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Assured Guaranty ltd.  (AGO)
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Assured Guaranty Ltd's

Competitiveness


 

AGO Sales vs. its Competitors Q2 2022



Comparing the results to its competitors, Assured Guaranty Ltd reported Total Revenue decrease in the 2 quarter 2022 year on year by -54.08 %, despite revenue increase by most of its competitors of 11.35 %, recorded in the same quarter.

List of AGO Competitors





Revenue Growth Comparisons




Net Income Comparison


Assured Guaranty ltd. recorded net loss , despite income increase by most of its competitors of 73.83 %

<<  More on AGO Income Comparisons


Assured Guaranty Ltd's Comment on Competitors and Industry Peers


Assured Guaranty is the market leader in the financial guaranty industry. Assured Guaranty believes its financial strength, protection against defaults, credit selection policies, underwriting standards and surveillance procedures make it an attractive provider of financial guaranties.

Assured Guaranty's principal competition is in the form of obligations that issuers decide to issue on an uninsured basis. In the U.S. public finance market, when interest rates are low, investors may prefer greater yield over insurance protection, and issuers may find the cost savings from insurance less compelling. Over the last several years, interest rates generally have been lower than historical norms. In 2015, average daily benchmark AAA 30-year municipal interest rates as reflected by the MMD Index were approximately 35 basis points lower that their levels in 2014, a year in which rates were already low by historical standards.

Nevertheless, in the U.S. public finance market in 2015, usage of municipal bond insurance increased to approximately 6.7% of the par amount of new issues sold, compared with approximately 5.9% in 2014. The Company believes the increase in market penetration despite falling interest rates indicates greater demand for bond insurance based on investors’ heightened awareness of municipal issuers’ potential to come under financial stress (due to such high-profile cases as Detroit’s bankruptcy) and evidence that Assured Guaranty insured bonds held their market value better than comparable uninsured bonds in distressed situations.

In the international infrastructure finance market, the uninsured execution serving as the Company’s principal competition occurs primarily in privately funded transactions where no bonds are sold in the public markets. In the structured finance market, the uninsured execution occurs in both public and primary transactions primarily where bonds are sold with sufficient credit or structural enhancement embedded in transactions, such as through overcollateralization, first loss insurance, excess spread or other terms, to make the bonds attractive to investors without bond insurance.

Assured Guaranty is the only financial guaranty company active before the global financial crisis of 2008 that has maintained sufficient financial strength to write new business continuously since the crisis began. As a result of rating agency downgrades of the financial strength ratings of financial guaranty competitors active before the crisis, Assured Guaranty’s only significant financial guaranty competitor in 2015 was BAM, a mutual insurance company that commenced business in 2012.

Based on industry statistics, the Company estimates that, of the new U.S. public finance bonds sold with insurance in 2015, the Company insured approximately 60% of the par, while BAM insured approximately 38%. BAM is effective in competing with the Company for small to medium sized U.S. public finance transactions in certain sectors, and its pricing and underwriting strategies may have a negative impact on the amount of premium the Company is able to charge for its insurance for such transactions. However, the Company believes it has competitive advantages over BAM due to: AGM's and MAC's larger capital base; AGM's ability to insure larger transactions and issuances in more diverse U.S. bond sectors; and AGM's and MAC's strong financial strength ratings from multiple rating agencies (in the case of AGM, AA+ from KBRA, AA from S&P and A2 from Moody's, and in the case of MAC, AA+ from KBRA and AA from S&P, compared with BAM's AA solely from S&P). Additionally, as a public company with access to both the equity and debt capital markets, Assured Guaranty may have greater flexibility to raise capital, if needed.

Another potentially significant competitor to the Company on U.S. public finance transactions is National, which the Company estimates insured approximately 2% of the par of public finance bonds sold with insurance in 2015. In 2009, MBIA, one of the legacy insurers that is not writing new business, transferred its U.S. public finance exposures to its affiliate National. The transfer was challenged in litigation that was not settled until May 2013. Subsequently, S&P has raised National’s financial strength rating from BBB to AA-, noting that S&P no longer viewed MBIA’s rating as a limitation on National’s rating, and Moody’s has upgraded National's financial strength rating from Baa2 to A3.

In the global structured finance and infrastructure markets, Assured Guaranty is the only financial guaranty insurance company currently writing new guarantees. Management considers the Company’s greater diversification to be a competitive advantage in the long run because it means the Company is not wholly dependent on conditions in any one market.

In the future, additional new entrants into the financial guaranty industry could reduce the Company's new business prospects, including by furthering price competition or offering financial guaranty insurance on transactions with structural and security features that are more favorable to the issuers than those required by Assured Guaranty. However, the Company believes that the presence of multiple guarantors might also increase the overall visibility and acceptance of the product by a broadening group of investors, and the fact that investors are willing to commit fresh capital to the industry may promote market confidence in the product.

In addition to monoline insurance companies, Assured Guaranty competes with other forms of credit enhancement, such as letters of credit or credit derivatives provided by banks and other financial institutions, some of which are governmental enterprises, or direct guaranties of municipal, structured finance or other debt by federal or state governments or government sponsored or affiliated agencies. Alternative credit enhancement structures, and in particular federal government credit enhancement or other programs, can interfere with the Company's new business prospects, particularly if they provide direct governmental-level guaranties, restrict the use of third-party financial guaranties or reduce the amount of transactions that might qualify for financial guaranties.





  

Overall company Market Share Q2 2022

Overall company, revenue fell by -54.08 % and company lost market share, to approximate 0.22 %.




<<  More on AGO Market Share.
 
*Market share is calculated based on total revenue.


AGO's vs. Competition, Data

(Revenue and Income for Trailing 12 Months, in Millions of $, except Employees)


COMPANY NAME MARKET CAP
(in millions of $)
REVENUES
(in millions of $)
INCOME
(in millions of $)
EMPLOYEES
Assured Guaranty ltd. AGO 3,139.47 865.00 352.00 300
Aon Plc AON 61,035 12,448.00 1,544.00 50,000
Truist Financial Corporation TFC 59,861 22,495.00 6,254.00 59,000
Cullen CFR 8,794 1,425.67 427.21 4,211
Old National Bancorp ONB 4,924 1,018.68 215.33 2,652
Univest Financial Corporation UVSP 698 269.12 71.81 717
Summit Financial Group Inc. SMMF 350 130.86 48.53 231
Unum Group UNM 8,347 11,972.20 1,112.20 10,300
Primerica Inc. PRI 4,896 2,777.24 330.27 1,764
Brown and Brown Inc. BRO 17,663 3,253.17 613.57 7,807
Erie Indemnity Company ERIE 12,000 2,746.25 292.91 4,800
Travelers Companies inc. TRV 38,938 35,761.00 3,564.00 30,600
Arthur J. Gallagher and Co. AJG 37,732 17,049.10 1,083.70 32,401
American International Group Inc. AIG 41,422 57,171.00 13,891.00 46,000
SUBTOTAL 299,799.38 169,382.29 29,800.53 250,783
       
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