curve experienced a slight shift during the three months ended March 31, 2023, reflecting concerns of the U.S.

Federal Reserve about continuing ongoing inflation emanating from the combination of:

1) the strength of the U.S.

economy as the economic effects of the COVID-19 pandemic continue to abate;

2) geopolitical instability in Eastern Europe which threatened additional inflation and global economic stability;

2 unchanged sentences

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 appears likely to continue for at least the near term.

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

The movement in the market values of our fixed maturity portfolio during the three months ended March 31, 2023 generated net unrealized gains of $1.9 million which increased our book value per common share by $0.02 during the period.

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

and globally are 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.

5 unchanged sentences

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

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.

As of March 31, 2023, 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 $8.6 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 September 30, 2022 and December 31, 2021, these respective durations in years were as follows:

September 30, 2022 December 31, 2021

At March 31, 2023 and December 31, 2022, these respective durations in years were as follows:

March 31, 2023 December 31, 2022

Fixed maturities and cash and cash equivalents

1 unchanged sentence

Reserve for loss and LAE - net of LPT/ADC Agreement reserves 1.1 1.1

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 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.

During the three months ended March 31, 2023, the weighted average duration of our fixed maturity investment portfolio remained at 1.3 years while the duration for the reserve for loss and LAE remained at 5.3 years.

agency mortgage-backed securities ("Agency MBS") and commercial mortgage-backed securities.

At March 31, 2023, the duration of our loss reserves net of the LPT/ADC Agreement was slightly 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 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 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

At March 31, 2023 and December 31, 2022, 32.3% and 29.6%, respectively, of our fixed income investments are comprised of floating rate securities.

The floating rate investment holdings at March 31, 2023 and December 31, 2022 were as follows:

March 31, 2023 December 31, 2022

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

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Collateralized mortgage-backed securities 4,835 0.6 % 4,773 0.5 %

Corporate bonds 977 0.1 % 1,145 0.1 %

Total floating rate AFS fixed maturities at fair value 120,496 13.5 % 118,865 12.3 %

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

At March 31, 2023 and December 31, 2022, 100.0% of the Company’s U.S.

agency bond holdings are mortgage-backed.

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

September 30, 2022 December 31, 2021

agency MBS comprise 10.9% of our fixed maturity investment portfolio at March 31, 2023.

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.

Additional details on our U.S.

Agency MBS holdings at March 31, 2023 and December 31, 2022 were as follows:

March 31, 2023 December 31, 2022

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

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Agency MBS $ 34,161 100.0 % $ 34,365 100.0 %

agency MBS comprise 17.8% of our fixed maturity investment portfolio at September 30, 2022.

At September 30, 2022 and December 31, 2021, 98.8% and 97.8%, respectively, of our fixed maturity investments consisted of investment grade securities.

At March 31, 2023 and December 31, 2022, 98.4% and 98.5%, 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 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

The security holdings by sector and financial strength rating of our corporate bond holdings at March 31, 2023 and December 31, 2022 were as follows:

March 31, 2023 AAA A+, A, A- BBB+, BBB, BBB- BB+ or lower Fair Value % of Corporate bonds portfolio

Corporate bonds

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1.6 % 33.9 % 58.9 % 5.6 % $ 91,805 100.0 %

1.7 % 40.3 % 52.8 % 5.2 % $ 85,242 100.0 %

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

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1.6 % 35.5 % 57.7 % 5.2 % $ 91,953 100.0 %

0.6 % 40.1 % 53.9 % 5.4 % $ 240,642 100.0 %

(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 September 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 March 31, 2023;

of which 100.0% are euro denominated, with 54.4% in the Consumer Sector and 27.9% in the Financial Institutions sector.

