v3.26.3
Investments
 9 Months Ended
Sep. 30, 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 external investment 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 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
September 30, 2026December 31, 2025
(in millions)
Fixed-maturity securities, available-for-sale$6,506 $6,369 
Fixed-maturity securities, trading85 124 
Short-term investments950 903 
Other invested assets:
Equity method investments:
Ownership interest in Sound Point399 415 
Funds and other investments663 664 
Other (1)189 12 
Total (2)$8,792 $8,487 
____________________
(1)    The September 30, 2026 balance consists primarily of loans issued by a U.K. regulated utility and a U.S. infrastructure project to both of which the Company has insured exposures.
(2)    In the investment portfolio, the aggregate carrying value of Sound Point managed investments was $534 million and $628 million as of September 30, 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 September 30, 2026 and December 31, 2025, based on fair value, 7.9% 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) subordinated notes, liquidity bonds issued by a U.K. regulated utility and Loss Mitigation Securities. As of September 30, 2026 and December 31, 2025, the carrying value of CLO subordinated notes was $191 million and $228 million, respectively. As of September 30, 2026 and December 31, 2025, the carrying value of liquidity bonds issued by a U.K. regulated utility to which the Company has insured exposure was $158 million and $168 million, respectively. As of September 30, 2026 and December 31, 2025, the carrying value of Loss Mitigation Securities was $143 million and $140 million, respectively.

Fixed-maturity securities classified as trading securities primarily include Puerto Rico contingent value instruments (CVIs) and are not rated. 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 September 30, 2026 and December 31, 2025 was $82 million and $114 million, respectively. The Company may sell any CVIs it continues to hold.

The investment portfolio includes $922 million in alternative investments primarily consisting of (i) $191 million of CLO subordinated notes classified as available-for-sale fixed-maturity securities, and (ii) $667 million of investments across various asset classes that are reported in other invested assets. The Company’s alternative investment commitments as of September 30, 2026 include $529 million in unfunded and targeted commitments which together with its $922 million in funded commitments total $1.5 billion. Alternative investment commitments of $1.5 billion include the $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, CLOs and other strategies.

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 $74 million and $70 million as of September 30, 2026 and December 31, 2025, respectively.

Available-for-Sale Fixed-Maturity Securities by Security Type
As of September 30, 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 subdivisions21 %$1,486 $(14)$19 $(141)$1,350 
U.S. government and agencies1 49 — — (6)43 
Corporate securities (2)
50 3,545 (11)14 (272)3,276 
Mortgage-backed securities (3):
RMBS11 778 (29)2 (62)689 
Commercial mortgage-backed securities (CMBS)4 276 — — (10)266 
Asset-backed securities:
CLOs7 514 (28)4 (67)423 
Other (4)3 238 — 2 (5)235 
Non-U.S. government securities3 249 — — (25)224 
Total available-for-sale fixed-maturity securities100 %$7,135 $(82)$41 $(588)$6,506 
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 September 30, 2026 and December 31, 2025, respectively, based on fair value.
(4)This category includes investments in securities issued by an affiliated entity with amortized cost of $59 million and $53 million as of September 30, 2026 and December 31, 2025, respectively, and fair value of $61 million and $54 million as of September 30, 2026 and December 31, 2025, respectively.

Gross Unrealized Loss by Length of Time
for Available-for-Sale Fixed-Maturity Securities for Which a Credit Loss was Not Recorded
As of September 30, 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$781 $(42)$447 $(99)$1,228 $(141)
U.S. government and agencies35 (1)5 (5)40 (6)
Corporate securities2,146 (123)517 (112)2,663 (235)
Mortgage-backed securities:
RMBS453 (22)84 (10)537 (32)
CMBS218 (9)44 (1)262 (10)
Asset-backed securities:
CLOs141 (3)47 (5)188 (8)
Other138 (5)12 — 150 (5)
Non-U.S. government securities175 (15)16 (10)191 (25)
Total$4,087 $(220)$1,172 $(242)$5,259 $(462)
Number of securities (1)1,205 640 1,803 
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 when determining whether a security had a credit loss. The Company has determined that the unrealized losses recorded as of September 30, 2026 and December 31, 2025 were primarily related to higher interest rates rather than credit quality. As of September 30, 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 September 30, 2026, of the securities in an unrealized loss position for which an allowance for credit loss was not recorded, 484 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 $257 million and $147 million as of September 30, 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 September 30, 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 September 30, 2026
Amortized
Cost		Estimated
Fair Value
(in millions)
Due within one year$137 $137 
Due after one year through five years1,422 1,373 
Due after five years through 10 years2,191 2,016 
Due after 10 years2,331 2,025 
Mortgage-backed securities:
RMBS778 689 
CMBS276 266 
Total$7,135 $6,506 
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 $75 million and $77 million as of September 30, 2026 and December 31, 2025, respectively. The total collateral funded into a reinsurance trust or a similar account by certain AGL subsidiaries or otherwise restricted for the benefit of other AGL subsidiaries in accordance with statutory and regulatory requirements had a fair value of $746 million and $813 million as of September 30, 2026 and December 31, 2025, respectively.

