BAM Announces 2020 Statutory Financial Results

Rhea-AI Summary

Build America Mutual reported a record growth in par insured and total premiums for 2020, showcasing strong organic capital growth. In Q1 2021, BAM secured a $150 million reinsurance agreement with Fidus Re Ltd, increasing claims-paying resources to over $1.1 billion. CEO Seán W. McCarthy emphasized the importance of this capital expansion in enhancing BAM's financial strength through its long-term plan. The latest financial results will be reflected in BAM's upcoming Q1 report, scheduled for release in May 2021.

Positive

• Record growth in par insured and total premiums for 2020.
• Completion of a $150 million reinsurance agreement, raising claims-paying resources to over $1.1 billion.
• Strong organic growth in capital during 2020.

Negative

• None.

Build America Mutual, the only mutual, U.S. municipal-only bond insurer, today published its 2020 statutory financial results, reporting record par insured and total premiums. In addition to strong organic growth in capital during 2020, BAM completed a $150 million, fully collateralized reinsurance agreement with Fidus Re Ltd in the first quarter of 2021 that expands its claims-paying resources to more than $1.1 billion.

“The substantial growth in claims-paying resources is the result of the continued execution of our long-term capital plan, which allows BAM to build unparalleled financial strength both through organic growth and periodically accessing the capital markets,” said Seán W. McCarthy, Chief Executive Officer of BAM.

Fidus Re is a special-purpose insurer created solely to provide reinsurance protection to BAM, and previously provided $100 million of claims-paying resources to BAM through a similar transaction in 2018, which remains in force. Both agreements were funded by the sale of insurance-linked notes by Fidus Re, which carry AA ratings from Kroll Bond Rating Agency.

BAM’s Statutory Financial Statements and Operating Supplements are available in the Financial Information section of BAM’s website. The financial statements have also been filed with the National Association of Insurance Commissioners and the 50 state insurance regulators that license BAM. The latest Fidus Re transaction will be reflected in BAM’s first quarter results, which will be published in May.

About Build America Mutual

BAM is a mutual bond insurance company operated for the benefit of its members – the cities, states, and other municipal entities that use BAM’s financial guaranty to lower their cost of borrowing – and BAM is the preferred provider of bond insurance for members of the National League of Cities. As of December 31, 2020, there were more than $75 billion of BAM-insured municipal bonds outstanding for more than 4,200 member-issuers.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210217006009/en/

FAQ

What were Build America Mutual's financial results for 2020?

Build America Mutual reported record growth in par insured and total premiums for 2020.

How much has BAM increased its claims-paying resources?

BAM's claims-paying resources increased to over $1.1 billion following a $150 million reinsurance agreement.

When will Build America Mutual release its Q1 2021 financial results?

BAM's Q1 2021 financial results are scheduled to be published in May 2021.

What is the significance of the reinsurance agreement with Fidus Re?

The reinsurance agreement allows BAM to enhance its claims-paying resources and strengthen its financial stability.