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Operating expenses drive American losses

American Overseas Group Limited, the Bermudian-based insurance holding company, has reported a consolidated net loss available to common shareholders of $1.8 million for the three months ended September 30, 2021.

This compares with consolidated net income available to common shareholders of $500,000 for the three months ended September 30, 2020.

Book value per weighted share at September 30 was $959.06, a decline from the book value per weighted share of $1,126.51 at September 30, 2020.

For the three months ended September 30, the company had an operating loss of $1.8 million, compared with operating income of $600,000 for the three months ended September 30, 2020.

The financial guaranty segment ended in April of 2020 due to 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.

For the three months ended September 30, net earned property and casualty premiums increased $1.1 million from $4.3 million a year ago to $5.4 million, driven by an increase in existing and new programmes.

Fee income remained constant at $2.6 million quarter over quarter while gross written premiums increased $4.2 million, moving from $96.2 million to $100.4 million.

Quarterly direct written premiums were positively impacted by continued expansion of new programmes, rate increases and overall economic recovery.

Loss and loss adjustment expenses as a percentage of earned premium increased from 55.1 per cent to 71.2 per cent.

For the three months ended September 30, operating expenses increased $1.1 million from $2.6 million to $3.7 million primarily due to a $900,000 increase in taxes, licences and fees associated with programme business written in Louisiana.

For prior-year quarterly results, the company received credits associated with these expenses from its programme partner. Additionally, the company recognised latent charges related to current year to date expenses associated with Louisiana taxes, licences and fees in the current quarter.

The remaining $200,000 increase in operating expense for the quarter is driven primarily by marketing activity returning to more normal levels in 2021 compared with 2020 expenditure levels, which suffered the impact of Covid-related restrictions.

As part of its continuing 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

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Published January 04, 2022 at 11:57 am (Updated January 04, 2022 at 7:32 pm)

Operating expenses drive American losses

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