Slides
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Investor Presentation Second Quarter 2025 Quarterly Highlights
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2 Forward Looking Statement In this presentation, we have included statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “estimate,” “project,” “plan,” “believe,” “anticipate,” “intend,” “planned,” “potential” and similar expressions, or future or conditional verbs such as “will,” “should,” “would,” “could,” and “may,” or the negative of those expressions or verbs, identify forward-looking statements. We caution readers that these statements are not guarantees of future performance. Forward-looking statements are not historical facts, but instead represent only our beliefs regarding future events, which may by their nature be inherently uncertain and some of which may be outside our control. These statements may relate to plans and objectives with respect to the future, among other things which may change. We are alerting you to the possibility that our actual results may differ, possibly materially, from the expected objectives or anticipated results that may be suggested, expressed or implied by these forward-looking statements. Important factors that could cause our results to differ, possibly materially, from those indicated in the forward-looking statements include, among others, those discussed under “Risk Factors” in our most recent SEC filed quarterly or annual report. Any or all of management’s forward-looking statements here or in other publications may turn out to be incorrect and are based on management’s current belief or opinions. Ambac Financial Group’s (“AFG”) and its subsidiaries’ (collectively, “Ambac” or the “Company”) actual results may vary materially, and there are no guarantees about the performance of Ambac’s securities. Among events, risks, uncertainties or factors that could cause actual results to differ materially are: (1) the high degree of volatility in the price of AFG’s common stock; (2) failure to consummate the proposed sale of all of the common stock of Ambac Assurance Corporation (“AAC”) and the transactions contemplated by the related stock purchase agreement (the “Sale Transactions”) in a timely manner or at all; (3) disruptions from the proposed Sale Transactions, including from litigation, that may harm Ambac’s business, including current plans and operations; (4) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed Sale Transactions; (5) uncertainty concerning the Company’s ability to achieve value for holders of its securities from the specialty property and casualty insurance business, the insurance distribution business, or related businesses; (6) inadequacy of reserves established for losses and loss expenses and the possibility that changes in loss reserves may result in further volatility of earnings or financial results; (7) risks historically reported by the Company with respect to the legacy financial guarantee business, which may continue to affect the Company if the Sale Transactions are not consummated; (8) credit risk throughout Ambac’s business, including but not limited to exposures to reinsurers and insurance distribution partners; (9) the Company’s inability to generate the significant amount of cash needed to service its debt and financial obligations, and its inability to refinance its indebtedness; (10) the Company’s substantial indebtedness could adversely affect the Company’s financial condition and operating flexibility; (11) the Company may not be able to obtain financing, refinance its outstanding indebtedness, or raise capital on acceptable terms or at all due to its substantial indebtedness and financial condition; (12) greater than expected underwriting losses in the Company’s specialty property and casualty insurance business; (13) failure of specialty insurance program partners to properly market, underwrite or administer policies; (14) inability to obtain reinsurance coverage or charge rates for insurance on expected terms; (15) loss of key relationships for production of business in specialty property and casualty and insurance distribution businesses or the inability to secure such additional relationships to produce expected results; (16) the impact of catastrophic public health, environmental or natural events, or global or regional conflicts; (17) the risk that the Company’s risk management policies and practices do not anticipate certain risks and/or the magnitude of potential for loss; (18) restrictive covenants in agreements and instruments that impair Ambac’s ability to pursue or achieve its business strategies; (19) disagreements or disputes with the Company’s insurance regulators; (20) failure of a financial institution in which we maintain cash and investment accounts; (21) adverse impacts from changes in prevailing interest rates; (22) events or circumstances that result in the impairment of our intangible assets and/or goodwill that was recorded in connection with Ambac’s acquisitions; (23) the risk of litigation, regulatory inquiries, investigations, claims or proceedings, and the risk of adverse outcomes in connection therewith; (24) the Company’s ability to adapt to the rapid pace of regulatory change; (25) actions of stakeholders whose interests are not aligned with broader interests of Ambac's stockholders; (26) system security risks, data protection breaches and cyber attacks; (27) failures in services or products provided by third parties; (28) political developments that disrupt the economies where the Company has insured exposures or the markets in which our insurance programs operate; (29) our inability to attract and retain qualified executives, senior managers and other employees, or the loss of such personnel; (30) fluctuations in foreign currency exchange rates; (31) failure to realize our business expansion plans, including failure to effectively onboard new program partners, or failure of such plans to create value; (32) greater competition for our specialty property and casualty insurance business and/or our insurance distribution business; (33) loss or lowering of the AM Best rating for our property and casualty insurance company subsidiaries; (34) disintermediation within the insurance industry or greater competition from technology-based insurance solutions or non-traditional insurance markets; (35) adverse effects of market cycles in the property and casualty insurance industry; (36) variations in commission income resulting from timing of policy renewals and the net effect of new and lost business production; (37) variations in contingent commissions resulting from the effects insurance losses; (38) reliance on a limited number of counterparties to produce revenue in our specialty property and casualty insurance and insurance distribution businesses; (39) changes in law or in the functioning of the healthcare market that impair the business model of our accident and health managing general underwriter; (40) difficulties in identifying appropriate acquisition or investment targets, properly evaluating the business and prospects of acquired businesses, businesses in which we invest, or targets, integrating acquired businesses into our business or failures to realize expected synergies from acquisitions or new business investments; (41) failure to realize expected benefits from investments in technology; (42) harmful acts and omissions of our business counterparts; and (43) other risks and uncertainties that have not been identified at this time.
