Summary of Assured Guaranty Ltd. Q4 2025 Earnings Call

1Key Financial Results and Metrics

Q4 2025 Adjusted Operating Income: $109 million, or $2.32 per share, an 83% increase from $66 million, or $1.27 per share, in Q4 2024.

Full-Year 2025 Adjusted Operating Income: $445 million, or $9.08 per share, up 28% from $389 million, or $7.10 per share, in 2024.

Adjusted Book Value: Reached new highs at $186.43 per share.

Shareholder Equity: Increased to $125.32 per share.

Share Repurchases: $500 million in share buybacks, representing 12% of shares outstanding at the end of 2024.

Dividends: $69 million distributed to shareholders, with a 12% increase in quarterly dividends announced.

2Strategic Updates and Business Highlights

New Business Production: Present value of new business production (PVP) totaled $286 million, with strong contributions from all underwriting groups.

Municipal Bond Insurance Leadership: Achieved a 15-year high in new-issue municipal par sold, insuring over $27 billion, which is a 16% increase from 2024.

Secondary Market Growth: More than tripled secondary market par insured compared to the previous year, reaching approximately $2 billion.

Legal Success: Secured a pretax gain of about $103 million from litigation with Lehman Brothers and resolved several other loss mitigation situations positively impacting financial results.

Acquisition: Completed the acquisition of Warwick Re, rebranded as Assured Life Reinsurance, to diversify revenue sources and leverage existing strengths in credit and structured finance.

3Forward Guidance and Outlook

2026 Expectations: Strong transaction pipeline anticipated across financial guarantee markets, with continued growth in municipal bond insurance and structured finance.

Annuity Reinsurance Growth: Plans to expand the newly acquired Assured Life Re business, with expectations of significant earnings contributions in the future.

Market Conditions: Positive outlook for BBB credit issuance and overall market demand, particularly in U.S. public finance and European infrastructure finance.

4Bad News, Challenges, or Points of Concern

Mix of Business: PVP was limited by a lower number of large transactions in the BBB category, potentially impacting premium generation.

Exposure Management: Ongoing focus on managing exposures in U.K. utilities and Brightline, with specific attention to Thames Water's situation, which remains a concern.

Capital Allocation: Potential competition for capital between share buybacks and investments in the annuity reinsurance market, which could affect future buyback targets.

5Notable Q&A Insights

BBB Credit Issuance: Management expressed optimism about the recovery of BBB credit issuance, with a strong start in Q1 2026.

U.K. Utilities Update: Positive developments in U.K. water utilities, particularly with Southern Water's upgrade, but Thames remains a key focus.

Alternative Investment Portfolio: Management reassured that current exposures in the CLO market are well-managed, with no direct exposure to private credit causing concern.

Capital Management Strategy: Emphasized the interdependent nature of capital allocation decisions, balancing share buybacks with opportunities in the annuity reinsurance business. Overall, Assured Guaranty Ltd. reported strong financial results and strategic advancements in 2025, with a positive outlook for 2026, while also addressing challenges in business mix and exposure management.