Detailed Narrative
Record Valuation Metrics and Capital Strength
Assured Guaranty reported record per share valuation metrics at the end of Q2 2026, with adjusted operating shareholders' equity reaching $129.94 and adjusted book value at $189.72. These achievements reflect successful execution of strategic initiatives and were underscored by S&P, KBRA, and Moody's affirming the financial strength ratings of its financial guarantee insurance subsidiaries with stable outlooks, citing excellent capital and earnings, exceptional liquidity, and a strong competitive position.
Robust New Business Production
The company generated $152 million in PVP during the first half of 2026, marking a 48% increase over the first half of 2025. This growth was primarily driven by strong activity in U.S. public finance, which contributed $106 million in PVP, and global structured finance, which saw PVP increase to $35 million from $15 million in the prior year. The company remains the top provider of municipal bond insurance, insuring $9.6 billion of new issue par across 423 transactions, including 17 transactions of $100 million or more.
Strategic Capital Allocation and Shareholder Returns
Assured Guaranty continues to evaluate capital deployment opportunities, balancing growth investments in its financial guarantee and annuity reinsurance platforms with shareholder returns. In Q2 2026, the company repurchased 554,000 shares for $45 million at an average price of $80.68 per share and returned $17 million in dividends. Since 2013, total share repurchases amount to $6 billion, representing 81% of shares outstanding at the program's inception, alongside a quarterly dividend increase from $0.10 to $0.38 per share.
Annuity Reinsurance and International Expansion
The Assured Life Re platform is progressing well, with the company comfortable about meeting production and income milestones. Management noted potential for accelerated bookings, which could require more upfront capital. Concurrently, Assured Guaranty is focused on expanding its financial guarantee business in Europe and the Asia Pacific region, complementing its strong U.S. municipal business and aiming for greater revenue diversification, with a strong pipeline expected for the second half of 2026.
Investment Portfolio Performance and Credit Exposures
The alternative investment portfolio maintained an inception-to-date IRR of approximately 12%, significantly outperforming the 3-year average yield of 4.3% on the fixed maturity portfolio, despite a $19 million mark-to-market loss on a CLO equity fund in Q2. The company continues to proactively manage its Brightline transaction exposure, which experienced economic loss development but did not impact adjusted operating income due to sufficient deferred premium revenue. No significant developments were reported regarding Thames Water exposure.