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Press release content from Globe Newswire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Globe Newswire
Press release content from Globe Newswire. The AP news staff was not involved in its creation.

Results of Operations for the Three Months Ended March 31, 2021 - American Overseas Group ...

June 30, 2021 GMT

HAMILTON, Bermuda, June 30, 2021 (GLOBE NEWSWIRE) -- American Overseas Group Limited (BSX: AORE.BH) (Pink Sheets: AOREF.PK) (“AOG” or the “Company”) today reported consolidated net income available to common shareholders of $1.0 million, or $20.81 per diluted share, for the three months ended March 31, 2021. This compares to consolidated net loss available to common shareholders of $0.8 million, or $17.97 per diluted share, for the three months ended March 31, 2020.

The result for the three months was driven by property and casualty growth in both existing and new programs. Book value per weighted share at March 31, 2021 was $1,055.01 a decline from the book value per weighted share of $1,062.22 at December 31, 2020.  

For the three months ended March 31, 2021, the Company had operating income of $0.9 million, or $19.99 per diluted share, compared to an operating loss of $1.2 million, or $25.95 per diluted share for the three months ended March 31, 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 (“AGMC”). The aggregate outstanding par value of the reinsurance portfolio commuted was $345.0 million.

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Net earned property and casualty premiums increased $1.2 million from $3.8 million in 2020 to $5.0 million in 2020, driven by an increase in existing and new programs.   Loss and loss adjustment expenses as a percentage of earned premium declined slightly from 55.4% to 54.6%. Fee income increased slightly from $3.1 million to $3.3 million due to increase in gross written premiums year over year of $5.5 million, moving from $98.4 million to $103.9 million.

Operating expenses decreased $1.4 million or 35.9% from $3.9 million in 2020 to $2.5 million in 2021 mainly due to savings in the financial guaranty segment and improved operational efficiencies.    

As part of its ongoing capital management efforts, the Company will continue to redirect excess capital within the group to debt reduction unless other compelling opportunities present themselves.

Forward-Looking Statements

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This release contains statements that may be considered “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, without limitation, the Company’s expectations respecting the volatility of its insured portfolio, losses, loss reserves and loss development, the adequacy and availability of its liquidity and capital resources, its current run off strategy, its strategy for writing other reinsurance businesses and its expense reduction measures. These statements are based on current expectations and the current views of the economic and operating environment and are not guarantees of future performance. A number of risks and uncertainties, including economic competitive conditions, could cause actual results to differ materially from those projected in forward-looking statements. The Company’s actual results could differ materially from those expressed or implied in the forward-looking statements.

Explanation of Non-GAAP Financial Measures

The Company believes that the following non-GAAP financial measure included in this press release serve to supplement GAAP information and is meaningful to investors.

Operating income (loss): The Company believes operating income (loss) is a useful measure because it measures income from operations, unaffected by non-operating items such as realized investment gains or losses. Operating income (loss) is typically used by research analysts and rating agencies in their analysis of the Company.

Information About the Company

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. More information can be found at www.aoreltd.com.

American Overseas Group Limited

info@aoreltd.com

 
 
American Overseas Group Limited
Consolidated Balance Sheets
(unaudited)
As at March 31, 2021 and December 31, 2020
(dollars in thousands)
                   
            March 31, 2021     December 31, 2020
Assets            
    Investments:            
      Fixed-maturity securities held as available for sale, at fair value   $ 68,077       $ 72,642  
      Equity investments held as available for sale, at fair value       4,336         4,143  
    Cash and cash equivalents       23,606         24,254  
    Restricted cash       796         548  
    Accrued investment income       353         355  
    Premiums receivable       87,154         73,073  
    Deferred insurance premiums       109,231         101,843  
    Reinsurance balances receivable, net       184,161         194,914  
    Deferred policy acquisition costs       5,096         3,590  
    Intangible assets       4,800         4,800  
    Goodwill       33,050         33,050  
    Other assets       4,980         3,767  
      Total Assets     $ 525,641       $ 516,979  
                   
                   
Liabilities and Equity            
  Liabilities:            
    Loss and loss expense reserve     $ 194,812       $ 192,943  
    Deferred commission income       3,425         2,482  
    Unearned premiums       114,055         105,678  
    Ceded premium payable       71,052         71,989  
    Payable to general agents       5,621         4,331  
    Funds withheld       59,724         64,980  
    Accounts payable and accrued liabilities       10,117         7,922  
    Notes payable       16,521         16,521  
    Non-owned interest in VIE       300         300  
    Interest payable       451         451  
      Total Liabilities       476,078         467,597  
                   
  Shareholders' Equity:            
    Common shares       4,698         4,698  
    Additional paid-in capital       189,151         189,151  
    Accumulated other comprehensive income       1,165         1,962  
    Retained deficit       (151,504 )       (152,482 )
      Total Shareholders' Equity       43,510         43,329  
    Non-controlling interest of preferred shares of subsidiaries       6,053         6,053  
    Total Equity       49,563         49,382  
                   