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

March 31, 2023 Fair Value % of Holdings Rating (1)

($ in thousands)

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

Anheuser-Busch INBEV SA, 2.875%, Due 9/25/2024 $ 10,822 3.5 % BBB+

Chubb Ina Holdings Inc., 1.55%, Due 3/15/2028 6,375 2.0 % A

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Glencore Finance (Europe) LTD, 1.875%, Due 9/13/2023 5,377 1.7 % BBB+

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

Volkswagen International Finance NV, 1.125%, Due 10/2/2023 5,360 1.7 % A-

Santander Consumer Finance SA, 1.125%, Due 10/9/2023 5,353 1.7 % A

America Movil SAB DE CV, 1.5%, Due 3/10/2024 5,298 1.7 % A-

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Molson Coors Beverage Co., 1.25%, Due 7/15/2024 5,227 1.7 % BBB-

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

FBD Insurance PLC, 5.0%, Due 10/9/2028 5,121 1.6 % NA

$ 60,409 19.3 %

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

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

At March 31, 2023 and December 31, 2022, respectively, we held the following non-U.S.

dollar denominated securities:

September 30, 2022 December 31, 2021

March 31, 2023 December 31, 2022

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

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dollar denominated securities $ 208,624 100.0 % $ 205,121 100.0 %

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

At March 31, 2023 and December 31, 2022, 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 nine months ended September 30, 2022.

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

The net increase in non-U.S.

denominated fixed maturities is due to relative appreciation of euro denominated bonds during the three months ended March 31, 2023.

At March 31, 2023 and December 31, 2022, all of the Company's non-U.S.

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

For our non-U.S.

dollar denominated corporate bonds, the following table summarizes the composition of the fair value of our fixed maturity investments at the dates indicated by ratings at September 30, 2022 and December 31, 2021:

September 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 March 31, 2023 and December 31, 2022:

March 31, 2023 December 31, 2022

($ 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 September 30, 2022 and December 31, 2021, respectively.

denominated currencies at March 31, 2023 and December 31, 2022, respectively.

Other Investments, Equity Securities and Equity Method Investments

Our alternative investments are categorized as other investments, equity securities, and equity method investments as reported on our consolidated balance sheets.

Our alternative investments are categorized as other investments, equity securities, and equity method investments as reported on our condensed consolidated balance sheets.

These include private equity funds, private credit funds and hedge fund investments, investments in limited partnerships, as well as investments in direct lending entities and investments in technology-oriented insurance related businesses known as insurtechs.

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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 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

Our alternative investments as of March 31, 2023 and December 31, 2022 consisted of the following asset classes:

March 31, 2023 December 31, 2022

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

Real estate equity method investments $ 44,925 17.0 % $ 44,050 19.6 %

Hedge fund equity method investments 15,447 5.9 % 32,929 14.6 %

Investments in direct lending entities 52,783 20.0 % 42,976 19.1 %

Publicly traded equity investments $ 402 0.2 % $ 386 0.1 %

Privately held common stocks 31,911 12.1 % 32,290 11.9 %

Privately held preferred stocks 12,953 4.9 % 10,945 4.0 %

Total equity securities $ 45,266 17.2 % $ 43,621 16.0 %

Hedge fund investments $ 517 0.2 % $ 5,376 2.0 %

Real estate investments 41,104 15.6 % 40,944 15.0 %

Other equity method investments 30,275 11.5 % 33,839 12.4 %

Total equity method investments $ 71,896 27.3 % $ 80,159 29.4 %

Private equity funds $ 38,213 14.5 % $ 34,278 12.6 %

Private credit funds 17,605 6.7 % 24,374 8.9 %

Privately held other investments 32,115 12.2 % 30,500 13.5 %

Other equity method investments 19,793 7.5 % 6,763 3.0 %

Privately held equity securities 42,002 15.9 % 22,829 10.1 %

Publicly traded equity securities 598 0.2 % 1,174 0.5 %

Privately held equity investments 33,255 12.6 % 34,014 12.5 %

Investment in direct lending funds (at cost) 57,250 21.7 % 56,087 20.6 %

Total other investments $ 146,323 55.5 % $ 148,753 54.6 %

Total alternative investments $ 263,485 100.0 % $ 272,533 100.0 %

Our allocation to alternative investments decreased to 42.6% of our total cash and investments as of March 31, 2023 compared to 43.0% as of December 31, 2022;

and increased to 97.3% of our total shareholders' equity as of March 31, 2023 compared to 95.8% as of December 31, 2022.

