ASSURED GUARANTY LTD 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward Looking Statements This Form 10-Q contains information that includes or is based upon forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward looking statements give the expectations or forecasts of future events of Assured Guaranty Ltd. (AGL) and its subsidiaries (collectively with AGL, Assured Guaranty or the Company). These statements can be identified by the fact that they do not relate strictly to historical or current facts and relate to future operating or financial performance. Any or all of Assured Guaranty’s forward looking statements herein are based on current expectations and the current economic environment and may turn out to be incorrect. Assured Guaranty’s actual results may vary materially from those expressed in, or implied or projected by, the forward-looking information and statements. Among factors that could cause actual results to differ materially are: (i) significant changes in inflation, interest rates, the world’s credit markets or segments thereof, credit spreads, foreign exchange rates, tariff regimes or general economic conditions, including the possibility of a recession or stagflation; (ii) geopolitical risk, terrorism and political violence risk, including regional and global military conflicts, and strategic competition and trade confrontation; (iii) cybersecurity risk and the impacts of artificial intelligence, machine learning and other technological advances, including the possibility of malicious cyber attacks, dissemination of misinformation, and disruption of markets in which Assured Guaranty participates; (iv) the impact of a United States (U.S.) government shutdown and/or the possibility of payment defaults on the debt of the U.S. government or instruments issued, insured or guaranteed by related institutions, agencies or instrumentalities, and downgrades to their credit ratings; (v) developments in the world’s financial and capital markets, including stresses in banking institutions, and the possibility that increasing participation of unregulated financial institutions in these markets results in losses or lower valuations of assets, reduced liquidity and credit and/or contraction of these markets, that adversely affect repayment rates of insured obligors, Assured Guaranty’s insurance loss or recovery experience, or investments of Assured Guaranty; (vi) reduction in the amount or market rates of return of available insurance opportunities and/or the demand for Assured Guaranty’s insurance; (vii) the failure or ineffectiveness of Assured Guaranty’s risk mitigation strategies or activities, including distressed credit workouts, management of exposure limits, hedging activities, and the procurement of third party reinsurance for insured exposures; (viii) the possibility that investments made by Assured Guaranty for its investment portfolio do not result in the benefits anticipated or subject Assured Guaranty to negative consequences; (ix) the possibility that Assured Guaranty’s strategies or strategic transactions do not result in the benefits anticipated and/or subject Assured Guaranty to negative consequences; (x) the impact of the announcement of Assured Guaranty’s strategies on Assured Guaranty and the perception of Assured Guaranty by its investors, regulators, rating agencies, and employees; (xi) risks related to the expansion into annuity reinsurance and the launching of Assured Life Reinsurance Ltd.; (xii) the failure of Assured Guaranty to successfully integrate acquired businesses, including Assured Guaranty’s acquisition of Warwick Company (UK) Limited; (xiii) loss of key personnel; (xiv) the possibility that longevity, mortality, lapse, withdrawal or surrender experience in Assured Guaranty’s annuity reinsurance business is less favorable than the rates Assured Guaranty used in pricing its reinsurance agreements; (xv) the inability to control the business, management or policies of entities in which Assured Guaranty holds a noncontrolling interest; (xvi) the impact of market volatility on the fair value of Assured Guaranty’s assets and liabilities subject to mark-to-market, including certain of its investments, contracts accounted for as derivatives, its committed capital securities, and its consolidated variable interest entities; (xvii) the possibility that budget or pension shortfalls, difficulties in obtaining additional financing, changes in applicable laws or regulations or other factors will result in credit losses or liquidity claims on obligations that Assured Guaranty insures or reinsures; (xviii) insured losses, including losses with respect to related legal proceedings, in excess of those expected by Assured Guaranty or the failure of Assured Guaranty to realize loss recoveries that are assumed in its expected loss estimates for insurance exposures; (xix) the possibility that underwriting insurance in new jurisdictions and/or covering new sectors, lines or classes of business does not result in the benefits anticipated or subjects Assured