Assured Guaranty (AGO) Q3 2024 earnings summary

Executive summary

• Net income attributable to shareholders was $171 million ($3.17 per share) for Q3 2024, with adjusted operating income of $130 million ($2.42 per share) and adjusted operating shareholders' equity per share and adjusted book value per share at record highs of $113.96 and $166.47, respectively.

• Year-to-date adjusted operating income was $323 million ($5.80 per share), up 13% year-over-year, and net income for the nine months was $358 million ($6.44 per share).

• The merger of AGM into AG was completed in August/Q3 2024, streamlining structure, improving efficiency, and increasing claims-paying resources, with no change to AG's ratings.

• Share repurchases totaled 5.8 million shares for $470 million through November 8, 2024, representing 10% of shares outstanding at 2023 year-end, with $385 million remaining authorized.

• New business production was strong, with GWP and PVP for the first three quarters at $254 million and $281 million, respectively, both up from the prior year.

Financial highlights

• Q3 2024 net income was $171 million ($3.17/share), and adjusted operating income was $130 million ($2.42/share), with YTD net income at $358 million ($6.44/share) and adjusted operating income at $323 million ($5.80/share).

• Net earned premiums were $97 million in Q3 2024 and $300 million YTD, both up year-over-year.

• Net investment income was $82 million in Q3 2024 and $247 million YTD, down from prior-year periods.

• Insurance segment adjusted operating income was $162 million in Q3 2024, up from $59 million in Q3 2023, mainly due to a benefit in loss expense.

• Diluted EPS was $3.17 for Q3 2024 and $6.44 for the nine months, both higher year-over-year.

Outlook and guidance

• Share repurchase target remains $500 million for both 2024 and 2025, with $385 million currently authorized.

• Management expects continued demand for financial guaranty insurance, supported by wider credit spreads and increased awareness of bond insurance value.

• Anticipate a slight decrease in corporate tax rate in 2025 due to Bermuda tax changes.

• The company is committed to investing $1.5 billion in alternative investments, including $1 billion in Sound Point managed investments.

• International business, especially in Australia and the U.K., is expected to grow and deliver higher returns.