In addition to the categories described above, we also evaluate our alternative investments by the following asset classes:

March 31, 2023 December 31, 2022

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

Private Equity $ 63,277 24.0 % $ 60,227 22.1 %

Private Credit 44,676 17.0 % 51,783 19.0 %

Hedge Funds 517 0.2 % 5,376 2.0 %

Alternatives 83,636 31.7 % 85,866 31.5 %

Venture Capital 23,346 8.9 % 21,126 7.7 %

Real Estate 48,033 18.2 % 48,155 17.7 %

Total alternative investments $ 263,485 100.0 % $ 272,533 100.0 %

For further details on these alternative investments, see " Notes to Condensed Consolidated Financial Statements:

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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

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 nine months ended September 30, 2022 and 2021:

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

The following table summarizes our investment results for the three months ended March 31, 2023 and 2022:

For the Three Months Ended March 31,

($ in thousands) 2023 2022

Net investment income:

Fixed income assets (1)

Fixed income investments (1)

$ 8,451 $ 6,157

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Total net investment income 9,545 6,567

Net realized (losses) gains:

Net realized gains:

Fixed income assets (1)

96 1,791 1,192 5,794

Other investments, including equities 176 79

Total net realized (losses) gains (1,726) 1,958 (153) 6,924

Net unrealized gains (losses):

Total net realized gains 176 1,222

Net unrealized gains:

Other investments, including equities 829 1,087

Total net unrealized gains (losses) 154 (2,895) 3,001 1,089

Total net unrealized gains 829 1,087

Interest in (loss) income of equity method investments:

3 unchanged sentences

$ 10,499 $ 10,147

Other comprehensive loss:

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

Other comprehensive income (loss):

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

$ 1,936 $ (11,392)

Total investment return = (A) + (B) $ 12,435 $ (1,245)

Annualized income from fixed income assets and cash (2)

Annualized income from fixed income assets (2)

$ 35,028 $ 24,600

Average aggregate fixed income assets and cash, at cost (2)

Average aggregate fixed income assets, at cost (2)

947,270 1,416,353

4 unchanged sentences

Total investment return 1.0 % (0.1) %

Includes AFS securities as well as funds withheld receivable, and loan to related party.

Average aggregate fixed income assets and cash include AFS securities, cash and restricted cash, funds withheld receivable, and loan to related party and is computed as an average of the amounts disclosed in our quarterly U.S.

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

Average aggregate fixed income assets and cash include AFS portfolio, cash and restricted cash, funds withheld receivable, and loan to related party and is computed as an average of the amounts disclosed in our quarterly U.S.

GAAP consolidated financial statements.

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GAAP consolidated financial statements.

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:

The following table details total investment returns for our fixed income investments for the three months ended March 31, 2023 and 2022, respectively:

Fixed Income Investments (1)

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

For the Three Months Ended March 31,

($ in thousands) 2023 2022

10 unchanged sentences

Net Investment Returns 1.1 % (0.6) %

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

The following table details total investment returns for our alternative investments for the three months ended March 31, 2023 and 2022, respectively:

Alternative Investments (2)

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

For the Three Months Ended March 31,

($ in thousands) 2023 2022

2 unchanged sentences

Change in AOCI (3)

— (4,078) 4,414 (7,497)

Gross investment returns $ 1,841 $ 7,451

10 unchanged sentences

GAAP consolidated financial statements.

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.