Guaranty to negative consequences; (xx) increased competition, including from new market entrants and alternative forms of credit protection; (xxi) any rating agency action in relation to Assured Guaranty, and/or of any securities Assured Guaranty has issued, and/or of transactions that Assured Guaranty has insured, including rating agency requirements to hold additional capital against insured exposures; (xxii) the inability of Assured Guaranty to access capital on acceptable terms or have sufficient liquidity to cover unexpected stress; (xxiii) noncompliance with, and/or changes in, applicable laws or regulations, including insurance, bankruptcy and tax laws, tariffs, or other governmental actions; (xxiv) the possibility that legal or regulatory decisions or determinations subject Assured Guaranty or obligations that it insures or reinsures to negative consequences; (xxv) difficulties or delays with the execution of Assured Guaranty’s business strategy; (xxvi) changes in applicable accounting policies or practices; (xxvii) public health crises, including pandemics and endemics, and the governmental and private actions taken in response to such events; (xxviii) natural or man-made catastrophes; (xxix) the impact of climate change on Assured Guaranty’s business and regulatory actions taken related to such risk; (xxx) other risk 64 Table of Contents factors identified in AGL’s filings with the U.S. Securities and Exchange Commission; (xxxi) other risks and uncertainties that have not been identified at this time; and (xxxii) management’s response to these factors. The foregoing important factors should not be construed as exhaustive, and should be read in conjunction with the other cautionary statements that are included in this Form 10-Q, as well as the risk factors included in Assured Guaranty’s 2025 Annual Report on Form 10-K. Assured Guaranty undertakes no obligation to update or review any forward looking statement, whether as a result of new information, future developments or otherwise, except as required by law. Investors are advised, however, to consult any further disclosures Assured Guaranty makes on related subjects in Assured Guaranty’s reports filed with the U.S. Securities and Exchange Commission (SEC). If one or more of these or other risks or uncertainties materialize, or if Assured Guaranty’s underlying assumptions prove to be incorrect, actual results may vary materially from what Assured Guaranty projected. Any forward looking statements in this Form 10-Q reflect Assured Guaranty’s current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to its operations, results of operations, growth strategy and liquidity. For these statements, Assured Guaranty claims the protection of the safe harbor for forward looking statements contained in Section 27A of the Securities Act of 1933, as amended (Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act). Available Information The Company maintains a website at assuredguaranty.com . The Company makes available, free of charge, on its website (under assuredguaranty.com/sec-filings ) the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after the Company files such material with, or furnishes it to, the SEC. The Company also makes available, free of charge, on its website ( assuredguaranty.com/governance ) its Corporate Governance Guidelines, Global Code of Ethics, AGL’s Bye-Laws, the charters of the committees of the Company’s Board of Directors (the Board or AGL’s Board), and its environmental and social policies and statements. In addition, the SEC maintains an Internet site (at sec.gov ) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The Company routinely posts important information for investors on its website (under assuredguaranty.com/company-statements and, more generally, under the Investor Information tab at assuredguaranty.com/investor-information and Businesses tab at assuredguaranty.com/businesses ). The Company also maintains a social media account on LinkedIn ( linkedin.com/company/assured-guaranty/ ). The Company uses its website and may use its social media account as a means of disclosing material information and for complying with its disclosure obligations under SEC Regulation FD (Fair Disclosure). Accordingly, investors should monitor the Company Statements, Investor Information and Businesses portions of the Company’s website as well as the Company’s social media account on LinkedIn, in addition to following the Company’s press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, the Company’s website is not incorporated by reference into, and is not a part of, this report. Overview Business The Company reports its results of operations in three distinct segments, Financial Guaranty, Annuity Reinsurance, and Asset Management, consistent with the manner in which the Company’s chief operating decision maker reviews the business to assess performance and allocate resources. The Company’s Corporate division and other activities (including financial guaranty variable interest entities (FG VIEs) and consolidated