Ambac Financial Group, Inc.

Greetings and welcome to AMBAC Financial Group Inc. Third Quarter 2024 Earnings Conference 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 Sebaske, Head of Investor Relations. Please go ahead.

Thank you. Good morning and welcome to AMBAC's third 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 the prepared remarks, we'll be highlighting slides from an investor presentation, which can be located on our website. Our call today includes forward-looking statements. The company cautions investors that any forward-looking statement involves 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. These factors are described as the forward-looking statements in our earnings press release and 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 Investors section of our website, I would now like to turn the call over to Mr. Claude LeBlanc.

Thank you, Chuck, and welcome to everyone joining today's call. The third quarter was a milestone quarter for AMBAC as we materially advanced our strategy towards becoming a pure play P&C business with the acquisition of Beat Capital. The quarter also reflected the very strong organic growth behind our businesses with the announcement of multiple new MGA launches. Last night, after market closed, we also announced the acceleration of our $50 million share buyback program, which will commence immediately. Turning to our distribution business. With the acquisition of BEAT, we have further advanced our goal towards becoming a leading destination for MGA and underwriting talent, which we believe will lead to exceptional long-term growth. While acquisitions will remain one pathway for future expansion, organic growth is our key strategic focus as we expand our distribution business. Between BEAT and Terada, we have launched six new programs this year, including one during the quarter and two in October. These six new MGAs cover a broad set of risk classes, including E&S casualty, management liability, professional liability, technical commercial property, and credit. The exceptional leadership of these franchises come with the pedigree from some of the best in the industry, including names like Arch, AIG, Nationwide, FM Global, and Hiscox, amongst others. These six new MGAs will help drive significant future organic growth to our business starting in 2025. As our business scales, we will also be providing the costs associated with launching these de novos. There is likely to be some volatility to the expenses as the timing, size, and pathway to profitability of each new startup opportunity fluctuates. However, it is reasonable to think about each de novo typically incurring approximately $1.5 to $3.5 million of expenses spread over six to eight quarters from launch. These startup expenses will diminish relative to the overall results as we continue to grow. We will provide additional details regarding startup expenses in the coming quarters. As for market conditions, broadly speaking, we believe that markets remain quite favorable for us in the U.S. casualty lines we are focused on as rate increases are keeping up with or exceeding loss cost trends. We're also keeping a close eye on commercial auto and certain professional lines and remain optimistic based on the subclasses we target. With respect to the property markets, pricing has softened. However, it was coming off multi-year peak levels to start the year, so not unexpected. We do expect the effect of hurricanes Milton and Helene to stabilize property insurance pricing going into 2025, whereas the effects on non-property lines is limited. In summary, we see the overall commercial insurance market conditions, including the secular trends towards ENS and risk specialization, as supportive and conducive to our continued expansion. As we look ahead to our future as a PurePlace specialty P&C platform, I am extremely pleased with the overwhelming shareholder support we received for the sale of our legacy financial guarantee business. I'm also happy to report that Oaktree has received PRA approval for the sale and we now await the only remaining approval from the Wisconsin Office of the Commissioner of Insurance. We continue to anticipate closing this transaction in the fourth quarter or the first quarter of next year. As we have stated on prior calls, the regulatory process is outside of our control. Turning now to our third quarter results, our consolidated specialty PNC insurance platform continued to generate strong production with $260 million in premium. an 86% increase over last year. Over the first three quarters, our total premium production totaled $611 million, an increase of 68% over the prior year period and on pace for $900 million this year. To date, our P&C businesses generated approximately $20 million of combined EBITDA. The acquisition of BEAT contributed $64 million of premiums placed to our third quarter production. For BEAT, July is a relatively strong production month in the third quarter, and consequently, it has a disproportionate impact on the business's result in the quarter, given our close on July 31. David will discuss our quarterly results in more detail in a few minutes. I am pleased to report we continue to make significant progress on the integration of BEAT. We've already been able to identify a number of early-day synergies and are confident in our ability to realize a broader set of synergies as we progress our integration efforts and our platform continues to grow. I can now confidently state that the combined breadth and depth of our capacity relationships, distribution channels, and a highly desirable operational environment makes ANVAC a premier destination for top underwriting talent. Turning to Everspan's results for the quarter, EverSpan had a strong quarter. The focus continues to be on underwriting profitability, which improved both this quarter and year to date, as the benefits of scale, diversification, and proactive underwriting actions take effect. Looking towards 2025, EverSpan maintains a strong pipeline of internal and external program opportunities, which we believe will further our goal 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.