The following table details total investment returns for alternative investments by asset class for the three months ended March 31, 2023:

March 31, 2023 Private Equity Private Credit Hedge Funds Alternative Assets Venture Capital Real Estate Total

($ in thousands)

Gross investment income $ 109 $ 778 $ 167 $ — $ — $ (218) $ 836

Net realized and unrealized gains (losses) 665 (462) — — 1,083 (281) 1,005

Total Investment Return $ 774 $ 316 $ 167 $ — $ 1,083 $ (499) $ 1,841

Average Investments $61,752 $48,230 $2,947 $ 84,751 $ 22,236 $ 48,094 $ 268,009

Gross Investment Returns 1.3 % 0.7 % 5.7 % — % 4.9 % (1.0) % 0.7 %

Annualized Gross Returns 5.0 % 2.6 % 22.7 % — % 19.5 % (4.2) % 2.7 %

Total investment returns on alternative investments were positive and earned 0.7% during the three months ended March 31, 2023, however, gross and net investment returns were lower compared to the same respective period in 2022.

During the three months ended March 31, 2023, positive returns were experienced across all of our asset classes other than our real estate investments.

The following table details total investment returns for alternative investments by asset class for the three months ended March 31, 2022:

March 31, 2022 Private Equity Private Credit Hedge Funds Alternative Assets Venture Capital Real Estate Total

($ in thousands)

Gross investment income $ 108 $ 373 $ (68) $ 1,340 $ 118 $ — $ 1,871

Net realized and unrealized gains (losses) 1,576 (150) — 79 (339) — 1,166

Change in AOCI — — — 4,414 — — 4,414

Total Investment Return $ 1,684 $ 223 $ (68) $ 5,833 $ (221) $ — $ 7,451

Average Investments $ 61,779 $ 31,604 $ 32,895 $ 48,855 $ 7,177 $ 55,630 $ 237,939

Gross Investment Returns 2.7 % 0.7 % (0.2) % 11.9 % (3.1) % — % 3.1 %

Annualized Gross Returns 10.9 % 2.8 % (0.8) % 47.8 % (12.3) % — % 12.5 %

Total returns on alternative investments were positive and earned 3.1% during the three months ended March 31, 2022 partly due to the sale of an equity method investment which produced gross returns of $5.8 million and contributed 2.4% to the gross investment returns during the prior year period.

Despite the recent volatility experienced in financial markets, we believe our alternative investment portfolio remains well positioned to achieve its targeted longer-term returns.

Other Balance Sheet Changes

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

$ 12,368 $ 19,507 $ (7,139) (36.6) %

Reinsurance recoverable on unpaid losses

547,975 562,845 (14,870) (2.6) %

The following table summarizes our other material balance sheet changes at March 31, 2023 and December 31, 2022:

($ in thousands) March 31, 2023 December 31, 2022 Change Change %

Deferred commission and other acquisition expenses

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The Company's deferred commission and other acquisition expenses decreased by 12.0% and unearned premiums decreased by 12.4% 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.

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.

Funds withheld receivable decreased by 15.9% largely due to the settlement of reinsurance losses payable under the AmTrust Quota Share.

Accrued expenses and other liabilities decreased by 15.8% primarily driven by a decrease in underwriting-related derivative liability on GLS policies which was $4.0 million as of March 31, 2023 compared to $14.6 million at December 31, 2022 due to the acceleration of covered payments which triggered coverage in excess of the contracts risk margin.

The Company's reserve for loss and LAE decreased by 5.3% primarily due to continued settlement of loss reserves for AmTrust Reinsurance contracts.

Capital Resources

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.

During the three months ended March 31, 2023, book value per common share decreased by 5.0% to $2.66 and diluted book value per common share decreased by 5.4% to $2.64, compared to December 31, 2022.

This was due to the net loss attributable to Maiden common shareholders of $11.3 million during the three months ended March 31, 2023 and an opening allowance for expected credit losses of $5.5 million in the beginning retained earnings on January 1, 2023;

partly offset by a net increase in AOCI of $2.5 million during the period.