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3 Second Quarter Key Operating Highlights • P&C premium production up 110% to ~$346 million • P&C revenue up 21% to ~$54 million and Total revenue up 8% to ~$55 million • Beat Capital had organic growth of ~26% and Cirrata Proforma Organic Growth Inclusive of Beat ~12% • Wisconsin OCI has recommended for the approval of Legacy sale and set September 3rd Form A hearing date
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4 $53 $145 $205 $231 $250 A&H Specialty Auto Other professional Niche Specialty Risks Property Marine & Energy Professional D&O Reinsurance Misc. Specialty 2Q2024 3Q2024 4Q2024 1Q2025 2Q2025 $0 $100 $200 $300 Net Income EBITDA 2Q2024 3Q224 4Q2024 1Q2025 2Q 2025 -$10 $0 $10 $20 Cirrata: Insurance Distribution Premium Placed by Line ($ in millions)Net Income (loss) & EBITDA1,3 ($ in millions) 1. EBITDA Margin calculated as EBITDA/Total (Segment) Revenue 2. EBITDA is prior to the impact of noncontrolling interests, relating to subsidiaries where Ambac does not own 100%, of and for the six months ended June 30, 2025 and 2024, respectively. 3. Refer to slides 13 for a reconciliation of Non-GAAP financial measures • Premium placed increased 368% to $250 million • Total revenue up 148% to $33 million over prior year • Organic growth of (3)% • Net loss of $(8) million with a margin of (24)% • Adjusted EBITDA of $5 million2,3 with a margin1 of 14% • Adjusted EBITDA to shareholders of $3 million2,3 with a margin1 of 8%
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5 2Q2025 2Q2024 (GPW in millions) (Program #) 23 24 27 26 24 Gross Written Premiums Number of Programs 2Q2024 3Q2024 4Q2024 1Q2025 2Q2025 0 50 100 150 200 20 25 33% 6% 33% 7% 0% 5% 10% 7% Commercial auto liability General liability Excess liability Workers Compensation Non-standard auto Surety Professional Lines Other 23% 1% 21% 20% 8% 11% 6% 10% 1% Commercial auto liability Commercial auto physical damage General liability Excess liability Workers Compensation Non-standard auto Surety Professional Lines Other Everspan: Specialty P&C Program Insurer Gross Premium Written (GPW) and Number of Programs GPW by Line of Business 1. Ambac Stockholders’ Equity as shown on slide 20 • GPW $96 million down (13)% vs. 2Q2024 • 61% of 2Q25 GPW is E&S lines • Loss ratio of 67.8% compared to 85.1% for 2Q2024 • Combined ratio of 106.7% vs. 109.4% for 2Q2024
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6 Diversification & Scale Improve Underwriting 1. Expense ratio includes program fee revenue as a reduction to net acquisition costs 2. Total Net Loss Ratio is total net losses incurred (case + IBNR + ULAE) divided by net premiums earned 3. Combined Ratio is sum of expense ratio and total net loss ratio
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7 Ambac’s Operating Segment Highlights 1. See slide 12 for EBITDA reconciliation to Net income (loss) and see slide 15 for Adjusted EBITDA reconciliation 2. Represents the consolidated share of Ambac stockholders equity for each Segment and includes intercompany eliminations Three Months Ended June 30, 2025 Three Months Ended June 30, 2024 Specialty Property & Casualty Insurance Insurance Distribution Corporate & Other Consolidated Specialty Property & Casualty Insurance Insurance Distribution Corporate & Other Consolidated Gross premiums written $ 96.2 $ 96.2 $ 111.2 $ 111.2 Net premiums written 15.2 15.2 32.3 32.3 Total revenues 21.4 $ 33.0 $ 0.5 55.0 31.8 $ 13.3 $ 5.9 51.0 Total expenses 20.8 43.2 13.9 77.9 32.9 12.0 20.8 65.8 Pretax income (loss) 0.6 (10.2) (13.4) (23.0) (1.1) 1.3 (14.9) (14.7) Net income (loss) to Ambac common stockholders (1) 0.4 (7.7) (13.2) (20.5) (1.1) 1.0 (14.9) (14.9) EBITDA(1) 0.6 4.7 (13.0) (7.7) (1.1) 2.4 (14.4) (13.1) Adjusted EBITDA to Ambac common stockholders (1) 0.7 2.5 (7.8) (4.6) (1.0) 2.0 (1.6) (0.6)
