Company: MHLA
Filing Date: 2025-03-10
Form Type: 10-K
Source: 0001412100-25-000011
Chunk: 31

Company: Maiden Holdings, Ltd.
Filing Date: 2025-03-10
Form: 10-K
Item: Item 1A
Chunk 31
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 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 its results did not reach the objectives we expected it to over time. Having completed the capital commitment we made to GLS in 2020, we determined in 2023 to not commit any additional capital to new opportunities and to run-off the existing accounts GLS underwrote.

These strategies have not been successful in achieving our objectives, and as part of our ongoing efforts to improve our performance, we actively evaluate our business plans and strategies, which have resulted in material changes to those plans. As the run-off of our older reinsurance liabilities has been much more volatile than expected and our asset management strategies develop along timelines longer than initially anticipated, the need to re-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.

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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 near-term expansion of those strategies is appropriate and during 2024 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. These steps resulted in the announcement of our proposed combination with Kestrel on December 29, 2024. 

We are subject to increasing risks related to our ability to successfully implement these evolving plans and strategies. Changing plans and strategies requires significant management of time and effort and may divert management’s attention from our core operations and competencies, and our efforts to improve our capital position and solvency. Moreover, modifications we undertake to our operations may not immediately result in improved financial performance. 

Therefore, risks associated with implementing or changing our business strategies and initiatives, including the proposed combination with Kestrel, as well as risks related to developing or enhancing the operations, controls and other infrastructure required for these strategies and initiatives, may not have a positive impact on our publicly reported results until many years after implementation, possibly leading to an adverse effect on our long-term results of operations and financial condition.