Assured Guaranty Ltd. (AGO): history, ownership, mission, how it works & makes money

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A Brief History of Assured Guaranty Ltd.

Assured Guaranty Ltd. (AGL) has established itself as a key player in the financial guaranty insurance market since its inception. Founded in 2003, the company has grown through strategic acquisitions and a focus on public finance and structured finance sectors.

Key Milestones

  • 2003: Assured Guaranty Ltd. was founded.
  • 2004: AGL went public on the New York Stock Exchange (NYSE) under the ticker symbol AGO.
  • 2010: Acquired Financial Security Assurance Inc. (FSA), enhancing its market share and product offerings.
  • 2013: Completed the acquisition of the municipal bond insurance business of the former Ambac Financial Group.
  • 2020: Launched a new insurance product targeting the renewable energy sector.

Financial Performance

As of June 30, 2024, Assured Guaranty reported strong financial results, reflecting a robust insurance segment performance. The key financial metrics for the second quarter of 2024 are as follows:

Metric Q2 2024 Q2 2023
Net income attributable to AGL (in millions) $78 $125
Basic Earnings Per Share (EPS) $1.43 $2.09
Net earned premiums (in millions) $84 $85
Net investment income (in millions) $81 $89

Market Position

AGL is recognized for its financial strength in the insurance market, holding strong ratings from major agencies. As of May 28, 2024, the ratings are as follows:

Agency Rating Date of Last Action
S&P Global Ratings AA (stable) 5/28/24
Kroll Bond Rating Agency AA+ (stable) 10/20/23
Moody’s Ratings A1 (stable) 7/10/24

Share Repurchase Program

AGL has been active in its share repurchase program, reflecting its commitment to returning value to shareholders. The details are summarized below:

Year Number of Shares Repurchased Total Payments (in millions) Average Price Paid Per Share
2023 3,215,893 $199 $61.95
2024 (as of June 30) 4,067,103 $329 $80.82

Recent Developments

In 2024, AGL has continued to expand its product offerings and market reach. The company authorized an additional $300 million for share repurchases and continues to strengthen its balance sheet through prudent financial management.

Conclusion

As of 2024, Assured Guaranty Ltd. remains well-positioned in the financial guaranty sector, with a solid operational framework and a focus on sustainable growth.



A Who Owns Assured Guaranty Ltd. (AGO)

Ownership Structure

As of 2024, Assured Guaranty Ltd. (AGO) has a diverse ownership structure characterized by institutional and individual investors. The following table outlines the major shareholders and their respective ownership percentages.

Shareholder Type Shareholder Name Ownership Percentage
Institutional Investor Vanguard Group 10.5%
Institutional Investor BlackRock, Inc. 9.8%
Institutional Investor State Street Corporation 7.2%
Individual Investor Board of Directors and Executives 5.1%
Institutional Investor Wellington Management 4.9%
Other Investors Public Float 62.5%

Shareholder Equity

As of June 30, 2024, the shareholders' equity attributable to Assured Guaranty Ltd. was $5,539 million, translating to a book value per share of $104.15. The company has experienced fluctuations in its equity due to share repurchases and dividends.

Recent Financial Performance

In the second quarter of 2024, Assured Guaranty Ltd. reported a net income attributable to shareholders of $78 million, or $1.41 per diluted share. This represents a decrease compared to $125 million, or $2.06 per diluted share, in the same period the previous year.

Financial Metric Q2 2024 Q2 2023
Net Income (in millions) $78 $125
Net Income per Diluted Share $1.41 $2.06
Weighted Average Diluted Shares Outstanding (in millions) 55.0 60.1

Dividends and Share Repurchases

Assured Guaranty Ltd. has maintained a consistent approach to returning value to shareholders through dividends and share repurchase programs. In 2024, the company declared dividends totaling $36 million, with a dividend per share of $0.62.

Action Amount (in millions)
Dividends Declared $36
Share Repurchases (YTD) $281

Market Capitalization

As of June 30, 2024, the market capitalization of Assured Guaranty Ltd. stood at approximately $5.5 billion. This figure reflects the share price and total shares outstanding, indicating the company's valuation in the public market.

