Syncora reports Q1 loss
Syncora Holdings, a Bermuda holding company whose subsidiaries include Syncora Guarantee, a monoline financial guarantee insurance provider, has reported its financial results for the three months ended March 31, 2017.
The company made a net loss for the period of $30.8 million. This was an improvement on the loss of $85.7 million it made over the same period of 2016.
Net premiums earned came to $15.6 million for the three months ended March 31, 2017, down slightly on the $16.6 million it made for the first quarter of 2016. The company blamed the decrease on the continued run-off of its book of business driven mainly by premium accelerations from refundings and remediation activities. Total premium accelerations were $8.1 million for the three months ended March 31, 2017, as compared to $6.2 million for the three months ended March 31, 2016.
In addition, net realised losses on investments increased by $11.9 million to $14.9 million for the three months ended March 31, 2017 from $3.0 million for the three months ended March 31, 2016.
Syncora said that the increase was due to other-than-temporary impairment charges related to foreign currency exchange losses on certain Euro-denominated remediation bonds.
Net loss on insurance cash flow certificates was $6.3 million for the three months ended March 31, 2017, as compared to $13.0 million for the three months ended March 31, 2016. As this represents future cash flow receipts from certain insurance claim payments the Company anticipates making on policies that have been remediated, the decrease was primarily driven by lower positive RMBS development.
Net earnings on credit default and other swap contracts was $13.5 million for the three months ended March 31, 2017, as compared to a loss of $31.6 million for the three months ended March 31, 2016.
The increase was primarily due to non-performance risk and yield curve spread widening.
Net losses and loss adjustment expenses were $16.8 million for the three months ended March 31, 2017, as compared to $35.1 million for the three months ended March 31, 2016. The decrease was primarily due to lower net incurred losses on Syncora’s Puerto Rico General Obligation exposures, partially offset by continued positive reserve developments on its RMBS exposures.
Operating expenses were $16.7 million for the three months ended March 31, 2017, as compared to $20.9 million for the three months ended March 31, 2016. The decrease was primarily due to cost savings associated with headcount reductions.
