v3.26.1
Investments
 3 Months Ended
Mar. 31, 2026
Investments, Debt and Equity Securities [Abstract]  
Investments Investments
The largest component of the investment portfolio is fixed-maturity securities, the majority of which are investment grade and managed by outside managers. The Company has established investment guidelines for these investment managers regarding credit quality, exposure to a particular sector and exposure to a particular obligor within a sector.

Portions of the Company’s alternative investments portfolio are managed by Sound Point. Pursuant to a letter agreement effective July 1, 2023 (Letter Agreement), AG engaged Sound Point to be its sole alternative credit manager and transitioned to Sound Point the management of certain existing alternative investments and related commitments. Under the Letter Agreement, AG, including through its investment subsidiary AGAS, agreed, subject to the terms and conditions of the Letter Agreement, to invest in funds, other vehicles and separately managed accounts managed by Sound Point. When aggregated with the alternative investments and commitments transitioned from the Company and any reinvestments (collectively, Sound Point Investments), together with investments made by other Assured Guaranty affiliates, the total amount of such investments is expected to be $1 billion. AG has invested with Sound Point across multiple strategies in order to seek to enhance investment returns and anticipates continuing to invest with Sound Point pursuant to the Letter Agreement. The Letter Agreement contemplates a long-term investment partnership between Sound Point and Assured Guaranty, whereby AG has agreed to reinvest all returns of capital from Sound Point Investments until July 1, 2038, at which point the Letter Agreement may be terminated without cause. In addition, AG has agreed to reinvest all gains and dividends from Sound Point Investments until July 1, 2025, and fifty percent of such gains and dividends thereafter until July 1, 2033. Beginning July 1, 2028, AG may elect to reduce the amounts invested or required to be reinvested in certain Sound Point Investments under the Letter Agreement, subject to corresponding adjustments of Assured Guaranty’s ownership interest in Sound Point. To the extent not required to be reinvested by the Letter Agreement, all proceeds from Sound Point Investments received in accordance with their operative investment documents can be distributed to AG.

Investment Portfolio
Carrying Value
As of
March 31, 2026December 31, 2025
 (in millions)
Fixed-maturity securities, available-for-sale$6,875 $6,369 
Fixed-maturity securities, trading127 124 
Short-term investments768 903 
Other invested assets:
Equity method investments:
Ownership interest in Sound Point406 415 
Funds and other investments685 664 
Other45 12 
Total (1)$8,906 $8,487 
____________________
(1)    In the investment portfolio, the aggregate carrying value of Sound Point managed investments was $549 million and $628 million as of March 31, 2026 and December 31, 2025, respectively, excluding the Company’s ownership interest in Sound Point and, as of December 31, 2025, certain investments in funds that were accounted for as CIVs.

As of March 31, 2026 and December 31, 2025, 7.0% and 8.6%, respectively, of available-for-sale fixed-maturity securities were either rated BIG or not rated, primarily consisting of collateralized loan obligation (CLO) equity tranches, liquidity bonds issued by a U.K. regulated utility and Loss Mitigation Securities. As of March 31, 2026 and December 31, 2025, the carrying value of CLO equity tranches was $173 million and $228 million, respectively. As of March 31, 2026 and December 31, 2025, the carrying value of liquidity bonds issued by a U.K. regulated utility was $162 million and $168 million, respectively. As of March 31, 2026 and December 31, 2025, the carrying value of Loss Mitigation Securities was $135 million and $140 million, respectively. Fixed-maturity securities classified as trading securities primarily include contingent value instruments (CVIs) and are not rated.

The investment portfolio includes $965 million in alternative investments primarily consisting of (i) $173 million of CLO equity securities classified as available-for-sale fixed-maturity securities, and (ii) $730 million of investments across various asset classes that are reported in other invested assets. The Company’s alternative investment commitments as of
March 31, 2026 include $554 million in unfunded commitments which together with its $965 million in funded commitments total $1.5 billion. Alternative investment commitments of $1.5 billion include a $1 billion commitment to invest in Sound Point managed alternative investments, subject to certain conditions precedent. Capital allocated to alternative investments was committed to several funds pursuing various strategies, including private healthcare investing, asset-based/specialty finance, commercial real estate finance and CLOs.

Since the Assured Life Re Acquisition Date, the investment portfolio includes available-for-sale fixed-maturity securities and short-term investments supporting the PRT block of business that are held in a consolidated VIE. See Note 10. Variable Interest Entities.

Accrued investment income, which is reported in “other assets,” was $77 million as of March 31, 2026 and $70 million as of December 31, 2025.

