AOG continues to work toward debt reduction
American Overseas Group Limited has reported a consolidated net loss available to common shareholders of $3 million, or $63.75 per diluted share, for the three months ended June 30.
The Bermuda-based holding company said that this compares with a consolidated net loss available to common shareholders of $1.4 million, or $30.97 per diluted share, for the second quarter of 2020.
Book value per weighted share at June 30 was $1,003.21, a decline from the book value per weighted share of $1,112.19 at June 30, 2020.
The company said that it had an operating loss of $2.4 million, or $51.26 per diluted share, compared with an operating loss of $20.7 million, or $443.09 per diluted share, for the second quarter of last year.
AOG said that the financial guaranty segment ended in April last year because of a commutation of the remaining portfolio of financial guaranty reinsurance business it had assumed from Assured Guaranty Municipal Corp. The aggregate outstanding par value of the reinsurance portfolio commuted was $345 million.
Net earned property and casualty premiums increased $1.5 million from $4.1 million a year ago to $5.6 million, driven by an increase in existing and new programmes.
Fee income increased 28.6 per cent from $2.1 million to $2.7 million driven by an increase in gross written premiums year over year of $27.8 million, moving from $86.9 million to $114.7 million.
The company said that quarterly direct written premiums were positively affected by continued expansion of new programmes in Texas and other key states as well as overall economic recovery, causing volume increases in the personal auto market.
Loss and loss adjustment expenses as a percentage of earned premium increased from 51.2 per cent to 66 per cent.
The company said that operating expenses in the second quarter increased $2.1 million from $2.8 million to $4.9 million primarily due to a one-time recognition of items previously held as a receivable against a personal guarantee contract.
This contract is associated with a managing general agency programme that was discontinued in the first quarter of 2020.
Each quarter, the company said, it evaluates the collectability of the receivable, and has determined there to be a significant risk to collectability in the near term.
The company no longer holds a receivable balance for the matter in question, but said that it continues to vigorously pursue its interests to recover expenses owed under the personal guarantee contract.
As part of its ongoing capital management efforts, the company said it will continue to redirect excess capital within the group to debt reduction unless other compelling opportunities present themselves.
American Overseas Group Limited is an insurance holding company incorporated in Bermuda and a tax resident of the United Kingdom. Its operating subsidiaries provide specialty property/casualty insurance, reinsurance and insurance management services.