Bermuda financial guaranty reinsurer Assured Guaranty Ltd. said profit in the second quarter was 55 percent higher, reaching $66.8 million, as the company benefited from the company?s financial strength ratings being affirmed as stable.

Chief executive and president Dominic Frederico, 54, said in an earnings statement issued last night: ?During the quarter, our insurer financial strength ratings, a key element of our strategic objectives, were significantly enhanced,? as insurance rating agency Standard and Poor?s affirmed the company?s AAA rating as stable, meaning a downgrade is unlikely, while Fitch Ratings said the group?s US direct financial guaranty insurer, Assured Guaranty Corp., also had an AAA rating with a stable outlook.

?We continue to expand our financial guaranty direct platform,? Mr. Frederico said, as well as the company?s Bermuda-based reinsurer seeing strong demand. Assured Guaranty was established in 2003 when ACE Limited spun off its financial guaranty arm. ACE retains a stake in the company, with a shareholding of 38,629,000 shares, Yahoo! finance data showed.

Assured?s operating income in the quarter rose 170 percent to $75.2 million compared to $27.9 million during the second quarter, 2004.

The company?s rating affirmations could draw clients, especially bond issuers looking buy insurance policies to protect against loss, after a leading US provider of this kind of insurance, MBIA, came under fire by US regulators for its reliance on reinsurance from a Bermuda company it and other reinsurers jointly established.

MBIA is the reinsurer?s, Channel Reinsurance Ltd., only client, as well as a shareholder, raising questions on whether the transaction is an arms length one. And, Channel Re?s low employee numbers have raised question because it only has five staffers to oversee a $30 billion book of business. Standard & Poor?s in June cut its outlook on the reinsurer?s debt rating to negative.

In the period, Assured sold financial guaranty insurance policies worth $20.4 million, 18 percent more than in the second quarter last year.

Its mortgage guaranty business saw its business go from sales of $900,000 in policies in the year-ago period to $1.9 million this year.

Fewer financial guaranty reinsurance policies were sold in the second quarter as Assured Guaranty sales declined to $8 million from $35.8 million in the prior period.

Also impacting this area was an inter-company transaction that transferred $18.4 million in financial guaranty policies from Assured Guaranty Corp. to Assured Guaranty Re.

The company earned $48.3 million in premium during the period. Assured?s quarterly profit beat the consensus of seven analysts who expected earnings to come in around 48 cents a share; the company posted 90 cents a share in second-quarter profit. The company?s shares fell $0.34 to $23.57 in trading on the New York Stock Exchange yesterday. Assured?s profit report was realised after US markets closed.

Separately, the company said it has named Robin Monro-Davies and Michael O?Kane to its board of directors effective immediately.

Mr. Monro-Davies, a former chief executive of Fitch Ratings, will serve on the nominating and governance committee and the risk oversight committee while Mr. O?Kane will serve on the audit and finance committees, after previously serving as senior managing director of the securities division at TIAA-CREF.Assured Guaranty Ltd. 2Q 05 report card:

? Net income: $66.8 million, or $0.90 a share, in the second quarter, a 55 percent increase over the year-ago period when Assured Guaranty posted $43.1 million in profit, or $0.57 a share.

? Net investment income: $23.7 million compared to $23.5 million in the year-ago period

? Net premiums written: $30.2 million

? Total revenues: The money Assured took in from business was four-fold with total revenues of $71.8 million compared to $14.2 million during the second quarter 2004.

? Shareholders? equity: $1.6 billion at the end of the quarter compared with $1.5 billion at the end of 2004