The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the Company's Consolidated Financial Statements and related notes included elsewhere in this Annual Report on Form 10-K. Amounts in tables may not reconcile due to rounding differences. Some of the information contained in this discussion and analysis or set forth elsewhere in this Report, including information with respect to the Company's plans and strategy for its business, includes forward-looking statements that involve risk and uncertainties. Please see the "Special Note About Forward-Looking Statements" in this Annual Report on Form 10-K for more information on factors that could cause actual results to differ materially from the results described in or implied by any forward-looking statements contained in this discussion and analysis. You should review the "Risk Factors" set forth in this Annual Report on Form 10-K for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained herein.

Since our founding in 2007, we have entered into a series of significant strategic transactions that have transformed the scope and scale of our business while keeping our low volatility, non-catastrophe risk profile intact. These transactions have increased our gross premiums written to in excess of $2.0 billion in 2012 while strongly positioning our capital to extend its business platform both in the U.S. and internationally and include:

• Entering into a quota share reinsurance agreement with American Capital Acquisition Corporation ("ACAC") in 2010 (the "ACAC Quota Share");

• Acquiring the majority of the reinsurance-related infrastructure, assets and liabilities of U.K.-based GMAC International Insurance Services, Ltd. in 2010 (the "IIS Acquisition");

• Completing a public debt offering of $107.5 million in June 2011 and repurchasing a like amount of our outstanding TRUPS Offering securities in July 2011 ("2011 Senior Notes");

• Completing a public debt offering of $100.0 million in March 2012 ("2012 Senior Notes"). The net proceeds of $96.6 million have been used for working capital and general corporate purposes; and

• Completing a public offering of $150.0 million Preference Shares - Series A (the "Preference Shares"). The Company received net proceeds of $145.0 million from the offering. The net proceeds from the offering are expected to be used for continued support and development of our reinsurance business and for other general corporate purposes, which may include repurchasing a portion of the Company's outstanding common shares and repurchasing the Company's outstanding 14% 30-year trust preferred securities ("TRUPS") issued in January 2009.

These significant transactions along with other unusual or non-recurring events should be considered when evaluating year-to-year comparability or when comparing our performance with other companies considered our peers and with whom we compete on a regular basis.

Overview

We are a Bermuda-based holding company formed in June 2007 primarily focused on serving the needs of regional and specialty insurers in the United States and Europe by providing innovative reinsurance solutions designed to support their capital needs. We specialize in reinsurance solutions that optimize financing by providing coverage within the more predictable and actuarially credible lower layers of coverage and/or reinsuring risks that are believed to be lower hazard, more predictable and generally not susceptible to catastrophe claims. Our tailored solutions include a variety of value added services focused on helping our clients grow and prosper.

We provide reinsurance through our wholly owned subsidiaries, Maiden US and Maiden Bermuda and have operations in the United States and Bermuda. On a more limited basis, Maiden Specialty, a wholly owned subsidiary of Maiden US, provides primary insurance on a surplus lines basis focusing on non-catastrophe inland marine and property coverages. During 2013, it is our intention to substantially reduce our exposure to these coverages. Maiden Bermuda does not underwrite any primary insurance business. Maiden LF is a life insurer organized in Sweden and writes credit life insurance on a primary basis in support of Maiden Global business development efforts.

We currently operate our business through three segments: Diversified Reinsurance, AmTrust Quota Share Reinsurance and ACAC Quota Share. As of December 31, 2012, we had approximately $4.1 billion in total assets, $1.0 billion of total shareholders' equity and $1.3 billion in total capital, which includes shareholders' equity, the senior notes and junior subordinated debt.

The market conditions in which we operate have historically been cyclical, experiencing cycles of price erosion followed by rate strengthening as a result of catastrophes or other significant losses that affect the overall capacity of the industry to provide coverage. During the period covered by this discussion, the reinsurance market has been characterized by significant competition in most lines of business.

Natural and man-made catastrophes occur each year that affect reinsurance industry results. In each of the last three years the insurance and reinsurance industry has experienced an extensive series of significant natural and man-made catastrophes, both globally and in the U.S., that negatively impacted overall industry performance. Consistent with our business model, the Company only experienced modest losses from the 2010 and 2011 global catastrophe events.

