Ryan quits American Overseas Group
Bermuda-based American Overseas Group (AOG) has reported that it made a consolidated net loss of $8.2 million for the six months ended June 30, 2017. This was a slight improvement on the consolidated net loss of $12.1 million that it reported for the same period of 2016.
The company said that its first half 2017 results had been hit by losses from AOG’s reinsurance of Puerto Rico-related credits in its financial guaranty segment.
For the six months ended June 30, 2017, the company had an operating loss of $13.4 million, compared to an operating loss of $5.5 million for the six months ended June 30, 2016. Operating income for the property and casualty segment in 2017 was $4.3 million, compared to the $5.7 million operating income in 2016 for this segment.
The financial guaranty segment had operating losses of $14.9 million for the first six months of 2017, largely driven by losses from the company’s reinsurance of Puerto Rico-related credits. This compares to financial guaranty operating losses of $6.5 million in the first six months of 2016. Interest expense on debt of $1.2 million was $0.6 million lower for the first six months of 2017 as compared to the first six months of 2016, due to debt reduction.
Net earned property and casualty premiums were $1.8 million for the first six months of 2017, which is comparable to $1.9 million for the same period in 2016. Loss and loss adjustment expenses were $2.5 million for the first six months of 2017, which was $0.9 million higher than the same period in 2016. This was caused by higher loss costs and includes both prior year development and current year losses. This contributed to the overall decline for the property and casualty segment, from operating income of $5.7 million in 2016 to operating income of $4.3 million in 2017.
AOG added that the legacy financial guaranty portfolio of American Overseas Reinsurance Company continues to run-off satisfactorily, notwithstanding loss reserve increases mainly due to the Company’s continued exposure to Puerto Rico credits.
The financial guaranty operating loss of $14.9 million in 2017 compares to an operating loss of $6.5 million in 2016.
Operating expenses of $6.9 million were $1.3 million lower in the first six months of 2017 as compared to the first six months of 2016. This is mainly reflective of the cost saving initiatives implemented by the company in 2016 and 2017.
As part of its ongoing capital management efforts, AOG will continue to redirect excess capital within the group to debt reduction unless other compelling opportunities present themselves.
American Overseas Group, Bermuda, First half 2017 result