Ambac Reports $963 Q4 Net Loss

NU Online News Service, March 23, 12:45 p.m. EDT

Ambac Financial Group Inc. reports a 2011 fourth-quarter net loss of more than $963 million as a combination of financial factors negatively impacted the company’s earnings.

The New York-based bond insurer says its fourth-quarter net loss grew by $882 million compared to the 2010 fourth quarter because of “higher net loss and loss expenses, derivative-product losses and higher losses on variable-interest entities.”

The fourth-quarter results translate into net loss per share of $3.18 compared to net loss per share of 27 cents for 2010.

Fourth-quarter revenues came in at a loss of $81 million compared to positive-$191 million for the 2010.

For the year, Ambac reports a net loss of $1.96 billion compared to 2010 net loss of more than $753 million.

Revenues on the year were down from $434 million in 2010 to $296 million.

The company entered into bankruptcy reorganization in 2010 after suffering losses on its book of structured financial products, specifically residential mortgage back securities, during the economic crisis of 2008.

The company’s financial guaranty insurer, Ambac Assurance established a segregated account for those liabilities in 2010 and has been under rehabilitation under the supervision of the Office of the Commissioner of Insurance for the State of Wisconsin since.

Just last week, a federal bankruptcy judge granted Ambac the go ahead with its reorganization plan.

The company says in today’s statement that it “is not currently able to estimate when it will be able to consummate such reorganization” and will continue to operate under the bankruptcy laws until its reorganization is complete.

Ambac says unpaid claims submitted to Ambac Assurance during the fourth quarter amounted to $317 million. Since the account was established in 2010, total claims stand at $2.77 billion and remain unpaid while it is bankruptcy.

The company says its loss reserves for RMBS as of the end of 2011 stand at more than $4.45 billion, including the unpaid claims.

Comments

Resource Center

View All »

Complimentary White Paper: The Compression of Workplace Time

How brokers and carriers respond to the compression of workplace time will create significant competitive...

The Changing Insurance Consumer: 6 Ways to Create Profitable Relationships

Today’s mobile and web-savvy consumers have new expectations when it comes to interacting with your...

Contractors General Liability Coverage 102

What is a prior work exclusion? Which option is right for my client? Why do...

Sign up today to get a 50% matching credit -...

Insurance marketing sometimes seems like it's a game of swings and misses, but we're here...

Guide: 5 Steps to Selling Cyber

Cyber risk and data security is on the agenda of every business owner and executive....

Citation Correlation

Do rigger and signalperson qualifications correlate with the cause of crane and rigging accidents? ...

Complete Guide to Electronic Signatures in Property & Casualty Insurance...

In property and casualty insurance, closing new business quickly is key. Learn how to leverage...

INSTANT ACCESS: Complimentary Sales Closer Questionnaires

Help property owners or managers compare your commercial residential property insurance coverage vs. the competition....

Determining Vacant Property Perils and Valuations

Are your clients fully covered for Vacant Properties? In this economic climate, your insureds may...

Risk Management for Law Firms

This package of 3 concise risk management articles offers straightforward content and practical suggestions law...

Risk Management Report eNewsletter

Identify problems involving emerging risks, reinsurance, and business interruption with help from Risk Management Report - FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.