S&P Affirms Assured Guaranty’s Ratings

July 17, 2022

S&P Global Ratings [S&P] has affirmed the AA financial strength ratings of Assured Guaranty.

A spokesperson said, “Assured Guaranty Ltd. announced today that S&P Global Ratings [S&P] has affirmed the AA financial strength ratings on U.S. bond insurers Assured Guaranty Municipal Corp. [AGM] and Assured Guaranty Corp. [AGC]; U.K. financial guarantor Assured Guaranty UK Limited [AGUK] and European financial guarantor Assured Guaranty [Europe] SA [AGE]; and Bermuda insurers Assured Guaranty Re Ltd. [AGRe] and Assured Guaranty Re Overseas Ltd. [AGRO]. The outlooks of all the Assured Guaranty entities are stable.

“In its July 8, 2022 research update, S&P noted Assured Guaranty’s:

  • “excellent capital and earnings with a meaningful capital adequacy buffer at the current rating”
  • “exceptional” liquidity
  • “very strong competitive position based on a well-defined, diverse underwriting strategy”
  • “combination of a very strong business risk profile and very strong financial risk profile”
  • “vigilant approach to its global underwriting strategy,” which “does not expose the company to outsized risk”
  • “experienced management team” that “demonstrates a strong understanding of the various risks the company has as it executes its corporate strategy”
  • “positive” risk management culture “reflecting Assured’s robust risk reporting and significant oversight from senior management”
  • “strong demand in the insured secondary market”
  • and “well thought out and measured” approach to writing business in non-U.S. public finance markets

S&P also wrote, “In 2020, Assured most likely reached an inflection point where the amount of new insured par written is greater than the runoff of the legacy exposure.” In addition, S&P assessed “Assured’s liquidity as exceptional resulting from a conservative investment strategy that we believe adequately supports its liquidity needs. The company is sufficiently covered for loss and loss adjustment expenses payable in the next 12 months, and we do not foresee any longer-term material liquidity risks at this time. Given Assured’s investment strategy, we believe the company maintains sufficient liquidity to cover unexpected stress in the insured portfolio.”

In response to the report, Dominic Frederico, President and CEO of Assured Guaranty said: “The affirmation of our AA S&P financial strength ratings reflects S&P’s continued recognition of our very strong capital position, excellent capital and earnings, exceptional liquidity, very strong business risk profile and vigilant approach to our global underwriting strategy. We concur with S&P’s observation that trends in the U.S. public finance market combined with Assured Guaranty’s growing global structured finance business afford strong growth opportunities for our company.”

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