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8 2028 Adjusted EBITDA to Ambac Target1 1. See slide 12 for EBITDA reconciliation to Net income (loss) and see slide 15 for Adjusted EBITDA reconciliation 2. Organic growth includes acquisition synergies and net de novo launch costs 3. Represents management forecasts, which are subject to market conditions, risk factors described in Ambac’s Annual and Quarters Reports on Form 10K & 10Q files with the SEC, and subsequent SEC filings, and changes in the view of management . Actual results may differ materially. 2
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Non-GAAP Reconciliations
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10 Non-GAAP Financial Data In addition to reporting the Company’s quarterly financial results in accordance with GAAP, the Company is reporting non-GAAP financial measures: Organic Revenue Growth Rated (Insurance Distribution segment only), EBITDA, Adjusted Net Income and Adjusted Net Income Margin, Adjusted EBITDA and Adjusted EBITDA Margin. These amounts are derived from our consolidated financial information, but are not presented in our consolidated financial statements prepared in accordance with GAAP. We present non-GAAP supplemental financial information because we believe such information is of interest to the investment community, and that it provides greater transparency and enhanced visibility into the underlying drivers and performance of our businesses on a basis that may not be otherwise apparent on a GAAP basis. We view these non-GAAP financial measures as important indicators when assessing and evaluating our performance on a segmented and consolidated basis and they are presented to improve the comparability of our results between periods by eliminating the impact of the items that may not be representative of our core operating performance. These non-GAAP financial measures are not substitutes for the Company’s GAAP reporting, should not be viewed in isolation and may differ from similar reporting provided by other companies, which may define non-GAAP measures differently. Ambac Non-GAAP Financial Data
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11 Three Months Ended June 30, 2025 Three Months Ended June 30, 2024 Specialty Property & Casualty Insurance Insurance Distribution Corporate & Other Consolidated Specialty Property & Casualty Insurance Insurance Distribution Corporate & Other Consolidated Net income (loss) (Continuing Operations) $ 0.4 $ (8.0) $ (13.2) $ (20.8) $ (1.1) $ 1.2 $ (14.9) $ (14.7) Adjustments: Add: Acquisition and integration related expenses — 0.4 0.4 0.8 — — 10.4 10.4 Add: Intangible amortization — 9.3 — 9.3 — 1.1 — 1.1 Add: Equity-based compensation expense 0.1 0.1 1.9 2.0 0.1 — 1.7 1.8 Add: Severance and restructuring expense — — 2.9 2.9 — — 5.2 5.2 Add: Other non-operating (income) losses — (0.6) — (0.6) — — (4.5) (4.5) Adjusted net income (loss) before tax and NCI 0.5 1.2 (8.0) (6.3) (1.0) 2.4 (2.0) (0.6) Income tax effects — (1.9) — (1.9) — — — — Adjusted net income (loss) before NCI 0.5 (0.7) (8.0) (8.2) (1.0) 2.4 (2.0) (0.6) Net (income) loss attributable to noncontrolling interest — (2.3) — (2.3) — (0.4) — (0.4) Adjusted net income (loss) attributable to shareholders $ 0.5 $ (3.0) $ (8.0) $ (10.6) $ (1.0) $ 2.0 $ (2.0) $ (1.1) Net income (loss) margin 1.9 % (24.0) % NM (37.4) % (3.4) % 9.4 % NM (28.8) % Adjusted net income (loss) margin 2.1 % (2.1) % NM (14.8) % (3.1) % 17.9 % NM (1.2) % ANI (L) attributable to shareholders margin 2.1 % (9.0) % NM (19.0) % (3.1) % 14.7 % NM (2.1) % Adjusted Net Income & Margin — Quarter The following table reconciles Net income (loss) to the non-GAAP measure EBITDA as of each date presented:
