Results of Operations for the Three Months Ended September 30, 2022 - American Overseas Group Limited Announces Net Loss Of $0.4 Million and Operating Loss of $0.4 Million For the Three Months Ended September 30, 2022 - Insurance News

HAMILTON, Bermuda, Dec. 29, 2022 (GLOBE NEWSWIRE) -- American Overseas Group Limited (BSX: AORE.BH) (Pink Sheets: AOREF.PK) (“AOG” or the “Company”) today reported consolidated net loss available to common shareholders of $0.4 million, or $9.40 per diluted share, for the three months ended September 30, 2022. This compares to consolidated net loss available to common shareholders of $1.8 million, or $37.38 per diluted share, for the three months ended September 30, 2021. Book value per weighted share at September 30, 2022 was $780.66, a decline from the book value per weighted share of $959.06 at September 30, 2021.

For the three months ended September 30, 2022, the Company had an operating loss of $0.4 million, or $9.40 per diluted share, compared to operating loss of $1.8 million, or $37.68 per diluted share for the three months ended September 30, 2021.

For the three months ended September 30, 2022, net earned property and casualty premiums decreased $0.5 million from $5.4 million a year ago to $4.9 million. Fee income increased $0.1 million from $2.6 million to $2.7 million with gross written premiums increasing $9.8 million, moving from $100.4 million to $110.2 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 decreased slightly from 71.2% to 70.4%.

For the three months ended September 30, 2022, operating expenses decreased $0.9 million from $3.7 million to $2.8 million due largely to $0.6 million of expenses incurred in 2021 associated with taxes, licenses and fees related to business written in the prior year.

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

[email protected]

American Overseas Group Limited
Consolidated Balance Sheets
(unaudited)
As at September 30, 2022 and December 31, 2021
(dollars in thousands)


	September 30, 2022			December 31, 2021
Assets

Investments:
Fixed-maturity securities held as available for sale, at fair value	$	104,670		$	102,678
Equity investments held as available for sale, at fair value		2,470			3,781
Cash and cash equivalents		22,653			31,908
Restricted cash		2,666			4,440
Accrued investment income		587			553
Premiums receivable		90,016			76,626
Deferred insurance premiums		126,176			108,904
Reinsurance balances receivable, net		219,843			223,982
Deferred policy acquisition costs		4,264			4,588
Intangible assets		4,800			4,800
Goodwill		33,050			33,050
Other assets		5,223			3,166
Total Assets	$	616,418		$	598,476


Liabilities and Equity

Liabilities:
Loss and loss expense reserve	$	218,103		$	215,642
Deferred commission income		2,917			3,210
Unearned premiums		131,238			113,423
Ceded premium payable		89,204			82,059
Payable to general agents		7,095			7,121
Funds withheld		100,894			104,257
Accounts payable and accrued liabilities		13,020			12,420
Notes payable		16,521			16,521
Non-owned interest in VIE		300			300
Interest payable		451			451
Total Liabilities		579,743			555,404

Shareholders' Equity:
Common shares		4,698			4,698
Additional paid-in capital		189,179			189,179
Accumulated other comprehensive (loss) income		(4,642	)		1,124
Retained deficit		(158,013	)		(157,982	)
Total Shareholders' Equity		31,222			37,019
Non-controlling interest of preferred shares of subsidiaries		5,453			6,053
Total Equity		36,675			43,072


Total Liabilities and Equity	$	616,418		$	598,476


See Notes to September 30, 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 September 30,						Nine Months ended September 30,
	2022			2021			2022			2021
Revenues

Net premiums earned	$	4,844		$	5,397		$	15,025		$	15,935
Fee income		2,683			2,644			8,687			8,667

Net investment income		109			46			141			208
Net realized gains on investments		-			14			237			50
Other income		21			28			916			105


Total revenues		7,657			8,130			25,006			24,965

Expenses
Losses and loss adjustment expenses		3,410			3,841			10,315			10,232
Acquisition expenses		1,418			1,931			4,770			5,506
Operating expenses		2,821			3,663			8,600			11,038
Other expense		-			-			-			-
Interest expense		451			451			1,352			1,352

Total expenses		8,100			9,886			25,037			28,128


Net (loss) available to common shareholders	$	(443	)	$	(1,756	)	$	(31	)	$	(3,163	)
Income tax (expense)		-			-			-			(26	)

Net (loss) before dividends		(443	)		(1,756	)		(31	)		(3,189	)
Dividends on preference shares of subsidiary		-			-			-			(585	)


Net (loss) available to common shareholders	$	(443	)	$	(1,756	)	$	(31	)	$	(3,774	)


