Segment Information

3 Months Ended

Mar. 31, 2020

The Company currently has two reportable segments: Diversified Reinsurance and AmTrust Reinsurance. Our Diversified Reinsurance segment consists of a portfolio of predominantly property and casualty reinsurance business focusing on regional and specialty property and casualty insurance companies located primarily in Europe. Our AmTrust Reinsurance segment includes all business ceded to Maiden Reinsurance by AmTrust, primarily the AmTrust Quota Share and the European Hospital Liability Quota Share, which are in run-off effective January 1, 2019. In addition to our reportable segments, the results of operations of the former NGHC Quota Share segment which was commuted in November 2019 and the remnants of our retroceded U.S. treaty business have been included in the "Other" category. Please refer to "Note 10. Related Party Transactions" for additional information.

The Company evaluates segment performance based on segment profit separately from the results of our investment portfolio. General and administrative expenses are allocated to the segments on an actual basis except salaries and benefits where management’s judgment is applied; however general corporate expenses are not allocated to the segments. In determining total assets by reportable segment, the Company identifies those assets that are attributable to a particular segment such as reinsurance balances receivable, reinsurance recoverable on unpaid losses, deferred commission and other acquisition expenses, funds withheld receivable, loan to related party and restricted cash and investments. All remaining assets are allocated to Corporate.

As discussed in "Note 1. Basis of Presentation" and "Note 10. Related Party Transactions", the Partial Termination Amendment and the termination of the remaining business with AmTrust effective January 1, 2019 resulted in a significant reduction in gross premiums written. This was due to the return of unearned premium on certain lines covered by the Partial Termination Amendment, with no new business written since 2018 as a result of the termination of the AmTrust Quota Share and the European Hospital Liability Quota Share. The following tables summarize the underwriting results of our reportable segments and the reconciliation of our reportable segments and Other category's underwriting results to consolidated net income (loss) from continuing operations:



For the Three Months Ended March 31, 2020	Diversified Reinsurance			AmTrust Reinsurance			Total
Gross premiums written	$	11,734		$	—		$	11,734
Net premiums written	$	10,372		$	—		$	10,372
Net premiums earned	$	12,531		$	18,684		$	31,215
Other insurance revenue	408			—			408
Net loss and loss adjustment expenses ("loss and LAE")	(7,041		)	(14,045		)	(21,086		)
Commission and other acquisition expenses	(4,979		)	(6,994		)	(11,973		)
General and administrative expenses	(1,613		)	(644		)	(2,257		)
Underwriting loss	$	(694	)	$	(2,999	)	(3,693		)
Reconciliation to net income from continuing operations
Net investment income and realized gains on investment							29,002
Total other-than-temporary impairment losses							(1,506		)
Interest and amortization expenses							(4,831		)
Foreign exchange and other gains, net							8,197
Other general and administrative expenses							(6,293		)
Income tax expense							(15		)
Net income from continuing operations							$	20,861

Net loss and LAE ratio⁽¹⁾	54.4		%	75.2		%	66.7		%
Commission and other acquisition expense ratio⁽²⁾	38.5		%	37.4		%	37.9		%
General and administrative expense ratio⁽³⁾	12.5		%	3.5		%	27.0		%
Expense ratio⁽⁴⁾	51.0		%	40.9		%	64.9		%
Combined ratio⁽⁵⁾	105.4		%	116.1		%	131.6		%

3. Segment Information (continued)



For the Three Months Ended March 31, 2019	Diversified Reinsurance			AmTrust Reinsurance			Other			Total
Gross premiums written	$	15,338		$	(576,477	)	$	—		$	(561,139	)
Net premiums written	$	14,947		$	(576,477	)	$	—		$	(561,530	)
Net premiums earned	$	25,292		$	157,810		$	—		$	183,102
Other insurance revenue	812			—			—			812
Net loss and LAE	(14,391		)	(138,070		)	(228		)	(152,689		)
Commission and other acquisition expenses	(9,261		)	(60,356		)	—			(69,617		)
General and administrative expenses	(3,031		)	(1,266		)	—			(4,297		)
Underwriting loss	$	(579	)	$	(41,882	)	$	(228	)	(42,689		)
Reconciliation to net loss from continuing operations
Net investment income and realized losses on investment										20,921
Interest and amortization expenses										(4,829		)
Foreign exchange and other gains, net										4,979
Other general and administrative expenses										(12,322		)
Income tax benefit										38
Net loss from continuing operations										$	(33,902	)

