Build America Mutual announced record results for growth in claims paying resources, statutory comprehensive income,1 pricing, and total premiums in the first quarter of 2017. The results were driven by high investor demand for BAM’s insured municipal bonds, which offset a broad decline in new- issue municipal bond volume. Par outstanding rose 7% to $35.2 billion.
Key financial metrics for the quarter include:
- Total claims paying resources rose by $18.5 million, 225% faster than the $5.7 million increase recorded during the same period of 2016. This was BAM’s 10th consecutive quarter of growth in claims paying resources.
- Statutory Comprehensive Income rose to $3.9 million in the quarter, versus a loss of ($1.5 million) in the same period of 2016. BAM’s statutory net loss was $5.6 million, a 32% decline from $8.2 million in the first quarter of 2016, and was offset by $9.5 million in member surplus contributions.
- BAM insured $338 million in secondary market transactions during the period, a 313% increase in the secondary activity versus the same period of 2016.
- BAM recorded no loss reserves during the period, and has never realized a loss in its insured portfolio in its history.
“BAM had an excellent quarter. While rising interest rates reduced refunding activity, market volatility drove rising demand for our guaranty,” said BAM Chairman Bob Cochran. “Demand was broad based: In the primary market, retail investor demand prompted underwriters to use BAM insurance on portions of larger transactions that would otherwise have sold without a guaranty. In the secondary market, institutional investor uncertainty about liquidity for unenhanced bonds helped drive our extremely strong results.”
BAM’s total claims paying resources rose to $662 million at the end of the quarter. Since inception, BAM has insured more than $38 billion of municipal bonds, with $35.2 billion gross par outstanding at the end of the first quarter.
BUILD AMERICA MUTUAL ASSURANCE COMPANY
200 Liberty Street, 27th Floor | New York, New York 10281 | t: 212.235.2575
“BAM has built a distinctive franchise in the financial guaranty industry, with an unmatched commitment to the core US municipal market,” said Manning Rountree, Chief Executive Officer of White Mountains Insurance Group, which provided BAM’s formation capital. “We believe BAM’s long-term future is bright, and we approach our investments in BAM with patience and perspective.”
Build America Mutual’s Statutory Financial Statements and Operating Supplements are available in the Financial Information section of BAM’s web site at: http://buildamerica.com/financialinformation. The financial statements have also been filed with the National Association of Insurance Commissioners and the 50 state insurance regulators that license BAM.
For more information, contact Michael Stanton, Head of Corporate Strategy and Communications, at email@example.com or 212-235-2575, or Richard Holzinger, Head of Investor Relations, at firstname.lastname@example.org or 212-235-2518.
1. Statutory Comprehensive Income is defined as statutory net income plus member surplus contributions collected.