DEF: Assured Guaranty Reports Strong 2024 Performance, Share Price Surges Over 20%

Assured Guaranty's share price rose over 20% in 2024, reaching a historic high, driven by strong financial performance and strategic capital management.

Summary

• Assured Guaranty Ltd. (AGL) reported strong performance in 2024, with its share price increasing by over 20% to $90.01.
• The company's five-year and three-year total shareholder returns (TSR) exceeded all three indices to which it compares itself.
• Shareholders' equity attributable to AGL per share reached a new high of $108.80, adjusted operating shareholders equity per share reached $114.75, and adjusted book value per share reached $170.12.
• U.S. GAAP net income attributable to AGL per share was $6.87, and adjusted operating income per share was $7.10.
• Gross written premiums (GWP) reached $440 million, and new business production in the insurance segment (PVP) was $402 million.
• In the U.S. public finance market, GWP was $259 million and PVP was $270 million, representing a 23% and 27% increase, respectively, compared to 2023.
• The company insured 4.8% of all new municipal bond issues by par, outperforming its 10-year average of 4.2%.
• AGL repurchased 11% of its common shares outstanding at December 31, 2023, exceeding its 2024 target of $500 million.
• Approximately $570 million was returned to shareholders in 2024, including $502 million through share repurchases and $68 million through dividends.
• The company rationalized its capital structure by combining its two U.S. insurance companies, allowing for a $400 million special dividend payment and a total release of $897 million from insurance operating companies to holding companies.
• The Annual General Meeting of shareholders will be held on May 2, 2025, in London.

Sentiment

Score: 9

Explanation: The document expresses a highly positive sentiment due to the strong financial results, strategic initiatives, and shareholder returns. The company's performance exceeded expectations in several key areas, indicating a successful year.

Positives

• Strong share price performance with a rise of over 20% in 2024.
• TSR exceeded all three comparison indices over five-year and three-year periods.
• Record highs in shareholders' equity, adjusted operating shareholders equity, and adjusted book value per share.
• Significant increase in GWP and PVP in the U.S. public finance market.
• Successful capital management program with substantial share repurchases and dividend payments.
• Efficient capital structure rationalization through the combination of U.S. insurance companies.
• Release of significant capital from insurance operating companies to holding companies.

Future Outlook

The company plans to continue pursuing its strategic expansion into alternative asset management and carefully expand its financial guaranty insurance product into new geographic areas and asset classes.

Management Comments

• We enjoyed very strong performance in 2024.
• We continued to build shareholder value.
• We are proud that in 2024 we achieved gross written premiums of $440 million, and new business production in the insurance segment of $402 million.
• We repurchased 11% of our common shares outstanding at December 31, 2023, while exceeding our 2024 target of repurchasing $500 million of our shares, further managing our excess capital.

Industry Context

The announcement highlights Assured Guaranty's leading position in the financial guaranty industry, particularly in the U.S. public finance market, and its strategic expansion into alternative asset management.

Comparison to Industry Standards

• Assured Guaranty's five-year and three-year TSR exceeded all three indices to which it compares itself, indicating strong relative performance.
• The company's par penetration rate of 4.8% in new municipal bond issues outperformed its 10-year average of 4.2%.
• The company's transaction penetration rate was 9.2%, its highest annual level in the last decade.

Related Party Transactions

• Wellington Management managed approximately $2.1 billion of Assured Guaranty's investment assets, with expenses of approximately $1.3 million in 2024.
• BlackRock supplies Assured Guaranty's investment reporting module, with expenses of approximately $468,000 in 2024.
• Insurance Advisory Partners LLC, founded by director nominee Antonio Ursano, Jr., provided financial advisory services, with fees and expenses less than $120,000 in 2024.

Stakeholder Impact

• Shareholders benefited from a significant increase in share price and substantial returns through share repurchases and dividends.
• Employees are supported through competitive compensation and benefits packages, professional development opportunities, and a focus on diversity and inclusion.
• Policyholders are assured by the company's strong financial position and efficient capital management.
• The company's commitment to environmental and social responsibility benefits the broader community.

Next Steps

• The Annual General Meeting of shareholders will be held on May 2, 2025, to vote on the election of directors, executive compensation, and the appointment of the independent auditor.
• The company will continue to pursue its strategic expansion into alternative asset management and carefully expand its financial guaranty insurance product into new geographic areas and asset classes.

Key Dates