Net (loss) per common share:
Basic	$	(9.42	)	$	(37.38	)	$	(0.65	)	$	(80.34	)
Diluted		(9.42	)		(37.38	)		(0.65	)		(80.34	)

Weighted-average number of common shares outstanding:
Basic		46,979			46,979			46,979			46,979
Diluted		46,979			46,979			46,979			46,979

See Notes to September 30, 2022 Consolidated Financial Statements available on American Overseas Group Ltd. Website at www.aoreltd.com

AMERICAN OVERSEAS GROUP LTD.
NET INCOME AND OPERATING INCOME BY SEGMENT


(dollars in thousands)	Three months ended September 30, 2022
	Net Income Available to Common Shareholders			Net Realized (Gain)/Loss on Sales of Investments		Operating Income (Loss)
Property and casualty:

Net premiums earned	$	4,844					4,844
Losses and loss adjustment expenses		(3,410	)				(3,410	)
Acquisition expenses		(1,418	)				(1,418	)
Property/Casualty Underwriting Income		16					16

Fee income		2,683					2,683
Other income, net of other expense		-					-
Operating expenses		(2,626	)				(2,626	)
Income tax		-					-
Property and casualty		73			-		73

Corporate and Investing

Net investment income		109					109
Net realized gain/(loss)		-			-		-
Operating expenses		(195	)				(195	)
Interest expense		(451	)				(451	)
Other income, net of other expense		22					22
Corporate and investing		(515	)		-		(515	)

Group total	$	(442	)	$	-		(442	)

AMERICAN OVERSEAS GROUP LTD.
NET INCOME AND OPERATING INCOME BY SEGMENT


(dollars in thousands)	Three months ended September 30, 2021
	Net Income Available to Common Shareholders			Net Realized (Gain)/Loss on Sales of Investments			Operating (Loss)
Property and casualty:

Net premiums earned	$	5,397					$	5,397
Losses and loss adjustment expenses		(3,841	)					(3,841	)
Acquisition expenses		(1,931	)					(1,931	)
Property/Casualty Underwriting Income		(375	)					(375	)

Fee income		2,644						2,644
Operating expenses		(3,307	)					(3,307	)
Income tax		-						-
Property and casualty		(1,038	)		-			(1,038	)

Corporate and Investing

Net investment income		46						46
Net realized gain/(loss)		14			(14	)		-
Operating expenses		(356	)					(356	)
Interest expense		(451	)					(451	)
Other income, net of other expense		29						29
Corporate and investing		(718	)		(14	)		(732	)

Group total	$	(1,756	)	$	(14	)	$	(1,770	)

AMERICAN OVERSEAS GROUP LTD.
NET INCOME AND OPERATING INCOME BY SEGMENT


(dollars in thousands)	Nine months ended September 30, 2022
	Net Income Available to Common Shareholders			Net Realized (Gain)/Loss on Sales of Investments			Operating (Loss)Income
Property and casualty:

Net premiums earned	$	15,025					$	15,025
Losses and loss adjustment expenses		(10,315	)					(10,315	)
Acquisition expenses		(4,770	)					(4,770	)
Property/Casualty Underwriting Income		(60	)					(60	)

Fee income		8,687						8,687
Other income, net of other expense		804						804
Operating expenses		(7,857	)					(7,857	)
Income tax		-						-
Property and casualty		1,574			-			1,574

Corporate and Investing

Net investment income		141						141
Net realized gain/(loss)		237			(237	)		-
Operating expenses		(743	)					(743	)
Interest expense		(1,352	)					(1,352	)
Other income, net of other expense		112						112
Corporate and investing		(1,605	)		(237	)		(1,842	)

Group total	$	(31	)	$	(237	)	$	(268	)

AMERICAN OVERSEAS GROUP LTD.
NET INCOME AND OPERATING INCOME BY SEGMENT


(dollars in thousands)	Nine months ended September 30, 2021
	Net Income Available to Common Shareholders			Net Realized (Gain)/Loss on Sales of Investments			Operating (Loss)Income
Property and casualty:

Net premiums earned	$	15,935					$	15,935
Losses and loss adjustment expenses		(10,232	)					(10,232	)
Acquisition expenses		(5,506	)					(5,506	)
Property/Casualty Underwriting Income		197						197

Fee income		8,667						8,667
Operating expenses		(10,052	)					(10,052	)
Income tax		(26	)					(26	)
Property and casualty		(1,214	)		-			(1,214	)

Corporate and Investing

Net investment income		208						208
Net realized gain/(loss)		50			(50	)		-
Operating expenses		(986	)					(986	)
Interest expense		(1,352	)					(1,352	)
Other income, net of other expense		105						105
Corporate and investing		(1,975	)		(50	)		(2,025	)

Group total	$	(3,189	)	$	(50	)	$	(3,239	)