Company: KG
Filing Date: 2025-08-15
Form Type: 10-Q
Source: 0002055116-25-000018
Chunk: 454

Company: Kestrel Group Ltd
Filing Date: 2025-08-15
Form: 10-Q
Item: Item 4
Chunk 454
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, pursuant to which Cavello assumed the loss reserves as of December 31, 2018 associated with a quota share reinsurance agreement between certain insurance subsidiaries of Maiden and AmTrust that went in run-off effective January 1, 2019, subject to additional collateral funding requirements. As of June 30, 2025, the amount of collateral required was $432.2 million. See "Note 8. Reinsurance" for additional information regarding these reinsurance and collateral arrangements with Cavello. 

Maiden’s reinsurers may not pay losses in a timely fashion, or at all. Either of these events would increase Kestrel Group’s costs and could have a material adverse effect on Kestrel Group’s business, financial condition, results of operations and prospects.

The failure of any of the loss limitation methods Kestrel Group has employed or could employ in the future could have a material adverse effect on its results of operations or financial condition.

Kestrel Group seeks to limit loss exposure through loss limitation provisions in policies it writes, such as limitations on the amount of losses that can be claimed under a policy, limitations or exclusions from coverage and provisions relating to choice 

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of forum, which are intended to ensure that Kestrel Group’s policies are legally interpreted as intended. These contractual provisions may not be enforceable in the manner expected and disputes relating to coverage may not be resolved in Kestrel Group’s favor. If the loss limitation provisions in the policies are not enforceable or disputes arise concerning the application of such provisions, the losses that Kestrel Group incurs could be materially higher than expected and Kestrel Group’s financial condition and results of operations could be adversely affected.

Maiden’s investments in alternative investments and its investments in joint ventures and/or entities accounted for using the equity method may be illiquid and volatile in terms of value and returns, which could negatively affect Kestrel Group’s investment income and liquidity.

In addition to fixed maturity securities, Maiden has invested in alternative investments such as hedge funds, fixed income funds, equity funds, privately held investments, private equity and private credit funds and co-investments, real estate funds and co-investments and other alternative investments. At June 30, 2025, approximately 46% of its total cash and investments were categorized as equity securities, equity method investments and other investments on its condensed consolidated balance sheets.

These alternative investments and other similar investments may be illiquid due to restrictions on sales, transfers and redemption terms