Available-for-Sale Fixed-Maturity Securities by Security Type
As of March 31, 2026
Security TypePercent
of
Total (1)		Amortized
Cost		Allowance for Credit LossesGross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Fair
Value
 (dollars in millions)
Obligations of state and political subdivisions25 %$1,800 $(13)$32 $(75)$1,744 
U.S. government and agencies1 56 — 1 (5)52 
Corporate securities (2)
48 3,478 (7)38 (159)3,350 
Mortgage-backed securities (3):
 
RMBS10 694 (27)6 (49)624 
Commercial mortgage-backed securities (CMBS)4 273 — 2 (3)272 
Asset-backed securities:
CLOs6 469 (16)1 (80)374 
Other (4)3 239 — 3 (1)241 
Non-U.S. government securities3 232 — 1 (15)218 
Total available-for-sale fixed-maturity securities100 %$7,241 $(63)$84 $(387)$6,875 
Available-for-Sale Fixed-Maturity Securities by Security Type
As of December 31, 2025
Security TypePercent
of
Total (1)		Amortized
Cost		Allowance for Credit LossesGross
Unrealized
Gains		Gross
Unrealized
Losses		Estimated
Fair
Value
 (dollars in millions)
Obligations of state and political subdivisions28 %$1,816 $(13)$37 $(71)$1,769 
U.S. government and agencies1 55 — 1 (4)52 
Corporate securities (2)
46 2,998 (6)75 (115)2,952 
Mortgage-backed securities (3):
    
RMBS10 678 (26)10 (47)615 
CMBS3 197 — 2 (1)198 
Asset-backed securities:
CLOs7 499 (9)4 (38)456 
Other (4)3 206 — 3 — 209 
Non-U.S. government securities2 123 — 3 (8)118 
Total available-for-sale fixed-maturity securities100 %$6,572 $(54)$135 $(284)$6,369 
____________________
(1)Percentages are based on amortized cost.
(2)Corporate securities include taxable securities issued by universities and hospitals.
(3)U.S. government-agency obligations represented 70% and 75% of mortgage-backed securities as of March 31, 2026 and December 31, 2025, respectively, based on fair value.
(4)This category includes an investment in an affiliated entity with amortized cost of $53 million and fair value of $54 million, as of both March 31, 2026 and December 31, 2025.


Gross Unrealized Loss by Length of Time
for Available-for-Sale Fixed-Maturity Securities for Which a Credit Loss was Not Recorded
As of March 31, 2026
 Less than 12 months12 months or moreTotal
 Fair
Value		Gross Unrealized
Loss		Fair
Value		Gross Unrealized
Loss		Fair
Value		Gross Unrealized
Loss
 (dollars in millions)
Obligations of state and political subdivisions$393 $(3)$629 $(72)$1,022 $(75)
U.S. government and agencies23 — 5 (5)28 (5)
Corporate securities1,222 (38)626 (91)1,848 (129)
Mortgage-backed securities: 
RMBS105 (1)103 (6)208 (7)
CMBS130 (2)55 (1)185 (3)
Asset-backed securities:
CLOs139 (5)43 — 182 (5)
Other79 (1)9 — 88 (1)
Non-U.S. government securities168 (6)19 (9)187 (15)
Total$2,259 $(56)$1,489 $(184)$3,748 $(240)
Number of securities (1) 728  735  1,439 
Gross Unrealized Loss by Length of Time
for Available-for-Sale Fixed-Maturity Securities for Which a Credit Loss was Not Recorded
As of December 31, 2025
 Less than 12 months12 months or moreTotal
 Fair
Value		Gross Unrealized
Loss		Fair
Value		Gross Unrealized
Loss		Fair
Value		Gross Unrealized
Loss
 (dollars in millions)
Obligations of state and political subdivisions$79 $(1)$837 $(70)$916 $(71)
U.S. government and agencies14 — 5 (4)19 (4)
Corporate securities122 (1)732 (87)854 (88)
Mortgage-backed securities:    
RMBS11 — 114 (6)125 (6)
CMBS41 — 57 (1)98 (1)
Asset-backed securities:
CLOs189 (9)44 (5)233 (14)
Other31 — 19 — 50 — 
Non-U.S. government securities2 — 19 (8)21 (8)
Total$489 $(11)$1,827 $(181)$2,316 $(192)
Number of securities (1) 167  855  1,014 
___________________
(1)    The number of securities does not add across because lots consisting of the same securities have been purchased at different times and appear in both categories above (i.e., less than 12 months and 12 months or more). If a security appears in both categories, it is counted only once in the total column.

