Results of Operations for the Three Months Ended March 31, 2022 - American Overseas Group Limited Announces Net Income Of $0.7 Million and Operating Income of $0.7 Million For the Three Months Ended March 31, 2022
June 30, 2022 at 09:02 pm
Share
HAMILTON, Bermuda, June 30, 2022 (GLOBE NEWSWIRE) -- American Overseas Group Limited (BSX: AORE.BH) (Pink Sheets: AOREF.PK) (“AOG” or the “Company”) today reported consolidated net income available to common shareholders of $0.7 million, or $15.06 per diluted share, for the three months ended March 31, 2022. This compares to consolidated net income available to common shareholders of $1.0 million, or $20.81 per diluted share, for the year ended March 31, 2021. Book value per weighted share at March 31, 2022 was $850.78, a decline from the book value per weighted share of $1,055.01 at March 31, 2021.
For the three months ended March 31, 2022, the Company had an operating income of $0.7 million, or $15.30 per diluted share, compared to operating income of $0.9 million, or $19.99 per diluted share for the year ended March 31, 2021.
For the three months ended March 31, 2022, net earned property and casualty premiums increased $0.1 million from $5.0 million a year ago to $5.1 million. Fee income remained constant at $3.3 million while gross written premiums increased $4.2 million, moving from $103.9 million to $108.1 million. Quarterly direct written premiums were positively impacted by rate increases in current business. Loss and loss adjustment expenses as a percentage of earned premium increased from 54.6% to 64.2% as loss costs continued to increase in 2022 due to both frequency and severity.
For the three months ended March 31, 2022, operating and acquisition expenses increased $0.4 million from $4.3 million to $4.7 million primarily driven by a one-time favorable accrual adjustment to consulting contracts in Q1 2021 of $0.2 million, and a year over year increase in acquisition, taxes, licenses and fees associated with program business written in Louisiana of $0.1 million.
As part of its ongoing capital management efforts, the Company will continue to redirect excess capital within the group to debt reduction unless other compelling opportunities present themselves.
Forward-Looking Statements
This release contains statements that may be considered "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include, without limitation, the Company's expectations respecting the volatility of its insured portfolio, losses, loss reserves and loss development, the adequacy and availability of its liquidity and capital resources, its current run off strategy, its strategy for writing other reinsurance businesses and its expense reduction measures. These statements are based on current expectations and the current views of the economic and operating environment and are not guarantees of future performance. A number of risks and uncertainties, including economic competitive conditions, could cause actual results to differ materially from those projected in forward-looking statements. The Company's actual results could differ materially from those expressed or implied in the forward-looking statements.
Explanation of Non-GAAP Financial Measures
The Company believes that the following non-GAAP financial measure included in this press release serve to supplement GAAP information and is meaningful to investors.
Operating income (loss): The Company believes operating income (loss) is a useful measure because it measures income from operations, unaffected by non-operating items such as realized investment gains or losses. Operating income (loss) is typically used by research analysts and rating agencies in their analysis of the Company.
Information About the Company
American Overseas Group Limited is an insurance holding company incorporated in Bermuda and a tax resident of the United Kingdom. Its operating subsidiaries provide specialty property/casualty insurance, reinsurance and insurance management services. More information can be found at www.aoreltd.com.
American Overseas Group Limited
info@aoreltd.com
American Overseas Group Limited
Consolidated Balance Sheets
(unaudited)
As at March 31, 2022 and December 31, 2021
(dollars in thousands)
March 31, 2022
December 31, 2021
Assets
Investments:
Fixed-maturity securities held as available for sale, at fair value
$
105,900
$
102,678
Equity investments held as available for sale, at fair value
3,553
3,781
Cash and cash equivalents
33,360
31,908
Restricted cash
2,267
4,440
Accrued investment income
491
553
Premiums receivable
94,764
76,626
Deferred insurance premiums
117,167
108,904
Reinsurance balances receivable, net
228,978
223,982
Deferred policy acquisition costs
4,918
4,588
Intangible assets
4,800
4,800
Goodwill
33,050
33,050
Other assets
4,534
3,166
Total Assets
$
633,782
$
598,476
Liabilities and Equity
Liabilities:
Loss and loss expense reserve
$
215,168
$
215,642
Deferred commission income
3,439
3,210
Unearned premiums
122,021
113,423
Ceded premium payable
95,616
82,059
Payable to general agents
16,263
7,121
Funds withheld
109,958
104,257
Accounts payable and accrued liabilities
14,078
12,420
Notes payable
16,521
16,521
Non-owned interest in VIE
300
300
Interest payable
451
451
Total Liabilities
593,814
555,404
Shareholders' Equity:
Common shares
4,698
4,698
Additional paid-in capital
189,179
189,179
Accumulated other comprehensive (loss) income
(2,687
)
1,124
Retained deficit
(157,275
)
(157,982
)
Total Shareholders' Equity
33,915
37,019
Non-controlling interest of preferred shares of subsidiaries
6,053
6,053
Total Equity
39,968
43,072
Total Liabilities and Equity
$
633,782
$
598,476
See Notes to March 31, 2022 Consolidated Financial Statements available on American Overseas Group Ltd. Website at www.aoreltd.com
American Overseas Group Limited
Consolidated Statements of Operations
(unaudited)
(dollars in thousands, except share and per share amounts)
Three Months ended March 31,
2022
2021
Revenues
Net premiums earned
$
5,088
$
4,985
Fee income
3,295
3,286
Net investment (expense) income
(69
)
97
Net realized (losses) gains on investments
(11
)
39
Other income
841
33
Total revenues
9,144
8,440
Expenses
Losses and loss adjustment expenses
3,266
2,724
Acquisition expenses
1,698
1,776
Operating expenses
3,021
2,485
Other expense
-
-
Interest expense
451
451
Total expenses
8,436
7,436
Net income available to common shareholders
$
708
$
1,004
Income tax (expense)
-
(26
)
Net income before dividends
708
978
Dividends on preference shares of subsidiary
-
-
Net income available to common shareholders
$
708
$
978
Net income per common share:
Basic
$
15.06
$
20.81
Diluted
15.06
20.81
Weighted-average number of common shares outstanding:
Basic
46,979
46,979
Diluted
46,979
46,979
See Notes to March 31, 2022 Consolidated Financial Statements available on American Overseas Group Ltd. Website at www.aoreltd.com
American Overseas Group Limited is a writer of non-standard auto insurance through its United States subsidiaries. The Company operates through two segments: property/casualty insurance/reinsurance and corporate/other. The property/casualty segment provides insurance and reinsurance related to United States short-tail personal lines. All product lines fall within these classifications. Its business group comprises categories, including the United States-based property and casualty insurance companies that provide non-standard auto insurance through specialty managing general agents (MGAs); Barbados-based affiliated reinsurance companies that assume and reinsure a small portion of the U.S.-sourced non-standard auto business; and the Unites States based management services company. The Company provides access to the United States property and casualty insurance underwriting capacity in the specialty niche of non-standard auto insurance through MGAs for a fee.
Results of Operations for the Three Months Ended March 31, 2022 - American Overseas Group Limited Announces Net Income Of $0.7 Million and Operating Income of $0.7 Million For the Three Months Ended March 31, 2022