Results Of Operations For The Three Months Ended June 30, 2022 - American Overseas Group Limited Announces Net Loss Of $0.3 Million And Operating Loss...

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HAMILTON, Bermuda, Sept. 30, 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 $0.3 million, or $6.28 per diluted share, for the three months ended June 30, 2022. This compares to consolidated net loss available to common shareholders of $3.0 million, or $63.75 per diluted share, for the three months ended June 30, 2021. Book value per weighted share at June 30, 2022 was $775.49, a decline from the book value per weighted share of $1,003.21 at June 30, 2021.

For the three months ended June 30, 2022, the Company had an operating loss of $0.5 million, or $11.58 per diluted share, compared to operating loss of $2.4 million, or $51.26 per diluted share for the three months ended June 30, 2021.

For the three months ended June 30, 2022, net earned property and casualty premiums decreased $0.4 million from $5.5 million a year ago to $5.1 million. Fee income remained constant at $2.7 million while gross written premiums increased $1.9 million, moving from $114.7 million to $116.6 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 increased from 66.1% to 71.4% as loss costs continued to increase in 2022 due to both frequency and severity.

For the three months ended June 30, 2022, operating expenses decreased $2.1 million from $4.9 million to $2.8 million due to a one-time recognition in the amount of $1.2 million in the second quarter of 2021 of items previously held as a receivable against a personal guarantee contract and $0.9 million expense in 2021 year taxes, licenses and fees associated with program business written in Louisiana that was 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 .

American Overseas Group Limited

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


							June 30, 2022		December 31, 2021
Assets

		Investments:
			Fixed-maturity securities held as available for sale, at fair value		$	109,497			$	102,678
			Equity investments held as available for sale, at fair value			2,619				3,781
		Cash and cash equivalents			25,146				31,908
		Restricted cash			2,232				4,440
		Accrued investment income			417				553
		Premiums receivable			89,048				76,626
		Deferred insurance premiums			124,521				108,904
		Reinsurance balances receivable, net			228,444				223,982
		Deferred policy acquisition costs			4,424				4,588
		Intangible assets			4,800				4,800
		Goodwill			33,050				33,050
		Other assets			4,491				3,166
			Total Assets		$	628,690			$	598,476


Liabilities and Equity

	Liabilities:
		Loss and loss expense reserve		$	220,290			$	215,642
		Deferred commission income			3,037				3,210
		Unearned premiums			129,428				113,423
		Ceded premium payable			94,424				82,059
		Payable to general agents			5,783				7,121
		Funds withheld			107,708				104,257
		Accounts payable and accrued liabilities			14,319				12,420
		Notes payable			16,521				16,521
		Non-owned interest in VIE			300				300
		Interest payable			451				451
			Total Liabilities			592,259				555,404

	Shareholders' Equity:
		Common shares			4,698				4,698
		Additional paid-in capital			189,179				189,179
		Accumulated other comprehensive (loss) income			(5,328	)			1,124
		Retained deficit			(157,570	)			(157,982	)
			Total Shareholders' Equity			30,979				37,019
		Non-controlling interest of preferred shares of subsidiaries			5,453				6,053
		Total Equity			36,431				43,072


			Total Liabilities and Equity		$	628,690			$	598,476

		See Notes to June 30, 2022 Consolidated Financial Statements available on American Overseas Group Ltd. Website at

American Overseas Group Limited
	Consolidated Statements of Operations
	(unaudited)
	(dollars in thousands, except share and per share amounts)


									Three months ended June 30,		Six Months ended June 30,
										2022				2021				2022			2021
		Revenues

			Net premiums earned			$	5,093			$	5,552			$	10,181		$	10,537
			Fee income				2,709				2,736				6,004			6,022

			Net investment (expense) income				101				65				32			162
			Net realized (losses) gains on investments				248				(2	)			237			36
			Other income				55				44				896			77


				Total revenues				8,206				8,395				17,349			16,834

		Expenses
			Losses and loss adjustment expenses				3,639				3,667				6,904			6,391
			Acquisition expenses				1,653				1,799				3,351			3,575
			Operating expenses				2,758				4,888				5,779			7,373
			Other expense				-						-			-
			Interest expense				451				451				902			902