Despite the elevated levels of global and U.S. catastrophe losses affecting the industry during this period, industry financial conditions, taken as a whole, have continued to improve through a combination of very positive non-catastrophe underwriting results, enhanced balance sheets resulting from strong fixed income market performance and readily available capital sources for industry participants. As a result, capital positions across the insurance and reinsurance industry appeared to remain adequate through December 31, 2012.

However, the property and casualty industry invests significant portions of its premiums and retained underwriting profits in fixed income maturities and relies significantly on investment income to generate acceptable levels of net income. Yields on these securities have continued to decline and remain at historically low levels. Interest rates are widely forecast to persist at such levels for the foreseeable future. During the third quarter of 2012, the U.S. Federal Reserve announced additional policy measures designed to provide greater liquidity to certain credit markets, in particular the mortgage-backed securities market. The U.S. Federal Reserve announced additional actions in the fourth quarter of 2012 further increasing liquidity in credit markets. The likely continued existence of these investment conditions should continue to adversely impact the results of the property and casualty industry generally, placing additional pressure on both insurance and reinsurance companies underwriting results.

Although the combined ultimate impact of recent catastrophe activity, in particular Superstorm Sandy, and the fixed income investment environment remains unclear and is currently more uncertain in light of reinsurance industry performance, broad industry conditions brought about by these events remain supportive of improved pricing in primary insurance markets in the near term. To date however, industry financial conditions have limited the amount of enhanced reinsurance pricing the industry would normally experience during periods of increased catastrophe losses. More recently, January 1 reinsurance renewals for the industry appeared to show limited pricing improvement as a result of Sandy. However, the scope and tenure of any improved pricing environment remains less certain.

As market conditions continue to develop, we continue to maintain our adherence to disciplined underwriting by declining business when pricing, terms and conditions do not meet our underwriting standards. Depending on the ultimate impact of Superstorm Sandy combined with the continuing unfavorable investment environment on industry capital positions and profitability, a significant positive effect on competition and pricing is possible. We believe we are well positioned to take advantage of market conditions should the pricing environment become more favorable.

Recent Developments

Losses Incurred from Catastrophic Events

As we have described, our business model is designed to minimize our exposure to catastrophic property losses. Despite this approach, we periodically do incur losses from such events which exceed our provisions for normalized catastrophe activity, which occurred both in 2011 and 2012.

In 2011, the unusually high frequency of loss activity from U.S. thunderstorm and tornado impacted our U.S. clients in the second quarter of 2011, adversely affecting the Company's results. The 2011 results include $9.5 million in losses incurred by Maiden US related to thunderstorm and tornado activity across the U.S. in the second quarter, net of the Company's quarterly provisions for normalized catastrophe activity. These losses increased our loss ratio and combined ratio for that period by 0.6% on a consolidated basis.

In 2012, we incurred significant losses as a result of Superstorm Sandy which struck the Northeast U.S. on October 29, 2012. Presently, industry insured losses are likely to exceed $20 billion making it the largest catastrophe loss in U.S. history. Based on a comprehensive analysis of the Company's exposure in the affected area, as well as loss reports and estimates from clients, we initially expected the underwriting impact from Superstorm Sandy, net of applicable reinsurance and the Company's provision for normalized catastrophe losses to be in the range of between $25 million and $35 million. Maiden's exposure to this event emanates predominantly from the Company's excess property insurance business written by Maiden Specialty, and to a lesser extent from the U.S. assumed treaty reinsurance business written by Maiden US and the ACAC Quota Share.

For the year ended December 31, 2012, the Company has presently incurred $31.1 million in losses from Sandy, which increased its loss ratio and combined ratio by 1.7% for the year. The sources of these losses are as follows:

For the Year Ended December 31, 2012    Maiden US     Maiden Specialty      ACAC      Total
                                                          ($ in Millions)
Losses Incurred                        $     6.5     $          22.6       $ 2.0     $ 31.1
% of Total                                  20.9 %              72.7 %       6.4 %    100.0 %

Other U.S.-based catastrophe experience in 2011 and 2012 were within the Company's expected parameters which are incorporated into the pricing of our Maiden US accounts. Despite these elevated level of weather-related losses in 2011 and 2012, consistent with its operating model, Maiden has maintained profitable underwriting results in both years.

