Assured Guaranty Ltd. · NYSE:AGO

Assured Guaranty — William Blair & Co. 2004 Growth Stock Conference

13 slides from Assured Guaranty's conference presentation, Jun 23, 2004

  1. Slide 1: William Blair & Co. 2004 Growth Stock Conference

    William Blair & Co. 2004 Growth Stock Conference Dominic Frederico, CEO June 23, 2004

  2. Slide 2: Safe Harbor Disclosure

    Safe Harbor Disclosure  Forward-looking statements are being made in this presentation. Actual results could differ materially from projected results  Some of the forward-looking statements may include references to our financial outlook, business strategy, growth prospects, ratings, market positi

  3. Slide 3: Business Overview

    Business Overview Last 12 Month PVP/GPW by Segment * ($ in millions)  Diversified business – $90B par in-force Financial Guaranty Financial – 60% muni; 40% structured Direct Guaranty – Average credit quality: A+ 28% Reinsurance 62% – 92% U.S.; 8% International  Excellent financial strength $81 $18

  4. Slide 4: Investment Highlights

    Investment Highlights  Attractive market dynamics and market share expansion opportunities  Triple-A strategy broadens market access and enhances return profile  Flexible operating structure with Bermuda advantage  Established franchise  Substantial in force business supports stable earnings 4

  5. Slide 5: Significant Growth Opportunity

    Significant Growth Opportunity  Attractive market fundamentals; $5B PVP market in 2003  Limited number of direct and reinsurance competitors  High barriers to entry - people, ratings and capital Net Industry Insured Par Outstanding ($ in billions) R = 13% CAG $1,649 $1,474 $1,299 $1,131 2000 2001

  6. Slide 6: Triple-A Business Strategy

    Triple-A Business Strategy  Absolute commitment to credit underwriting discipline  Strict focus on investment grade financial guaranty  Expand financial guaranty direct business  Continue to grow financial guaranty reinsurance  Develop position in international markets Achieve AAA/Aaa ratings 6

  7. Slide 7: Financial Guaranty Direct Business Highlights

    Financial Guaranty Direct Business Highlights Financial Guaranty Direct Net Par Outstanding ($ in billions)  Sizable, high quality in-force portfolio – $24B in FG par insured = 28% – $2B mortgage risk in force GR CA – 99% investment grade  4 areas of focus – Structured finance – Municipal finance

  8. Slide 8: Financial Guaranty Direct – Recent Successes

    Financial Guaranty Direct – Recent Successes Structured  Pipeline building; market dynamics improved since early 2004 Finance  Expanding asset class expertise  Secondary wraps written include State of California GO and Municipal NY State Housing Finance Agency Finance  California license expecte

  9. Slide 9: Finance Guaranty Reinsurance Highlights

    Finance Guaranty Reinsurance Highlights Financial Guaranty Reinsurance PVP ($ in millions)  Leading market position = 22% – 16-year track record AGR C – 22% market share in 2003, versus 16% in 2002  Significant in-force portfolio – $66B net in-force portfolio – Diversified by bond type and $145.0

  10. Slide 10: Financial Guaranty Reinsurance Strategy

    Financial Guaranty Reinsurance Strategy  Maintain market leadership as largest monoline financial guaranty reinsurer  Maintain credit discipline – Customers limited to AAA/Aaa primary monolines – Focus on investment grade business  Manage capital consistent with triple-A strategy  Enhance return

  11. Slide 11: Adjusted Income Statement – 3/31/04

    Adjusted Income Statement – 3/31/04 IPO As Adjusted As Reported Adjustments for IPO ($ in millions) * Net earned premiums $87 ($41) $46 Net investment income 24 0 24 Losses 24 (20) 4 Expenses incl. interest 34 0 34 After-tax operating income 44 (11) 33 Operating EPS $0.58 $0.15 $0.43 Combined ratio

  12. Slide 12: 3/31/04 Adjusted Balance Sheet

    3/31/04 Adjusted Balance Sheet IPO As As Reported Adjustments Adjusted ($ in millions) * for IPO Investments and cash $2,257 ($195) $2,062 Loss reserves 431 (217) 214 Unearned premium reserve 538 (21) 517 Debt 75 125 200 Shareholder’s equity 1,510 (125) 1,385 Adjusted book value ** 1,978 (125) 1,853

  13. Slide 13: Conclusion

    Conclusion  Dedicated to financial guaranty market – Exited business inconsistent with this strategy  Established 16-year track record  Substantial $2.8 billion claims paying resources and $90 billion in-force par – Fifth largest capital base in monoline industry  AAA/Aaa underwriting standard a

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