Maiden Holdings, Ltd. 10-Q

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited Condensed Consolidated Financial Statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (this "Form 10-Q" or this "Report"). References in this Form 10-Q to the terms "we", "us", "our", "the Company", "Maiden" or other similar terms mean the consolidated operations of Maiden Holdings, Ltd. and its subsidiaries, unless the context requires otherwise. References in this Form 10-Q to the term "Maiden Holdings" means Maiden Holdings, Ltd. only. Certain reclassifications have been made for 2024 to conform to the 2025 presentation and have no impact on consolidated net income and total equity previously reported. Note on Forward-Looking Statements This Quarterly Report on Form 10-Q includes the consummation of the business combination with Kestrel (as defined herein), including the expected time period to consummate the business combination, and the anticipated benefits of the business combination, projections concerning financial information and statements concerning future economic performance and events, plans and objectives relating to management, operations, products and services, and assumptions underlying these projections and statements. These projections and statements are forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 and are not historical facts but instead represent only our belief regarding future events, many of which, by their nature, are inherently uncertain and outside our control. These projections and statements may address, among other things, our strategy for growth, product development, financial results and reserves. Our actual results and financial condition may differ, possibly materially, from these projections and statements and therefore you should not place undue reliance on them. Factors that could cause our actual results and financial condition to differ, possibly materially, from those in the specific projections and statements are discussed throughout this Management's Discussion and Analysis of Financial Condition and Results of Operations and in "Risk Factors" in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2024 that was filed with the U.S. Securities and Exchange Commission ("SEC") on March 10, 2025, however, these factors should not be construed as exhaustive. Forward-looking statements speak only as of the date they are made and we undertake no obligation to update or revise any forward-looking statement that may be made from time to time, whether as a result of new information, future developments or otherwise, except as required by law. 41 Overview Maiden Holdings is a Bermuda-based holding company. Maiden creates shareholder value by actively managing and allocating our assets and capital, including through ownership and management of businesses and assets mostly in the insurance and related financial services industries where we can leverage our deep knowledge of those markets. As of March 31, 2025, Maiden Reinsurance owns approximately 31.0% of the Company's total outstanding common shares which is eliminated for accounting and financial reporting purposes on the Company's condensed consolidated financial statements. The voting power of Maiden Reinsurance, with respect to its common shares ownership, was capped at 9.5% pursuant to the bye-laws of the Company. However, on April 29, 2025, Maiden shareholders approved the proposal to remove the 9.5% voting limitation at the Company's special general meeting of its shareholders (the "Special Meeting"). The ownership of the common shares by Maiden Reinsurance was made in compliance with Maiden Reinsurance's investment policy and approved by the Vermont DFR. Current Operations The Company does not presently underwrite prospective reinsurance risks. During 2024, Maiden entered into a series of strategic transactions that, upon completion, will substantially transform our business plan and operations, which are fully described in our Annual Report on Form 10-K for the year ended December 31, 2024 that was filed on March 10, 2025. 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. Our wholly owned subsidiary, Maiden Global Holdings Ltd. (“Maiden Global”) is 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 ("IIS business"). These products also produced reinsurance programs which were underwritten by our wholly owned subsidiary Maiden Reinsurance Ltd. (“Maiden Reinsurance”). During 2024, we conducted and completed a strategic review of our IIS Business. The purpose of that review was to evaluate the strategic value of this business, including the operations of Maiden LF and Maiden GF in relation to their ongoing growth and profitability prospects, regulatory capital requirements and ability to create shareholder value in excess of the Company's target return on capital levels. As a result of that review, we concluded that divesting this business was in the best interests of shareholders and therefore we entered into the following transactions to accomplish that objective: 1) two Renewal Rights and Asset Purchase Agreement with AmTrust Nordic AB (“AmTrust Renewal Rights Agreements”); and 2) a Stock Purchase Agreement to sell Maiden LF and Maiden GF (“Swedish Subsidiaries Sale”). For further information on these transactions, please see Note 14. Assets Held for Sale in the Notes to Condensed Consolidated Financial Statements included in Part I Item 1. "Financial Information" . The Company also has various historic reinsurance programs underwritten by Maiden Reinsurance which are in run-off, including the liabilities associated with AmTrust Financial Services, Inc. ("AmTrust") reinsurance agreements which were terminated in 2019 as discussed in Note 10. Related Party Transactions of the Notes to Condensed Consolidated Financial Statements included in Part I Item 1. "Financial Information" . In addition, the Company has a retroactive reinsurance agreement and a commutation agreement that further reduces its exposure and limits the potential volatility related to AmTrust liabilities, which are discussed in Note 8. Reinsurance of the Notes to Condensed Consolidated Financial Statements included in Part I Item 1. "Financial Information" . The Company is also running off certain business related to its Genesis Legacy Solutions ("GLS") platform. In November 2020, the Company formed its indirect wholly owned subsidiary GLS, which specialized 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 to those companies' operations, working with clients to develop and implement finality solutions including acquiring entire companies. The Company believed the formation of GLS was highly complementary to its overall longer-term strategy. However, a combination of factors, including market conditions in the sector GLS focuses on, resulted in an inability for GLS to gain sufficient scale to achieve its objectives or earn a profit, and GLS results did not reach the objectives the Company expected it to over time. Having completed the capital commitment made to GLS in November 2020, the Company determined during 2023 to not commit any additional capital to new opportunities and to run-off the existing accounts underwritten by GLS. Our business currently consists of two reportable segments: Diversified Reinsurance and AmTrust Reinsurance. Our Diversified Reinsurance segment consists of a portfolio of predominantly property and casualty reinsurance business focusing on regional and specialty property and casualty insurance companies located primarily in Europe. This segment also includes transactions entered into by GLS since November 2020 . 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, AEL and 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, 2024 that was filed on March 10, 2025 for further information on recent developments within the Company. Business Strategy In addition to restoring operating profitability, our strategic focus centers on creating the greatest risk-adjusted shareholder returns in order to increase book value for our common shareholders, both near and long-term. In that respect, management’s focus is to increase non-GAAP book value, which fully reflects the steps we have taken to protect our balance sheet, primarily through our LPT/ADC Agreement with Cavello, as this represents the ultimate economic value of Maiden. 42 In recent years we pursued a revised operating strategy which leveraged the significant assets and capital we retain. As noted, we also formed GLS to focus on smaller accounts in the legacy (re)insurance marketplace, which we believed was complimentary to this strategy. Our assessment had been that these areas of strategic focus would enhance our profitability through increased returns, which would also increase the likelihood of fully utilizing the significant net operating loss ("NOL") carryforwards, as described further below, which would increase both GAAP and non-GAAP book value and create additional common shareholder value. The recognition of the deferred tax asset on our balance sheet remains a leading priority for the Company to increase its GAAP and non-GAAP book value. This strategy has recently had two principal areas of focus: • Asset management - investing in assets and asset classes in a prudent but expansive manner in order to maximize investment returns and is principally enabled by limiting the amount of insurance risk we assume in relation to the assets we hold and maintaining required regulatory capital at very strong levels to manage our aggregate risk profile; and • Capital management - effectively managing the capital we hold on our balance sheet and when appropriate, repurchasing securities or returning capital to enhance common shareholder returns. The returns expected to be produced by each pillar of our strategy are primarily evaluated in relation to our cost of debt capital, which carries a weighted average effective interest rate of 7.6%. To the extent our experience or belief indicates we cannot exceed the cost of debt capital, we expect to refrain from activities in those areas, as evidenced in our decisions regarding legacy management. Our ability to execute our asset and capital management initiatives are dependent on maintaining adequate levels of unrestricted liquidity and cash flows. Please refer to the "Liquidity and Capital Resources" section for further information. Asset Management As of March 31, 2025 , we have invested $254.2 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. Please refer to the "Liquidity and Capital Resources" section on " Other Investments, Equity Investments and Equity Method Investments" for further information on our alternative asset classes and a detailed discussion of their investment returns. Recent development and trends in financial markets, particularly the recent volatility in interest rates and the associated economic uncertainty as a result of those changes, indicate that it may take longer than expected to achieve those returns and we expect that to factor into future capital allocation decisions. 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. While our recorded ultimate losses for our insurance liabilities have experienced significant adverse loss development in recent years, as our insurance liabilities further mature we remain confident that we can continue the prudent and disciplined repurchase of our common shares and senior notes, both of which are authorized for repurchase, 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, 2024 for further information on the common shares repurchases made by Maiden Reinsurance in 2024 and 2023. In connection with the combination agreement (as amended, "Combination Agreement") entered into with Kestrel Group LLC (“Kestrel”), Maiden has suspended its common share repurchase program. Legacy Underwriting At March 31, 2025, GLS and its subsidiaries have total insurance related liabilities of $24.5 million which consisted of total loss reserves of $18.2 million, an underwriting-related derivative liability of $4.0 million, and net deferred gains on retroactive reinsurance of $2.3 million. Re-Assessment of Business Strategy As part of ongoing efforts to continually improve our performance, we regularly evaluate our business plans and strategies, which have resulted in material changes to those plans. In recent years, losses reported in our AmTrust Reinsurance segment have produced significant levels of adverse prior period loss development, including amounts increasingly not covered by the LPT/ADC Agreement. Please refer to the "Underwriting Results by Reportable Segment" section on " AmTrust Reinsurance Segment" for further information. As the run-off of our insurance liabilities has been more volatile than expected and our asset management strategies develop along timelines longer than initially anticipated, the need to allocate capital to other activities that produce more consistent levels of revenue and profit as we seek to create longer-term shareholder value has increased. As we have re-evaluated our longer-term strategy, we also engaged in an ongoing strategic evaluation of both the insurance and reinsurance marketplace and the ability of both the fee-based, distribution and the reinsurance markets to increase current income and improve our ability to utilize and recognize our deferred tax assets. As a result, we determined that the near-term expansion of those strategies is appropriate and during 2024 we took steps to: 1) further de-emphasize our prior strategies; and 2) actively explore fee-based and distribution opportunities which are non-risk bearing and capital efficient while potentially being complemented by limited and selective deployment of reinsurance capacity to supplement those activities and enhance returns to shareholders. 43 These steps resulted in the announcement of our Combination Agreement with Kestrel on December 29, 2024 . On April 29, 2025, the Company's shareholders approved all proposals related to the combination agreement at the Special Meeting. The transaction remains subject to customary closing conditions, the approval of listing of the shares of the combined company on the Nasdaq (subject to official notice of issuance) and the receipt of certain other regulatory approvals. Closing is currently expected to occur during the second quarter of 2025. See Note 1. Basis of Presentation in the Notes to Condensed Consolidated Financial Statements included in Part I Item 1. "Financial Information" for further information. We believe the upcoming combination with Kestrel represents a transformative milestone for Maiden, and believe that Kestrel’s balance sheet light, fee revenue model will enable us to realize our vision of delivering a strong fee-based insurance platform while selectively deploying underwriting capacity to optimize returns for shareholders. In light of the revisions to our strategy, during 2024 we took steps to begin to reduce the asset management pillar of our strategy which are discussed below. Our alternative investments portfolio increased by 1.1% during the three months ended March 31, 2025 primarily due to net purchases of private equity funds in the first quarter of 2025. H owever we expect this portfolio to be reduced further in future periods as we continue to refine our capital and asset management strategy consistent with our revised business strategy. T he alternative portfolio produced a lower positive net return of 0.3% during the three months ended March 31, 2025 compared to 3.4% for the same respective period in 2024. While we remain confident that our asset management strategy will achieve the returns we have set out to achieve, we currently believe it is more critical to reposition our balance sheet and increase our liquidity in support of the current initiatives being pursued. While we have revised our strategy and believe that our upcoming combination with Kestrel will increase the likelihood of achieving our stated objectives, 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 a result, we continue to pursue finality solutions to resolve the AmTrust liabilities not covered by the LPT/ADC Agreement, including through third-parties. There can be no guarantee that we will execute such finality solutions and these solutions could involve significant charges to execute and we are actively evaluating the potential costs and benefits of such solutions, to the extent they are available to the Company. 