investment vehicles (CIVs)) are presented separately. In the Financial Guaranty segment (which, prior to the three-month period ended March 31, 2026 (first quarter 2026), was called the Insurance segment), the Company provides credit protection products to the United States (U.S.) and non-U.S. public finance (including infrastructure) and structured finance markets. The Annuity Reinsurance segment comprises the results of Assured Life Reinsurance Ltd. (Assured Life Re) and other subsidiaries acquired in the acquisition of Assured Life Re. The Company participates in the asset management business through its ownership interest in Sound Point Capital Management, LP (Sound Point, LP) and certain of its investment management affiliates (together with Sound Point, LP, Sound Point). See Item 1. Financial Statements, Note 1. Business and Basis of Presentation. 65 Table of Contents The Corporate division primarily consists of the results of holding companies that have issued public equity or debt. The Other category primarily includes the effect of consolidating FG VIEs and CIVs (FG VIE and CIV consolidation). See Item 1. Financial Statements, Note 3. Segment Information. Financial Strength Ratings Demand for the financial guaranties issued by the Company’s financial guaranty (FG) insurance subsidiaries may be impacted by changes in the credit ratings assigned to them by the rating agencies. The financial strength ratings (or similar ratings) assigned to AGL’s FG insurance subsidiaries, along with the date of the most recent rating action (or confirmation) by the rating agency assigning the rating, are shown in the table below. S&P KBRA Moody’s A.M. Best Company, Inc. Assured Guaranty Inc. (AG) AA (stable) (6/30/25) AA+ (stable) (8/4/25) A1 (stable) (7/10/24) — Assured Guaranty Re Ltd. (AG Re) AA (stable) (6/30/25) — — — Assured Guaranty Re Overseas Ltd. (AGRO) AA (stable) (6/30/25) — — A+ (stable) (7/19/25) Assured Guaranty UK Limited (AGUK) AA (stable) (6/30/25) AA+ (stable) (8/4/25) A1 (stable) (7/10/24) — Assured Guaranty (Europe) SA (AGE) AA (stable) (6/30/25) AA+ (stable) (8/4/25) — — In addition, the Company’s annuity reinsurance subsidiary, Assured Life Re, is rated BBB (Outlook Positive) (1/28/26) by Fitch Ratings, Inc. Ratings are subject to continuous rating agency review and revision or withdrawal at any time. In addition, the Company periodically assesses the value of each rating assigned to each of its companies, and as a result of such assessment may request that a rating agency add or drop a rating from certain of its companies. There can be no assurance that any of the rating agencies will not take negative action on the financial strength ratings (or similar ratings) of AGL’s insurance subsidiaries in the future or cease to rate one or more of AGL’s insurance subsidiaries, either voluntarily or at the request of that subsidiary. Economic Environment Strength of the Economy Generally. Global tariffs have increased since the U.S. administration announced a “reciprocal tariff” strategy on April 2, 2025, with the announced objective of rectifying trade practices that contribute to large and persistent annual U.S. goods trade deficits. Since that time, there have been numerous changes to announced tariffs as well as legal actions relating to tariff policies, resulting in uncertainty as to the future levels of U.S. tariffs. For example, the U.S. Supreme Court held on February 20, 2026, that the International Emergency Economic Powers Act (IEEPA) does not authorize the President of the U.S. to impose tariffs. However, the U.S. administration has indicated that tariffs found to be illegal by the U.S. Supreme Court will be replaced with alternative tariffs. Some U.S. trading partners have announced or imposed tariffs or other trading restrictions in response to U.S. actions. These actions by the U.S. and its trading partners have disrupted international trade and are negatively impacting the U.S. and global economies. According to the first quarter 2026 advance estimate released by the U.S. Bureau of Economic Analysis, real gross domestic product (GDP) increased at an annual rate of 2.0% in first quarter 2026, compared to a real GDP increase of 0.5% in the fourth quarter of 2025. At the end of March 2026, the U.S. unemployment rate, seasonally adjusted, stood at 4.3%, slightly lower than where it started the year at 4.4%. The Company believes a more robust economy makes it less likely that obligors whose obligations it guarantees in its FG business will default, while a recession, if it were to occur, would make it more likely that obligors whose obligations it guarantees will default. However, a recession may also cause credit spreads to widen as investors seek security, which tends to create new business opportunities for the Company in its financial guaranty business. Inflation. According to the U.S. Bureau of Labor Statistics, the inflation rate in the U.S. before seasonal adjustment for the 12-month period ending March 2026, as measured by the Consumer Price Index for All Urban