Financial services holding company Ambac reported a net income of $66 million for its third quarter of 2023, a lower figure compared to the $340 million reported for the same period last year.
The firm’s Q3 2023 results include the performance of Everspan, Ambac’s specialty program insurer, and MGA division Cirrata.
Everspan produced its first quarterly pre-tax profit. It generated $77million in GPW, an increase of 160% over Q3 2022. According to Ambac, its insurer is on target to generate approximately $250 million of gross premiums in 2023, and is forecasting $400 million of GPW for 2024.
Cirrata (Ambac’s distribution/DUAE division) generated $62 million of premium, up 119% over the prior year. The MGA is on track to exceed its 2023 target premium of $200 million, and is targeting $300 million of premium for 2024, according to Ambac.
For this year’s third quarter, Ambac saw an increase in gross written premiums, to $79.6 million from $16.3 million in Q3 2022. Net premiums earned also saw some growth as the firm reported $18.3 million this quarter, compared to the $10.8 in the same period last year.
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, totaled $77.5 million in Q3 2023, representing an increase of 160%.
The firm’s legacy financial guarantee insurance segment generated net income of $66 million in the third quarter of 2023. Net premium earned decreased 8%, to $6.1 million, while losses and loss adjustment expenses were a $85.8 million benefit, compared to a $356.1 million benefit in Q2 2022.
Claude LeBlanc, President and Chief Executive Officer, stated: “Working with our Wisconsin regulator, the capital model for Ambac Assurance Corporation (“AAC”) has been substantially completed.
“This has allowed us to finalise our internal evaluation of the strategic options I previously laid out for the legacy financial guarantee business, and as a result, we have appointed Moelis & Company along with other external advisors to actively discuss such strategic options with interested parties.”
LeBlanc continued: “During the quarter we continued to execute on our P&C growth strategy, and I am very pleased that Everspan produced positive pre-tax income for the first time, consistent with our prior guidance.
“Combined premium production across both Everspan and Cirrata grew by 140% over last year to $140 million in the quarter and exceeded $450 million over the last four quarters. For 2024 we are now targeting over $700 million of premium production with attractive margins in our P&C businesses, subject to market conditions.”