Issuance of Preference Shares

On August 22, 2012, the Company issued six million 8.25% Preference Shares, par value $0.01 per share, at $25 per share. The Company received net proceeds of $145.0 million from the offering, after deducting expenses and underwriting discounts of $5.0 million. The Preference Shares have no stated maturity date and are redeemable in whole or in part at the option of the Company any time on or after August 29, 2017 at a redemption price of $25 per share plus any declared and unpaid dividends, without accumulation of any undeclared dividends.

Dividends on the Preference Shares are non-cumulative. Consequently, in the event dividends are not declared on the Preference Shares for any dividend period, holders of Preference Shares will not be entitled to receive a dividend for such period, and such undeclared dividend will not accrue and will not be payable. The holders of Preference Shares will be entitled to receive dividend payments only when, as and if declared by the Company's board of directors or a duly authorized committee of the board of directors. Any such dividends will be payable from, and including, the date of original issue on a non-cumulative basis, quarterly in arrears. To the extent declared, these dividends will accumulate, with respect to each dividend period, in an amount per share equal to 8.25% of the $25 liquidation preference per annum.

The holders of the Preference Shares have no voting rights other than the right to elect up to two directors if preference share dividends are not declared and paid for six or more dividend periods. The Preference Shares have been listed on the New York Stock Exchange and trading commenced on August 31, 2012 under the symbol "MHPRA".

Senior Note Offerings

On June 24, 2011, the Company's wholly-owned U.S. holding company subsidiary, Maiden NA, closed the offering of $107.5 million aggregate principal amount of 8.25% Senior Notes due June 15, 2041 ("2011 Senior Notes"), which are fully and unconditionally guaranteed by Maiden Holdings. The 2011 Senior Notes are redeemable for cash, in whole or in part, on or after June 15, 2016, at 100% of the principal amount of the 2011 Senior Notes to be repurchased plus accrued and unpaid interest up to but excluding the redemption date. Maiden NA has listed the 2011 Senior Notes on the New York Stock Exchange and trading commenced on July 21, 2011 under the symbol "MHNA".

Total net proceeds from the offering were approximately $104.7 million, after deducting the underwriting discount and estimated offering expenses payable by Maiden NA and the Company. The net proceeds were used to repurchase a portion of the TRUPS Offering securities. The Company repurchased $107.5 million of Junior Subordinated Debt issued in the TRUPS Offering securities on July 15, 2011. Pursuant to the terms of the TRUPS Offering, the Company incurred a non-recurring repurchase expense of approximately $15.1 million, which was reported in the Company's results of operations for the year ended December 31, 2011. The Company will save approximately $6.2 million annually as a result of the refinancing, and approximately $15.9 million from the closing of the 2011 Senior Notes offering until January 20, 2014, the date on which the repurchase or redemption penalty associated with the TRUPS Offering expires. As a result of the repurchase, the Company also incurred an additional non-recurring non-cash charge of approximately $20.3 million for the year ended December 31, 2011, which represents the accelerated amortization of original issue discount and issuance costs associated with equity issued in conjunction with the TRUPS Offering.

On March 27 2012, the Company, through Maiden NA, issued $100.0 million principal amount of 8.00% Senior Notes ("2012 Senior Notes") due on March 27, 2042, which are fully and unconditionally guaranteed by the Company. The 2012 Senior Notes are redeemable for cash, in whole or in part, on or after March 27, 2017, at 100% of the principal amount to be redeemed plus accrued and unpaid interest to but excluding the redemption date. Maiden NA has listed

the 2012 Senior Notes on the New York Stock Exchange and trading commenced on March 29, 2012 under the symbol "MHNB".

The net proceeds from the 2012 Senior Notes of $96.6 million have been used for working capital and general corporate purposes.

The 2011 Senior Notes and 2012 Senior Notes may also be referred to as the "2011 Senior Note Offering" or the "2012 Senior Note Offering", respectively, and may collectively be referred to as the "Senior Note Offerings".

2012 Financial Highlights

2012 Consolidated Results of Operations

• Net income attributable to Maiden common shareholders of $46.5 million, or $0.64 basic and diluted earnings per common share for the year ended December 31, 2012 compared to $28.5 million, or $0.40 basic and $0.39 diluted earnings per common share for the year ended December 31, 2011.