Consumers, was 3.3%, as compared to 2.4% for the 12-month period ending March 2025. According to the United Kingdom (U.K.) Office for National 66 Table of Contents Statistics, the Consumer Prices Index including owner occupiers’ housing costs rose 3.4% for the 12 months through March 2026, the same as for the 12 months through March 2025. The most recent events around the Strait of Hormuz have caused oil prices to rise, which the Company believes has increased upward pressure on inflation, especially in the U.K. Generally, inflation reduces the real value of money over time. For obligors whose payments the Company insures, inflation can mean that the real value of their fixed debt payments decreases, potentially making it relatively easier for obligors to service these fixed-rate debts and less likely for them to default. However, if inflation increases operating expenses and revenues or incomes do not keep pace, obligors may find it more difficult to make their payment obligations, even if nominal debt payments remain unchanged. Higher inflation can also lead to tighter monetary policies, which are actions taken by sovereign central banks to reduce the amount of money circulating in the economy, including raising interest rates, which can make refinancing or servicing debt more difficult. In addition, consumer price inflation in the U.K. affects reported net par outstanding for certain U.K. exposures with $24.0 billion of net par outstanding as of March 31, 2026, and also affects projected future installment premiums on the portion of such exposure that pays at least a portion of the premium on an installment basis over the term of the exposure. The Company’s U.K. bulk purchase annuity (pension risk transfer, PRT) reinsurance business is also subject to U.K. inflation, as the annuity payments under such transactions are typically adjusted for changes in U.K. consumer price or retail price indices, meaning that the projected benefit obligations the Company reinsures increase in an inflationary environment, which in turn can increase the Company’s benefit payments under those reinsurance contracts. The Company holds inflation-linked assets, including index-linked gilts and inflation swaps, to mitigate this inflation exposure. Interest Rates. The federal funds rate is the rate at which U.S. banks lend to and borrow from each other, is the benchmark for most U.S. interest rates, and tends to influence U.S. mortgage rates. As the federal funds rate decreases, interest rates, including mortgage rates, tend to decrease. From September 2024 through December 2025, the Federal Open Market Committee (FOMC) lowered the federal funds rate from a target range of 5.25% to 5.50% to a range of 3.50% to 3.75%. Most recently, at its April 2026 meeting, the FOMC held the federal funds rate at a target range of 3.50% to 3.75%, stating that it is strongly committed to supporting maximum employment and returning inflation to its 2% objective. From 2024, the Bank of England’s Monetary Policy Committee (MPC) took actions similar to those of the FOMC to spur economic growth. As inflationary pressures eased and the U.K. economy showed signs of stagnation or mild recession, the MPC kept the Bank of England base rate (Bank Rate) unchanged for most of 2024, before beginning to decrease the Bank Rate in August 2024. In 2025 and early 2026, with inflation being closer to the MPC’s target level and economic growth slowed, the MPC further lowered the Bank Rate several times. As of April 30, 2026, the Bank Rate stood at 3.75%, down from a high of 5.25% in mid-2024. The level and direction of change of interest rates and credit spreads impact the Company in numerous ways. On the one hand, lower interest rates may increase the fair value of fixed-maturity securities currently held in the Company’s investment portfolio, encourage municipal and infrastructure bond issuance and positively impact the finances of some of the obligors whose payments the Company insures. On the other hand, lower interest rates may decrease the base on which the Company charges up-front premium on most new municipal and infrastructure bond transactions and may also decrease amounts the Company can earn on securities newly acquired for its investment portfolio. Lower interest rates also are often accompanied by narrower credit spreads, which may also decrease the level of premiums the Company can charge for its FG transactions. The most recent events around the Strait of Hormuz have caused oil prices to rise, which the Company believes has increased upward pressure on interest rates, especially in the U.K. Credit Spreads. The 30-year AAA Municipal Market Data (MMD) rate is a measure of interest rates in the Company’s largest financial guaranty insurance market, U.S. public finance. The MMD rate averaged 4.30% for the quarter ended March 2026, higher than the 4.18% average rate for the quarter ended December 2025 and higher than the 4.04% average rate for the quarter ended March 2025. Meanwhile, the difference, or credit spread, between the 30-year BBB rated general obligation relative to the 30-year AAA MMD averaged 84 basis points (bps) for the quarter ended March 2026, which is narrower compared to the 88 bps average for the quarter ended December 2025 and narrower compared to the 90 bps average for the quarter ended March 2025. The Company believes that wider spreads could permit it to increase its premium rates on new business. 