2025 Developments The run-off of our historic reinsurance programs produced underwriting income of $7.5 million for the three months ended March 31, 2025 which was driven by favorable prior year reserve development of $12.4 million for three months ended March 31, 2025. During the three months ended March 31, 2025, our book value decreased by 17.4% to $0.38 per common share at March 31, 2025, and our non-GAAP book value decreased by 6.6% to $1.42 per common share at March 31, 2025. There were no common share repurchases made in the three months ended March 31, 2025 under the Company's authorized common share repurchase plan. Please refer to the "Results of Operations" section for further information on our 2025 results to date. Maiden Holdings North America ("Maiden NA") 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 $460.8 million at March 31, 2025. Approximately $379.9 million of these NOL carryforwards expire in various years beginning in 2029. As of March 31, 2025, $81.0 million or 17.6% of the Company's NOL carryforwards have no expiry date under the relevant U.S. tax law. 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 $167.5 million or $1.68 per common share at March 31, 2025. Net U.S. DTA of $167.5 million is not presently recognized on the Company's condensed consolidated balance sheets as a full valuation allowance is carried against it. At this time, the Company believes it is necessary to maintain a full valuation allowance against the net U.S. DTA as more evidence is needed regarding the utilization of these losses. As circumstances further develop, we will continuously evaluate the amount of the valuation allowance held against the net U.S. DTA. For further details on the NOL carryforwards, please see " Note 13 — Income Taxes " included under Item 8 " Financial Statements and Supplementary Data " of the Annual Report on Form 10–K for the year ended December 31, 2024. Taken together, we believe these measures should generate additional income for Maiden NA in a tax-efficient manner, while sharing in the improvement in profitability anticipated in Maiden Reinsurance as a result of the measures enacted as described above. 44 Three Months Ended March 31, 2025 and 2024 Financial Highlights For the Three Months Ended March 31, 2025 2024 Change Summary Consolidated Statement of Income Data (unaudited): ($ in thousands except per share data) Net (loss) income $ (8,645) $ 1,459 $ (10,104) Basic and diluted (loss) earnings per common share: Net (loss) income attributable to common shareholders (2) (0.09) 0.01 (0.10) Gross premiums written 4,074 8,323 (4,249) Net premiums earned 7,684 12,408 (4,724) Underwriting income (loss) (3) 7,454 (7,524) 14,978 Net investment results (13) 3,643 17,056 (13,413) Non-GAAP measures: Non-GAAP operating loss (1) (2,807) (4,950) 2,143 Non-GAAP basic and diluted operating loss per common share (1) (0.03) (0.05) 0.02 Annualized non-GAAP operating return on average adjusted shareholders' equity (1) (7.8) % (6.2) % (1.6) March 31, 2025 December 31, 2024 Change Consolidated Financial Condition ($ in thousands except per share data) Total investments and cash and cash equivalents (4) $ 500,977 $ 518,798 $ (17,821) Total assets 1,234,584 1,316,006 (81,422) Reserve for loss and LAE 757,286 793,679 (36,393) Senior notes - principal amount 262,361 262,361 — Shareholders' equity 37,573 45,193 (7,620) Total capital resources (5) 299,934 307,554 (7,620) Ratio of debt to total capital resources (10) 87.5 % 85.3 % 2.2 Book Value calculations: Book value per common share (6) $ 0.38 $ 0.46 $ (0.08) Accumulated dividends per common share (12) 4.27 4.27 — Book value per common share plus accumulated dividends $ 4.65 $ 4.73 $ (0.08) Change in book value per common share plus accumulated dividends (1.7) % Diluted book value per common share (7) $ 0.37 $ 0.45 $ (0.08) Non-GAAP measures: Adjusted book value per common share (8) $ 1.42 $ 1.52 $ (0.10) Adjusted shareholders' equity (9) 141,541 150,148 (8,607) Adjusted total capital resources (9) 403,902 412,509 (8,607) Ratio of debt to adjusted total capital resources (11) 65.0 % 63.6 % 1.4 (1) Non-GAAP operating earnings (loss), non-GAAP operating earnings (loss) per common share, and annualized non-GAAP operating return on average common shareholders' equity are non-GAAP financial measures. See " Key Financial Measures " for additional information. (2) Please refer to " Notes to Condensed Consolidated Financial Statements (unaudited) Note 12. Earnings per Common Share " for the calculation of basic and diluted income (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. See " Key Financial Measures " for additional information. (4) Total investments and cash and cash equivalents includes both restricted and unrestricted. (5) Total capital resources is the sum of the Company's principal amount of debt and shareholders' equity. See " Key Financial Measures " for additional information. 45 (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 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 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 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. Under U.S. GAAP, the deferred gain shall be amortized over the estimated remaining settlement period. See " Key Financial Measures " for additional information. (10) Ratio of debt to total capital resources is calculated using the total principal amount of debt divided by the sum of total capital resources. (11) Ratio of debt to adjusted total capital resources is calculated using the total principal amount of debt divided by the sum of adjusted total capital resources. (12) Accumulated dividends per common share includes the cumulative sum of dividends declared and paid in the past on the Company's issued common shares since inception. (13) Net investment results include the sum of net investment income, net realized and unrealized gains (losses), and interest in income (loss) of equity method investments. 46 Key Financial Measures In addition to our key financial measures presented in accordance with GAAP in the Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Income and Comprehensive Income, management uses certain non-GAAP financial measures to evaluate the Company's financial performance and the overall growth in value generated for the Company’s common shareholders. Management believes that these measures, which may be defined differently by other companies, explain the Company’s results to investors in a manner that allows for a more complete understanding of the underlying trends in the Company’s business. The non-GAAP measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. The calculation of these key financial measures including the reconciliation of non-GAAP measures to the nearest GAAP measure and relevant discussions are found within Item 2 - "Management's Discussion and Analysis of Financial Condition and Results of Operations" . These non-GAAP financial measures are: Non-GAAP operating earnings (loss) and non-GAAP diluted operating earnings (loss) per common share : Management believes that the use of non-GAAP operating earnings and non-GAAP diluted operating earnings per common share enables investors and other users of the Company’s financial information to analyze its performance in a manner similar to how management analyzes performance. Management also believes that these measures generally follow industry practice therefore allowing the users of financial information to compare the Company’s performance with its industry peer group, and that the equity analysts and certain rating agencies which follow the Company, and the insurance industry as a whole, generally exclude these items from their analyses for the same reasons. Non-GAAP operating earnings should not be viewed as a substitute for U.S. GAAP net income. 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 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 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 ongoing business. We believe all of these amounts are substantially independent of our business and any potential future underwriting process, therefore their inclusion 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. For purposes of these non-GAAP operating measures, the fee-generating business which is included in our Diversified Reinsurance segment, is considered part of the underwriting operations of the Company. Management believes that this measure is important in evaluating the underwriting performance of the Company and its segments. This measure is also a useful tool to measure the profitability of the Company separately from the investment results and is also a widely used performance indicator in the insurance industry. A reconciliation of the Company's underwriting results can be found in the Condensed Consolidated Financial Statements in the " Notes to Condensed Consolidated Financial Statements (unaudited) Note 3. Segment Information " included under Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q. 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, 2025, as it believes that as the run-off of our reinsurance portfolios progresses, such ratios are increasingly not meaningful and of less value to readers as they evaluate the financial results of the Company, particularly compared to historical data. While an important metric of success, underwriting income (loss) does not reflect all components of profitability, as it does not recognize the impact of investment income earned on premiums between the time premiums are received and the time loss payments are ultimately paid to clients. Because we do not manage our cash and investments by segment, investment income and interest expense are not allocated to the reportable segments. Certain general and administrative expenses are generally allocated to segments based on actual costs incurred. 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: Book value per common share and diluted book value per common share are non-GAAP measures. Management uses growth in both of these metrics as a prime measure of the value we are generating for our common shareholders, 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 share repurchases. Ratio of Debt to Total Capital Resources: Management uses this non-GAAP measure to monitor the financial leverage of the Company. This measure is calculated using the total principal amount of debt divided by the sum of total capital resources. Non-GAAP underwriting income (loss) and Non-GAAP Net Loss and LAE: Management has further adjusted underwriting income (loss), as defined above, as well as reported net loss and LAE by excluding the portion of favorable or unfavorable prior year reserve development for which we have ceded the risk under retroactive reinsurance agreements such as the LPT/ADC Agreement. 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. 47 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 to shareholders' equity the unamortized deferred gain on ceded retroactive reinsurance under the LPT/ADC Agreement to shareholders' equity. The deferred gain liability on retroactive reinsurance under the LPT/ADC Agreement represents loss reserves estimated to be fully recoverable from Cavello. The unamortized deferred gain on ceded retroactive reinsurance under the LPT/ADC Agreement includes the aggregate impact of: 1) cumulative increases to losses incurred prior to December 31, 2018 for which we have ceded the risk under the LPT/ADC Agreement; and 2) changes in estimated ultimate losses for certain workers' compensation reserves previously commuted by the Company to AmTrust which are subject to specific terms and conditions pursuant to the LPT/ADC Agreement. As a result, by virtue of this adjustment, management has also adjusted Total Capital Resources and computed the Ratio of Debt to Adjusted Capital Resources and Adjusted Book Value per Common Share. We believe adjusting for this shows the ultimate economic benefit of the LPT/ADC Agreement and reflecting the economic benefit of this non-recurring retroactive reinsurance agreement is helpful to understand future trends in our operations, which will improve the Company's shareholders' equity over the settlement or contract periods, respectively. Alternative investments is the total of the Company's holdings of equity securities, other investments and equity method investments as reported on the Company's Condensed Consolidated Balance Sheets. Certain Operating Measures 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, 2024, filed with the SEC on March 10, 2025, for a general discussion on " Certain Operating Measures" utilized by the Company. Critical Accounting Policies and Estimates The critical accounting policies and estimates should be read in conjunction with " Part I, Item 1 - Notes to Condensed Consolidated Financial Statements (unaudited) Note 2. Significant Accounting Policies " included in this Form 10-Q and " Notes to Consolidated Financial Statements Note 2. Significant Accounting Policies " included within the audited Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 10, 2025. There have been no material changes in the application of our critical accounting estimates subsequent to that report. 48 Results of Operations The following table sets forth our selected unaudited Condensed Consolidated Statement of Income data for the three months ended March 31, 2025 and 2024: For the Three Months Ended March 31, ($ in thousands) 2025 2024 Gross premiums written $ 4,074 $ 8,323 Net premiums written $ 4,049 $ 8,314 Net premiums earned $ 7,684 $ 12,408 Other insurance revenue, net — 46 Net loss and LAE 7,623 (11,625) Commission and other acquisition expenses (4,558) (5,593) General and administrative expenses (1) (3,295) (2,760) Underwriting income (loss) (2) 7,454 (7,524) Other general and administrative expenses (1) (7,478) (5,300) Net investment income 3,034 7,700 Net realized and unrealized investment gains 3,331 8,750 Foreign exchange and other (losses) gains (7,434) 2,053 Interest and amortization expenses (4,818) (4,815) Income tax expense (12) (11) Interest in (loss) income of equity method investments (2,722) 606 Net (loss) income $ (8,645) $ 1,459 (1) Underwriting related general and administrative expenses is a non-GAAP measure. Please refer to "General and Administrative Expenses" below for additional information related to these corporate expenses and the reconciliation to those presented in our unaudited Condensed Consolidated Statements of Income. (2) Underwriting loss is a non-GAAP measure and is calculated as net premiums earned plus other insurance revenue less net loss and LAE, commission and other acquisition expenses and general and administrative expenses directly related to underwriting activities. (3) 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) income Net loss for the three months ended March 31, 2025 was $8.6 million compared to net income of $1.5 million for the same respective period in 2024. The decrease in our financial results for the first quarter of 2025 compared to the first quarter of 2024 was primarily due to the following factors: • an underwriting income of $7.5 million for the three months ended March 31, 2025 compared to an underwriting loss of $7.5 million in the same period in 2024 largely due to: • favorable prior year loss development ("PPD") of $12.4 million in the first quarter of 2025 compared to adverse PPD of $6.6 million during the same period in 2024, detailed as follows; • Our AmTrust Reinsurance segment had favorable PPD of $7.8 million in the first quarter of 2025 compared to adverse PPD of $7.2 million for the first quarter of 2024. • Our Diversified Reinsurance segment had favorable PPD of $4.6 million in the first quarter of 2025 compared to favorable PPD of $0.7 million for the first quarter of 2024. • On a current accident year basis, underwriting loss was $4.9 million for the three months ended March 31, 2025 compared to an underwriting loss of $1.0 million for the same period in 2024. • lower income from investment activities which totaled $3.6 million for the three months ended March 31, 2025 compared to $17.1 million for the same period in 2024 primarily due to continued negative operating cash flows due to settlement of claim payments to AmTrust as we run-off existing reinsurance liabilities in the AmTrust Reinsurance segment. The change in investment activities was comprised of: • net investment income decreased to $3.0 million for the three months ended March 31, 2025 compared to $7.7 million that was earned for the same period in 2024; • realized and unrealized investment gains of $3.3 million for the three months ended March 31, 2025 compared to gains of $8.8 million for the same period in 2024; and • interest in loss of equity method investments of $2.7 million for the three months ended March 31, 2025 compared to income of $0.6 million in 2024. 