• Operating earnings(1) of $48.5 million, or $0.67 basic and $0.66 diluted operating earnings per common share(1) for the year ended December 31, 2012 compared to $69.6 million, or $0.97 basic and $0.96 diluted operating earnings per common share for the year ended December 31, 2011.

• Gross premiums written of $2.0 billion for the year ended December 31, 2012, a 10.4% increase over the year ended December 31, 2011.

• Net premiums earned of $1.8 billion for the year ended December 31, 2012, a 16.2% increase over the year ended December 31, 2011.

• Underwriting income of $18.7 million and combined ratio(2) of 99.5% for the year ended December 31, 2012 compared to $42.8 million and 98.1% for the year ended December 31, 2011.

• Net investment income of $81.2 million for the year ended December 31, 2012, a 8.4% increase over the year ended December 31, 2011.

2012 Consolidated Financial Condition

• Operating return on common equity(1) of 5.9%for the year ended December 31, 2012 compared to 9.2% for the year ended December 31, 2011.

• Common shareholders' equity of $865.2 million at December 31, 2012 compared to $768.6 million at December 31, 2011; book value per common share of $11.96 and $10.64 at December 31, 2012 and 2011, respectively.

• Total cash and investments of $2.8 billion and $2.3 billion at December 31, 2012 and 2011, respectively; fixed maturities comprise 92.4% and 86.9% of total invested assets, of which 48.0% and 60.1% have a credit rating of AA+ or better and an overall average credit rating of A+ at December 31, 2012 and 2011, respectively.

• Total assets of $4.1 billion at December 31, 2012 compared to $3.4 billion at December 31, 2011.

• Reserve for loss and loss adjustment expenses of $1.7 billion and $1.4 billion at December 31, 2012 and 2011, respectively.

• Total debt of $333.8 million and $233.8 million at December 31, 2012 and 2011, respectively, and a debt to total capitalization ratio of 24.7% and 23.3% at December 31, 2012 and 2011, respectively.

(1) Operating earnings, operating earnings per share and operating return on equity are non-GAAP financial measures. See "Non-GAAP Financial Measures" for additional information and a reconciliation to the nearest U.S. GAAP financial measure (net income).

(2) Combined ratio is an operating metric. See "Non-GAAP Financial Measures" for additional information.

Non-GAAP Financial Measures

In presenting the Company's results, management has included and discussed certain non-GAAP financial measures. Management believes that these non-GAAP measures, which may be defined differently by other companies, better explain the Company's results of operations in a manner that allows for a more complete understanding of the underlying trends in the Company's business. However these measures should not be viewed as a substitute for those determined in accordance with U.S. GAAP. These non-GAAP measures are:

Operating Earnings and Operating Earnings per Common Share: In addition to presenting net income determined in accordance with U.S. GAAP, we believe that showing operating earnings enables investors, analysts, rating agencies and other users of our financial information to more easily analyze our results of operations in a manner similar to how management analyzes our underlying business performance. Operating earnings should not be viewed as a substitute for U.S. GAAP net income. Operating earnings are an internal performance measure used in the management of our operations and represents operating results excluding, as applicable on a recurring basis, the following:

• Net realized and unrealized gains or losses on investment;

• Foreign exchange and other gains or losses;

• Amortization of intangible assets; and

• Non-cash deferred tax expenses;

We exclude net realized and unrealized gains or losses on investment and foreign exchange and other gains or losses as we believe that both are heavily influenced in part by market opportunities and other factors. We do not believe amortization of intangible assets are representative of our ongoing business. We believe all of these amounts are largely independent of our business and underwriting process and including them distorts the analysis of trends in our operations.

We also exclude certain non-recurring expenditures that are material to understanding our results of operations, including the following:

• for 2011 and 2010, we exclude transaction expenses related to the IIS Acquisition as these are non-recurring; and

• in 2011, we exclude the Junior Subordinated Debt repurchase expense and the accelerated amortization of Junior Subordinated Debt discount and issuance costs.

The following is a reconciliation of operating earnings to its most closely related GAAP measure, net income.