67 Table of Contents U.S. Residential Mortgage Rates . According to Freddie Mac, the 30-year fixed-rate mortgage rate averaged 6.38% for the week ending March 26, 2026, lower than the 30-year mortgage rate average of 6.65% from one year ago. The National Association of Realtors reported that there was a 3.6% decrease in year-over-year existing-home sales from March 2025 to March 2026, and that the median existing-home sales price increased 1.4% from March 2025 ($403,100) to March 2026 ($408,800). Higher housing prices may benefit distressed residential mortgage-backed securities (RMBS) the Company insures. Foreign Exchange Rates . For the quarter ended March 31, 2026, the exchange rates between the pound sterling and the U.S. dollar and between the euro and the U.S. dollar traded in a tight range, both finishing the quarter near where they started. The Company is subject to foreign exchange risk in several areas of its business. First, with respect to the financial guaranty business, the Company guarantees non-U.S. obligations denominated primarily in pound sterling and euros, and also invests in pound sterling and euro denominated investments. Second, PRT reinsurance liabilities are denominated in pound sterling, along with the assets (after hedging) supporting this business. The impact of fluctuations in the pound sterling/U.S. dollar exchange rate on premiums receivable, financial guaranty loss reserves and PRT liabilities, along with any cross-currency derivatives, is reflected in the Company's consolidated statements of operations, while the impact of fluctuations in the pound sterling/U.S. dollar exchange rate on the Company’s investments classified as available-for-sale is reported in other comprehensive income. Key Business Strategies The Company continually evaluates its business strategies and is currently pursuing key business strategies in four areas: (i) growth of its insurance and asset management businesses; (ii) loss mitigation; (iii) enhancement of investment returns through alternative investments; and (iv) capital management. Insurance and Asset Management Growth The Company seeks to grow its core FG insurance business through new business production in established sectors and jurisdictions and by entering into new markets, lines and classes of business. In addition, the Company seeks to leverage its core credit competencies by expanding its business into additional revenue streams, such as annuity reinsurance and asset management, with the objective of diversifying its revenue streams and growing its net income. FG Insurance Portfolio The Company seeks to grow its FG insurance portfolio through new business production in each of its markets: public finance (including infrastructure) and structured finance. The Company believes high-profile defaults by municipal obligors, such as the Commonwealth of Puerto Rico (Puerto Rico), Detroit, Michigan and Stockton, California as well as events such as the COVID-19 pandemic have led to increased awareness of the value of bond insurance and stimulated demand for the product. The Company believes that demand for its insurance in this market will continue because, for those exposures that the Company guarantees, it undertakes the tasks of credit selection, analysis, negotiation of terms, surveillance and, if necessary, loss mitigation. The Company believes that its insurance: (i) encourages retail investors, who typically have fewer resources than the Company for analyzing municipal bonds, to purchase such bonds; (ii) enables institutional investors to operate more efficiently; and (iii) allows smaller, less well-known issuers to gain market access on a more cost-effective basis. The low interest rate environment and tight U.S. municipal credit spreads from when the financial crisis began in 2008 through early 2020 dampened demand for bond insurance compared with the levels before the financial crisis. After the onset of the COVID-19 pandemic in early 2020, credit spreads initially widened as a result of market concerns about the impact of the COVID-19 pandemic on some municipal credits, thereby improving demand for FG insurance even in a low interest rate environment, before narrowing again in 2022. The Company believes that, over time, wider credit spreads may improve demand for bond insurance. In certain segments of the non-U.S. infrastructure and global structured finance markets, the Company believes its financial guaranty product is competitive with other financing options. In the infrastructure market, the Company’s financial guaranty can enhance the insured obligation’s rating, lower the cost of long-term funding, and enhance the liquidity and