				Total expenses				8,501				10,805				16,936			18,241


	Net income available to common shareholders			$	(295	)		$	(2,410	)		$	413		$	(1,407	)
			Income tax (expense)				-						-			(26	)

	Net income before dividends				(295	)			(2,410	)			413			(1,433	)
			Dividends on preference shares of subsidiary				-				(585	)			-			(585	)


	Net income available to common shareholders			$	(295	)		$	(2,995	)		$	413		$	(2,018	)


		Net income per common share:
		Basic					$	(6.28	)		$	(63.75	)		$	8.79		$	(42.96	)
		Diluted						(6.28	)			(63.75	)			8.79			(42.96	)

		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 June 30, 2022 Consolidated Financial Statements available on American Overseas Group Ltd. Website at

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


(dollars in thousands)	Three months ended June 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	$	5,093				5,093
Losses and loss adjustment expenses		(3,639	)			(3,639	)
Acquisition expenses		(1,653	)			(1,653	)
Property/Casualty Underwriting Income		(199	)			(199	)

Fee income		2,709				2,709
Other income, net of other expense		-				-
Operating expenses		(2,503	)			(2,503	)
Income tax		-				-
Property and casualty		7			-			7

Corporate and Investing

Net investment income		101				101
Net realized gain/(loss)		248			(248	)		-
Operating expenses		(255	)			(255	)
Interest expense		(451	)			(451	)
Other income, net of other expense		54				54
Corporate and investing		(303	)		(248	)		(551	)

Group total	$	(296	)	$	(248	)		(544	)

AMERICAN OVERSEAS GROUP LTD.

NET INCOME AND OPERATING INCOME BY SEGMENT


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

Net premiums earned	$	5,552			$	5,552
Losses and loss adjustment expenses		(3,667	)			(3,667	)
Acquisition expenses		(1,799	)			(1,799	)
Property/Casualty Underwriting Income		86				86

Fee income		2,736				2,736
Operating expenses		(4,468	)			(4,468	)
Income tax		-				-
Property and casualty		(1,646	)		-			(1,646	)

Corporate and Investing

Net investment income		65				65
Net realized gain/(loss)		(2	)		2			-
Operating expenses		(420	)			(420	)
Interest expense		(451	)			(451	)
Other income, net of other expense		44				44
Corporate and investing		(764	)		2			(762	)

Group total	$	(2,410	)	$	2		$	(2,408	)

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


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

Net premiums earned	$	10,181			$	10,181
Losses and loss adjustment expenses		(6,904	)			(6,904	)
Acquisition expenses		(3,351	)			(3,351	)
Property/Casualty Underwriting Income		(74	)			(74	)

Fee income		6,004				6,004
Other income, net of other expense		804				804
Operating expenses		(5,232	)			(5,232	)
Income tax		-				-
Property and casualty		1,502			-			1,502

Corporate and Investing

Net investment income		32				32
Net realized gain/(loss)		237			(237	)		-
Operating expenses		(547	)			(547	)
Interest expense		(902	)			(902	)
Other income, net of other expense		91				91
Corporate and investing		(1,089	)		(237	)		(1,326	)

Group total	$	413		$	(237	)	$	176

AMERICAN OVERSEAS GROUP LTD.

NET INCOME AND OPERATING INCOME BY SEGMENT


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

Net premiums earned	$	10,537			$	10,537
Losses and loss adjustment expenses		(6,391	)			(6,391	)
Acquisition expenses		(3,575	)			(3,575	)
Property/Casualty Underwriting Income		571				571

Fee income		6,022				6,022
Operating expenses		(6,745	)			(6,745	)
Income tax		(26	)			(26	)
Property and casualty		(178	)		-			(178	)

Corporate and Investing

Net investment income		162				162
Net realized gain/(loss)		36			(36	)		-
Operating expenses		(628	)			(628	)
Interest expense		(902	)			(902	)
Other income, net of other expense		77				77
Corporate and investing		(1,255	)		(36	)		(1,291	)

Group total	$	(1,433	)	$	(36	)	$	(1,469	)

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