Assured Guaranty sees 2016 profits hit by weak fourth quarter results


Bermuda-based Assured Guaranty saw its full year profits decline from $1.05 billion in 2015 to $881 million for 2016, a fall of 17 percent.

Assured Guaranty said that this decrease in its net income was attributable primarily to lower fair value gains on credit derivatives.

The company saw gross written premiums fall from $181 million for full year 2015 to $154 million for 2016. Net investment income also fell, going from $423 million in 2015 to $408 million in 2016.

Assured Guaranty was also hit by poor fourth quarter 2016 results. Net income for that period came to $197 million, compared with net income of $429 million for the same period of 2015. The company said that this decrease was primarily attributable to lower fair value gains on credit derivatives, offset in part by higher net earned premiums.

However, Dominic Frederico, president and CEO of Assured Guaranty was positive about the results. “By effectively executing our core strategies of new business production, capital management, acquisitions and loss mitigation, Assured Guaranty achieved outstanding results in 2016,” he said in a statement on the results. “We achieved strong GAAP results, as well as setting new highs in key metrics our management uses to measure success, including operating income, non-GAAP operating shareholders’ equity per share and non-GAAP adjusted book value per share.

“We continued to lead the US municipal bond insurance industry in both par and number of transactions insured and, when combined with contributions from our international infrastructure and structured finance businesses, where we are the only bond insurer that continues to serve these markets, we produced the most new business in five years, even as interest rates reached historic lows.”

Assured Guaranty, Results 2016, Bermuda, Dominic Frederico

Bermuda Re