In addition, fixed-maturity securities of $551 million, short-term investments of $10 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. The above total includes $2 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
Third QuarterNine Months
2026202520262025
(in millions)
Investment income:
Fixed-maturity securities, available-for-sale (1)$93 $81 $269 $232 
Short-term investments8 14 24 39 
Other invested assets4 1 6 3 
Investment income105 96 299 274 
Investment expenses(2)(2)(6)(4)
Net investment income$103 $94 $293 $270 
Fair value gains (losses) on trading securities (2)$(2)$8 $11 $11 
Equity in earnings (losses) of investees:
Ownership interest in Sound Point$2 $— $3 $12 
Funds and other investments10 20 29 64 
Equity in earnings (losses) of investees$12 $20 $32 $76 
____________________
(1)    Amounts include $3 million, $7 million, $9 million and $21 million of investment income on Loss Mitigation Securities for third quarter 2026, third quarter 2025, nine months 2026 and nine months 2025, respectively.
(2)    Fair value losses on trading securities pertaining to securities still held as of September 30, 2026 were $2 million for third quarter 2026 and gains of $5 million for nine months 2026. Fair value gains on trading securities pertaining to securities still held as of September 30, 2025 were $7 million for third quarter 2025 and $9 million for nine months 2025.

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)
Third QuarterNine Months
2026202520262025
(in millions)
Gross realized gains on sales of available-for-sale securities$2 $1 $7 $5 
Gross realized losses on sales of available-for-sale securities(3)(1)(10)(10)
Net foreign currency gains (losses)3 1 4 — 
Change in the allowance for credit losses and intent to sell (1)(13)(12)(38)(25)
Other net realized gains (losses)— 1 1 (2)
Net realized investment gains (losses)$(11)$(10)$(36)$(32)
____________________
(1)    The change in the allowance for credit losses for third quarter 2026 was primarily related to CLO subordinated notes and corporate securities. The change in the allowance for credit losses for third quarter 2025, nine months 2026 and nine months 2025 was primarily associated with CLO subordinated notes.

The proceeds from sales of fixed-maturity securities classified as available-for-sale were $127 million in third quarter 2026, $106 million in third quarter 2025, $712 million in nine months 2026 and $533 million in nine months 2025.

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
Third QuarterNine Months
2026202520262025
(in millions)
Balance, beginning of period$72 $47 $54 $60 
Additions for securities for which credit losses were not previously recognized1 1 18 11 
Additions for purchases of securities accounted for as purchased financial assets with credit deterioration2 — 2 — 
Additions (reductions) for securities for which credit losses were previously recognized12 11 20 13 
Write-offs charged against the allowance(5)(5)(12)(30)
Balance, end of period$82 $54 $82 $54 

During third quarter 2026, the Company purchased a portion of the subordinated note of a CLO for $5 million that was accounted for as a purchased credit-deteriorated security (PCD security). At acquisition, this security had outstanding principal of $8 million, an allowance for credit losses of $2 million, and a non-credit related discount of $1 million. During nine months 2026, the Company purchased two securities with credit deterioration for $7 million. At acquisition, the securities had an outstanding principal of $11 million, an allowance for credit losses of $2 million, and a non-credit related discount of $2 million. The majority of securities with credit losses relate to RMBS, CLOs, obligations of state and political subdivisions and corporates.