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12 Three Months Ended June 30, 2025 Three Months Ended June 30, 2024 Specialty Property & Casualty Insurance Insurance Distribution Corporate & Other Consolidated Specialty Property & Casualty Insurance Insurance Distribution Corporate & Other Consolidated Net income (loss) (1) $ 0.4 $ (8.0) $ (13.2) $ (20.8) $ (1.1) $ 1.2 $ (14.9) $ (14.7) Adjustments: Interest expense — 5.6 — 5.6 — — — — Income taxes 0.2 (2.2) (0.2) (2.2) — — — — Depreciation — — 0.4 0.4 — — 0.5 0.5 Amortization of intangible assets — 9.3 — 9.3 — 1.1 — 1.1 EBITDA (2) $ 0.6 $ 4.7 $ (13.0) $ (7.7) $ (1.1) $ 2.4 $ (14.4) $ (13.1) Impact of noncontrolling interest — (2.2) — (2.2) — (0.4) — (0.4) EBITDA to stockholders $ 0.6 $ 2.5 $ (13.0) $ (9.8) $ (1.1) $ 2.0 $ (14.4) $ (13.6) EBITDA Reconciliation — Quarter 1. Net income (loss) is prior to the impact of noncontrolling interests. 2. EBITDA is prior to the impact of noncontrolling interests and relates to subsidiaries where Ambac does not own 100% The following table reconciles Net income (loss) to the non-GAAP measure EBITDA as of each date presented:
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13 Specialty Property & Casualty Insurance Insurance Distribution Corporate & Other Consolidated Six Months Ended June 30, 2025 Net income (loss) (1) $ 1.9 $ (9.7) $ (27.8) $ (35.3) Adjustments: Interest expense — 11.0 — 11.0 Income taxes 0.3 (2.7) — (2.4) Depreciation — 0.1 0.7 0.9 Amortization of intangible assets — 18.1 — 18.1 EBITDA (2) $ 2.1 $ 16.8 $ (27.0) $ (7.8) Six Months Ended June 30, 2024 Net income (loss) (1) $ 0.6 $ 5.1 $ (23.9) $ (18.1) Adjustments: Interest expense — — — — Income taxes 0.1 0.1 (0.1) 0.1 Depreciation — — 1.9 1.9 Amortization of intangible assets — 2.3 — 2.3 EBITDA (2) $ 0.7 $ 7.6 $ (22.1) $ (13.8) EBITDA Reconciliation 1. Net income (loss) is prior to the impact of noncontrolling interests. 2. EBITDA is prior to the impact of noncontrolling interests and relates to subsidiaries where Ambac does not own 100% The following table reconciles Net income (loss) to the non-GAAP measure EBITDA as of each date presented:
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14 Three Months Ended June 30, 2025 Three Months Ended June 30, 2024 Specialty Property & Casualty Insurance Insurance Distribution Corporate & Other Consolidated Specialty Property & Casualty Insurance Insurance Distribution Corporate & Other Consolidated EBITDA $ 0.6 $ 4.7 $ (13.0) $ (7.7) $ (1.1) $ 2.4 $ (14.4) $ (13.1) Add: Impact of noncontrolling interests — (2.2) — (2.2) — (0.4) — (0.4) EBITDA to shareholders 0.6 2.5 (13.0) (9.8) (1.1) 2.0 (14.4) (13.6) Net income margin 2.0 % (24.2) % NM (37.9) % (3.4) % 9.4 % NM (28.8) % Net income margin to Ambac shareholders 2.0 % (23.4) % NM (37.4) % (3.4) % 9.4 % NM (28.8) % EBITDA margin 2.9 % 14.2 % NM (13.9) % (3.4) % 18.1 % NM (25.7) % EBITDA margin to Ambac shareholders 2.9 % 7.6 % NM (17.9) % (3.4) % 14.8 % NM (26.6) % Add: Acquisition and integration related expenses — 0.4 0.4 0.8 — — 10.4 10.4 Add: Equity-based compensation expense 0.1 0.1 1.9 2.0 0.1 — 1.7 1.8 Add: Severance and restructuring expense — — 2.9 2.9 — — 5.2 5.2 Adjusted EBITDA 0.7 4.6 (7.8) (2.5) (1.0) 2.4 (1.6) (0.2) Adjusted EBITDA attributable to Ambac shareholders 0.7 2.5 (7.8) (4.6) (1.0) 2.0 (1.6) (0.6) Adjusted EBITDA Margin 3.2 % 13.9 % NM (4.6) % (3.2) % 18.1 % NM (0.4) % Adjusted EBITDA Margin to Ambac shareholders 3.2 % 7.6 % NM (8.3) % (3.2) % 14.8 % NM (1.2) % Adjusted EBITDA Reconciliation — Quarter The following table reconciles Net income (loss) to the non-GAAP measure EBITDA as of each date presented:
