Ambac Financial Group, Inc.

Greetings, and welcome to the AMBAC Financial Group Second Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Charles Sebasti, Head of Investor Relations. Please go ahead, sir.

Thank you. Good morning and welcome to AMPAC's second quarter 2024 call to discuss financial results. Speaking today will be Claude LeBlanc, President and CEO, and David Trick, Chief Financial Officer. They will discuss the financial results of our business and the current market environment. And after prepared remarks, we'll take your questions. For those of you following along on the webcast, during prepared remarks, we'll be highlighting some slides from the investor presentation, which can be located on our website. Our call today includes forward-looking statements. The company cautions investors that any forward-looking statements involve risks and uncertainties and is not a guarantee of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. Those factors are described under forward-looking statements in our earnings press release, our most recent 10Q and 10K filed with the SEC. We do not undertake any obligation to update forward-looking statements. Also, in our prepared remarks or responses to questions, we may mention some non-GAAP financial measures. Reconciliation to those non-GAAP measures are included in our recent earnings press release, operating supplement, and other materials available on the investor section of our website, amvac.com. I would now like to turn the call over to Mr. Claude LeBlanc.

Thank you, Chuck, and welcome to everyone joining today's call. Our reported results for the second quarter were favorable compared to the prior year. We generated a net loss of just under $1 million, adjusted net income of $8 million, and consolidated EBITDA of $27 million. David will discuss our financial results in detail shortly. Today, I would like to provide an update on the two strategic announcements we made earlier in the quarter. in june we announced an agreement to sell our legacy financial guarantee business to oak tree capital management for 420 million this was the culmination of several years of targeted efforts to optimize the portfolio maximize recoveries and progress the business towards a steady state runoff in preparation for a strategic review the oak tree bid was the best value to shareholders measured on a notional time and risk-adjusted basis. The sale price achieved was consistent with or above a range of estimated values that we evaluated. The sale of AEC is expected to close during the fourth quarter of 2024, although the ultimate timing will be subject to approvals outside of our control. Upon the close of the sale, we will implement a share repurchase program of up to $50 million to be initiated in the first three months of closing, depending on market conditions. In making this decision, management and the board took into consideration our anticipated year-end liquidity and capital position and our go-forward capital needs and obligations, amongst other considerations. Following the execution of the share repurchase program, We will evaluate authorizing additional capital return activities measured against other capital deployment opportunities and based on market conditions. Last week, we also announced the closing of the BEAT capital acquisition. I would like to take this opportunity to officially welcome John Cavanaugh and his partners and the entire BEAT team to the AMBAC family. In BEAT, we have found an organization with a similar culture and values. Both Serata and BEAT employ a partnership model to align interest. The combination offers significant potential for revenue, capital, and expense synergies, which we believe will allow us to achieve superior returns and create long-term value for our shareholders. The Serata-BEAT combination establishes us as a leading insurance distribution platform with exceptional global growth opportunities through both organic and inorganic means. We believe the combined breadth and depth of our capacity relationships, distribution channels, and a highly desirable operational environment makes us a premier destination for top MGA talent. Our distribution businesses are primarily focused on specialty and E&S lines, where specialization and flexibility of rate and form have led this segment to outperform the growth of the broader P&C markets. On a combined basis, AMBAC specialty P&C businesses are now expected to generate approximately $1.4 billion of premium on a pro forma basis for 2024, essentially doubling the size of our P&C platform. The combined Serata Beat insurance distribution platform now comprises 16 MGAs, up from five as of the end of the second quarter. As we seek to accelerate our premium and margin growth, our combined platform is uniquely positioned to continue to attract what we believe to be best-in-class talent as well as top MGAs. Together, we are better positioned to leverage our key differentiated offerings for the benefit of our MGA partners, which include, first, aligned risk capital. Unlike the majority of our insurance distribution peers, we can accelerate the launch and support the continued development and growth of our distribution businesses. Our Lloyds syndicates and capital light carriers enable us to align interests with our capacity providers and gives us the ability to incubate and launch distribution ventures more rapidly. This distinct market advantage positions us for strong future growth. As a public company, we offer key risk and oversight controls that benefit our businesses as well as our key stakeholders. And lastly, business agility, supported by our extensive technology-focused shared service offering. Turning now to our second quarter results, excluding our beat business. Our consolidated specialty P&C insurance platform continued to generate strong production with over $165 million in premium. a 75% increase over last year. Our insurance distribution business placed over $53 million of premium, up 31% over the prior year. This was supported by the ongoing benefit of organic growth initiatives and the addition of Riverton to the platform last August. We also announced the launch of Tara Hill in the second quarter, and MGA focused on management and professional alliance. Going forward, we believe Serata's business profile and mix will be meaningfully and positively impacted by the BEAT acquisition. We look forward to providing investors with more details on the combined business in the coming months. Everspan had strong growth in the quarter, generating gross written premium of $111 million, which was up 109% over last year and produced a combined ratio of 109.4% improving from the 112.7% last year as the portfolio continues to scale and diversify. This quarter, the underwriting results were impacted by increased loss frequency in commercial auto. As we indicated in prior quarters, we continue to take a cautious approach to reserving and expect some near-term volatility as EverSpan's portfolio scales and diversifies across programs and lines of business. Consistent with our focus on discipline underwriting, we discontinued the subject commercial auto program this quarter. We believe rates are keeping up or exceeding lost cost trends for all of our other programs. At the same time, Everspan maintains a strong pipeline of program opportunities, which we believe will further our goals to diversify the portfolio, support growth, reduce our combined ratios, and deliver strong future ROEs. I will now turn the call over to David to discuss our financial results for the quarter. David.