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

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

$ 119,672 $ 159,210 $ (39,538) (24.8) %

Common shareholders' equity

207,721 225,047 (17,326) (7.7) %

Total shareholders' equity

The following table shows the movement in our capital resources at March 31, 2023 and December 31, 2022:

March 31, 2023 December 31, 2022 Change Change (%)

($ in thousands)

Common shares at par value $ 1,496 $ 1,492 $ 4 0.3 %

Additional paid-in capital 885,125 884,259 866 0.1 %

Accumulated other comprehensive loss (38,760) (41,234) 2,474 (6.0) %

Accumulated deficit (459,704) (442,863) (16,841) 3.8 %

Treasury shares, at cost (117,363) (117,075) (288) 0.2 %

Total Maiden shareholders' equity

270,794 284,579 (13,785) (4.8) %

3 unchanged sentences

$ 533,294 $ 547,079 $ (13,785) (2.5) %

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 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 $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 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:

• net increase due to share-based compensation of $1.5 million.

Total capital resources decreased by $13.8 million, or 2.5% compared to December 31, 2022 due to the following items:

• net increase in additional paid-in capital of $0.9 million mainly due to share-based compensation of $0.8 million;

• net increase in AOCI of $2.5 million which arose due to:

(1) net unrealized gains on investment of $1.9 million due to a increase of $1.9 million for our fixed income investment portfolio relating to market price movements in the three months ended March 31, 2023, and (2) an increase in cumulative translation adjustments of $0.6 million in the three months ended March 31, 2023 due to the impact of the U.S.

dollar depreciation on the re-measurement of net assets denominated in British pound and euro;

• accumulated deficit increased by $16.8 million due to an opening allowance for expected credit losses on our other investments, reinsurance recoverable, reinsurance balances receivable and funds withheld receivable of $5.5 million for the three months ended March 31, 2023 which decreased opening retained earnings as well as a net loss of $11.3 million for the three months ended March 31, 2023;

• treasury shares increased by $0.3 million due to common shares repurchased for tax withholding in respect of tax obligations on the vesting of both non-performance-based and discretionary performance-based restricted shares.

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

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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, 2022.

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

Book value and diluted book value per common share at March 31, 2023 and December 31, 2022 were as follows:

($ in thousands except share and per share data) March 31, 2023 December 31, 2022

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

Preference Shares

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

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

The Board has not declared or paid a dividend on the preference shares since 2018 and there can be no assurance that it will declare and pay dividends on the preference shares in the future.

The preference shares are perpetual and there is no fixed date on which we are required to redeem or otherwise repurchase them.

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 nine months ended September 30, 2022.

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

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.

During the three months ended March 31, 2023, the Company did not repurchase any common shares under its share repurchase authorization.

At March 31, 2023, the Company had a remaining authorization of $74.2 million for share repurchases.

There were no changes in the Company’s Senior Notes at March 31, 2023 compared to December 31, 2022 and the Company did not enter into any short-term borrowing arrangements during the three months ended March 31, 2023.

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

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

The 2013 Senior Notes issued by Maiden NA are fully and unconditionally guaranteed by Maiden Holdings.

The Senior Notes are unsecured and unsubordinated obligations of the Company.

As described in " Notes to Condensed Consolidated Financial Statements (unaudited) Note 14.

Subsequent Events " included under Part I Item 1 " Financial Information" of this Form 10-Q, on May 3, 2023, the Company's Board of Directors approved the repurchase, including the repurchase by Maiden Reinsurance in accordance with its investment guidelines, of up to $100,000 of the Company's Senior Notes from time to time at market prices in open market purchases or as may be privately negotiated.

Maiden Holdings does not have any significant operations or assets other than ownership of the shares of our subsidiaries.

The dividends and other permitted distributions from Maiden NA (and its subsidiaries) will be our sole source of funds to meet ongoing cash requirements, including debt service payments.

