Assured Guaranty claims Q1 success despite fall in profits

04-05-2018

Assured Guaranty has announced that net income for first quarter 2018 totalled $197 million, a fall from the $317 million it made in the three-month period ended March 31, 2017 (first quarter 2017).

However, the company pointed out that last year’s first quarter net income was higher due primarily to significant gains attributable to the company's strategic initiatives, including commutation gains of $73 million (pretax) and bargain purchase gain and settlement of pre-existing relationships on the acquisition of MBIA UK Insurance of $58 million (pretax).

“Assured Guaranty had a successful first quarter in 2018,” said Dominic Frederico, president and chief executive officer of Assured Guaranty. “Measures of Assured Guaranty’s value per share again reached record levels, including those for shareholders’ equity, non-GAAP operating shareholders’ equity and non-GAAP adjusted book value. We guaranteed the lion’s share of insured municipal par sold, and our international infrastructure business delivered a strong quarter, the tenth consecutive quarter in which we recorded international PVP.

“We also made a strategic investment in an infrastructure-focused investment firm and agreed to reinsure substantially all of the legacy bond insurer Syncora’s book of business. This year through May 3, we have repurchased 4.2 million shares at a cost of $151 million and have $197 million remaining in the current share buyback authorisation.”

Net earned premiums in first quarter 2018 were $145 million, compared with $164 million in first quarter 2017. According to the company this fall was due primarily to lower premium accelerations from refundings and lower scheduled net earned premiums due to the amortisation of the insured portfolio.

Net investment income for first quarter 2018 of $101 million was lower than net investment income in first quarter 2017 of $122 million due primarily to the accretion on the Zohar II 2005-1 Notes (the Zohar II Notes), which were used as consideration for the MBIA UK Acquisition. Realised losses on investments for first quarter 2018 were $5 million, compared with realised gains of $32 million in first quarter 2017 which included a gain on the sale of the Zohar II Notes.

Assured Guaranty, Q1 2018, profits, fall, caveat

Bermuda Re