The Company considered the credit quality, cash flows, interest rate movements, ability to hold a security to recovery and intent to sell a security in determining whether a security had a credit loss. The Company has determined that the unrealized losses recorded as of March 31, 2026 and December 31, 2025 were primarily related to higher interest rates and spread compression rather than credit quality. As of March 31, 2026, the Company did not intend to and was not required to sell investments in an unrealized loss position prior to the expected recovery in value. As of March 31, 2026, of the securities in an unrealized loss position for which an allowance for credit loss was not recorded, 270 securities had unrealized losses in excess of 10% of their carrying value, whereas as of December 31, 2025, 253 securities had unrealized losses in excess of 10% of their carrying value. The total unrealized loss for these securities was $152 million and $147 million as of March 31, 2026 and December 31, 2025, respectively.

The amortized cost and estimated fair value of available-for-sale fixed-maturity securities by contractual maturity as of March 31, 2026 are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
Distribution of Available-for-Sale Fixed-Maturity Securities by Contractual Maturity
As of March 31, 2026
 Amortized
Cost		Estimated
Fair Value
 (in millions)
Due within one year$232 $234 
Due after one year through five years1,462 1,452 
Due after five years through 10 years2,132 2,048 
Due after 10 years2,448 2,245 
Mortgage-backed securities:  
RMBS694 624 
CMBS273 272 
Total$7,241 $6,875 
Based on fair value, fixed-maturity securities, short-term investments and cash that are either held in trust for the benefit of third-party ceding insurers in accordance with statutory requirements, placed on deposit to fulfill state licensing requirements or otherwise pledged or restricted totaled $76 million and $77 million as of March 31, 2026 and December 31, 2025, respectively. The total collateral funded into a reinsurance trust or a similar account by certain AGL subsidiaries or is otherwise restricted for the benefit of other AGL subsidiaries in accordance with statutory and regulatory requirements had a fair value of $812 million and $813 million as of March 31, 2026 and December 31, 2025, respectively.

Fixed-maturity securities of $574 million, short-term investments of $4 million and cash of $10 million are held in a consolidated VIE supporting the PRT block of business. See Note 10. Variable Interest Entities. The use of the VIE’s assets is restricted based on the terms of the PRT reinsurance agreement. Included in the above is $4 million of fixed-maturity securities that were pledged as collateral for derivatives.

Income from Investments

The components of income derived from the investment portfolio are presented in the following tables.

Income from Investments
 First Quarter
 20262025
(in millions)
Investment income:
Fixed-maturity securities, available-for-sale (1)$85 $74 
Short-term investments8 13 
Other invested assets1 1 
Investment income94 88 
Investment expenses(2)(1)
Net investment income$92 $87 
Fair value gains (losses) on trading securities (2)$6 $1 
Equity in earnings (losses) of investees:
Ownership interest in Sound Point$6 $13 
Funds and other investments25 40 
Equity in earnings (losses) of investees$31 $53 
____________________
(1)    Amounts include $3 million and $7 million of investment income on Loss Mitigation Securities for first quarter 2026 and first quarter 2025, respectively.
(2)    Fair value gains on trading securities pertaining to securities still held as of March 31, 2026 were $5 million for first quarter 2026.

A majority of the trading securities are Puerto Rico CVIs. In 2022, as a result of the resolution of certain defaulting Puerto Rico exposures, the Company received Puerto Rico CVIs, along with other consideration. The CVIs are intended to provide creditors with additional recoveries tied to the outperformance of the Puerto Rico 5.5% sales and use tax receipts against May 2020 certified fiscal plan projections, subject to annual and lifetime caps. The fair value of remaining CVIs as of March 31, 2026 and December 31, 2025 was $119 million and $114 million, respectively. The Company may sell in the future any CVIs it continues to hold.

Realized Investment Gains (Losses)

The table below presents the components of net realized investment gains (losses). Realized gains and losses on sales of investments are determined using the specific identification method.
Net Realized Investment Gains (Losses)
 First Quarter
 20262025
 (in millions)
Gross realized gains on sales of available-for-sale securities$2 $3 
Gross realized losses on sales of available-for-sale securities(2)(8)
Net foreign currency gains (losses)1 (1)
Change in the allowance for credit losses and intent to sell (1)(16)(10)
Net realized investment gains (losses)$(15)$(16)
____________________
(1)    The change in the allowance for credit losses for first quarter 2026 was primarily related to CLO equity tranches and, in first quarter 2025, was primarily related to Loss Mitigation Securities.

The following table presents the roll forward of the allowance for the credit losses on available-for-sale fixed-maturity securities.

Roll Forward of Allowance for Credit Losses
for Available-for-Sale Fixed-Maturity Securities
 First Quarter
 20262025
 (in millions)
Balance, beginning of period$54 $60 
Additions for securities for which credit losses were not previously recognized11 1 
Additions (reductions) for securities for which credit losses were previously recognized5 9 
Write-offs charged against the allowance(7)(25)
Balance, end of period$63 $45 

The Company did not purchase any securities with credit deterioration during the periods presented. The majority of securities with credit losses relate to RMBS, CLOs and obligations of state and political subdivisions.