49 • corporate general and administrative expenses increased to $7.5 million for the three months ended March 31, 2025 compared to corporate expenses of $5.3 million for the same period in 2024 primarily due to significantly higher expenses related to our pending business combination with Kestrel; and • foreign exchange and other losses of $7.4 million for the three months ended March 31, 2025, compared to foreign exchange and other gains of $2.1 million for the same period in 2024, primarily due to significant weakening of the U.S dollar on the re-measurement of net loss reserves and insurance related liabilities denominated in the British pound and euro. Net Premiums Written Net premiums written by our reportable segments, reconciled to the total consolidated net premiums written for the three months ended March 31, 2025 and 2024 are detailed below: For the Three Months Ended March 31, 2025 2024 Change in ($ in thousands) Total Total $ % Diversified Reinsurance $ 4,991 $ 8,819 $ (3,828) (43.4) % AmTrust Reinsurance (942) (505) (437) 86.5 % Total $ 4,049 $ 8,314 $ (4,265) (51.3) % Net premiums written for the three months ended March 31, 2025 decreased to $4.0 million, compared to net premiums written of $8.3 million for the same period in 2024: • Premiums written in the Diversified Reinsurance segment decreased by $3.8 million for the three months ended March 31, 2025, compared to the same respective period in 2024 due to the pending sale of Maiden LF and Maiden GF as discussed in Note 14. Assets Held for Sale of the Notes to Condensed Consolidated Financial Statements in Part I Item 1. "Financial Information" . As part of these transactions, Maiden LF and Maiden GF are no longer writing new business and their non-underwriting related assets and liabilities are represented as held-for-sale in our condensed consolidated financial statements. • Premiums written in the AmTrust Reinsurance segment decreased by $0.4 million for the three months ended March 31, 2025, compared to the same respective period in 2024. 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 $4.7 million for the three months ended March 31, 2025 compared to the same respective period in 2024. Net premiums earned by our reportable segments, reconciled to the total consolidated net premiums earned, for the three months ended March 31, 2025 and 2024 are detailed as follows: For the Three Months Ended March 31, 2025 2024 Change in ($ in thousands) Total Total $ % Diversified Reinsurance $ 5,000 $ 8,991 $ (3,991) (44.4) % AmTrust Quota Share Reinsurance 2,684 3,417 (733) (21.5) % Total $ 7,684 $ 12,408 $ (4,724) (38.1) % Net premiums earned in the Diversified Reinsurance segment for the three months ended March 31, 2025 decreased by $4.0 million or 44.4% compared to the same respective period in 2024 due to the pending sale of Maiden LF and Maiden GF as discussed above. 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, 2025 decreased by $0.7 million or 21.5% compared to the same respective period in 2024. Please refer to the analysis of our AmTrust Reinsurance segment for further discussion. Other Insurance Revenue Other Insurance Revenue has been primarily produced by our Diversified Reinsurance segment. Please refer to the analysis below of our Diversified Reinsurance segment for further discussion. Net Investment Income Net investment income decreased by $4.7 million or 60.6% for the three months ended March 31, 2025, compared to the same respective period in 2024. Annualized average book yields decreased to 2.7% for the three months ended March 31, 2025, compared to 4.6% for the same respective period in 2024 due to the following factors: • Loan to related party interest income decreased by $2.5 million for the three months ended March 31, 2025 compared to the same period in 2024 as interest income on the loan receivable is now offset by interest payable on the premium repayment to AmTrust as discussed in Note 10. Related Party Transactions . Net interest income earned on the net loan was also offset by a non-recurring adjustment of $1.2 million in the three months ended March 31, 2025 due to contractual reductions regarding the timing of paid loss settlements in 2024. Therefore, the net loan carried a lower 50 weighted average interest rate on a balance of $128.1 million which decreased to 1.9% for the three months ended March 31, 2025, compared to 7.3% on a balance of $168.0 million for the same respective period in 2024; • Interest income on our funds withheld receivable decreased by $0.8 million for the three months ended March 31, 2025, compared to the same period in 2024. At March 31, 2025, the funds withheld balance with AmTrust was $0.0 million compared to $61.0 million at March 31, 2024. Funds withheld receivable from AmTrust had earned an annual interest rate of 3.5% for much of 2024, until it was fully exhausted in the third quarter of 2024. Average aggregate fixed income assets for the three months ended March 31, 2025 decreased by 25.9% compared to the same period in 2024 due to continued run-off of our reinsurance liabilities previously written on prospective risks. For the three months ended March 31, 2025 and 2024, we experienced negative operating cash flows due to settlement of claim payments to AmTrust as we run-off existing reinsurance liabilities in the AmTrust Reinsurance segment. Floating rate investments comprise 49.4% of our fixed income investments at March 31, 2025 compared to 51.1% at March 31, 2024. The following table details our average aggregate fixed income assets (at cost) and annualized investment book yield for the three months ended March 31, 2025 and 2024: For the Three Months Ended March 31, ($ in thousands) 2025 2024 Average aggregate fixed income assets, at cost (1) $ 428,013 $ 577,388 Annualized investment book yield 2.7 % 4.6 % (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 Net realized and unrealized investment gains of $3.3 million were recognized for the three months ended March 31, 2025, compared to net realized and unrealized investment gains of $8.8 million for the same respective period in 2024. The reduction in unrealized gains was attributable in part to the reduced size of the Company's alternative asset portfolio as it continues to divest these assets in conjunction with its change in business strategy. Net realized and unrealized investment gains for the three months ended March 31, 2025 and 2024 are summarized in the table below by investment category: For the Three Months Ended March 31, ($ in thousands) 2025 2024 Net realized gains (losses): Fixed income assets (1) $ (1) $ (218) Other investments (133) — Total net realized losses (134) (218) Net unrealized gains (losses): Other investments 4,762 9,839 Equity securities (1,297) (871) Total net unrealized gains 3,465 8,968 Net realized and unrealized investment gains $ 3,331 $ 8,750 (1) Fixed income assets includes AFS securities as well as cash, restricted cash, funds withheld receivable, and loan to related party. Interest in Income of Equity Method Investments Total interest in loss of equity method investments of $2.7 million were recognized for the three months ended March 31, 2025 compared to an interest in the income of equity method investments of $0.6 million for the same respective period in 2024. Equity method investments consist of real estate investments of $58.1 million and other investments of $20.7 million as of March 31, 2025. Interest in (loss) income of equity method investments for the three months ended March 31, 2025 and 2024 is detailed by investment category below: For the Three Months Ended March 31, ($ in thousands) 2025 2024 Other investments $ (2,676) $ 253 Real estate investments (46) 353 Interest in (loss) income of equity method investments $ (2,722) $ 606 51 Net Loss and LAE Net loss and LAE decreased by $19.2 million for the first quarter of 2025 compared to the same period in 2024. Net losses were impacted by net favorable PPD of $12.4 million for the first quarter of 2025 compared to net adverse PPD of $6.6 million for the same period in 2024. Excluding PPD, current year losses were $4.7 million for the first quarter of 2025 compared to $5.1 million for the first quarter of 2024. 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. The segment 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 $1.0 million or 18.5% for the three months ended March 31, 2025, compared to the same respective period in 2024 primarily due to lower earned premiums in both segments. Total acquisition expenses increased as a percentage of net premiums earned for the three months ended March 31, 2025 driven by accelerated amortization of deferred acquisition costs upon the recognition of a premium deficiency of $1.3 million in the AmTrust Reinsurance segment. Please see further discussion in the individual segment analysis further below. General and Administrative Expenses 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 increased by $2.7 million or 33.7% for the three months ended March 31, 2025, compared to the same period in 2024. Corporate expenses increased by $2.2 million or 41.1% for the three months ended March 31, 2025, largely due to higher professional service fees related to the Company's pending combination with Kestrel. Excluding these non-recurring expenses, our adjusted operating expenses increased 3.3% to $8.0 million for the three months ended March 31, 2025, compared to $7.8 million for the same period in 2024. The majority of these expenses were related to higher legal fees for ongoing litigation and claims disputes partly offset by lower compensation costs. Corporate expenses also included vesting of certain stock-based awards which were $0.5 million for the three months ended March 31, 2025 compared to $0.4 million for the same period in 2024. General and administrative expenses for the three months ended March 31, 2025 and 2024 were comprised of: For the Three Months Ended March 31, ($ in thousands) 2025 2024 General and administrative expenses – segments $ 3,295 $ 2,760 General and administrative expenses – corporate 7,478 5,300 Total general and administrative expenses $ 10,773 $ 8,060 Expenses related to the Company’s IIS business, which is no longer writing new business and has entered into the AmTrust Renewal Rights Agreements, were 16.2% of recurring operating expenses for the three months ended March 31, 2025. Interest and Amortization Expenses Total interest and amortization expenses related to outstanding senior notes issued by Maiden Holdings in 2016 and Maiden NA in 2013 ("Senior Notes") were $4.8 million for the three months ended March 31, 2025 and 2024, respectively. This included $4.8 million of interest expense on the Senior Notes in the three months ended March 31, 2025 and 2024, 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. Amortization expenses were $41.0 thousand for the three months ended March 31, 2025, compared to amortization expense of $39.0 thousand for the same respective period in 2024. Please refer to " Notes to Condensed Consolidated Financial Statements (unaudited) Note 7. Long Term Debt " for further details on the Senior Notes. The weighted average effective interest rate for the Senior Notes was 7.6% for the three months ended March 31, 2025 and 2024, respectively. Foreign Exchange and Other (Losses) Gains Net foreign exchange and other losses of $7.4 million were realized for the three months ended March 31, 2025 compared to net foreign exchange and other gains of $2.1 million for the same period in 2024. For the three months ended March 31, 2025, net foreign exchange losses of $7.9 million were attributable to significant weakening of the U.S. dollar on the re-measurement of net loss reserves and insurance related liabilities denominated in the British pound and euro. Net foreign exchange gains of $2.1 million were realized for the three months ended March 31, 2024. The net foreign exchange gains of $2.1 million in the first quarter of 2024 were driven by modest strengthening of the U.S. dollar on the re-measurement of net loss reserves and insurance related liabilities denominated in British pound and euro during the period. Foreign currency fluctuations are 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, 2025 included net loss reserves of $344.5 million. Our foreign currency asset exposures at March 31, 2025 included $126.6 million of fixed maturity securities managed by our investment managers who have the discretion to hold foreign 52 currency exposures as part of their total return strategy, $30.6 million of equity method real estate investments denominated in Canadian dollars, as well as $12.6 million of funds withheld receivable. Underwriting Results by Reportable Segment Diversified Reinsurance Segment The underwriting results for our Diversified Reinsurance segment for the three months ended March 31, 2025 and 2024 were as follows: For the Three Months Ended March 31, ($ in thousands) 2025 2024 Gross premiums written $ 5,016 $ 8,828 Net premiums written $ 4,991 $ 8,819 Net premiums earned $ 5,000 $ 8,991 Other insurance revenue, net — 46 Net loss and LAE 2,234 (2,924) Commission and other acquisition expenses (2,291) (4,295) General and administrative expenses (2,689) (2,090) Underwriting income (loss) $ 2,254 $ (272) Underwriting income (loss) by business unit is detailed in the table below for the Diversified Reinsurance segment for the three months ended March 31, 2025 and 2024: For the Three Months Ended March 31, ($ in thousands) 2025 2024 International $ (795) $ (655) GLS 1,190 (88) Other run-off lines 1,859 471 Underwriting income (loss) $ 2,254 $ (272) Premiums — As discussed in the "Overview" section, Maiden LF and Maiden GF are no longer writing new business and have entered into the AmTrust Renewal Rights Agreements which are expected to cover certain programs of Maiden LF and Maiden GF's primary business written in Sweden, Norway, other Nordic countries, the United Kingdom and Ireland. In addition, on November 29, 2024, the Company entered into an agreement to sell its Swedish subsidiaries, Maiden LF and Maiden GF to an expanding group of international insurance and reinsurance companies headquartered in the United Kingdom. Maiden LF and Maiden GF were the principal operating subsidiaries of the Company’s IIS platform; therefore we will continue to experience limited premium written for 2025 in the Diversified Segment. Please refer to Note 14. Assets Held for Sale of the Notes to Condensed Consolidated Financial Statements included in Part I Item 1. "Financial Information" for more details. Gross premiums written decreased by $3.8 million or 43.2% for the three months ended March 31, 2025 while net premiums written decreased by $3.8 million or 43.4% for the three months ended March 31, 2025, compared to the same respective period in 2024. Net premiums earned decreased by $4.0 million or 44.4% during the three months ended March 31, 2025, compared to the same respective period in 2024. Other insurance revenue, net — Other insurance revenue, net includes fee related income generated 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. Other insurance revenue, net included $46.0 thousand of service fee income earned for the three months ended March 31, 2024, with no other insurance revenue earned in the three months ended March 31, 2025. Net Loss and LAE — Net loss and LAE decreased by $5.2 million for the three months ended March 31, 2025, compared to the same respective period in 2024. The net loss and LAE was impacted by net favorable PPD of $4.6 million for the three months ended March 31, 2025 compared to favorable PPD of $0.7 million for the same period in 2024. The net favorable PPD for the three months ended March 31, 2025 was primarily from favorable development in GLS and other runoff business lines as shown in the table below. GLS experienced favorable PPD due to the pending commutation of a GLS contract which is awaiting approval by the Vermont DFR. The net favorable development for the three months ended March 31, 2024 was primarily from GLS and other runoff business lines. 