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Segment Information

6 Months Ended

Jun. 30, 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 June 30, 2020	Diversified Reinsurance			AmTrust Reinsurance			Total
Gross premiums written	$	9,687		$	(4,705	)	$	4,982
Net premiums written	$	8,553		$	(4,463	)	$	4,090
Net premiums earned	$	11,527		$	9,781		$	21,308
Other insurance revenue	250			—			250
Net loss and loss adjustment expenses ("loss and LAE")	(6,038		)	(4,970		)	(11,008		)
Commission and other acquisition expenses	(4,374		)	(3,780		)	(8,154		)
General and administrative expenses	(1,746		)	(667		)	(2,413		)
Underwriting (loss) income	$	(381	)	$	364		(17		)
Reconciliation to net income from continuing operations
Net investment income and realized gains on investment							23,184
Interest and amortization expenses							(4,830		)
Foreign exchange and other losses, net							(2,295		)
Other general and administrative expenses							(6,848		)
Income tax benefit							18
Net income from continuing operations							$	9,212

Net loss and LAE ratio⁽¹⁾	51.3		%	50.8		%	51.0		%
Commission and other acquisition expense ratio⁽²⁾	37.1		%	38.6		%	37.8		%
General and administrative expense ratio⁽³⁾	14.8		%	6.9		%	43.0		%
Expense ratio⁽⁴⁾	51.9		%	45.5		%	80.8		%
Combined ratio⁽⁵⁾	103.2		%	96.3		%	131.8		%

3. Segment Information (continued)



For the Three Months Ended June 30, 2019	Diversified Reinsurance			AmTrust Reinsurance			Other		Total
Gross premiums written	$	11,244		$	(9,127	)	$	—	$	2,117
Net premiums written	$	8,718		$	(9,127	)	$	—	$	(409	)
Net premiums earned	$	22,472		$	111,514		$	—	$	133,986
Other insurance revenue	754			—			—		754
Net loss and LAE	(12,497		)	(109,088		)	24		(121,561		)
Commission and other acquisition expenses	(8,147		)	(41,509		)	—		(49,656		)
General and administrative expenses	(2,092		)	(562		)	—		(2,654		)
Underwriting income (loss)	$	490		$	(39,645	)	$	24	(39,131		)
Reconciliation to net income from continuing operations
Net investment income and realized gains on investment									55,208
Interest and amortization expenses									(4,830		)
Foreign exchange and other gains									1,207
Other general and administrative expenses									(9,504		)
Income tax benefit									1,026
Net income from continuing operations									$	3,976

Net loss and LAE ratio⁽¹⁾	53.8		%	97.8		%			90.2		%
Commission and other acquisition expense ratio⁽²⁾	35.1		%	37.2		%			36.9		%
General and administrative expense ratio⁽³⁾	9.0		%	0.5		%			9.0		%
Expense ratio⁽⁴⁾	44.1		%	37.7		%			45.9		%
Combined ratio⁽⁵⁾	97.9		%	135.5		%			136.1		%

3. Segment Information (continued)



For the Six Months Ended June 30, 2020	Diversified Reinsurance			AmTrust Reinsurance			Total
Gross premiums written	$	21,421		$	(4,705	)	$	16,716
Net premiums written	$	18,925		$	(4,463	)	$	14,462
Net premiums earned	$	24,058		$	28,465		$	52,523
Other insurance revenue	658			—			658
Net loss and LAE	(13,079		)	(19,015		)	(32,094		)
Commission and other acquisition expenses	(9,353		)	(10,774		)	(20,127		)
General and administrative expenses	(3,359		)	(1,311		)	(4,670		)
Underwriting loss	$	(1,075	)	$	(2,635	)	(3,710		)
Reconciliation to net income from continuing operations
Net investment income and realized gains on investment							52,186
Total other-than-temporary impairment losses							(1,506		)
Interest and amortization expenses							(9,661		)
Foreign exchange and other gains							5,902
Other general and administrative expenses							(13,141		)
Income tax benefit							3
Net income from continuing operations							$	30,073

Net loss and LAE ratio⁽¹⁾	52.9		%	66.8		%	60.4		%
Commission and other acquisition expense ratio⁽²⁾	37.8		%	37.8		%	37.8		%
General and administrative expense ratio⁽³⁾	13.6		%	4.7		%	33.5		%
Expense ratio⁽⁴⁾	51.4		%	42.5		%	71.3		%
Combined ratio⁽⁵⁾	104.3		%	109.3		%	131.7		%