Factors that may affect payments to holders of the 2013 Senior Notes include restrictions on the payments of dividends by Maiden Reinsurance to Maiden NA which provides the sole source of income for interest payments on the 2013 Senior Notes.

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 paid a total of $25.0 million in dividends to Maiden NA as of March 31, 2023.

Summarized financial information of Maiden NA and Maiden Holdings as of March 31, 2023 and for the three months ended March 31, 2023 were as follows:

Maiden NA Maiden Holdings

($ in thousands)

Total assets $ 4,219 $ 9,227

Total liabilities 149,186 108,489

Amounts due from subsidiaries (not included in total assets above) 1,237 402

Amounts due to subsidiaries (not included in total liabilities above) 13,644 4,715

Related party loan payable (not included in total liabilities above) — 275,191

Total revenue 113 3

Net loss (1,964) (9,762)

The summarized financial information above has been presented on a combined basis for the issuer Maiden NA and the guarantor Maiden Holdings, excluding all other subsidiaries.

Intercompany balances and transactions between Maiden NA and Maiden Holdings, whose information is presented above on a combined basis, were eliminated.

Any investment by Maiden NA or Maiden Holdings in subsidiaries that are not issuers or guarantors is not presented in the financial information above.

Intercompany balances with subsidiaries that are not issuers or guarantors and any related party transactions were separately disclosed above and are not included in the total assets and total liabilities presented for Maiden NA and Maiden Holdings.

The net loss for Maiden NA and Maiden Holdings was due to interest and amortization expenses on the Senior Notes as well as general and administrative expenses.

The net loss in Maiden NA was also due to income tax expense incurred.

The ratio of Debt to Total Capital Resources at March 31, 2023 and December 31, 2022 was computed as follows:

($ in thousands) March 31, 2023 December 31, 2022

Senior notes - principal amount

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In certain of these joint ventures, the Company has provided certain indemnities, guarantees and commitments to ce rtain parties such that it may be required to make payments now or in the future as further described in the " Notes to Condensed Consolidated Financial Statements (unaudited) Note 11.

In certain of these joint ventures, the Company has provided certain indemnities, guarantees and commitments to

ce rtain parties such that it may be required to make payments now or in the future as further described in the " Notes to Condensed Consolidated Financial Statements (unaudited) Note 11.

Commitments, Contingencies and Guarantees " included under Part I Item 1 " Financial Information" of this Form 10-Q.

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

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.

As discussed above, at March 31, 2023, guarantees of $42.3 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 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 was $7.9 million for the three months ended March 31, 2023 compared to a non-GAAP operating loss of $6.9 million for the same period in 2022, and was largely due to a non-GAAP underwriting loss of $6.7 million for the three months ended March 31, 2023, compared to a non-GAAP underwriting loss of $2.7 million for the same period in 2022.

The non-GAAP underwriting loss in both respective periods included 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, as well as loss development under the European Hospital Liability Quota Share.

Also, it included an underwriting loss in the Diversified Reinsurance segment of $2.0 million for the three months ended March 31, 2023 compared to underwriting income of $1.5 million for the same period in 2022.

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

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GAAP financial measure as follows:

For the Three Months Ended September 30, 2022 2021

($ in thousands except per share data)

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

Add (subtract):

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 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 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 loss per share attributable to common shareholders

$ (0.24) $ (0.04)

For the Nine Months Ended September 30, 2022 2021

For the Three Months Ended March 31, 2023 2022

($ in thousands except per share data)

Net income available to Maiden common shareholders $ 19,186 $ 101,426

Net (loss) income (attributable) available to Maiden common shareholders $ (11,328) $ 1,594

Add (subtract):

Net realized and unrealized investment gains (1,005) (2,309)

Foreign exchange and other gains (19,121) (6,070)

Foreign exchange and other losses (gains) 2,816 (3,949)

Interest in loss (income) of equity method investments 51 (1,271)