53 The table below details PPD by line of business for the three months ended March 31, 2025 and 2024: For the Three Months Ended March 31, 2025 2024 Prior Year Loss Development adverse (favorable) ($ in thousands) IIS business $ (151) $ 352 GLS (2,535) (522) Other run-off lines (1,871) (485) Total Diversified Reinsurance Prior Year Development $ (4,557) $ (655) Commission and Other Acquisition Expenses — Commission and other acquisition expenses decreased by $2.0 million or 46.7% for the three months ended March 31, 2025, compared to the same respective period in 2024 due to lower premiums written and earned by Maiden LF and GF as they are no longer writing new business having entered into the AmTrust Renewal Rights Agreements in 2024. General and Administrative Expenses — General and administrative expenses increased by $0.6 million or 28.7% for the three months ended March 31, 2025, compared to the same respective period in 2024. AmTrust Reinsurance Segment The AmTrust Reinsurance segment reported underwriting income of $5.2 million during the three months ended March 31, 2025, compared to an underwriting loss of $7.3 million for the same respective period in 2024. The underwriting results for the AmTrust Reinsurance segment for the three months ended March 31, 2025 and 2024 were as follows: For the Three Months Ended March 31, ($ in thousands) 2025 2024 Gross premiums written $ (942) $ (505) Net premiums written $ (942) $ (505) Net premiums earned $ 2,684 $ 3,417 Net loss and LAE 5,389 (8,701) Commission and other acquisition expenses (2,267) (1,298) General and administrative expenses (606) (670) Underwriting income ( loss ) $ 5,200 $ (7,252) Premiums — The table below shows net premiums written by category for the three months ended March 31, 2025 and 2024: For the Three Months Ended March 31, 2025 2024 Change in ($ in thousands) Total Total $ Net Premiums Written Small Commercial Business $ (259) $ (492) $ 233 Specialty Program — (15) 15 Specialty Risk and Extended Warranty (683) 2 (685) Total AmTrust Reinsurance $ (942) $ (505) $ (437) The negative premiums for the three months ended March 31, 2025 and March 31, 2024 reflect the termination of the AmTrust Quota Share and the European Hospital Liability Quota Share as of January 1, 2019 which has resulted in no new business written under these contracts since 2018. 54 Net premiums earned decreased by $0.7 million for the three months ended March 31, 2025 compared to the same respective period in 2024. The table below provides detail on net premiums earned in the three months ended March 31, 2025 and 2024: For the Three Months Ended March 31, 2025 2024 Change in ($ in thousands) Total Total $ Net Premiums Earned Small Commercial Business $ (259) $ (492) $ 233 Specialty Program — (15) 15 Specialty Risk and Extended Warranty 2,943 3,924 (981) Total AmTrust Reinsurance $ 2,684 $ 3,417 $ (733) Net Loss and LAE — Net loss and LAE decreased by $14.1 million for the three months ended March 31, 2025, compared to the same respective period in 2024. This was driven by favorable PPD under the AmTrust Quota Share for the three months ended March 31, 2025 compared to adverse development for the same respective period in 2024. Net favorable PPD was $7.8 million during the three months ended March 31, 2025, compared to net adverse development of $7.2 million for the same respective period in 2024, incurred primarily within the AmTrust Quota Share and European Hospital Liability Quota Share. The table below shows PPD for the AmTrust Reinsurance segment for the three months ended March 31, 2025 and 2024: For the Three Months Ended March 31, 2025 2024 Prior Year Loss Development adverse (favorable) ($ in thousands) AmTrust Quota Share $ (1,655) $ 5,000 LPT/ADC Agreement (6,176) (317) European Hospital Liability Quota Share 27 2,535 Total AmTrust Prior Year Development $ (7,804) $ 7,218 Net favorable PPD for the three months ended March 31, 2025 was primarily due to the amortization of the deferred gain liability of $5.9 million under the LPT/ADC Agreement since cumulative paid losses exceed the risk retention under the LPT/ADC Agreement. There was also a reduction of $0.3 million in the credit loss allowance for reinsurance recoverable under the LPT/ADC Agreement for the three months ended March 31, 2025. Net adverse development of $7.2 million for the three months ended March 31, 2024 was primarily due to the AmTrust Quota Share contract, with European Hospital Liability also producing adverse loss development. In the AmTrust Quota Share, U.S. Program business experienced continuing adverse development from construction defect coverage for accident years 2015 to 2018 as new claims emergence reported by AmTrust was again far greater than expected; this was partly offset by continued favorable development within Workers Compensation business for accident years 2014 to 2017. Net adverse loss development on European Hospital Liability Quota Share was primarily driven by emergence of loss data from adverse claim verdicts on older claims prior to 2014, resulting in strengthening of loss development tail on underwriting years 2011 to 2014. Commission and Other Acquisition Expenses — Commission and other acquisition expenses increased by $1.0 million for the three months ended March 31, 2025, compared to the same respective period in 2024. Total acquisition costs increased as a percentage of net premiums earned in 2024 due to accelerated amortization of deferred acquisition costs upon the recognition of a premium deficiency of $1.3 million for the AmTrust Quota Share for the three months ended March 31, 2025. There was no recognition of a premium deficiency for the same respective period in 2024. General and Administrative Expenses — General and administrative expenses decreased by $0.1 million for the three months ended March 31, 2025, compared to the same respective period in 2024. 55 Liquidity and Capital Resources Liquidity Maiden Holdings is a holding company and transacts no business of its own. We therefore rely on cash flows in the form of dividends, advances, loans and other permitted distributions from our subsidiary companies to pay expenses and make dividend payments on our common 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 March 31, 2025, the Company had investable assets of $641.7 million compared to $699.4 million as of December 31, 2024. Investable assets include the combined total of our investments, cash and restricted cash including cash equivalents, loan to a related party and funds withheld receivable. Our investable assets decreased by $57.7 million during the three months ended March 31, 2025 due to continued run-off of our reinsurance portfolio liabilities as claim payments were settled primarily from sales and maturities of AFS bond securities, as well as our loan to related party which decreased by $39.9 million in the three months ended March 31, 2025. 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, 2024, that was filed with the SEC on March 10, 2025. Maiden Reinsurance re-domesticated from Bermuda to Vermont on March 16, 2020. We continue to be actively engaged with the 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 active underwriting, capital management or other strategic initiatives, including our Combination Agreement with Kestrel. Please see Note 15. Subsequent Events in the Notes to Condensed Consolidated Financial Statements under Part I Item 1. "Financial Information" for additional information on the regulatory approval process related to the Combination Agreement with Kestrel. Maiden Reinsurance has received all necessary approvals required to date by the Vermont DFR in respect of its business plan, including GLS activities 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; and 2) the purchase of affiliated securities as demonstrated in prior common share repurchases. The Investment Policy, as approved and as amended, maintains our established investment management and governance practices. In 2024 and 2025, 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. During the three months ended March 31, 2025, Maiden Reinsurance paid dividends of $6.3 million to Maiden NA (2024: $6.3 million) as part of the approved dividend program. During the three months ended March 31, 2025 and 2024, Maiden NA did not pay any dividends to Maiden Holdings. 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. Further, we and our insurance subsidiaries may need additional capital to maintain compliance with regulatory capital requirements and/or be required to post additional collateral under existing reinsurance arrangements, which could reduce our liquidity. Operating, investing and financing cash flows Our sources of funds historically have consisted of premium receipts net of commissions and brokerage, investment income, net proceeds from capital raising activities, and proceeds from sales, maturities, pay downs and redemption of investments. Cash is currently used primarily to pay loss and LAE, ceded reinsurance premium, general and administrative expenses, and interest expense, with the remainder in excess of our operating requirements made available to our investment managers for investment in accordance with our investment policy as well as for capital management such as repurchasing our shares. Our business has undergone significant changes since 2018. 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 presently 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 have not written any new retroactive risks through GLS since December 30, 2022, and this will be smaller in relation to the run-off of our prior reinsurance business. During the three months ended March 31, 2025, we experienced negative operating cash flows as we run off the AmTrust Reinsurance segment reserves as shown in the cash flows table further below. We currently expect a trend of positive investing cash flows through 2025, and will 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. Claim payments will be principally from the run-off of existing reserves for loss and LAE. A significant portion of those liabilities are collateralized and claim payments will be funded by using this collateral which should provide sufficient funding to fulfill those obligations. The Company’s management believes our current sources of liquidity are adequate to meet its cash requirements for the next twelve months as we generally expect operating cash flows to be sufficiently offset by investing cash flows. The consideration and related expenses associated with completing the Combination Agreement with Kestrel will use substantial amounts of current liquidity. While we continue to expect our cash flows to be sufficient to meet our cash requirements and to operate our business, our ability to execute our asset and capital management initiatives are dependent on maintaining adequate levels of unrestricted liquidity and cash flows. 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. 56 At March 31, 2025, unrestricted cash, cash equivalents and fixed maturity investments were $42.5 million compared to $75.0 million held at December 31, 2024, a decrease of $32.5 million during the three months ended March 31, 2025. This was primarily driven by a $30.2 million decrease in our AFS bond portfolio due to sales and maturities during the three months ended March 31, 2025, the proceeds of which were used for operating expenses and interest payments on our Senior Notes. Please see the related discussion on investing and financing cash flows below. The table below summarizes our operating, investing and financing cash flows for the three months ended March 31, 2025 and 2024: For the Three Months Ended March 31, 2025 2024 ($ in thousands) Operating activities $ (21,126) $ 8,049 Investing activities 29,477 (19,736) Financing activities — (673) Effect of exchange rate changes on foreign currency cash 809 (148) Total increase (decrease) in cash, restricted cash and cash equivalents $ 9,160 $ (12,508) Cash Flows used in Operating Activities Cash flows used in operating activities for the three months ended March 31, 2025 was $21.1 million compared to cash flows provided by operating activities of $8.0 million for the three months ended March 31, 2024. The increase in cash used in operating activities for the three months ended March 31, 2025 was due to claim payments for ongoing runoff of reinsurance liabilities whereas the settlement of claims was primarily through the funds withheld receivable in the three months ended March 31, 2024. Cash Flows provided by Investing Activities Cash flows provided by investing activities consist primarily of proceeds from sales and maturities of investments net of purchases. Net cash provided by investing activities was $29.5 million for the three months ended March 31, 2025 compared to net cash used in investing activities of $19.7 million for the same period in 2024. For the three months ended March 31, 2025, the proceeds from the sales, maturities and calls exceeded the purchases of fixed maturity securities by $31.8 million compared to net purchases of $10.8 million for the same period in 2024. The size of the fixed income investment portfolio has diminished as claims payments are made for the runoff of existing loss reserves for the terminated AmTrust Quota Share and the European Hospital Liability Quota Share contracts. For the three months ended March 31, 2025 and 2024, investing cash flows included purchases of alternative investments which exceeded proceeds from the sales and redemptions. There were net purchases of $2.3 million for alternative investments during the three months ended March 31, 2025 compared to net purchases of alternative investments of $8.8 million for the same period in 2024. These net purchases were mainly due to pre-existing commitments for private equity fund investments for the three months ended March 31, 2025. Cash Flows used in Financing Activities Cash flows used in financing activities were $0.0 million for the three months ended March 31, 2025 compared to $0.7 million for the same period in 2024. During the three months ended March 31, 2025, the Company did not repurchase any common shares under our authorized common share repurchase plan. During the three months ended March 31, 2024, the Company repurchased 352,111 common shares at an average price of $1.91 per share for $0.7 million under our authorized common share repurchase plan. No dividends on common shares were paid during the three months ended March 31, 2025 and 2024. 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, 2024, that was filed with the SEC on March 10, 2025. Please also refer to " Part I, Item 1 - Notes to Condensed Consolidated Financial Statements (unaudited) "Note 4.(e) Restricted Cash, Cash Equivalents and Investments " included in this Form 10-Q for details of the fair values of restricted assets at March 31, 2025 and December 31, 2024. At March 31, 2025 and December 31, 2024, restricted cash and cash equivalents and fixed maturity investments used as collateral were $204.2 million and $192.4 million, respectively. This collateral represents 82.8% and 71.9% of the fair value of total fixed maturity investments, cash, restricted cash and cash equivalents at March 31, 2025 and December 31, 2024, respectively. 