Net loss and LAE ratio⁽¹⁾	55.1		%	87.5		%				83.0		%
Commission and other acquisition expense ratio⁽²⁾	35.5		%	38.2		%				37.9		%
General and administrative expense ratio⁽³⁾	11.6		%	0.8		%				9.0		%
Expense ratio⁽⁴⁾	47.1		%	39.0		%				46.9		%
Combined ratio⁽⁵⁾	102.2		%	126.5		%				129.9		%


(1)	Calculated by dividing net loss and LAE by the sum of net premiums earned and other insurance revenue.


(2)	Calculated by dividing commission and other acquisition expenses by the sum of net premiums earned and other insurance revenue.


(3)	Calculated by dividing general and administrative expenses by the sum of net premiums earned and other insurance revenue.


(4)	Calculated by adding together the commission and other acquisition expense ratio and general and administrative expense ratio.


(5)	Calculated by adding together net loss and LAE ratio and the expense ratio.



For the Three Months Ended March 31, 2020	Diversified Reinsurance	AmTrust Reinsurance	Other	Total



For the Three Months Ended March 31, 2019	Diversified Reinsurance	AmTrust Reinsurance	Other	Total

The following tables summarize the financial position of the Company's reportable segments including the reconciliation to the Company's consolidated total assets at March 31, 2020 and December 31, 2019:



March 31, 2020	Diversified Reinsurance		AmTrust Reinsurance		Total
Total assets - reportable segments	$	163,684	$	2,643,073	$	2,806,757
Corporate assets	—		—		515,000
Total Assets	$	163,684	$	2,643,073	$	3,321,757

December 31, 2019	Diversified Reinsurance		AmTrust Reinsurance		Total
Total assets - reportable segments	$	167,845	$	2,843,802	$	3,011,647
Corporate assets	—		—		556,549
Total Assets	$	167,845	$	2,843,802	$	3,568,196

3. Segment Information (continued)

The following tables set forth financial information relating to net premiums written by major line of business and reportable segment for the three months ended March 31, 2020 and 2019:



For the Three Months Ended March 31,	2020		2019
Net premiums written	Total		Total
Diversified Reinsurance
International	$	10,372	$	14,947
Total Diversified Reinsurance	10,372		14,947
AmTrust Reinsurance
Small Commercial Business	—		(342,681		)
Specialty Program	—		(12,608		)
Specialty Risk and Extended Warranty	—		(221,188		)
Total AmTrust Reinsurance	—		(576,477		)
Total Net Premiums Written	$	10,372	$	(561,530	)



For the Three Months Ended March 31,	2020	2019

The following tables set forth financial information relating to net premiums earned by major line of business and reportable segment for the three months ended March 31, 2020 and 2019:



For the Three Months Ended March 31,	2020				2019
Net premiums earned	Total		% of Total		Total		% of Total
Diversified Reinsurance
International	$	12,531	40.1	%	$	25,292	13.8	%
Total Diversified Reinsurance	12,531		40.1	%	25,292		13.8	%
AmTrust Reinsurance
Small Commercial Business	939		3.0	%	39,455		21.6	%
Specialty Program	75		0.3	%	76,221		41.6	%
Specialty Risk and Extended Warranty	17,670		56.6	%	42,134		23.0	%
Total AmTrust Reinsurance	18,684		59.9	%	157,810		86.2	%
Total Net Premiums Earned	$	31,215	100.0	%	$	183,102	100.0	%



For the Three Months Ended March 31,	2020	2019