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

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

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

Change in deferred gain on retroactive reinsurance under the LPT/ADC Agreement 1,573 (1,000)

Non-GAAP operating loss $ (7,893) $ (6,935)

Diluted (loss) earnings per share (attributable) available to common shareholders $ (0.11) $ 0.02

Add (subtract):

Net realized and unrealized investment gains (0.01) (0.03)

Foreign exchange and other gains (0.22) (0.07)

Foreign exchange and other losses (gains) 0.03 (0.05)

Interest in loss (income) of equity method investments — (0.01)

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

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 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 (loss) earnings $ (21,060) $ (3,114) $ (11,362) $ 58,135

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

Ending adjusted common shareholders’ equity 242,859 273,565 242,859 273,565

Average adjusted common shareholders’ equity 256,259 275,324 258,925 241,006

Non-GAAP Operating ROACE

Change in deferred gain on retroactive reinsurance under the LPT/ADC Agreement 0.01 (0.01)

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

$ (0.08) $ (0.08)

Non-GAAP Underwriting Results

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,

The non-GAAP underwriting results for the three months ended March 31, 2023 and 2022 are as follows:

For the Three Months Ended March 31,

($ in thousands) 2023 2022

2 unchanged sentences

Net premiums earned $ 9,002 $ 1,122

Other insurance revenue 368 138 888 946

Other insurance (expense) revenue, net (59) 51

Non-GAAP net loss and LAE (1)

4 unchanged sentences

$ (6,680) $ (2,655)

(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.

(1) Non-GAAP underwriting loss and non-GAAP net loss and LAE for the three months ended March 31, 2023 and 2022 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 $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 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.

The non-GAAP underwriting results include the impact of adverse 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 increase in the deferred gain under the LPT/ADC Agreement of $1.6 million during the three months ended March 31, 2023, the non-GAAP underwriting loss was $6.7 million.

This compared to a non-GAAP underwriting loss of $2.7 million when adjusted for the decrease in the deferred gain under the LPT/ADC Agreement of $1.0 million during the three months ended March 31, 2022.

The non-GAAP underwriting results above were driven by 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 as well as loss development related to the European Hospital Liability Quota Share.

Also, it included an underwriting loss in the Diversified Reinsurance segment of $2.0 million for the three months ended March 31, 2023 compared to .

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 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 September 30, For the Nine Months Ended September 30,

Adjusted for the increase in the deferred gain for the LPT/ADC Agreement, the non-GAAP net loss and LAE for the three months ended March 31, 2023 decreased by $1.6 million as these amounts included adverse loss experience for AmTrust Quota Share 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 for the three months ended March 31, 2022, the non-GAAP net loss and LAE increased by $1.0 million as these amounts included favorable loss experience for AmTrust Quota Share reserves subject to the LPT/ADC Agreement which are ultimately recoverable from Cavello.

These adjustments are reflected in the calculation of non-GAAP Loss and LAE below:

For the Three Months Ended March 31,

($ in thousands) 2023 2022

1 unchanged sentence

$ 9,815 $ (2,283)

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

(6,259) (3,609) (10,722) (24,296)

change in deferred gain on retroactive reinsurance under the LPT/ADC Agreement 1,573 (1,000)

Non-GAAP net loss and LAE

1 unchanged sentence

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 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.

The Adjusted Shareholders' Equity, Adjusted Total Capital Resources and Adjusted Book Value per Common Share at March 31, 2023 and December 31, 2022 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 $47.0 million at March 31, 2023 compared to $45.4 million at December 31, 2022, which relates to loss reserves subject to that agreement that are fully recoverable from Cavello.

The increase in the unamortized deferred gain under the LPT/ADC Agreement for the three months ended March 31, 2023 is attributable to $1.6 million in loss and LAE recognized as adverse 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.

