Ambac Financial Group, Inc.

Greetings and welcome to the AMBAC Financial Group Inc. First Quarter 2025 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 and then 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 Spassky, Head of Investor Relations.

Thank you. Good morning, and welcome to AMBAC's first quarter 2025 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 some slides from our 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 under the forward-looking statements in our earnings press release and our most recent 10-Q and 10-K file 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 earnings press release, operating supplement, and other materials in the investor section on our website, handback.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. AMBAC's insurance distribution and specialty program business got off to a very strong start in 2025, producing $318 million of premium, up 70%, and generating $63 million of revenue, up 27%, both from the prior period last year. This growth was primarily attributable to our BEAT acquisition, which alone contributed over 20 million of revenue in the quarter, representing growth of approximately 40% from BEAT's results in the first quarter of 2024. Looking at our distribution business segment, Serata generated over 230 million of premium for the quarter, up 156%. We are starting 2025 with a much larger stable of startup MGAs than anticipated. due to the successful launch of six new MGAs during 2024, which we believe will support strong organic growth into the future. While we expect new MGAs to attain profitability in 18 to 24 months on average, two of the six Class of 2024 startups achieved profitability in the first 12 months. For the first quarter, organic growth, excluding the BEAT acquisition, Got a bit of headwind, contracting 2%, primarily driven by our pullback in ESL and short-term medical business due to the continued industry turbulence, which we outlined last quarter. Excluding our pullback in these two lines of business, our organic growth for the quarter would have been almost 12%. I would also like to point out that these figures are measured on a subset of MGAs, given that we do not include organic growth for 12 months post an acquisition. If FEAT had been included in the organic growth computation this quarter, our consolidated organic growth would have been approximately 17% across all lines. One of our key strategic tenants is maintaining profitable underwriting results for our capacity and capital providers throughout market cycles. While the market has seen challenges in ESL, we believe market conditions are stabilizing and beginning to turn favorable for growth. ANH lines of business are very diversified as a class and less correlated to the broader P&C market, which makes them an attractive revenue and earnings diversifier to our overall portfolio. Beyond MGA startups, the other areas of focus that we believe will further materially enhance the organic growth of our platform include, one, enhancement of risk capacity for our syndicates and our portfolio companies. Two, product expansion and diversification Three, distribution expansion to drive synergies across our platform. Relative to some of our competitors, we have enormous white space to fill. And in line with the growth we have experienced to date, we see a lot of runway ahead of us for future growth, whether that is in the form of organic, inorganic, or product expansion from within our portfolio. In addition, we have a unique business model which we believe positions us well to attract top industry talent to our platform well into the future. Turning now to Everspan's results for the quarter. Everspan continues to manage through the underwriting decisions made last year, with the team focused on rebalancing capital allocation or expanding primary affiliate and market opportunities, with a de-emphasis on assumed programs. As a result, Everspan's gross premiums written were approximately 87 million, down 10% from the prior year, while our loss ratio improved nearly 9% or 880 basis points. This reduction in premium written increased Everspan's expense ratio, resulting in a combined ratio of 102 for the quarter. We believe the expense ratio will begin to trend more favorably in coming quarters as we migrate the portfolio and further scale our business. turning to our legacy business. While outside of our control, the OCI approval process for the sale of our legacy business continues, and we look forward to the completion of the sale to effectuate our transformation to a pure play specialty P&C insurance business. I will now turn the call over to David to discuss our financial results for the quarter. David.