Financial Strength Ratings

Assured Guaranty Ltd.'s insurance subsidiaries have received robust ratings from major credit rating agencies, which bolster investor confidence. The ratings as of May 2024 are as follows:

Agency Rating Outlook Date of Last Action
S&P Global Ratings AA Stable 5/28/2024
Kroll Bond Rating Agency AA+ Stable 10/20/2023
Moody’s A1 Stable 7/10/2024


Assured Guaranty Ltd. (AGO) Mission Statement

Company Overview

Assured Guaranty Ltd. (AGO) is a financial guaranty insurance company that provides credit enhancement and investment protection services. The company operates primarily in the public finance and structured finance sectors, focusing on municipal bonds and asset-backed securities.

Mission Statement

As of 2024, Assured Guaranty Ltd. aims to provide reliable financial guarantees that enhance the credit quality of debt obligations, enabling clients to achieve their financial goals while maintaining a strong commitment to risk management and operational excellence.

Financial Strength Ratings

The financial strength ratings of Assured Guaranty Ltd.'s insurance subsidiaries as of June 30, 2024, are as follows:

Rating Agency Subsidiary Rating Date of Last Action
S&P Global Ratings AG AA (stable) 5/28/24
Kroll Bond Rating Agency AG AA+ 10/20/23
Moody’s Ratings AG A1 (stable) 7/10/24
A.M. Best Company AG No Rating N/A

Financial Performance

For the second quarter of 2024, Assured Guaranty reported the following financial results:

Metric Q2 2024 Q2 2023
Net Income (Loss) Attributable to AGL (in millions) $78 $125
Net Income (Loss) per Diluted Share $1.41 $2.06
Weighted Average Diluted Shares 55.0 million 60.1 million

Premium Collections and Future Earnings

As of June 30, 2024, the expected future premiums to be collected and future net premiums to be earned are as follows:

Year Future Premiums to be Collected (in millions) Future Net Premiums to be Earned (in millions)
2024 (July - September) $59 $74
2024 (October - December) $39 $73
Total 2024 $98 $147
2025 $128 $276
2026 $111 $258

Insurance Portfolio

The financial guaranty portfolio by sector as of June 30, 2024, is as follows:

Sector Net Par Outstanding (in millions)
U.S. Public Finance $194,593
Non-U.S. Public Finance $49,583
Structured Finance $8,759

Shareholder Equity

As of June 30, 2024, the shareholders’ equity attributable to Assured Guaranty Ltd. is detailed below:

Metric Amount (in millions)
Common Shares Outstanding 53.2 million
Retained Earnings $5,929
Accumulated Other Comprehensive Income (Loss) $(392)
Total Shareholders’ Equity $5,595

Conclusion

Assured Guaranty Ltd. continues to focus on enhancing its financial strength and providing quality financial guarantees to its clients, ensuring that it remains a key player in the financial guaranty insurance market.



How Assured Guaranty Ltd. (AGO) Works

Business Model

Assured Guaranty Ltd. (AGO) provides financial guaranty insurance, primarily focusing on municipal bonds and structured finance. The company guarantees the timely payment of principal and interest on the bonds it insures, enhancing the creditworthiness of the issuers.

Financial Performance

As of June 30, 2024, Assured Guaranty reported a net income attributable to AGL of $78 million for the second quarter, compared to $125 million for the same period in 2023. For the first half of 2024, net income was $187 million, down from $206 million in 2023.

Financial Metrics Q2 2024 Q2 2023 6 Months 2024 6 Months 2023
Net Income Attributable to AGL (in millions) $78 $125 $187 $206
Net Income Per Diluted Share $1.41 $2.06 $3.31 $3.40
Effective Tax Rate 14.5% 12.6% 18.6% 15.6%

Insurance Operations

Assured Guaranty’s gross par written (GWP) for public finance in the U.S. was $7.043 billion in Q2 2024, while the total GWP for structured finance was $214 million. This reflects an increase in public finance GWP compared to $7.747 billion in Q2 2023.

GWP by Sector (in millions) Q2 2024 Q2 2023
Public Finance - U.S. $7,043 $7,747
Public Finance - Non-U.S. $1,572 $249
Structured Finance - U.S. $214 $252
Structured Finance - Non-U.S. $594 $726

Investment Portfolio

As of June 30, 2024, Assured Guaranty’s total investment portfolio was valued at $8.826 billion, down from $9.115 billion at the end of 2023. The portfolio includes fixed-maturity securities, equity investments, and alternative investments.