57 Cash and Investments Historically, the investment of our funds had generally been designed to ensure safety of principal while generating current income. Accordingly, our fixed income investment portfolio is invested in liquid, investment-grade fixed maturity securities which are all designated as AFS at March 31, 2025. Further, as our insurance liabilities continue to run-off and the required capital to operate our business for regulatory purposes decreases, we expanded Maiden Reinsurance’s investment policy which has been approved by the Vermont DFR. Under this modified investment policy, we expanded the range of asset classes we invest in to enhance the income and total returns our investment portfolio produces. We categorize these investments as alternative investments which include " Other Investments ", "Equity Securities" , and "Equity Method Investments" on our Condensed Consolidated Balance Sheets. As of March 31, 2025 and December 31, 2024, our cash and investments consisted of: March 31, 2025 December 31, 2024 ($ in thousands) Fixed maturities, available-for-sale, at fair value $ 202,460 $ 232,613 Equity securities, at fair value 11,850 13,147 Equity method investments 78,841 81,287 Other investments 163,558 157,016 Total investments 456,709 484,063 Cash and cash equivalents 28,706 25,651 Restricted cash and cash equivalents 15,562 9,084 Total Investments and Cash and Cash Equivalents $ 500,977 $ 518,798 In addition to the discussion on Cash and Cash Equivalents and Fixed Maturities that follows herein, please see the " Notes to Condensed Consolidated Financial Statements (unaudited) Note 4. Investments " included under Part I Item 1 " Financial Information" of this Form 10-Q for further discussion on our AFS fixed income securities. Under this revised investment policy, we had increased the amount of alternative investments held and we had expected to continue to increase the amounts invested therein over time. However, as our strategic plans have evolved and now changed, particularly as regards our pending combination with Kestrel, we have modified our approach to this investment policy, and have reduced our investments and ceased new commitments to alternative investments under this policy as part of these ongoing group strategic initiatives while also strengthening overall liquidity. The net purchases of other investments for the three months ended March 31, 2025 were due to pre-existing commitments for private equity funds, and we will not be making new commitments to alternative investments in the foreseeable future. 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. For further details on our alternative investments, in addition to the discussion of the investments herein, please see " Notes to Condensed Consolidated Financial Statements (unaudited) Note 4(b). Other Investments, Equity Securities and Equity Method Investments" included under Part I Item 1 " Financial Information " of this Form 10-Q. Our investment performance is subject to a variety of risks, including risks related to general economic conditions, market volatility, interest rate fluctuations, foreign exchange risk, liquidity risk and credit and default risk. Interest rates are highly sensitive to many factors, including governmental monetary policies, domestic and international economic and political conditions and other factors beyond our control. An increase in interest rates could result in significant losses, realized or unrealized, in the value of our investment portfolio. A portion of our portfolio consists of alternative investments that subject us to restrictions on redemption, which may limit our ability to withdraw funds for some period of time after the initial investment. The values of, and returns on, such investments may also be more volatile. We believe our other investments, equity securities and equity method investments portfolio provides diversification against our fixed-income investments and an opportunity for improved risk-adjusted return, however, the returns of these investments may be more volatile and we may experience significant unrealized gains or losses in any particular quarter or year. While we believe the returns produced by these investments will exceed our cost of capital, in particular our cost of debt capital, it is too soon to determine if the actual returns will achieve this objective and it may be an extended period of time before that determination can be made. We may utilize and pay fees to various companies to provide investment advisory and/or management services related to these investments. These fees, which would be predominantly based upon the amount of assets under management, would be included in net investment income. In addition, costs associated with evaluating, analyzing and monitoring these investments may require additional expenditures than traditional marketable securities. The substantial majority of our current investments are held by Maiden Reinsurance, whose investment policy was approved by the Vermont DFR. Prior to the exchange of our preference shares for common shares, the Company cumulatively invested $176.4 million in preference shares of Maiden Holdings which have since been extinguished and exchanged for 41,439,348 common shares of the Company as of December 27, 2022 ("Exchange"). Therefore, there are no preference shares outstanding. 58 As of March 31, 2025, Maiden Reinsurance owned approximately 31.0% of our total outstanding common shares which is eliminated for accounting and financial reporting purposes on our condensed consolidated financial statements. The voting power of Maiden Reinsurance, with respect to its common shares, was capped at 9.5% pursuant to the Company's bye-laws; however the Company's shareholders approved the proposal to remove the 9.5% voting limitation at the Special Meeting. Treasury shares include 44,750,678 common shares owned by Maiden Reinsurance consisting of 41,439,348 shares issued as part of the Exchange on December 27, 2022 and an additional 3,311,330 common shares that were directly purchased on the open market by Maiden Reinsurance under the Company's authorized share repurchase plan. The market value of our common shares held by Maiden Reinsurance due to the Exchange and common share repurchases was $25.5 million at March 31, 2025. Cash & Cash Equivalents At March 31, 2025, we consider the levels of cash and cash equivalents held to be within our targeted ranges. During periods when interest rates experience greater volatility, we have periodically maintained more cash and cash equivalents to better assess current market conditions and opportunities within our defined risk appetite, and may do so in future periods. Fixed Maturity Investments The average yield and average duration of our fixed maturities, by asset class, and our cash and cash equivalents (restricted and unrestricted) are as follows at March 31, 2025 and December 31, 2024: March 31, 2025 Original or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Average yield (1) Average duration (2) ($ in thousands) U.S. treasury bonds $ 52,748 $ — $ (1) $ 52,747 4.3 % 0.1 U.S. agency bonds – mortgage-backed 26,045 — (2,937) 23,108 4.6 % 5.8 Non-U.S. government bonds 45,779 38 (1) 45,816 2.2 % 0.6 Collateralized loan obligations 63,111 40 (48) 63,103 3.6 % 0.3 Corporate bonds 18,226 — (540) 17,686 0.9 % 1.3 Total fixed maturities 205,909 78 (3,527) 202,460 3.3 % 1.2 Cash and cash equivalents 44,268 — — 44,268 1.5 % 0.0 Total $ 250,177 $ 78 $ (3,527) $ 246,728 3.0 % 0.9 December 31, 2024 Original or Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Average yield (1) Average duration (2) ($ in thousands) U.S. treasury bonds $ 84,033 $ 25 $ — $ 84,058 4.5 % 0.1 U.S. agency bonds – mortgage-backed 26,841 — (3,485) 23,356 4.6 % 6.0 Non-U.S. government bonds 38,496 39 (3) 38,532 2.7 % 0.4 Collateralized loan obligations 60,829 4 (130) 60,703 4.1 % 0.2 Corporate bonds 26,589 — (625) 25,964 1.0 % 1.1 Total fixed maturities 236,788 68 (4,243) 232,613 3.7 % 1.0 Cash and cash equivalents 34,735 — — 34,735 1.5 % 0.0 Total $ 271,523 $ 68 $ (4,243) $ 267,348 3.4 % 0.8 (1) Average yield is calculated by dividing annualized investment income for each sub-component of fixed maturity securities and cash and cash equivalents (including amortization of premium or discount) by amortized cost. (2) Average duration in years. During the three months ended March 31, 2025, the yield on the 10-year U.S. Treasury bond decreased by 35 basis points to 4.23%. 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. Driven by the decrease in risk-free rates during the three months ended March 31, 2025, our fixed maturity investment portfolio generated net unrealized gains of $0.7 million which increased our book value per common share by $0.01 during the period. Current outlooks for global monetary policy have become more uncertain in recent months, as a combination of potential significant changes in U.S. fiscal and trade policy and the attendant uncertainty on the impacts of these policies on both U.S. and global economic outlooks and inflation appear to be causing central banks to either adopt a neutral stance or apply further tightening should data dictate such actions, particularly inflation and labor market data. 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. 59 Interest rate risk is the price sensitivity of a security to changes in interest rates. Credit spread risk is the price sensitivity of a security to changes in credit spreads. As noted, the fair value of our fixed maturity investments will fluctuate with changes in interest rates and credit spreads. We attempt to maintain adequate liquidity in our fixed maturity investments portfolio with a strategy designed to emphasize the preservation of our invested assets and provide sufficient liquidity for the prompt payment of claims and contract liabilities. Because we collateralize a significant portion of our insurance liabilities, unanticipated or large increases in interest rates could require us to utilize significant amounts of unrestricted cash and fixed maturity securities to provide additional collateral, which could impact our asset and capital management strategy described herein. We also monitor the duration and structure of our investment portfolio as discussed below. As of March 31, 2025, 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 $3.6 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 March 31, 2025 and December 31, 2024, these respective durations in years were as follows: March 31, 2025 December 31, 2024 Fixed maturities and cash and cash equivalents 0.9 0.8 Reserve for loss and LAE - gross of LPT/ADC Agreement reserves 6.4 6.4 Reserve for loss and LAE - net of LPT/ADC Agreement reserves 3.5 3.5 During the three months ended March 31, 2025, the weighted average duration of our fixed maturity investment portfolio increased by 0.1 years to 0.9 years while the duration for gross reserve for loss and LAE remained at 6.4 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 U.S. agency mortgage-backed securities ("Agency MBS") and commercial mortgage-backed securities held. At March 31, 2025, the duration of our loss reserves net of the LPT/ADC Agreement was higher than the duration of our fixed maturity investment portfolio. To limit our exposure to unexpected interest rate increases that could reduce the value of our fixed maturity securities and reduce our shareholders' equity, the Company holds floating rate securities whose fair values are less sensitive to interest rates. At March 31, 2025 and December 31, 2024, 49.4% and 51.1%, respectively, of our fixed income investments were comprised of floating rate securities which are detailed in the table below: March 31, 2025 December 31, 2024 ($ in thousands) Fair Value % of Total Fair Value % of Total Floating rate securities Collateralized loan obligations $ 63,103 16.3 % $ 60,703 13.6 % Total floating rate AFS fixed maturities at fair value 63,103 16.3 % 60,703 13.6 % Loan to related party 128,118 33.1 % 167,975 37.5 % Total floating rate securities $ 191,221 49.4 % $ 228,678 51.1 % Total fixed income investments at fair value (1) $ 387,452 $ 447,973 (1) Total fixed income investments at fair value include AFS fixed maturities, cash and restricted cash, funds withheld receivable, and net loan receivable from related party. At March 31, 2025 and December 31, 2024, 100.0% of the Company’s U.S. agency bond holdings are mortgage-backed. Total U.S. agency MBS comprise 11.4% of our fixed maturity investment portfolio at March 31, 2025. 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, 2025 and December 31, 2024 were as follows: March 31, 2025 December 31, 2024 ($ in thousands) Fair Value % of Total Fair Value % of Total FNMA – fixed rate $ 13,240 57.3 % $ 13,232 56.7 % FHLMC – fixed rate 7,806 33.8 % 7,987 34.2 % GNMA – variable rate 2,062 8.9 % 2,137 9.1 % Total U.S. Agency MBS $ 23,108 100.0 % $ 23,356 100.0 % 60 At March 31, 2025 and December 31, 2024, 100.0% of our fixed maturity investments consisted of investment grade securities. We define a security as being below investment grade if it has an S&P credit rating of BB+ or equivalent, or less. Please see Part I, Item 1 - Notes to Condensed Consolidated Financial Statements (unaudited) Note 4. Investments for additional information on the credit rating of our fixed income investment portfolio. The security holdings by sector and financial strength rating of our corporate bond holdings at March 31, 2025 and December 31, 2024 were as follows: Ratings (1) March 31, 2025 AAA A+, A, A- BBB+, BBB, BBB- BB+ or lower Fair Value % of Corporate bonds portfolio Corporate bonds ($ in thousands) Basic Materials — % — % 30.3 % — % $ 5,354 30.3 % Consumer — % 15.2 % 13.7 % — % 5,115 28.9 % Financial Institutions — % 38.2 % 2.6 % — % 7,217 40.8 % Total — % 53.4 % 46.6 % — % $ 17,686 100.0 % Ratings (1) December 31, 2024 AAA A+, A, A- BBB+, BBB, BBB- BB+ or lower Fair Value % of Corporate bonds portfolio Corporate bonds ($ in thousands) Basic Materials — % — % 19.6 % — % $ 5,090 19.6 % Consumer — % 9.9 % 24.8 % — % 9,001 34.7 % Financial Institutions 6.1 % 37.9 % 1.7 % — % 11,873 45.7 % Total 6.1 % 47.8 % 46.1 % — % $ 25,964 100.0 % (1) Ratings as assigned by S&P, or equivalent The table below includes the Company’s five largest corporate holdings at fair value and as a percentage of all fixed income securities held as at March 31, 2025. The Company's five largest corporate holdings are 100.0% euro denominated, with 28.9% in the Consumer Sector and 40.8% in the Financial Institutions sector. March 31, 2025 Fair Value % of Holdings Rating (1) ($ in thousands) Chubb Ina Holdings Inc., 1.55%, Due 3/15/2028 $ 6,760 3.4 % A PPG Industries Inc., 0.875%, Due 11/3/2025 5,354 2.6 % BBB+ McKesson Corp., 1.5% Due 11/17/2025 2,687 1.3 % A- Baxter International Inc., 1.3%, Due 5/30/2025 2,428 1.2 % BBB American Tower Corp, 1.0%, Due 1/15/2032 457 0.2 % BBB Total $ 17,686 8.7 % (1) Ratings as assigned by S&P, or equivalent At March 31, 2025 and December 31, 2024, we held the following types of non-U.S. dollar denominated securities: March 31, 2025 December 31, 2024 ($ in thousands) Fair Value % of Total Fair Value % of Total Non-USD denominated collateralized loan obligations $ 63,103 49.8 % $ 60,283 48.9 % Non-USD denominated corporate bonds 17,686 14.0 % 24,373 19.8 % Non-U.S. government bonds 45,816 36.2 % 38,532 31.3 % Total non-U.S. dollar denominated securities $ 126,605 100.0 % $ 123,188 100.0 % At March 31, 2025 and December 31, 2024, respectively, 100.0% of non-U.S. dollar denominated securities were invested in euro denominated bonds. The net increase in non-USD denominated fixed maturities is largely due to foreign exchange appreciation of euro denominated corporate bonds relative to the U.S. dollar during the three months ended March 31, 2025. At March 31, 2025 and December 31, 2024, the Company's non-U.S. government issuers have a rating of AA or higher by Fitch Ratings. The Company does not employ any credit default protection against any of the fixed maturities held in non-U.S. dollar denominated currencies at March 31, 2025 and December 31, 2024, respectively. 