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15 Six Months Ended June 30, 2025 Six Months Ended June 30, 2024 Specialty Property & Casualty Insurance Insurance Distribution Corporate & Other Consolidated Specialty Property & Casualty Insurance Insurance Distribution Corporate & Other Consolidated EBITDA $ 2.1 $ 16.8 $ (27.0) $ (8.1) $ 0.7 $ 7.6 $ (23.0) $ (14.8) Add: Impact of noncontrolling interests — (7.2) — (7.2) — (1.4) — (1.4) EBITDA to shareholders 2.1 9.6 (27.0) (15.3) 0.7 6.2 (23.0) (16.1) Net income margin 4.4 % (13.1) % NM (30.0) % 1.0 % 16.5 % NM (18.0) % Net income margin to Ambac shareholders 4.4 % (15.0) % NM (31.2) % 1.1 % 16.4 % NM (18.0) % EBITDA margin 5.0 % 22.7 % NM (6.9) % 1.2 % 24.3 % NM (14.7) % EBITDA margin to Ambac shareholders 5.0 % 12.9 % NM (13.0) % 1.2 % 19.9 % NM (16.0) % Add: Acquisition and integration related expenses — 0.4 1.1 1.5 — — 11.0 11.0 Add: Equity-based compensation expense 0.1 0.1 3.5 3.7 0.1 — 3.9 4.0 Add: Severance and restructuring expense — 0.1 4.7 4.8 — — 5.3 5.3 Add: Other non-operating (income) losses — (0.6) — (0.6) — — (4.4) (4.4) Adjusted EBITDA 2.3 16.7 (17.8) 1.2 0.8 7.5 (7.3) 1.1 Adjusted EBITDA attributable to Ambac shareholders 2.3 9.6 (17.8) (5.9) 0.8 6.2 (7.3) (0.2) Adjusted EBITDA Margin 5.3 % 22.5 % NM 1.0 % 1.4 % 24.1 % NM 1.1 % Adjusted EBITDA Margin to Ambac shareholders 5.3 % 13.0 % NM (5.0) % 1.4 % 19.8 % NM (0.2) % Adjusted EBITDA Reconciliation — Year-to-Date 1. Net income (loss) is prior to the impact of noncontrolling interests. 2. EBITDA is prior to the impact of noncontrolling interests and relates to subsidiaries where Ambac does not own 100% The following table reconciles Net income (loss) to the non-GAAP measure EBITDA as of each date presented:
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16 Ambac Financial Group, Inc. (“Ambac” or “AFG”) is an insurance holding company headquartered in New York City. Ambac’s core business is a growing specialty P&C distribution and underwriting platform. Ambac also has a legacy financial guarantee business in run-off which we have agreed to sell to funds managed by Oaktree Capital Management pending regulatory approval. Ambac’s common stock trades on the New York Stock Exchange under the symbol “AMBC”. Ambac is committed to providing timely and accurate information to the investing public, consistent with our legal and regulatory obligations. To that end, we use our website to convey information about our businesses, including the anticipated release of quarterly financial results, quarterly financial, statistical and business-related information. For more information, please go to www.ambac.com. The Amended and Restated Certificate of Incorporation of Ambac contains substantial restrictions on the ability to transfer Ambac’s common stock. Subject to limited exceptions, any attempted transfer of common stock shall be prohibited and void to the extent that, as a result of such transfer (or any series of transfers of which such transfer is a part), any person or group of persons shall become a holder of 5% or more of Ambac’s common stock or a holder of 5% or more of Ambac’s common stock increases its ownership interest. Contact Charles J. Sebaski Managing Director, Investor Relations (212) 208-3222 ir@ambac.com About Ambac