By Michael Loney

Feb 26 - (The Insurer) - Ambac has reported total premium production increased to $264.9 million in the fourth quarter, as a 34% drop in gross premiums written by Everspan was outweighed by a 309% increase in premiums placed by Cirrata driven by the Beat Capital acquisition.

• Q4 adj net loss of $1.1 million ($4.2 million prior period); $526.1 million net loss due to legacy business sale

• Total P&C premium production up 88% to $265 million, from $140.9 million in Q4 2023

• Cirrata premiums placed and revenue grows to $204.9 million from $50.2 million, on Beat inclusion

• -3.2 Cirrata organic growth impacted by weak conditions in A&H production

• Everspan GPW drops 34% to $60.0 million due to cancelled non-standard auto re program

• Everspan combined ratio improves 3.8 pts to 96.5% in Q4

The New York-based financial services holding company reported an adjusted net loss of $1.1 million in the fourth quarter, compared with a $4.2 million loss in the same period of 2023.

Ambac said that it advanced its strategic transformation in the quarter by entering the final stages of the sale of its legacy financial guarantee business, which it described as “a pivotal move positioning the company for long-term growth”.

As previously reported, Ambac’s shareholders in October approved the sale of the legacy financial guarantee business to funds managed by Oaktree Capital Management.

This resulted in a loss on disposal of $570 million in the fourth quarter because of the adoption of the discontinued operations accounting standard for the legacy business, leading to a consolidated net loss to Ambac common stockholders of $548 million, compared with $15.7 million in Q4 2023.

“The loss resulting from the accounting change is not the result of any change in the economics of financial terms of the sale of our business to funds managed by Oaktree Capital Partners for $420 million, as previously reported,” Ambac said.

The $570 million loss on the sale was partially offset by $44 million of net income from the legacy financial guarantee business primarily related to the impact of higher discount rates on losses incurred.

The close of the sale remains subject only to Wisconsin regulatory approval, which Ambac anticipates later this quarter or early next quarter.

Ambac for the fourth quarter reported that its total P&C premium production, which includes gross premiums written by the Everspan specialty P&C insurance segment and premiums placed by the Cirrata insurance distribution segment, grew to $265 million.

This was an 88% increase over the $140.9 million in the fourth quarter of 2023.

In the Cirrata insurance distribution business, premiums placed and revenue grew to $204.9 million during the fourth quarter of 2024 compared to the $50.2 million in Q4 2023. The increase was driven primarily by the inclusion of Beat Capital's results.

Cirrata’s total revenue grew to $44 million for the quarter, an increase of 257% over the $12.3 million in Q4 2023.

Ambac noted the launch of four new MGAs since the acquisition of Beat Capital, which closed in the third quarter, in addition to two new launches that Beat started pre-acquisition.

The insurance distribution segment reported a net loss from continuing operations to Ambac common stockholders of $6 million, compared with a $0.5 million profit in Q4 2023.

Cirrata’s organic growth for the quarter of -3.2% was negatively affected primarily by A&H production, mostly due to weak market conditions in employer stop loss and short-term medical lines.

The Everspan specialty P&C insurance segment reported a 96.5% combined ratio, a 3.8 point improvement from 100.3% in Q4 2023.

Everspan’s net income from continuing operations of $1.8 million in the quarter compared with $1.1 million in the prior-year period.

The segment’s gross premiums written of $60.0 million was down 34% from $90.7 million in Q4 2023, while net premiums written of -$2.6 million compared with $36.8 million.

Both gross and net premiums written contracted due to Everspan's cancellation of a personal lines non-standard auto reinsurance program in Q4 2024.

For the full year, Ambac reported total P&C insurance production of $876.1 million, up 74% from $503.9 million in 2023.

The specialty P&C segment grew gross premiums written 40% to $382.8 million, while the insurance distribution segment grew premiums placed 114% to $493.4 million.

The specialty P&C segment’ combined ratio was 101.6% for 2024, an improvement from 106.5% in 2023.

"Our P&C operating businesses had record performances in 2024, generating nearly $900 million in premiums across the platform,” said Ambac president and CEO Claude LeBlanc. “Cirrata earned nearly $20 million of adjusted Ebitda, up from $11 million the prior year, and Everspan contributed another $5 million, an increase of 400% over last year.

LeBlanc said that Ambac’s growth strategy is anchored in both strategic acquisitions and organic growth, driven primarily by the launch of new MGAs.

“On the new MGA launch front, we more than doubled our expectations last year with the launch of six new MGAs, four since acquiring Beat,” he said.

LeBlanc added: “Looking at 2025 our pipeline for organic and strategic growth remains very strong. Our commitment to technology, efficiency, and talent keeps Ambac at the forefront in terms of delivering innovation and market expansion and positions us well to enhance value for our shareholders."