For the Year Ended December 31,                      2012           2011           2010
                                                              ($ in Millions)
Net income attributable to Maiden common
shareholders                                     $     46.5     $     28.5     $     69.9
Add (subtract):
Net realized and unrealized gains on
investment                                             (1.9 )         (0.5 )         (6.6 )
Foreign exchange (gains) losses                        (1.6 )         (0.3 )          0.5
Amortization of intangible assets                       4.4            5.0            5.8
Junior subordinated debt repurchase expense               -           15.1              -
Accelerated amortization of junior
subordinated debt discount and issuance cost              -           20.3              -
Non-recurring general and administrative
expenses relating to IIS Acquisition                      -            0.2            1.9
Non-cash deferred tax expense                           1.1            1.3            1.2
Operating earnings attributable to Maiden
common shareholders                              $     48.5     $     69.6     $     72.7
Operating earnings per common share:
Basic operating earnings per common share        $     0.67     $     0.97     $     1.03
Diluted operating earnings per common share      $     0.66     $     0.96     $     1.02

Operating Return on Common Equity ("Operating ROCE"): Management uses operating return on average common shareholders' equity as a measure of profitability that focuses on the return to common shareholders. It is calculated using operating earnings available to common shareholders (as defined above) divided by average common shareholders' equity. Management has set as a target a long-term average of 15% Operating ROCE, which management believes provides an attractive return to shareholders for the risk assumed. Operating ROCE for the years ended December 31, 2012, 2011 and 2010 is computed as follows:

For the Year Ended December 31,                         2012        2011        2010
                                                               ($ in Millions)
Operating earnings available to common shareholders   $  48.5     $  69.6     $  72.7
Opening common shareholders' equity                   $ 768.6     $ 750.2     $ 676.5
Ending common shareholders' equity                    $ 865.2     $ 768.6     $ 750.2
Average common shareholders' equity                   $ 816.9     $ 759.4     $ 713.4
Operating return on common equity                         5.9 %       9.2 %      10.2 %

The decrease in Operating ROCE for the year ended December 31, 2012 is primarily due to lower net income in 2012 as a result of losses from Superstorm Sandy. In addition, Operating ROCE was further reduced by greater increases in the common shareholders' equity in 2012, the combined effect of net income along with higher other comprehensive income for the year ended December 31, 2012, the result of a $79.9 million increase in unrealized gains on the Company's fixed maturity investment portfolio.

Book Value per Common Share: Management uses growth in book value per common share as a prime measure of the value the Company is generating for its common shareholders, as management believes that growth in the Company's book value per common share ultimately translates into growth in the Company's share price. Book value per common share is calculated using common shareholders' equity (shareholders' equity excluding the aggregate liquidation value of our preference shares) divided by the number of common shares outstanding. Preference Shares are not included in the computation of book value per common share. Book value per common share is impacted by the Company's net income and external factors such as interest rates, which can drive changes in unrealized gains or losses on its investment portfolio. Book value per common share as of December 31, 2012, 2011 and 2010 is computed as follows:

December 31,                             2012            2011            2010
                                                    ($ in Millions)
Ending common shareholders' equity   $      865.2    $      768.6    $      750.2
Common shares outstanding              72,343,947      72,221,428      72,107,100
Book value per common share          $      11.96    $      10.64    $      10.40

Certain Operating Measures

Underwriting Income and Combined Ratio: The combined ratio is used in the insurance and reinsurance industry as a measure of underwriting profitability. Management measures underwriting results on an overall basis and for each segment on the basis of the combined ratio. The combined ratio is the sum of the net loss and loss expense ratio and the expense ratio and the computations of each component are described below. A combined ratio under 100% indicates underwriting profitability, as the total loss and loss adjustment expenses, commission and other acquisition expenses and general and administrative expenses are less than the net premiums earned and other insurance revenue on that business. We have generated underwriting income in each year since our inception. Underwriting income is calculated by subtracting net loss and loss adjustment expenses, commissions and other acquisition expenses and applicable general and administrative expenses from the net premiums earned and other insurance revenue and is the monetized counterpart of the combined ratio.

For purposes of these operating measures, the fee-generating business ("IIS Fee Business") associated with the IIS Acquisition which is included in the Diversified Reinsurance segment, is considered part of the underwriting operations of the Company. Certain portions of the IIS Fee Business are directly associated with the underlying reinsurance contracts recorded in the Diversified Reinsurance segment. To the extent that the fees are generated on underlying insurance contracts sold to third parties that are then ceded under quota share reinsurance contracts to Maiden Bermuda,

. . .