Company: MHLA
Filing Date: 2025-03-10
Form Type: 10-K
Source: 0001412100-25-000011
Chunk: 30

Company: Maiden Holdings, Ltd.
Filing Date: 2025-03-10
Form: 10-K
Item: Item 1A
Chunk 30
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PT/ADC Agreement starting in the fourth quarter of 2024. There can be no assurance that this reinsurance or that the timing and accounting recognition of recoveries under that reinsurance agreement will be sufficient to protect us against further declines in shareholders’ equity. 

We have taken steps to restructure our business by disposing of unprofitable operations and terminating reinsurance agreements in both of our reporting segments while significantly reducing headcount and overhead expenses. While we believe these actions along with our revised strategy will produce operating profitability, there can be no assurance that these actions will achieve their intended effects or that such reinsurance will be sufficient to protect us against further adverse loss reserve development. Further, as our insurance liabilities continue to run off, our investment income will continue to decrease which may adversely affect our profitability. While we continue to reduce our operating expenses, make additional investments which we believe will produce enhanced investment returns, and have written legacy retroactive risks, there can be no assurance that these measures will overcome the expected decline in investment income. Finally, we have not yet determined if and when we may resume active underwriting of new prospective risks, particularly in relation to our proposed combination with Kestrel, which would result in increased revenue.

While we continue to believe we will operate as a going concern, there can be no assurance that this will continue to be the case if we do not maintain operating profitability or if future significant declines in our shareholders’ equity occur. 

The inability of management to successfully implement its revised business strategy, including its proposed combination with Kestrel, could result in a further decline of capital, materially adversely affecting our financial condition and results of operations and may create enhanced risks.

Management continues to evaluate various operating strategies that are likely to be significantly different than our prior strategic business focus. In addition to restoring operating profitability, our strategic focus has centered 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 has been to increase the non-GAAP book value of the Company, 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. 

In recent years we pursued a revised operating strategy which leveraged the significant assets and capital we retain. We also formed GLS to focus on smaller accounts in the legacy (re)insurance marketplace, which we believed was complimentary to this strategy. However, a combination of factors, including