Investment Assets (in millions) June 30, 2024 December 31, 2023
Fixed-Maturity Securities $5,298 $5,372
Loss Mitigation Securities $465 $459
Short-Term Investments $1,717 $1,661
Alternative Investments $462 $394

Future Premium Collections

As of June 30, 2024, Assured Guaranty projected future premium collections amounting to $1.880 billion, with net premiums to be earned projected at $3.649 billion through various future periods.

Future Premium Collections (in millions) 2024 2025 2026 2027 2028 Total
Future Premiums to be Collected $98 $128 $111 $106 $99 $1,880
Future Net Premiums to be Earned $147 $276 $258 $243 $229 $3,649

Debt Management

Assured Guaranty’s total scheduled net debt service amortization for 2024 is projected at $961 million, with significant payments due in the coming years.

Scheduled Net Debt Service Amortization (in millions) 2024 2025 2026 2027 Total
Debt Service $110 $84 $140 $120 $961

Credit Ratings

The financial strength ratings for Assured Guaranty’s insurance subsidiaries are as follows:

Rating Agency Rating Date
S&P Global Ratings AA (stable) 5/28/24
Kroll Bond Rating Agency AA+ 10/20/23
Moody’s A1 (stable) 7/10/24

Shareholder Equity

As of June 30, 2024, shareholders' equity attributable to AGL decreased to $5.539 billion from $5.713 billion at the end of 2023, primarily due to share repurchases and dividends paid.

Shareholder Equity (in millions) June 30, 2024 December 31, 2023
Shareholders' Equity Attributable to AGL $5,539 $5,713


How Assured Guaranty Ltd. (AGO) Makes Money

Revenue Streams

Assured Guaranty Ltd. primarily generates revenue through the issuance of financial guaranty insurance, which protects investors against default on municipal and structured finance obligations.

Net Earned Premiums

In the second quarter of 2024, Assured Guaranty reported net earned premiums of $84 million, compared to $85 million in the same period of 2023. For the first half of 2024, the net earned premiums totaled $203 million, up from $166 million in the first half of 2023.

Period Net Earned Premiums (in millions)
Q2 2024 $84
Q2 2023 $85
H1 2024 $203
H1 2023 $166

Gross Written Premiums

For the second quarter of 2024, gross written premiums (GWP) were $132 million, an increase from $95 million in Q2 2023. For the first half of 2024, GWP reached $193 million, compared to $181 million in the first half of 2023.

Period Gross Written Premiums (in millions)
Q2 2024 $132
Q2 2023 $95
H1 2024 $193
H1 2023 $181

Investment Income

Assured Guaranty earns investment income from its portfolio of fixed-maturity securities. The total investment income for the second quarter of 2024 was $115 million, while for the first half of the year, it was $233 million.

Period Investment Income (in millions)
Q2 2024 $115
H1 2024 $233

Credit Derivative Revenues

In the second quarter of 2024, Assured Guaranty reported credit derivative revenues of $3 million, with total net earned premiums and credit derivative revenues of $87 million. For the first half of 2024, credit derivative revenues totaled $5 million, contributing to a total of $209 million.

Period Credit Derivative Revenues (in millions)
Q2 2024 $3
H1 2024 $5

Future Premium Collections

As of June 30, 2024, Assured Guaranty projected future premium collections of $1.88 billion through 2043, with expected net premiums to be earned totaling $4.06 billion over the same period.

Period Future Premiums to be Collected (in millions) Future Net Premiums to be Earned (in millions)
2024 $98 $147
2025 $128 $276
2026 $111 $258
2027 $106 $243
2028 $99 $229
2029-2033 $401 $939
2034-2038 $296 $621
2039-2043 $224 $396
After 2043 $417 $540
Total $1,880 $4,056

Financial Performance Overview

In terms of overall financial performance, Assured Guaranty reported a net income attributable to shareholders of $78 million for Q2 2024, down from $125 million in Q2 2023. For the first half of 2024, net income totaled $187 million, compared to $206 million for the same period in 2023.

Period Net Income (in millions)
Q2 2024 $78
Q2 2023 $125
H1 2024 $187
H1 2023 $206

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