Company: KG
Filing Date: 2025-03-26
Form Type: 424B3
Source: 0001104659-25-028251
Chunk: 95

Company: Kestrel Group Ltd
Filing Date: 2025-03-26
Form: 424B3
Chunk 95
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 of Maiden as of December 31, 2024. (C) The historical audited consolidated financial statements of Maiden are inclusive of Maiden GF and

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TABLE OF CONTENTS

Maiden LF. The discontinued operations adjustments are presented to exclude Maiden GF and Maiden LF’s results of operations. Pro forma Transaction Accounting Adjustments (a) Reflects the pro forma adjustment of $6.8 million to historical amounts to record the estimated fair value of reserve for loss and loss adjustment expenses, which reflects a decrease related to the present value of the net loss and loss adjustment expenses based on the estimated payout pattern, partially offset by an increase in net loss and loss adjustment expenses to the estimated market-based risk margin. The risk margin represents the estimated cost of capital required by a market participant to assume the net loss and loss adjustment expenses. The fair value of the net reserve for loss and loss adjustment expenses was determined using certain key assumptions, including the estimated cost of capital and investment yield. This will be amortized based on the claims settlement and reinsurance recovery timing. (b) Reflects the pro forma adjustment to record the value of acquired business (“VOBA”) at the estimated fair value of $5.9 million, which represents the present value of the expected underwriting profit within the unearned premiums liability, net of reinsurance, less costs to service the related policies and a risk premium. The fair value of VOBA was determined after taking into consideration certain key assumptions, including the estimated cost of capital, investment yield, loss ratio and related expenses. The adjustment for VOBA will be amortized in line with the earning pattern of unearned premiums (see Note 6(a) below). (c) Reflects the pro forma adjustment to eliminate the deferred commissions and other acquisition costs of $8.1 million. (d) Reflects the pro forma adjustment to eliminate the deferred gain on the retroactive reinsurance balance of $107.3 million (see Note 6(b) below). (e) Reflects a pro forma adjustment to record the senior notes at the estimated fair value of $177.0 million. The historical deferred debt issuance costs balance of $7.6 million was eliminated (see Note 6(c) below). (f) Reflects the pro forma adjustment to historical amounts to record the loan to a related party at the estimated fair value of $133.3 million and the premium repayment loan at the estimated fair value of $20.3 million (see Note 6(e) below). (g) Reflect