3. Segment Information (continued)



For the Six Months Ended June 30, 2019	Diversified Reinsurance			AmTrust Reinsurance			Other			Total
Gross premiums written	$	26,582		$	(585,604	)	$	—		$	(559,022	)
Net premiums written	$	23,665		$	(585,604	)	$	—		$	(561,939	)
Net premiums earned	$	47,764		$	269,324		$	—		$	317,088
Other insurance revenue	1,566			—			—			1,566
Net loss and LAE	(26,888		)	(247,158		)	(204		)	(274,250		)
Commission and other acquisition expenses	(17,408		)	(101,865		)	—			(119,273		)
General and administrative expenses	(5,123		)	(1,828		)	—			(6,951		)
Underwriting loss	$	(89	)	$	(81,527	)	$	(204	)	(81,820		)
Reconciliation to net loss from continuing operations
Net investment income and realized gains on investment										76,129
Interest and amortization expenses										(9,659		)
Foreign exchange and other gains										6,186
Other general and administrative expenses										(21,826		)
Income tax benefit										1,064
Net loss from continuing operations										$	(29,926	)

Net loss and LAE ratio⁽¹⁾	54.5		%	91.8		%				86.1		%
Commission and other acquisition expense ratio⁽²⁾	35.3		%	37.8		%				37.4		%
General and administrative expense ratio⁽³⁾	10.4		%	0.7		%				9.0		%
Expense ratio⁽⁴⁾	45.7		%	38.5		%				46.4		%
Combined ratio⁽⁵⁾	100.2		%	130.3		%				132.5		%


(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.

The following tables summarize the financial position of the Company's reportable segments including the reconciliation to the Company's consolidated total assets at June 30, 2020 and December 31, 2019:



June 30, 2020	Diversified Reinsurance		AmTrust Reinsurance		Total
Total assets - reportable segments	$	157,302	$	2,570,738	$	2,728,040
Corporate assets	—		—		485,396
Total Assets	$	157,302	$	2,570,738	$	3,213,436

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 and six months ended June 30, 2020 and 2019:



For the Three Months Ended June 30,	2020			2019
Net premiums written	Total			Total
Diversified Reinsurance
International	$	8,498		$	8,736
Other	55			(18		)
Total Diversified Reinsurance	8,553			8,718
AmTrust Reinsurance
Small Commercial Business	(6,394		)	5,515
Specialty Program	477			(16,031		)
Specialty Risk and Extended Warranty	1,454			1,389
Total AmTrust Reinsurance	(4,463		)	(9,127		)
Total Net Premiums Written	$	4,090		$	(409	)



For the Six Months Ended June 30,	2020			2019
Net premiums written	Total			Total
Diversified Reinsurance
International	$	18,870		$	23,683
Other	55			(18		)
Total Diversified Reinsurance	18,925			23,665
AmTrust Reinsurance
Small Commercial Business	(6,394		)	(337,166		)
Specialty Program	477			(28,639		)
Specialty Risk and Extended Warranty	1,454			(219,799		)
Total AmTrust Reinsurance	(4,463		)	(585,604		)
Total Net Premiums Written	$	14,462		$	(561,939	)

The following tables set forth financial information relating to net premiums earned by major line of business and reportable segment for the three and six months ended June 30, 2020 and 2019:



For the Three Months Ended June 30,	2020					2019
Net premiums earned	Total			% of Total		Total			% of Total
Diversified Reinsurance
International	$	11,472		53.8	%	$	22,490		16.8	%
Other	55			0.3	%	(18		)	—	%
Total Diversified Reinsurance	11,527			54.1	%	22,472			16.8	%
AmTrust Reinsurance
Small Commercial Business	(7,112		)	(33.4	)%	23,283			17.4	%
Specialty Program	426			2.0	%	30,326			22.6	%
Specialty Risk and Extended Warranty	16,467			77.3	%	57,905			43.2	%
Total AmTrust Reinsurance	9,781			45.9	%	111,514			83.2	%
Total Net Premiums Earned	$	21,308		100.0	%	$	133,986		100.0	%

3. Segment Information (continued)



For the Six Months Ended June 30,	2020					2019
Net premiums earned	Total			% of Total		Total			% of Total
Diversified Reinsurance
International	$	24,003		45.7	%	$	47,782		15.1	%
Other	55			0.1	%	(18		)	—	%
Total Diversified Reinsurance	24,058			45.8	%	47,764			15.1	%
AmTrust Reinsurance
Small Commercial Business	(6,173		)	(11.8	)%	62,738			19.8	%
Specialty Program	501			1.0	%	106,547			33.6	%
Specialty Risk and Extended Warranty	34,137			65.0	%	100,039			31.5	%
Total AmTrust Reinsurance	28,465			54.2	%	269,324			84.9	%
Total Net Premiums Earned	$	52,523		100.0	%	$	317,088		100.0	%

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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