AOG reports net loss for H1 2016
American Overseas Group (AOG) has announced that it made a consolidated net loss of $12.1 million during the first half of 2016.
This was down on the consolidated net income of $7 million that the Bermuda-based insurer reported over the same period of 2015.
AOG said that the 2016 results had been impacted by unrealised losses on credit derivatives of $4.6 million.
Despite this drop in profits, AOG reported a rise in its gross property and casualty written premiums, which according to the insurer are the primary driver of its fee income from $195.3 million in the first half of 2015 to $223.1 million for the same period of 2016.
However, the company’s net earned property and casualty premiums dropped to $1.9 million for the first half of 2016, from $4.1 million for the first half of 2015. According to the company the drop in net premiums earned “is the result of the Company’s decision to de-emphasise the retention of underwriting risk and shift its focus to a fee-based business within its property and casualty segment.”
AOG also reported that its financial guaranty segment had seen operating losses of $6.5 million for the first six months of 2016, largely driven by losses from AOG's reinsurance of Puerto Rico-related credits.
AOG concluded that as a part of its ongoing capital management efforts, it will continue to redirect excess capital within the group to debt reduction unless other compelling opportunities present themselves.