61 For our non-U.S. dollar denominated corporate bonds, the following table summarizes the composition of the fair value of our fixed maturity investments at the dates indicated by ratings at March 31, 2025 and December 31, 2024: Ratings (1) March 31, 2025 December 31, 2024 ($ in thousands) Fair Value % of Total Fair Value % of Total A+, A, A- $ 9,447 53.4 % $ 12,403 50.9 % BBB+, BBB, BBB- 8,239 46.6 % 11,970 49.1 % Total non-U.S. dollar denominated corporate bonds $ 17,686 100.0 % $ 24,373 100.0 % (1) Ratings as assigned by S&P, or equivalent 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 condensed consolidated balance sheets. These include private equity funds, private credit funds, investments in limited partnerships, as well as investments in direct lending entities and investments in technology-oriented insurance related businesses known as insurtechs. Private equity investments consist of direct investments in privately held entities, investments in private equity funds and private equity co-investments with sponsoring entities. Private credit investments consist of loans and other debt securities of privately held entities or investment sponsors. Our alternative investments as of March 31, 2025 and December 31, 2024 consisted of the following asset categories: March 31, 2025 December 31, 2024 ($ in thousands) Carrying Value % of Total Carrying Value % of Total Privately held common stocks $ 5,768 2.3 % $ 6,778 2.7 % Privately held preferred stocks 6,082 2.4 % 6,369 2.5 % Total equity securities $ 11,850 4.7 % $ 13,147 5.2 % Real estate investments $ 58,140 22.9 % $ 57,541 22.9 % Other equity method investments 20,701 8.1 % 23,746 9.4 % Total equity method investments $ 78,841 31.0 % $ 81,287 32.3 % Private equity funds $ 27,098 10.7 % $ 25,123 10.0 % Private credit investments 1,808 0.7 % 1,909 0.8 % Privately held equity investments 48,677 19.1 % 46,301 18.4 % Investments in direct lending entities (at cost) 85,975 33.8 % 83,683 33.3 % Total other investments $ 163,558 64.3 % $ 157,016 62.5 % Total alternative investments $ 254,249 100.0 % $ 251,450 100.0 % Our allocation to alternative investments increased to 50.8% of our total cash and investments held as of March 31, 2025 compared to 48.5% as of December 31, 2024, the combination of additional funding of certain investments based on pre-existing commitments and increases in value in select investments. In addition to the categories described above, we also evaluate our alternative investments by the following asset classes: March 31, 2025 December 31, 2024 ($ in thousands) Carrying Value % of Total Carrying Value % of Total Private Equity $ 58,922 23.2 % $ 58,031 23.1 % Private Credit 1,808 0.7 % 1,909 0.7 % Alternatives 103,597 40.7 % 104,790 41.7 % Venture Capital 26,196 10.3 % 23,533 9.4 % Real Estate 63,726 25.1 % 63,187 25.1 % Total alternative investments $ 254,249 100.0 % $ 251,450 100.0 % 62 For further details on these alternative investments, see " Notes to Condensed Consolidated Financial Statements: Note 4(b) Other Investments, Equity Securities and Equity Method Investments" included under Part I Item 1. "Financial Information" of this Report on Form 10-Q. Within these asset classes, our portfolio broadly consists of the following types of investments: • Private Equity – this asset class consists of both fund investments with leading private equity sponsors and direct equity investments in private companies, sometimes in conjunction with our private equity fund sponsors. As of March 31, 2025, $2.5 million or 4.2% of investments in the private equity asset class consisted of investments in private equity funds and $56.5 million or 95.8% consisted of direct equity investments in private companies. • Private Credit - this asset class consists of both fund investments with leading private credit sponsors and direct credit investments in private companies, sometimes in conjunction with our private credit fund sponsors. Private credit investments in both funds and on a direct basis will typically be secured lending arrangements with non-rated entities, often with additional protective provisions to enhance the security and returns of these investments. As of March 31, 2025, $1.8 million or 100.0% of the private credit asset class consisted of direct investments in debt securities of private companies. • Alternatives – this asset class consists of structured financing arrangements which typically have incentive features to enhance the Company’s returns. As part of these arrangements, the Company requires collateral or bankruptcy-remote structures to protect its investments. As of March 31, 2025, $102.0 million or 98.5% of investments in the alternatives asset class were direct investments and $1.6 million or 1.5% of the alternatives asset class were invested in funds. One investment in a collateralized direct lending entity of $86.0 million represents 83.0% of this asset class and is discussed further in "Note 4 — Investments" included in Part I Item 1. "Financial Information" in this Quarterly Report on Form 10-Q for the three months ended March 31, 2025. • Venture Capital – this asset class consists of both fund investments with venture capital firms focused primarily on “insurtech” or “fintech” early-stage investments as well as direct investments in start-up companies in this sector, including equity investments in individual companies made in conjunction with our venture capital fund sponsors. As of March 31, 2025, $12.1 million or 46.4% of investments in the venture capital asset class consisted of investments in funds and $14.0 million or 53.6% consisted of direct equity investments in start-up companies. As of March 31, 2025, $14.7 million or 56.0% of our venture capital investments were invested in funds or companies that would be considered “insurtech” investments. • Real Estate – this asset class consists of long-term equity investments in three real estate projects. Two are multi-family residential development projects near major urban centers where workforce housing demand continues to be strong. One investment is a minority stake as a limited partner with a leading property developer with a highly successful track record, where the Company will earn returns from both operating income from rentals and future sales of properties. As of March 31, 2025, the Company has $27.5 million invested in this project and expects investment returns to commence in earnest in 2026 and beyond. The second multi-family residential investment is a majority stake with general partner rights wherein the Company is providing the capital backing to an experienced and successful developer in the subject market, while also taking minority equity stakes in individual projects. To date, this development project has secured five properties in attractive locations and is currently in the zoning and planning stages. As of March 31, 2025, the Company has $30.6 million invested in this project and has commenced earning limited amounts of fee income from this project. As part of its investment, the Company has also provided certain loan guarantees which are discussed in more detail in Note 11 — Commitments, Contingencies and Guarantees included in Part I Item 1. "Financial Information" . We expect fee and operating income and gains from future sales of properties to commence in earnest in 2027 and beyond. Finally, the Company has a minority equity stake in an iconic office building in a major city in the U.S., with an attractive and growing tenant roll. As of March 31, 2025, the Company has $5.6 million invested in this project and to date has earned preferred returns and received certain distributions. In addition to preferred returns, the Company expects to receive future distributions of operating income from this investment. C ertain of the Company's investments in limited partnerships are related to real estate joint ventures with interests in multi-property projects with varying strategies ranging from the development of properties to the ownership of income-producing properties. In certain of these joint ventures, the Company has provided certain indemnities, guarantees and commitments to certain parties such that it may be required to make payments now or in the future. For further details on these financial guarantees, please see " Notes to Condensed Consolidated Financial Statements: Note 11 - Commitments, Contingencies and Guarantees" included under Part I Item 1. "Financial Information" of this Report on Form 10-Q. 63 Investment Results Our investment portfolio returns included in earnings decreased to $3.6 million during the three months ended March 31, 2025, compared to $17.1 million for the same respective period in 2024 largely due to lower interest income on the loan to related party and the funds withheld receivable. Also, the AFS fixed income portfolio is considerably smaller compared to the prior period due to the use of proceeds from sales and maturities to pay run-off reserve liabilities in both the AmTrust and Diversified Reinsurance segments. Our alternative investment portfolio increased by 1.1% in the first quarter of 2025 due to net purchases of private equity funds. The alternative investment portfolio produced a positive net return of 0.3% in the first quarter of 2025 compared to 3.4% for the same period in 2024. Please refer to Note 15. Subsequent Events of the Notes to Condensed Consolidated Financial Statements included in Part I Item 1. "Financial Information" for information regarding the recent sale of one the Company's private equity investments accounted for as an equity method investment held at March 31, 2025. The following table summarizes our investment results for the three months ended March 31, 2025 and 2024: For the Three Months Ended March 31, ($ in thousands) 2025 2024 Net investment income: Fixed income investments (1) $ 2,477 $ 6,411 Cash and restricted cash 363 174 Other investments, including equities 216 1,207 Investment expenses (22) (92) Total net investment income 3,034 7,700 Net realized losses: Fixed income assets (1) (1) (218) Other investments, including equities (133) — Total net realized losses (134) (218) Net unrealized gains: Other investments, including equities 3,465 8,968 Total net unrealized gains 3,465 8,968 Interest in loss of equity method investments: Interest in (loss) income of equity method investments (2,722) 606 Interest in (loss) income of equity method investments (2,722) 606 Total investment return included in earnings (A) $ 3,643 $ 17,056 Other comprehensive income: Unrealized gains on AFS fixed maturity securities and equity method investments excluding foreign exchange (B) $ 726 $ 1,018 Total investment return = (A) + (B) $ 4,369 $ 18,074 Annualized income from fixed income assets (2) $ 11,360 $ 26,340 Average aggregate fixed income assets, at cost (2) 428,013 577,388 Annualized investment book yield 2.7 % 4.6 % Average aggregate invested assets, at fair value (3) $ 677,050 $ 887,969 Investment return included in net earnings 0.5 % 1.9 % Total investment return 0.6 % 2.0 % 1. Fixed income investments include AFS securities as well as funds withheld receivable, and loan to related party. 2. Average aggregate fixed income assets 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. 64 3. Average aggregate invested assets include all investments (AFS and alternative investments), cash and restricted cash, loan to related party and funds withheld receivable and is computed as an average of the amounts disclosed in our quarterly U.S. GAAP consolidated financial statements. The following table details total investment returns for our fixed income investments for the three months ended March 31, 2025 and 2024: Fixed Income Investments (1) For the Three Months Ended March 31, ($ in thousands) 2025 2024 Gross investment income $ 2,840 $ 6,585 Net realized losses (1) (218) Change in AOCI (3) 726 1,018 Gross investment returns $ 3,565 $ 7,385 Average invested assets, at fair value (4) $ 424,200 $ 569,962 Gross Investment Returns 0.8 % 1.3 % Less: Investment expenses $ 54 $ (4) Net investment returns $ 3,511 $ 7,389 Net Investment Returns 0.8 % 1.3 % Our net investment returns decreased to 0.8% for the three months ended March 31, 2025, compared to 1.3% for the respective period in 2024. This was due to floating rate investments that comprised 49.4% of our fixed income investments at March 31, 2025 which caused the portfolio to accrue lower interest income under the current rate environment. The interest income from the net loan receivable from related party declined by $2.5 million. Net interest income is lower than the prior period since interest income on the AR Loan Agreement is now offset by interest payable on the Premium Repayment Loan Agreement beginning on January 1, 2025. Net interest income earned on the net loan receivable was also offset by a non-recurring adjustment of $1.2 million in the three months ended March 31, 2025 due to contractual reductions regarding the timing of paid loss settlements in 2024. Therefore, this caused a lower weighted average interest rate on an outstanding net balance of $128.1 million at March 31, 2025 compared to $168.0 million throughout 2024 and the average yield on the loan decreased to 1.9% for the three months ended March 31, 2025, compared to 7.3% for the same period in 2024. Excluding the non-recurring adjustment to net interest income, the average yield on the net loan receivable was 5.7% for the three months ended March 31, 2025. Please refer to " Notes to Condensed Consolidated Financial Statements - Note 4 — Investments " included under Part I, Item 1 " Financial Information" of this Quarterly Report on Form 10-Q for further detail on investment returns from fixed income investments held by the Company at March 31, 2025 and 2024. The following table details total investment returns for our alternative investments for the three months ended March 31, 2025 and 2024, respectively: Alternative Investments (2) For the Three Months Ended March 31, ($ in thousands) 2025 2024 Gross investment (loss) income $ (2,506) $ 1,813 Net realized losses (133) — Net unrealized gains 3,465 8,968 Gross investment returns $ 826 $ 10,781 Average invested assets, at fair value (4) $ 252,850 $ 318,007 Gross Investment Returns 0.3 % 3.4 % Less: Investment expenses $ (32) $ 96 Net investment returns $ 858 $ 10,685 Net Investment Returns 0.3 % 3.4 % 65 1. Fixed income investments includes AFS securities as well as cash, restricted cash, funds withheld receivable, and loan to related party. 2. Alternative investments includes other investments, equity securities, and equity method investments. 3. Change in accumulated other comprehensive income ("AOCI") excludes unrealized foreign exchange gains and losses. 