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 during the nine months ended September 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 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 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

$ 119,672 $ 159,210 $ (39,538) (24.8) %

Common shareholders' equity

207,721 225,047 (17,326) (7.7) %

The following table computes adjusted shareholders' equity and adjusted total capital resources by recognizing the unamortized deferred gain under the LPT/ADC Agreement at March 31, 2023 and December 31, 2022:

($ in thousands) March 31, 2023 December 31, 2022 Change Change %

Total shareholders' equity

$ 270,794 $ 284,579 $ (13,785) (4.8) %

LP Investment Adjustment — 4,083 (4,083) (100.0) %

Unamortized deferred gain on LPT/ADC Agreement 46,981 45,408 1,573 3.5 %

4 unchanged sentences

Adjusted total capital resources $ 580,275 $ 592,487 $ (12,212) (2.1) %

Non-GAAP Operating ROACE

Non-GAAP Operating ROACE for the three months ended March 31, 2023 and 2022 was as follows:

For the Three Months Ended March 31,

($ in thousands) 2023 2022

Non-GAAP operating loss $ (7,893) $ (6,935)

Opening adjusted shareholders’ equity 329,987 274,990

Ending adjusted shareholders’ equity 317,775 260,187

Average adjusted shareholders’ equity 323,881 267,589

Non-GAAP Operating ROACE

(9.9) % (10.5) %

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

September 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 at March 31, 2023 and December 31, 2022 was computed as follows:

March 31, 2023 December 31, 2022

Book value per common share

$ 2.66 $ 2.80

LP Investment Adjustment — 0.05

Unamortized deferred gain on LPT/ADC Agreement 0.46 0.45

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

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

The ratio of Debt to Adjusted Total Capital Resources at March 31, 2023 and December 31, 2022 was computed as follows:

($ in thousands) March 31, 2023 December 31, 2022

Senior notes - principal amount

15 unchanged sentences

To the extent that these exposures are not fully hedged or the hedges are ineffective, our results of operations or equity may be adversely affected.

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

At March 31, 2023, 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 $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.

Net foreign exchange losses of $2.0 million were generated during the three months ended March 31, 2023, compared to net foreign exchange gains of $3.9 million for the three months ended March 31, 2022.

Our non-USD denominated liabilities at March 31, 2023 included reserve for net loss and LAE of $328.4 million.

Our foreign currency asset exposures at March 31, 2023 include $208.6 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 $21.1 million of equity method real estate investments denominated in Canadian dollars.

Effects of Inflation

3 unchanged sentences

The actual effects of inflation on the results of operations of the Company cannot be accurately known until claims are ultimately settled.

We continue to monitor inflationary impacts resulting from recent government stimulus, sharp increases in demand, labor force and supply chain disruptions, among other factors, on our loss cost trends.

Our reserves predominantly consist of workers’ compensation, general liability, and hospital liability.

These long tailed lines of business have been subject to the longer term trend of social inflation, but we have not observed significant impacts for the recently elevated levels of inflation.

We proactively analyze available data and we incorporate trends into our loss reserving assumptions to ensure we are considerate of current and future economic conditions.

Governmental policy responses to inflation have significantly increased interest rates which, in the short term, have contributed to unrealized losses on our fixed income investments, particularly on our fixed maturity securities.

There remains uncertainty around the rate and direction of inflation and we continue to monitor our liquidity, capital and potential earnings impact of these changes but remain focused on our asset allocation decisions as described in our "Business Strategy" section of Item 7 " Management’s Discussion and Analysis of Financial Condition and Results of Operations - Overview ".

Inflation may also result in increased wage pressures for our operating expenses, as we remain focused on being a competitive employer in our market.

Labor shortages arising from the conditions of the COVID-19 pandemic have contributed to uncertainty in attracting and retaining talent that may put pressure on higher wage costs.

Currently, salaries and incentive compensation costs comprise more than one-half of our total general and administrative expenses and thereby could have a material impact our net operating results.

Off-Balance Sheet Arrangements

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

At March 31, 2023, 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