Financial Data and Key Metrics Changes - Adjusted book value per share reached a record high of $176.95, and adjusted operating shareholders' equity per share also reached a record high of $120.11 at the end of Q2 2025 [6] - Adjusted operating income for Q2 2025 was $50 million or $1.1 per share, compared to $80 million or $1.44 per share in Q2 2024 [22][25] - Net earned premiums and net investment income increased, contributing to the earnings power of core earnings [22] Business Line Data and Key Metrics Changes - The company insured $14.1 billion of new issued par sold in the primary market, a 30% increase compared to the same period last year [13] - In the secondary market, the company wrote nearly $900 million of policies in the first half of 2025, with over $500 million in Q2 alone, representing a 150% increase compared to the total amount insured in all of 2024 [8][13] - The insurance segment contributed $76 million to adjusted operating income, while the asset management segment contributed $4 million [27] Market Data and Key Metrics Changes - US municipal issuance was 17% ahead of last year's record pace through June 30, 2025 [7] - The total market volume reached $278 billion by June 30, 2025, with forecasts suggesting that municipal issuance in 2025 could surpass $500 billion [20] Company Strategy and Development Direction - The company aims to maintain its leadership position in US municipal bond insurance while expanding and diversifying its global infrastructure and structured finance reach [12] - A share repurchase program with a target of $500 million for the year is in place, with $296 million already repurchased as of August 6, 2025 [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory in both US and non-US markets, citing a strong competitive position and excellent capital and earnings [11] - The company is well-positioned for the second half of the year, with many attractive opportunities in global infrastructure and structured finance [20] Other Important Information - The company received affirmations of its financial strength ratings from S&P Global Ratings and KBRA, both with stable outlooks [11] - A $250 million stock redemption by the US insurance subsidiary was approved, expected to be executed in 2025 [30] Q&A Session Summary Question: Impact of lower interest rates on AGO's opportunities - Management noted that a lower interest rate environment could depress premium volume but may also lead to more issuers in the market, balancing the impact [33][34][39] Question: Increase in big exposures and loss expenses - Management explained that the increase in loss expenses is due to additional reserves on certain UK regulated utility and US municipal revenue exposures, emphasizing their strong surveillance team [40][68] Question: Future of Puerto Rico Oversight Board and restructuring - Management expressed optimism that changes in the Puerto Rico Oversight Board could lead to improvements in restructuring processes, viewing it as a potential positive development [52][54] Question: Performance of contingent value instruments - The company holds approximately $117 million in contingent value securities, which have performed well, and expects continued improvement [58][60]

Financial Data and Key Metrics Changes - Adjusted operating income per share for Q1 2025 was $3.18, a 62% increase from $1.96 in Q1 2024 [6][19] - Adjusted operating shareholders' equity reached $117.4 and adjusted book value was $172.79 per share [6][23] - Total investment income from alternative investments was $59 million, the highest quarterly level to date [9] Business Line Data and Key Metrics Changes - New business production in Q1 2025 was $39 million of PVP, with U.S. Public Finance contributing approximately 65% [6][12] - Assured Guaranty captured 64% of the primary market insured par sold in U.S. Municipal bond insurance [13] - Insured par sold increased by 23% to $4.7 billion compared to Q1 2024 [14] Market Data and Key Metrics Changes - The average underlying credit quality of municipal transactions was rated single A, indicating higher credit quality [14] - Secondary market bond insurance activity increased significantly, producing $376 million of insured par, surpassing all of 2024 [15] Company Strategy and Development Direction - The company aims to increase fee-based earnings through its 30% ownership interest in SoundPoint [9] - There is a focus on modernizing processes and technology for secondary market business to build a consistent transaction pipeline [15][18] - The company is expanding its product offerings and presence in Continental Europe, as evidenced by a transaction in France [18] Management's Comments on Operating Environment and Future Outlook - The current volatile market environment is expected to drive increased demand for the company's guarantees [10] - Management expressed confidence in the strong demand for financing in the municipal market despite economic uncertainties [44] - The company anticipates that stronger credits will continue to enter the market, reflecting ongoing demand [45] Other Important Information - A pretax gain of $103 million was recognized from litigation with Lehman Brothers International [8][19] - The company repurchased 1.3 million shares for $120 million at an average price of $89.72 per share [23] Q&A Session Summary Question: What likelihood is placed on a haircut to the debt for Thames Water? - Management indicated that reserves are assessed based on various scenarios and probabilities, with a focus on being senior creditors [26][32] Question: How do tariffs potentially impact credits wrapped by the company? - Management noted that the situation is fluid and emphasized a wait-and-see approach, highlighting increased municipal issuance as a positive sign [34][35] Question: Does the higher-rated credit issuance in Q1 change the outlook for normalized PVP to par? - Management stated that the current market volatility led to higher-rated issuances, but it does not change the overall outlook for the year [41][42] Question: What is the competitive environment in the secondary market? - Management confirmed that there is one other competitor in the secondary market, but they focus on a smaller segment compared to Assured Guaranty [46] Question: What contributed to the stronger performance in the asset management segment? - Management explained that earnings in the asset management business are often back-end loaded, reflecting strong performance from SoundPoint in the previous quarter [49]