4. Average invested assets is the average of the amounts disclosed in our quarterly U.S. GAAP consolidated financial statements. The following table details total investment returns for alternative investments by asset class for the three months ended March 31, 2025: March 31, 2025 Private Equity Private Credit Alternative Assets Venture Capital Real Estate Total ($ in thousands) Gross investment income $ 427 $ — $ (3,103) $ — $ 170 $ (2,506) Net realized and unrealized gains (losses) 2,019 42 (12) 1,343 (60) 3,332 Total Investment Return $ 2,446 $ 42 $ (3,115) $ 1,343 $ 110 $ 826 Average Investments $ 58,477 $ 1,858 $ 104,193 $ 24,865 $ 63,457 $ 252,850 Gross Investment Returns 4.2 % 2.3 % (3.0) % 5.4 % 0.2 % 0.3 % Annualized Gross Returns 16.7 % 9.0 % (12.0) % 21.6 % 0.7 % 1.3 % The following table details total investment returns for alternative investments by asset class for the three months ended March 31, 2024: March 31, 2024 Private Equity Private Credit Alternative Assets Venture Capital Real Estate Total ($ in thousands) Gross investment income $ (1,092) $ 903 $ 1,457 $ 5 $ 540 $ 1,813 Net realized and unrealized gains (losses) 7,858 1,423 (32) 674 (955) 8,968 Total Investment Return $ 6,766 $ 2,326 $ 1,425 $ 679 $ (415) $ 10,781 Average Investments $ 87,168 $ 54,453 $ 96,966 $ 21,882 $ 57,539 $ 318,007 Gross Investment Returns 7.8 % 4.3 % 1.5 % 3.1 % (0.7) % 3.4 % Annualized Gross Returns 31.0 % 17.1 % 5.9 % 12.4 % (2.9) % 13.6 % During the three months ended March 31, 2025, on an inception to date basis through March 31, 2025, our alternative investment portfolio has produced an internal rate of return of 4.9% and a multiple on invested capital of 1.12. This includes investments, primarily in the Alternatives and Real Estate asset classes where we anticipate future returns to emerge but have not as yet recognized either returns or gains based on the development stage of certain investments, which constitute 56.7% of our total alternative assets as of March 31, 2025. Excluding the investments still carried at cost, the internal rate of return was 8.8% with a multiple on invested capital of 1.21. Total returns on our alternative investments by asset class from inception are discussed in detail as of March 31, 2025 in the table below: Asset Class March 31, 2025 Total Direct Fund ($ in thousands) Carrying Value IRR MOIC (x) IRR MOIC (x) IRR MOIC (x) Private Equity $ 58,922 10.5 % 1.36 10.4 % 1.42 10.8 % 1.25 Private Credit 1,808 5.3 % 1.11 12.3 % 1.21 5.0 % 1.10 Hedge Funds — 5.2 % 1.12 5.2 % 1.12 — % — Alternatives 103,597 2.9 % 1.08 3.0 % 1.08 (12.3) % 0.83 Venture Capital 26,196 7.9 % 1.22 12.0 % 1.45 (2.5) % 0.95 Real Estate 63,726 (3.1) % 0.93 (3.1) % 0.93 — % — Total $ 254,249 4.9 % 1.12 4.2 % 1.11 6.3 % 1.12 66 • Private Equity – investment returns in this asset class reflect both dividends and distributions received as well as unrealized gains or losses from adjustments to net asset values in the case of fund investments and market value adjustments in the case of direct equity investments. During the three months ended March 31, 2025, private equity investments produced a total investment return of $2.4 million with fund investments earning $0.2 million while direct investments produced a total investment return of $2.3 million. Inception to date, private equity investments have produced an internal rate of return of 10.5% and a multiple on invested capital of 1.36; fund investments produced an internal rate of return of 10.8% and a multiple on invested capital of 1.25, and direct investments have produced an internal rate of return of 10.4% and a multiple on invested capital of 1.42. Net realized gains of $2.0 million on private equity investments have been recognized through March 31, 2025. Please refer to Note 15. Subsequent Events of the Notes to Condensed Consolidated Financial Statements under Part I Item 1. "Financial Information" for information regarding the recent sale of one the Company's private equity investments held at March 31, 2025. • Private Credit – investment returns in this asset class reflect both distributions received as well as unrealized gains or losses from adjustments to net asset values in the case of fund investments and market value adjustments in the case of direct equity investments. During the three months ended March 31, 2025, private credit investments did not produce any investment returns. Inception to date, private credit investments have produced an internal rate of return of 5.3% and a multiple on invested capital of 1.11, with fund investments producing an internal rate of return of 5.0% and a multiple on invested capital of 1.10, while direct investments have produced an internal rate of return of 12.3% and a multiple on invested capital of 1.21. • Alternative Assets – investment returns in this asset class largely relate to equity method recognition of income from structured financing arrangements in real assets which utilize bankruptcy-remote structures to protect these investments. During the three months ended March 31, 2025, alternative investments produced a total investment return of $(3.1) million. Inception to date, alternative direct investments have produced an internal rate of return of 3.0% and a multiple on invested capital of 1.08; in total, alternative fund investments have produced an internal rate of return of (12.3)% and a multiple on invested capital of 0.83. We have not recognized any returns (including contractual preferred returns) on other alternative investments as the underlying collateralized investment supporting this direct lending initiative continues to develop; these investments represent 83.0% of the alternative investment class at March 31, 2025. We expect to recognize our preferred returns and contingency gains as these investment develops further or if other collateral we have secured as part of our investment responds sooner, subject to certain conditions. • Venture Capital – investment returns in this asset class primarily reflect unrealized gains or losses from adjustments to net asset values in the case of fund investments and market value adjustments in the case of direct equity investments. During the three months ended March 31, 2025, our venture capital investments produced a total return of $1.34 million including $(0.12) million from our direct investments and $1.46 million from fund investments. Inception to date, venture capital investments have produced an internal rate of return of 7.9% and a multiple on invested capital of 1.22; venture capital fund investments have produced an internal rate of return of (2.5)% and a multiple on invested capital of 0.95, while direct venture capital investments have produced an internal rate of return of 12.0% and a multiple on invested capital of 1.45. Through March 31, 2025, we realized total gains of $4.8 million on the sale of the Company’s stake in Betterview Marketplace, Inc. ("Betterview") in a cash and stock transaction with Nearmap US, Inc. ("Nearmap") and continue to hold shares in Nearmap after its completion. To date our investment in Betterview has produced an internal rate of return of 25.8% and a multiple on invested capital of 1.74. • Real Estate – investment returns in this asset class include preferred returns and distributions (if any) from plan developers along with limited unrealized gains or losses to date as two of the projects remain in the development phase. As noted earlier, the Company does not expect significant investment returns from these attractive projects for the next several years. To date these investments have produced an internal rate of return of (3.1)% and a multiple on invested capital of 0.93. On an inception to date basis through March 31, 2025, the Company completed various alternative investments that had total contributions of $154.8 million which produced an internal rate of return of 8.7% and a multiple on invested capital of 1.19. This includes sales of certain assets concurrent with our aforementioned change in strategy during 2024 which was earlier than anticipated for most of these investments. Please refer to Note 15. Subsequent Events of the Notes to Condensed Consolidated Financial Statements under Part I Item 1. "Financial Information" for information regarding the recent sale of USQ Risk that was held at March 31, 2025. Including this asset sale, which was finalized early in the second quarter of 2025, our completed investments have yielded total distributions of $188.1 million, with $13.6 million in potential estimated additional value to be received from the sale of our position in USQ Risk, in addition to the $4.3 million already received at closing in early May. Including the USQ Risk transaction, these investments have to date produced an internal rate of return of 12.3% and a multiple of capital of 1.30x, above our targeted returns. 67 Total returns on our inactive alternative investments by asset class from inception are shown below as of March 31, 2025 along with total returns on our active alternative investment portfolio by asset class from inception as of March 31, 2025: Asset Class March 31, 2025 Total Completed Investments March 31, 2025 Total Active Investments ($ in thousands) Contributions IRR MOIC (x) Contributions IRR MOIC (x) Private Equity $ 45,505 7.7 % 1.18 $ 58,922 12.7 % 1.56 Private Credit 68,990 5.0 % 1.10 1,808 12.2 % 1.27 Hedge Funds 25,000 5.2 % 1.12 — — % — Alternatives 11,358 48.9 % 1.55 103,597 1.2 % 1.03 Venture Capital 3,925 14.3 % 2.22 26,196 2.8 % 1.06 Real Estate — — % — 63,726 (3.1) % 0.93 Total $ 154,778 8.7 % 1.19 $ 254,249 2.8 % 1.08 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 March 31, 2025 and December 31, 2024: ($ in thousands) March 31, 2025 December 31, 2024 Change in $ Change % Reinsurance recoverable on unpaid losses $ 549,350 $ 571,331 $ (21,981) (3.8) % Net loan receivable from related party 128,118 167,975 (39,857) (23.7) % Deferred commission and other acquisition expenses 5,524 8,102 (2,578) (31.8) % Reserve for loss and LAE 757,286 793,679 (36,393) (4.6) % Unearned premiums 26,196 29,793 (3,597) (12.1) % Accrued expenses and other liabilities 51,818 77,966 (26,148) (33.5) % The Company's deferred commission and other acquisition expenses decreased by 31.8% and unearned premiums decreased by 12.1% 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. Also, deferred commission and other acquisition expenses decreased due to accelerated amortization upon the recognition of a premium deficiency of $1.3 million in the AmTrust Reinsurance segment. During the three months ended March 31, 2025, the Company's reinsurance recoverable on unpaid losses decreased by $22.0 million or 3.8% primarily due to the receipt of $28.2 million in loss recoveries from Cavello under the LPT/ADC Agreement. This was partly offset by an increase in losses recoverable due to adverse PPD covered under the LPT/ADC Agreement for the three months ended March 31, 2025 driven by foreign currency translation adjustments on the re-measurement of net loss reserves and insurance related liabilities denominated in British pound and euro. Net loan receivable from related party decreased by $39.9 million or 23.7% since the AR Loan Agreement is now offset by the Premium Repayment Loan Agreement of $24.3 million beginning on January 1, 2025. Also, the repayment of the AR Loan commenced on January 1, 2025 which reduced the loan receivable by $15.6 million. The Company's reserve for loss and LAE decreased by 4.6% primarily due to continuing settlement of loss reserves liabilities for the AmTrust Reinsurance contracts. Accrued expenses and other liabilities decreased by $26.1 million for the three months ended March 31, 2025 primarily due to the reversal of reinsurance losses payable due to AmTrust of $24.3 million for the Premium Repayment Loan Agreement which is now presented under the Loan to Related Party on a net basis instead of under accrued expenses and other liabilities. Capital Resources During the three months ended March 31, 2025, book value per common share decreased by 17.4% to $0.38 and diluted book value per common share decreased by 17.8% to $0.37, compared to December 31, 2024. This was largely due to the net loss of $8.6 million reported by the Company, which produced substantially all of the $7.6 million decline in shareholders' equity for the three months ended March 31, 2025. Capital resources consist of funds deployed in support of our operations. 68 The following table shows the movement in our capital resources at March 31, 2025 and December 31, 2024: March 31, 2025 December 31, 2024 Change in $ Change (%) ($ in thousands) Common shares at par value $ 1,513 $ 1,503 $ 10 0.7 % Additional paid-in capital 888,575 888,067 508 0.1 % Accumulated other comprehensive loss (31,930) (32,733) 803 (2.5) % Accumulated deficit (696,559) (687,914) (8,645) 1.3 % Treasury shares, at cost (124,026) (123,730) (296) 0.2 % Total Maiden shareholders' equity 37,573 45,193 (7,620) (16.9) % Senior Notes - principal amount 262,361 262,361 — — % Total capital resources $ 299,934 $ 307,554 $ (7,620) (2.5) % Total capital resources decreased by $7.6 million compared to December 31, 2024 due to the following items: • accumulated deficit increased by $8.6 million due to the net loss reported for the three months ended March 31, 2025; • net increase in additional paid-in capital of $0.5 million due to share-based compensation of $0.5 million; • net increase in AOCI of $0.8 million due to: (1) net unrealized gains of $0.7 million on our AFS investment portfolio due to market price movements in the three months ended March 31, 2025, and (2) an increase in foreign currency translation adjustment of $0.1 million in the three months ended March 31, 2025 due to the impact of significant depreciation of the U.S. dollar on the re-measurement of net assets denominated in British pound and euro; and • treasury shares increased by $0.3 million due to common share repurchases of $0.3 million which represent tax withholding in respect of tax obligations on the vesting of non-performance-based restricted shares. Please refer to " Notes to Consolidated Financial Statements Note 6. Shareholders' Equity " included under Part II Item 8. " Financial Statements and Supplementary Data" of our Annual Report on Form 10-K for a discussion of the equity instruments issued by the Company as at December 31, 2024. Book value and diluted book value per common share at March 31, 2025 and December 31, 2024 were as follows: ($ in thousands except share and per share data) March 31, 2025 December 31, 2024 Ending common shareholders’ equity $ 37,573 $ 45,193 Numerator for diluted book value per common share calculation $ 37,573 $ 45,193 Common shares outstanding 99,682,710 99,039,253 Shares issued from assumed conversion of dilutive options and restricted shares 1,024,299 2,035,634 Denominator for diluted book value per common share calculation 100,707,009 101,074,887 Book value per common share $ 0.38 $ 0.46 Diluted book value per common share 0.37 0.45 Common Shares On February 21, 2017, the Company's Board of Directors approved the repurchase of up to $100.0 million of the Company's common shares from time to time at market prices. The Company adopted a Rule 10b5-1(c)(1) trading arrangement as defined in Item 408 of Regulation S-K under the Securities Exchange Act of 1934, as amended. On March 20, 2024, an amendment was made to the agreement initially signed on September 29, 2023 between Maiden Holdings and a financial intermediary authorizing the intermediary to purchase common shares from October 30, 2023 until the close of business on September 29, 2024, subject to certain conditions set forth in the agreement. The Company has fulfilled the repurchases under its current Rule 10b5-1(c)(1) trading arrangement. During the three months ended March 31, 2025, Maiden Reinsurance did not repurchase any common shares under the Company's share repurchase plan. During the three months ended March 31, 2024, Maiden Reinsurance repurchased 352,111 at an average price per share of $1.91 under the share repurchase plan. The Company's remaining authorization for common share repurchases is $68.1 million at March 31, 2025. Senior Notes There were no changes in the Company’s Senior Notes at March 31, 2025 compared to December 31, 2024. The Company did not enter into any short-term borrowing arrangements during the three months ended March 31, 2025. 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 2013 Senior Notes issued by Maiden NA 69 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 7. Long-Term Debt " included under Part I Item 1 " Financial Information" of this Form 10-Q, on May 2, 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 $100.0 million of the Company's Senior Notes from time to time at market prices in open market purchases or as may be privately negotiated. The Company has a remaining authorization of $99.9 million for such repurchases at March 31, 2025. 