                   
      Total Liabilities and Equity     $ 525,641       $ 516,979  
                   
    See Notes to March 31, 2021 Consolidated Financial Statements available on American Overseas Group Ltd. Website at www.aoreltd.com
                   

 

American Overseas Group Limited
Consolidated Statements of Operations
(unaudited)
For three months ended March 31, 2021 and 2020
(dollars in thousands, except share and per share amounts)
               
               
        Three Months ended March 31,
            2021       2020  
  Revenues        
               
    Net premiums earned   $ 4,985     $ 3,828  
    Fee income     3,286       3,166  
    Net change in fair value of credit derivatives     -       2  
    Net investment income     97       500  
    Net realized gains on investments     39       207  
    Fair value adjustment     -       (558 )
    Other income     33       -  
               
      Total revenues     8,440       7,145  
               
  Expenses        
    Losses and loss adjustment expenses     2,724       1,704  
    Acquisition expenses     1,776       1,283  
    Operating expenses     2,485       3,857  
    Other expense     -       523  
    Interest expense     451       451  
               
      Total expenses     7,436       7,818  
               
               
Net income (loss) available to common shareholders   $ 1,004     $ (673 )
    Income tax (expense)     (26 )     (164 )
               
Net income (loss) before dividends     978       (837 )
    Dividends on preference shares of subsidiary     -       -  
               
               
Net income (loss) available to common shareholders   $ 978     $ (837 )
               
               
  Net income (loss) per common share:        
  Basic   $ 20.81     $ (18.10 )
  Diluted     20.81       (17.97 )
               
  Weighted-average number of common shares outstanding:        
  Basic     46,979       46,214  
  Diluted     46,979       46,554  
               
  See Notes to March 31, 2021 Consolidated Financial Statements available on American Overseas Group Ltd. Website at www.aoreltd.com  
               

 

AMERICAN OVERSEAS GROUP LTD.          
           
NET INCOME AND OPERATING INCOME BY SEGMENT        
           
(dollars in thousands) March 31, 2021
  Net Income Available to Common Shareholders Net Realized (Gain)/Loss on Sales of Investments Net Change in Fair Value of Credit Derivatives Fair Value Adjustments Operating Income
Property and casualty:          
           
Net premiums earned $ 4,986         $ 4,986  
Losses and loss adjustment expenses   (2,724 )         (2,724 )
Acquisition expenses   (1,776 )         (1,776 )
Property/Casualty Underwriting Income   486           486  
           
Fee income   3,286           3,286  
Operating expenses   (2,277 )         (2,277 )
Income tax   (26 )         (26 )
Property and casualty   1,469     -     -     -     1,469  
           
Financial guaranty:          
           
Net premiums earned   -           -  
Net change in fair value of credit derivatives   -           -  
Losses and loss adjustment expenses   -           -  
Acquisition expenses   -           -  
Operating expenses   -           -  
Financial guaranty   -     -     -     -     -  
           
Corporate and Investing          
           
Net investment income   97           97  
Net realized gain/(loss)   39     (39 )       -  
Operating expenses   (209 )         (209 )
Interest expense   (451 )         (451 )
Other income, net of other expense   33           33  
Corporate and investing   (491 )   (39 )   -     -     (530 )
           
Group total $ 978   $ (39 ) $ -   $ -   $ 939  
           
AMERICAN OVERSEAS GROUP LTD.          
           
NET INCOME AND OPERATING INCOME BY SEGMENT        
           
(dollars in thousands) March 31, 2020
  Net Income Available to Common Shareholders Net Realized (Gain)/Loss on Sales of Investments Net Change in Fair Value of Credit Derivatives Fair Value Adjustments Operating Income
Property and casualty:          
           
Net premiums earned $ 3,831         $ 3,831  
Losses and loss adjustment expenses   (2,123 )         (2,123 )
Acquisition expenses   (1,285 )         (1,285 )
Property/Casualty Underwriting Income   423           423  
           
Fee income   3,166           3,166  
Operating expenses   (3,142 )         (3,142 )
Amortization expense   -           -  
Income tax   (164 )         (164 )
Property and casualty   283     -     -     -     283  
           
Financial guaranty:          
           
Net premiums earned   (3 )       193     190  
Net change in fair value of credit derivatives   2       (2 )     -  
Losses and loss adjustment expenses   418         (889 )   (471 )
Acquisition expenses   2         (24 )   (22 )
Operating expenses   (103 )         (103 )
Financial guaranty   316     -     (2 )   (720 )   (406 )
           
Corporate and Investing          
           
Net investment income   500           500  
Net realized gain/(loss)   207     (207 )       -  
Fair value adjustment   (558 )       558     -  
Operating expenses   (613 )         (613 )
Interest expense   (451 )         (451 )
Other income, net of other expense   (521 )         (521 )
Corporate and investing   (1,436 )   (207 )   -     558     (1,085 )
           
Group total $ (837 ) $ (207 ) $ (2 ) $ (162 ) $ (1,208 )