Financial services holding company Ambac has reported a net loss of $33.4 million for the first quarter of 2023, having reported a positive income result of $2.0 million for the same period last year.
This was despite Ambac more than doubling its gross written premium to $60.7 million over the same timeframe, helped by its specialty P&C business, Everspan, which saw gross premiums increase by 116% to $51.8 million and net premiums up 87% to $9.2 million.
Ambac attributed the top-line growth at Everspan to a continued expansion in the size and number of its program partners.
The unit also reported losses and loss expense ratio for the first quarter of 2023 was 66.6% in-line with the 65.3% for the first quarter of 2022, while the expense ratio of 63.1% was down from 237.1% in the prior year period as expenses continue to normalize.
For Ambac’s insurance distribution segment, meanwhile, premium placed grew 72% to $77.3 million, while gross commission income, which is generated as a percentage of premium placed, grew 69% in the first quarter 2023 to $14.5 million from $8.6 million in the first quarter of 2022.
Specialty P&C insurance production, which includes gross premiums written by Ambac’s specialty P&C insurance segment and premiums placed by the insurance distribution segment, totalled $129 million in the first quarter of 2023, representing an increase of 87%.
And for the company’s legacy financial guarantee insurance segment, net premium earned decreased from $13.4 million to $6.9 million, while losses and loss adjustment expenses decreased from $23.2 million to $13.0 million.
Ambac’s overall investment income for Q1 was $34 million, versus $5 million previously, with the increase owing mostly to a $12.3 million increase in income from alternative investments and a $7.2 million increase from higher yields on available-for-sale and short-term investments.
“Our Specialty P&C businesses kicked off 2023 with very strong performances,” commented Anbac President and CEO Claude LeBlanc.
“Everspan and Cirrata’s total premium production grew by 87% over last year to $129 million in the quarter. Overall U.S. casualty insurance pricing is keeping up with loss cost trends in the lines we are writing and is supportive of strong growth in the program sector, which we expect will continue to provide a tailwind to our business this year,” he explained.
“During the quarter we progressed work with our advisers to evaluate all available options to maximize value from our legacy financial guarantee businesses as we continue to work with our U.S. regulator on a revised operating and capital framework. We look forward to updating the market on our progress later this year.”