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. In 2023 and 2024, the Vermont DFR approved an annual dividend program from Maiden Reinsurance to Maiden NA, with notification to the Vermont DFR as dividends are paid. Subsequent to those approvals, Maiden Reinsurance paid total dividends of $75.0 million to Maiden NA as of March 31, 2025. The summarized financial information below has been presented on a combined basis for the issuer Maiden NA and the guarantor Maiden Holdings, excluding all other subsidiaries. Intercompany balances and transactions between Maiden NA and Maiden Holdings, whose information is presented above on a combined basis, were eliminated. Any investment by Maiden NA or Maiden Holdings in subsidiaries that are not issuers or guarantors is not presented in the financial information below. Intercompany balances with subsidiaries that are not issuers or guarantors and any related party transactions were separately disclosed below and are not included in the total assets and total liabilities presented for Maiden NA and Maiden Holdings. The net loss for Maiden NA and Maiden Holdings was due to interest and amortization expenses on the Senior Notes as well as general and administrative expenses. The net loss in Maiden NA also reflects income tax expense incurred for the respective period. Summarized financial information of Maiden NA and Maiden Holdings as of March 31, 2025 and for the three months ended March 31, 2025 were as follows: Maiden NA Maiden Holdings ($ in thousands) Total assets $ 7,883 $ 5,664 Total liabilities 151,294 110,703 Amounts due from subsidiaries (not included in total assets above) 27 2,226 Amounts due to subsidiaries (not included in total liabilities above) 12,748 3,242 Related party loan payable (not included in total liabilities above) — 316,464 Total revenue for the quarter-to-date period 454 4 Net loss for the quarter-to-date period (2,686) (10,816) The ratio of Debt to Total Capital Resources at March 31, 2025 and December 31, 2024 was computed as follows: ($ in thousands) March 31, 2025 December 31, 2024 Senior notes - principal amount $ 262,361 $ 262,361 Maiden shareholders’ equity 37,573 45,193 Total capital resources $ 299,934 $ 307,554 Ratio of debt to total capital resources 87.5 % 85.3 % Off-Balance Sheet Arrangements C ertain of the Company's investments in limited partnerships are related to real estate joint ventures with interests in multi-property projects with varying strategies ranging from the development of properties to the ownership of income-producing properties. In certain of these joint ventures, the Company has provided certain indemnities, guarantees and commitments to 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. Any loss for which the Company could be liable would be contingent on the default of a loan by the real estate joint venture entity for which the Company provided a financial guarantee to a lender. While the Company has committed to aggregate limits as to the amount of guarantees it will provide as part of its limited partnerships, guarantees are only provided on an individual transaction basis and are subject to the terms and conditions of each transaction mutually agreed by the parties involved. The Company is not bound to such guarantees without its express authorization. As discussed above, at March 31, 2025, guarantees of $67.7 million have been provided to lenders by the Company on behalf of the real estate joint venture, however, the likelihood of the Company incurring any losses pertaining to project level financing guarantees was determined to be remote. Therefore, no liability has been accrued under ASC 450-20. 70 Non-GAAP Measures As defined and described in the Key Financial Measures section , m anagement uses certain key financial measures, some of which are non-GAAP measures, to evaluate the Company's financial performance and the overall growth in value generated for the Company’s common shareholders. Management believes that these measures, which may be defined differently by other companies, explain the Company’s results to investors in a manner that allows for a more complete understanding of the underlying trends in the Company’s business. The calculation, reconciliation to nearest GAAP measure and discussion of relevant non-GAAP measures used by management are as follows: Non-GAAP operating loss and Non-GAAP diluted operating loss per share attributable to common shareholders Non-GAAP operating loss and Non-GAAP diluted operating loss per share attributable to common shareholders can be reconciled to the nearest U.S. GAAP financial measure as follows: For the Three Months Ended March 31, 2025 2024 ($ in thousands except per share data) Net (loss) income $ (8,645) $ 1,459 Add (subtract): Net realized and unrealized investment gains (3,331) (8,750) Foreign exchange and other losses (gains) 7,434 (2,053) Interest in loss (income) of equity method investments 2,722 (606) Change in deferred gain on retroactive reinsurance under the LPT/ADC Agreement (987) 5,000 Non-GAAP operating loss $ (2,807) $ (4,950) Diluted (loss) earnings per share attributable to common shareholders $ (0.09) $ 0.01 Add (subtract): Net realized and unrealized investment gains (0.03) (0.08) Foreign exchange and other losses (gains) 0.07 (0.02) Interest in loss (income) of equity method investments 0.03 (0.01) Change in deferred gain on retroactive reinsurance under the LPT/ADC Agreement (0.01) 0.05 Non-GAAP diluted operating loss per share attributable to common shareholders $ (0.03) $ (0.05) Non-GAAP operating loss was $2.8 million for the three months ended March 31, 2025 compared to a non-GAAP operating loss of $5.0 million for the same period in 2024. The non-GAAP operating results were primarily driven by favorable non-GAAP underwriting results in the AmTrust Reinsurance segment as discussed further below. Non-GAAP Underwriting Results The non-GAAP underwriting results for the three months ended March 31, 2025 and 2024 are as follows: For the Three Months Ended March 31, ($ in thousands) 2025 2024 Gross premiums written $ 4,074 $ 8,323 Net premiums written $ 4,049 $ 8,314 Net premiums earned $ 7,684 $ 12,408 Other insurance revenue, net — 46 Non-GAAP net loss and LAE (1) 6,636 (6,625) Commission and other acquisition expenses (4,558) (5,593) General and administrative expenses (3,295) (2,760) Non-GAAP underwriting income (loss) (1) $ 6,467 $ (2,524) (1) Non-GAAP underwriting income (loss) and non-GAAP net loss and LAE for the three months ended March 31, 2025 and 2024 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. 71 The non-GAAP underwriting results above are summarized by segment for the three months ended March 31, 2025 and 2024 in the table below: For the Three Months Ended March 31, ($ in thousands) 2025 2024 Diversified Reinsurance underwriting income (loss) $ 2,254 $ (272) AmTrust Reinsurance underwriting income (loss) 5,200 (7,252) Less: change in deferred gain on retroactive reinsurance under the LPT/ADC Agreement (987) 5,000 Non-GAAP AmTrust Reinsurance underwriting income (loss) 4,213 (2,252) Non-GAAP underwriting income (loss) (1) $ 6,467 $ (2,524) (1) Non-GAAP underwriting loss and non-GAAP net loss and LAE for the three months ended March 31, 2025 and 2024 are adjusted for prior year reserve development subject to the LPT/ADC Agreement. The non-GAAP underwriting results have been adjusted for 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 reinsurance recoverable under the LPT/ADC Agreement of $1.0 million during the three months ended March 31, 2025, the non-GAAP underwriting income was $6.5 million. This compared to a non-GAAP underwriting loss of $2.5 million when adjusted for the increase in reinsurance recoverable under the LPT/ADC Agreement of $5.0 million in the three months ended March 31, 2024. The non-GAAP underwriting income of $6.5 million for the three months ended March 31, 2025, was primarily driven by: • net favorable prior year reserve development 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; and • underwriting income of $2.3 million in the Diversified Reinsurance segment for the three months ended March 31, 2025. This included underwriting income of $1.2 million from GLS operations primarily due to a $2.5 million reduction in incurred losses from an agreement to commute loss reserves for a GLS contract, the approval of which remains pending with the Vermont DFR. Please refer to the respective segment results for AmTrust Reinsurance and Diversified Reinsurance under Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Quarterly Report on Form 10-Q for further details of these underwriting results. Non-GAAP Net Loss and LAE Adjusted for favorable prior year reserve development under the AmTrust Quota Share which is fully recoverable from Cavello under the LPT/ADC Agreement, the non-GAAP net loss and LAE increased by $1.0 million for the three months ended March 31, 2025. Adjusted for adverse prior year reserve development under the AmTrust Quota Share which is fully recoverable from Cavello under the LPT/ADC Agreement, the non-GAAP net loss and LAE decreased by $5.0 million for the three months ended March 31, 2024. These adjustments for the AmTrust Quota Share regarding PPD which is fully recoverable from Cavello under the LPT/ADC Agreement are reflected in the calculation of non-GAAP Loss and LAE below: For the Three Months Ended March 31, ($ in thousands) 2025 2024 Net loss and LAE $ (7,623) $ 11,625 Less: change in deferred gain on retroactive reinsurance under the LPT/ADC Agreement (987) 5,000 Non-GAAP net loss and LAE $ (6,636) $ 6,625 Adjusted Shareholders' Equity, Adjusted Total Capital Resources, Adjusted Book Value per Common Share, and Ratio of Debt to Total Adjusted Capital Resources The Adjusted Shareholders' Equity, Adjusted Total Capital Resources and Adjusted Book Value per Common Share at March 31, 2025 and December 31, 2024 reflect the addition of the unamortized deferred gain under the LPT/ADC Agreement to the GAAP shareholders' equity as depicted in the computations further below. The deferred gain under the LPT/ADC Agreement was $104.0 million at March 31, 2025 compared to $105.0 million at December 31, 2024. The decrease in the deferred gain of $1.0 million is due to amortization of the deferred gain of $5.9 million for the three months ended March 31, 2025 partly offset by adverse PPD of $4.9 million covered by the LPT/ADC Agreement for the three months ended March 31, 2025 due to foreign currency translation adjustments on the re-measurement of net loss reserves and insurance related liabilities denominated in British pound and euro. Please refer to Note 8. Reinsurance of the Notes to Condensed Consolidated Financial Statements included in Part I Item 1. "Financial Information" for details regarding the movement in the deferred gain liability under the LPT/ADC Agreement. 72 We believe the inclusion of the unamortized deferred gain on the LPT/ADC Agreement under these metrics better reflects the ultimate economic benefit of the LPT/ADC Agreement, which will improve the Company's shareholders' equity over the settlement period under the terms of the agreement. Reconciliation of shareholders' equity to Adjusted shareholders' equity and Adjusted Total Capital Resources The following table computes adjusted shareholders' equity and adjusted total capital resources by recognizing the unamortized deferred gain under the LPT/ADC Agreement at March 31, 2025 and December 31, 2024: ($ in thousands) March 31, 2025 December 31, 2024 Change in $ Change % Total shareholders' equity $ 37,573 $ 45,193 $ (7,620) (16.9) % Unamortized deferred gain on LPT/ADC Agreement 103,968 104,955 (987) (0.9) % Adjusted shareholders' equity 141,541 150,148 (8,607) (5.7) % Senior Notes - principal amount 262,361 262,361 — — % Adjusted total capital resources $ 403,902 $ 412,509 $ (8,607) (2.1) % Non-GAAP Operating ROACE Non-GAAP Operating ROACE for the three months ended March 31, 2025 and 2024 was as follows: For the Three Months Ended March 31, ($ in thousands) 2025 2024 Non-GAAP operating loss $ (2,807) $ (4,950) Opening adjusted shareholders’ equity 150,148 320,076 Ending adjusted shareholders’ equity 141,541 325,276 Average adjusted shareholders’ equity 145,845 322,676 Non-GAAP Operating ROACE (7.8) % (6.2) % 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 at March 31, 2025 and December 31, 2024 was computed as follows: March 31, 2025 December 31, 2024 Book value per common share $ 0.38 $ 0.46 Unamortized deferred gain on LPT/ADC Agreement 1.04 1.06 Adjusted book value per common share $ 1.42 $ 1.52 Ratio of Debt to Adjusted Total Capital Resources Management uses this non-GAAP measure to monitor the financial leverage of the Company. This measure is calculated using the total principal amount of debt divided by the sum of adjusted total capital resources as computed in the table above. The ratio of Debt to Adjusted Total Capital Resources at March 31, 2025 and December 31, 2024 was computed as follows: ($ in thousands) March 31, 2025 December 31, 2024 Senior notes - principal amount $ 262,361 $ 262,361 Adjusted shareholders’ equity 141,541 150,148 Adjusted total capital resources $ 403,902 $ 412,509 Ratio of debt to adjusted total capital resources 65.0 % 63.6 % 73 Currency and Foreign Exchange We conduct business in a variety of foreign (non-U.S.) currencies, the principal exposures being the euro and the British pound. Assets and liabilities denominated in foreign currencies are exposed to changes in currency exchange rates. Our reporting currency is the U.S. dollar, and exchange rate fluctuations relative to the U.S. dollar may materially impact our results and financial position. Our principal exposure to foreign currency risk is our obligation to settle claims in foreign currencies. In addition, in order to minimize this risk, we maintain and expect to continue to maintain a portion of our investment portfolio in investments denominated in currencies other than the U.S. dollar. We may employ various strategies (including hedging) to manage our exposure to foreign currency exchange risk. To the extent that these exposures are not fully hedged or the hedges are ineffective, our results of operations or equity may be adversely affected. At March 31, 2025, no such hedges or hedging strategies were in force or had been entered into. We measure monetary assets and liabilities denominated in foreign currencies at period end exchange rates, with the resulting foreign exchange gains and losses recognized in the unaudited Condensed Consolidated Statements of Income. Revenues and expenses in foreign currencies are converted at average exchange rates during the period. The effect of the translation adjustments for foreign operations is included in AOCI. Net foreign exchange losses of $7.9 million were generated during the three months ended March 31, 2025, compared to net foreign exchange gains of $2.1 million for the three months ended March 31, 2024. The foreign exchange losses for the three months ended March 31, 2025 was due to significant depreciation in the value of the U.S. dollar relative to the euro and the British pound. These losses were primarily unrealized and resulted from the effects of revaluation of our net insurance liabilities that are required to be settled in foreign currencies at each balance sheet date. The net foreign exchange gains of $2.1 million in the first quarter of 2024 were driven by modest strengthening of the U.S. dollar on the re-measurement of net loss reserves and insurance related liabilities denominated in British pound and euro during the period. At March 31, 2025, the increase in foreign currency translation adjustments of $0.1 million for the three months ended March 31, 2025 was 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, 2025 included reserve for net loss and LAE of $344.5 million. Our foreign currency asset exposures at March 31, 2025 include $126.6 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, $30.6 million of equity method real estate investments denominated in Canadian dollars, as well as $12.6 million of funds withheld receivable. Effects of Inflation The anticipated effects of inflation are considered explicitly in the pricing of the insured exposures, which are used as the initial estimates of reserves for loss and LAE. In addition, inflation is also implicitly accounted for in subsequent estimates of loss and LAE reserves, as the expected rate of emergence is in part predicated upon the historical levels of inflation that impact ultimate claim costs. To the extent inflation causes these costs, particularly medical treatments and litigation costs, to vary from the assumptions made in the pricing or reserving estimates, the Company will be required to change the reserve for loss and LAE with a corresponding change in its earnings in the period in which the variance is identified. The actual effects of inflation on the results of operations of the Company cannot be accurately known until claims are ultimately settled. 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 business. 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. While general economic inflation has eased in recent quarters, there remains uncertainty around the rate and direction of inflation and interest rates 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 2. " 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. Currently, while salaries and incentive compensation costs comprise less than one-half of our total general and administrative expenses, continuing inflation and tight labor conditions could have a material impact on our net operating results. Off-Balance Sheet Arrangements At March 31, 2025, we did not have any off-balance sheet arrangements as defined by Item 303(a) (4) of Regulation S-K. Recent Accounting Pronouncements See " Part I, Item 1 - Notes to Condensed Consolidated Financial Statements (unaudited) Note 2. Significant Accounting Policies " for a discussion on recently adopted accounting pronouncements. 74