transferability of debt obligations. Certain investors may receive advantageous capital requirement treatment with the addition of the Company’s financial guaranty. The Company considers its involvement in both infrastructure and structured finance transactions to be beneficial because such transactions diversify both the Company’s business opportunities and its risk profile 68 Table of Contents beyond U.S. public finance. The timing of new business production in the infrastructure and structured finance sectors is influenced by typically long lead times and therefore production may vary from period to period. U.S. Municipal Market Data and Bond Insurance Penetration Rates (1) Based on Sale Date First Quarter 2026 First Quarter 2025 (2) Year Ended December 31, 2025 (dollars in billions, except number of issues and percentages) Par: New municipal bonds issued $ 129.0 $ 118.6 $ 570.3 Total insured $ 7.7 $ 7.3 $ 42.9 Insured by Assured Guaranty $ 4.1 $ 4.7 $ 25.1 Number of issues: New municipal bonds issued 1,867 1,882 9,372 Total insured 350 383 1,809 Insured by Assured Guaranty 180 222 908 Bond insurance market penetration based on: Par 6.0 % 6.2 % 7.5 % Number of issues 18.7 % 20.4 % 19.3 % Single A par sold 20.0 % 21.3 % 25.2 % Single A transactions sold 66.2 % 69.2 % 64.7 % $25 million and under par sold 24.3 % 27.2 % 24.2 % $25 million and under transactions sold 25.2 % 26.6 % 24.9 % ____________________ (1) Source: The amounts in the table are those reported by London Stock Exchange Group. The table excludes private placements and Corporate-CUSIP transactions insured by Assured Guaranty, certain of which the Company also considers to be public finance business. (2) The three-month period ended March 31, 2025 (first quarter 2025). The Company seeks to expand its FG business geographically by entering new markets; in 2024, the Company opened new offices in Australia and Singapore. The Company has recently undertaken, and continues to undertake, several initiatives to broaden its insurance lines and classes of business, and improve the efficiency of its secondary market execution. For example, the Company has enhanced its structured finance new business production by developing fund finance into a flow business line. In addition, the Company is pursuing nonpayment insurance business strategies through internal and/or external growth opportunities. Annuity Reinsurance On January 21, 2026, the Company purchased all of the outstanding share capital in Warwick Company (UK) Limited (Warwick), which is the 100% indirect owner of Assured Life Re, formerly known as Warwick Re Limited, for a purchase price of $158 million, subject to certain post-closing adjustments (Assured Life Re Acquisition). Assured Life Re is a Class E long-term (life) reinsurance company incorporated and registered in Bermuda. Assured Life Re focuses on annuity reinsurance including U.K. PRT and U.S. multi-year guaranteed annuity (MYGA) transactions. The Company believes that the acquisition of the Assured Life Re platform will provide it with annuity business opportunities that complement its financial guaranty and asset management businesses, are consistent with its risk profile and benefit from its core competencies, including credit analysis and underwriting. The Assured Life Re Acquisition represents the Company’s first platform dedicated solely to the annuity reinsurance business. The Company continues to investigate additional opportunities in the annuity reinsurance business and in other businesses in line with its risk profile and that would benefit from its core competencies. Asset Management The Company participates in the asset management business through its ownership interest in Sound Point, and does not directly manage investments for third parties. The Company’s ownership interest in Sound Point furthers its growth strategy 69 Table of Contents of participating in a diversifying fee-based earnings stream independent of the risk-based premiums generated by its FG business. Loss Mitigation In an effort to avoid, reduce or recover losses and potential losses in its financial guaranty insurance portfolio, the Company employs a number of strategies. In the public finance area, the Company believes its experience and the resources it is prepared to deploy, as well as its ability to provide bond insurance or other solutions, result in more favorable outcomes in distressed public finance situations than would be the case without its participation. This has been illustrated, for example, by the Company’s role in negotiating various agreements in connection with the restructuring of obligations of Puerto Rico and various obligations of its related authorities and public corporations, as well as Detroit, Michigan and Stockton, California. For public finance credits, the Company’s surveillance function monitors and proactively engages with the distressed credits to offer assistance aimed to improve operations and financial performance, including access to external consultants and other industry experts. The Company