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Sep 30, 2024
Ambac Q3 2024 Earnings Report
Reported a net loss for Q3 2024, driven by transaction costs and acquisition-related interest expenses, but saw strong growth in P&C premium production and insurance distribution revenue.
Key Takeaways
Ambac Financial Group reported a net loss of $(28) million for the third quarter of 2024, or $(0.63) per diluted share. However, the company experienced significant growth in its P&C premium production, which increased by 86% year-over-year, and a 64% increase in insurance distribution revenue. The Specialty P&C Insurance segment also showed improvement with a better combined ratio.
Net loss of $(28) million or $(0.63) per diluted share; Adjusted net loss of $(19) million or $(0.46) per diluted share
Total P&C Premium Production increased 86% from Q3 2023, reaching $260 million.
Insurance Distribution revenue grew 64.0% over last year, totaling $24 million.
Specialty P&C Insurance combined ratio improved by 600 bps to 100.5%, with total revenue growing 158% to $40 million.
Ambac
Ambac
Ambac Revenue by Segment
Revenue by Segment
Insurance Distribution Revenue
CapyFin.com Forward Guidance
Ambac anticipates closing the sale of its Legacy Financial Guarantee business later this year or early next year and emerging as a pure-play P&C franchise in 2025.
Positive Outlook
- Distribution business is expected to exceed $1 billion of premium placed in 2025.
- Beat acquisition has expanded the pipeline for new MGA opportunities.
- Underwriting trend at Everspan is improving, with a goal of achieving an attractive return profile.
- Acceleration of the $50 million share buy-back program has been approved.
- Positive feedback from investors regarding the shift to a pure-play P&C franchise.
Challenges Ahead
- Dependence on gross premiums written as specialty program insurance companies earn premiums based on the portion of gross premiums written retained.
- Insurance Distribution revenues are dependent on premium volume.
- The Legacy Financial Guarantee Segment experienced a pre-tax loss of $9.4 million in the third quarter of 2024, primarily as a result incurred losses driven by a decline in discount rates.
- Pretax income margin for Insurance Distribution decreased by 4980 bps
- EBITDA margin for Insurance Distribution decreased by 1390 bps