American Overseas Group reported a markedly higher operating loss in the first six months of 2019 than it had in the same period last year, which it said was driven by losses in its financial guaranty segment, related to commuted policies and Puerto Rico related credits.
AOG reported an operating loss of $7.8 million in the six months June 30, 2019, compared to an operating loss of $1.5 million for the same period in 2018.
The company saw a small increase in its net written premiums, earning $10.4 million in the six months June 30, 2019, up from just under $10 million in the same period of 2018.
The financial guaranty segment had operating losses of $9.8 million for 2019, compared to operating losses of $2.6 million for 2018. This was driven by net losses associated with the commutation of just over $1 billion of outstanding par during the second quarter of 2019, as well as unfavorable development on outstanding losses.
As of June 30, 2019, outstanding par within the financial guaranty segment is $372 million compared to $1.95 billion at June 30, 2018.
The property and casualty segment looked healthier, with operating income $1.7 million in H1 2019, compared to the $1.4 million in H1 2018. Net earned property and casualty premiums increased $2.5 million from $1.4 million in 2018 to $3.9 million in 2019, driven by the addition of new agency relationships.
AOG said it will continue to redirect excess capital to debt reduction unless other compelling opportunities present themselves.
American Overseas Group