Bermudian-based bond insurer Assured Guaranty Ltd has become the latest organisation to capitalise on a tax benefit linked to the island’s new corporate income tax legislation.

Assured Guaranty reported net income of $376 million for fourth-quarter 2023, thanks in part to the establishment of a deferred tax asset, and corresponding tax benefit to income, of $189 million.

That result compares with net income of $94 million in the prior-year quarter.

For the full year, net income was $739 million, which compares with $124 million in 2022.

“Finishing with a strong fourth quarter, Assured Guaranty reported outstanding results for 2023,” said Dominic Frederico, president and CEO.

“Our key per-share measures — GAAP shareholders’ equity, adjusted operating shareholders’ equity and adjusted book value — each ended the year at a record high.

“In terms of earnings, we produced more than six times 2022’s GAAP net income per share and more than 2½ times that year’s adjusted operating income per share. Our share price rose by 20 per cent during the year.

“2023 [gross written premiums] and [present value of new business production] were $357 million and $404 million, respectively.

“Our diversified production strategy continued to demonstrate its value, as global structured finance produced 73 per cent more GWP and more than double the PVP it wrote in 2022, reaching its highest annual direct GWP and PVP amounts in a decade; non-US public finance saw a 9 per cent annual increase in GWP and a 22 per cent increase in PVP; and while new issuance volume in the municipal bond market was relatively low, we led the industry in new-issue insured par sold with a 61 per cent market share, and US public finance continued to produce more than half of both annual GWP and PVP.”

Mr Frederico added: “During 2023, we completed our strategic transaction with Sound Point and a separate transaction involving other AssuredIM assets, which resulted in pre-tax gains for the year of $222 million, net of expenses. The transaction with Sound Point furthers our asset management strategy, as we now own approximately 30 per cent of the combined entity.

“Additionally, in the fourth quarter, enactment of a new Bermuda tax law resulted in the establishment of a deferred tax asset, and corresponding benefit to income of $189 million.”

The company added: “The tax benefit in fourth-quarter 2023 resulted from legislation enacted in December of 2023 implementing a corporate income tax in Bermuda beginning in 2025, which affects the company’s Bermuda insurance subsidiaries.

“The new law allows an economic transition adjustment equal to the difference between the fair market value and the carrying value of assets and liabilities of each of the company’s Bermuda insurance subsidiaries as of September 30, 2023.

“The ETA resulted in the establishment of a deferred tax asset of $189 million that was reported as a tax benefit in fourth-quarter 2023 GAAP net income and adjusted operating income.

“The deferred tax asset is expected to be utilised over ten to 15 years, depending on the nature of each component of the deferred tax asset, beginning in 2025.”