Assured Guaranty, a financial guaranty insurer, has announced its financial results for the fourth quarter of 2023 reporting an increased net income of $376 million compared to the $94 million reported in the same period the year prior.
According to the firm, this increase was primarily due to a $189 million benefit as a result of the establishment of a deferred tax asset related to a new Bermuda tax law, lower loss expense, as well as fair value gains on CIVs and trading securities.
Adjusted operating incomes was also up, to $338 million for Q4 2023, compared to $14 million Q4 2022
The insurance segments net earned premiums and credit derivative revenues in Q4 2023 were lower, $86 million, compared to the $111 million reported in the same period the year prior.
Net investment income was $97 million, a slight improvement compared to the $80 million in Q4 2022. Fair value gains on trading securities also saw an improvement as the firm reported $32 million compared to a loss of 4 million in Q4 2022.
Assured Guaranty also reported its insurance segment adjusted operating income was $339 million in Q4 2023, compared with $66 million in Q4 2022.
According to the firm, this increase was due to the establishment of a deferred tax asset attributable to Bermuda tax law changes enacted in fourth quarter 2023, lower loss expense, and fair value gains on trading securities, partially offset by lower net earned premiums and credit derivative revenues.
Dominic Frederico, President and CEO, said: “Finishing with a strong fourth quarter, Assured Guaranty reported outstanding results for 2023,” said Dominic Frederico, President and CEO. “Our key per-share measures – GAAP shareholders’ equity, adjusted operating shareholders’ equity and adjusted book value – each ended the year at a record high. In terms of earnings, we produced more than six times 2022’s GAAP net income per share and more than two-and-a-half times that year’s adjusted operating income per share. Our share price rose by 20% during the year.
“2023 GWP and PVP were $357 million and $404 million, respectively. Our diversified production strategy continued to demonstrate its value, as global structured finance produced 73% more GWP and more than double the PVP it wrote in 2022, reaching its highest annual direct GWP and PVP amounts in a decade; non-U.S. public finance saw a 9% annual increase in GWP and a 22% increase in PVP; and while new issuance volume in the municipal bond market was relatively low, we led the industry in new-issue insured par sold with a 61% market share, and U.S. public finance continued to produce more than half of both annual GWP and PVP.
“During 2023, we completed our strategic transaction with Sound Point and a separate transaction involving other AssuredIM assets, which resulted in pre-tax gains for the year of $222 million, net of expenses. The transaction with Sound Point furthers our asset management strategy, as we now own approximately 30% of the combined entity. Additionally, in the fourth quarter, enactment of a new Bermuda tax law resulted in the establishment of a deferred tax asset, and corresponding benefit to income of $189 million.”
