What happened

Bermuda-based reinsurance company Maiden Holdings Ltd. (NASDAQ:MHLD) reported its third-quarter earnings on Friday afternoon, and to say that investors were unhappy would be an understatement. As of 11:15 a.m. EST on Monday, the stock had plunged by more than 25%.

So what

There was little to like in Maiden's third-quarter earnings report. The headline earnings number wasn't even close to what the market was looking for -- while analysts had expected a $0.18 profit, the company posted a massive $2.83-per-share loss, a staggering amount considering it's more than Maiden's current stock price.

Maiden Holdings lost money at an alarming rate during the third quarter.

Image source: Getty Images.

Furthermore, the company's combined ratio of 150.7% shows that Maiden isn't even close to an underwriting profit. This means that the company is paying about $1.50 out in claims for every $1 it takes in as premium income.

As a result of the massive loss, as well as writedowns from business divestitures, book value has plunged by more than 50% over the past quarter alone, from $7.71 to $3.71 per share currently.

Maiden is currently in a transitional period and has chosen to divest some of its operations, and just recently signed an agreement to transfer a portfolio of losses off of its books. The goal is to strengthen the company's financial position and create long-term sustainability, but there's still a long way to go.

Now what

The one possible silver lining is that Maiden Holdings' net premiums increased by 11.6% year over year in the third quarter. However, until the reinsurer manages to get its losses under control, I wouldn't expect the stock to turn around anytime soon.