Company: MHLA
Filing Date: 2025-03-10
Form Type: 10-K
Source: 0001412100-25-000011
Chunk: 128

Company: Maiden Holdings, Ltd.
Filing Date: 2025-03-10
Form: 10-K
Item: Item 7
Chunk 128
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 large volume of potential transactions that must be recorded in the insurance and reinsurance industry, backlogs in the recording of the Company’s business activities can also impair the accuracy of its loss and LAE reserve estimates. At December 31, 2024, there were no significant backlogs related to the processing of policy or contract information in any of our reporting segments. 

The Company assumes in its loss and LAE reserving process that, on average, the time period between the recording of expected losses and the reporting of actual losses are predictable when measured in the aggregate and over time. The time period over which all losses are expected to be reported to the Company varies significantly by line of business. This period can range from a few quarters for some lines, such as property, to many years for some casualty lines of business. To the extent that actual reported losses are reported more quickly or more slowly than expected, the Company may adjust its estimate of ultimate loss accordingly. 

Potential Volatility in the Reserve for Loss and LAE: In addition to the factors creating uncertainty in the Company’s estimate of loss and LAE, the Company’s estimated reserve for loss and LAE can change over time because of unexpected changes in the external environment. Potential changing external factors include: 

•changes in the inflation rate for goods and services related to the covered damages;

•changes in the general economic environment that could cause unanticipated changes in claim frequency or severity;

•changes in the litigation environment regarding the representation of plaintiffs and potential plaintiffs;

•changes in the judicial and/or arbitration environment regarding the interpretation of policy and contract provisions relating to the determination of coverage and/or the amount of damages awarded for certain types of claims;

•changes in the social environment regarding the general attitude of juries in the determination of liability and damages;

•changes in the legislative environment regarding the definition of damages;

•new types of injuries caused by new types of injurious activities or exposures; and

•assessment of changes in ceding company case reserving and reporting patterns.

The change in loss reserve estimates from the prior year is referred to as Prior Year Development ("PPD"). We experienced adverse PPD of $154.4 million for the year ended December 31, 2024 compared to adverse PPD of $38.2 million for the year ended December 31, 2023, primarily within the AmTrust Reinsurance segment for both respective years. 

Please refer to “Notes to Consolidated Financial Statements - Note 9 — Reserve for Loss and Loss Adjustment Expenses