also, from time to time and where appropriate, participates in litigation to enforce or defend its rights in its financial guaranty business. For example, the Company initiated a number of legal actions to enforce its rights with respect to obligations of Puerto Rico and various obligations of its related authorities and public corporations. In addition, the Company successfully defended claims brought by Lehman Brothers International (Europe) (in administration) (LBIE) and prevailed in its counterclaim against LBIE; following the exhaustion of LBIE’s appeals, the Company recognized a realized gain on credit derivatives in first quarter 2025 of $103 million, which represents the full satisfaction of the judgment it was awarded and its claims for attorneys’ fees, expenses and interest in connection with this litigation. See Item 1. Financial Statements, Note 8. Derivatives, for additional information. The Company may also purchase attractively priced obligations, including below-investment-grade (BIG) obligations, that it has insured and for which it had expected losses to be paid, in order to mitigate the economic effect of insured losses (Loss Mitigation Securities). The fair value of Loss Mitigation Securities as of March 31, 2026 (excluding the value of the Company’s insurance) was $135 million. The Company is, and for over a decade has been, working with the servicers of some of the U.S. RMBS transactions it insures to encourage the servicers to provide alternatives to distressed borrowers that will encourage them to continue making payments on their loans to help improve the performance of the related RMBS. In some instances, the terms of the Company’s financial guaranty policies or the terms of certain workout orders and resolutions give it the option to pay principal on an accelerated basis on an obligation on which it has paid a claim, thereby reducing the amount of guaranteed interest due in the future. The Company has at times exercised this option, which uses cash but reduces projected future losses. The Company may also facilitate the issuance of refunding bonds, by either providing insurance on the refunding bonds or purchasing refunding bonds, or both. Refunding bonds may provide the issuer with payment relief. Enhancement of Investment Returns Through Alternative Investments The Company seeks to maintain an investment portfolio that supports the requirements of its insurance subsidiaries, strategic initiatives and liquidity needs, while maximizing the income it earns from such investments. In support of that goal, the Company aims to diversify the types of investments in its portfolio. Simultaneously with the Company’s acquisition of an ownership interest in Sound Point, AG engaged Sound Point as its sole alternative credit manager and transferred to Sound Point the management of certain existing alternative investments and related commitments. The Company expects to enhance its alternative investment opportunities and the return on its investments by investing $1 billion with Sound Point across multiple strategies, and establishing a long-term investment partnership with Sound Point pursuant to which AG has agreed to reinvest all returns of capital from Sound Point investments until July 1, 2038 and 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. See Item 1. Financial Statements, Note 9. Investments, for a description of the alternative investments agreement with Sound Point. Capital Management The Company’s capital management strategy is designed to efficiently allocate and utilize capital across the Assured Guaranty group in order to optimize outcomes for rating agency assessments, regulatory compliance and the Company’s own strategic initiatives and risk management requirements. The Company believes this disciplined approach to capital management 70 Table of Contents supports the long-term stability and strength of Assured Guaranty, enabling it to advance its financial guaranty, annuity reinsurance and asset management businesses, and other corporate strategies. Assured Guaranty seeks to enhance financial flexibility and resiliency by proactively managing its capital and aligning resources with its business objectives and stakeholder interests. Since the launch of its share repurchase program in 2013, the Company has returned $6.0 billion of excess capital to its shareholders by repurchasing 81% of its common shares outstanding at the beginning of the program. Summary of Share Repurchases Amount (1) Number of Shares Average price per share (1) (in millions, except per share data) 2013 - 2025 $ 5,863 156.09 $ 37.56 2026 (January 1 - March 31) 75 0.88 85.58 2026 (April 1 - May 6) 29 0.35 82.67 Cumulative repurchases since the beginning of 2013 $ 5,967 157.32 37.93 ____________________ (1) Excludes commissions. As of May 6, 2026, the Company was authorized to repurchase an additional $147 million of its common shares. As part of its overall capital management strategy, the Company regularly evaluates the level of its share repurchase program on a quarter-to-quarter basis, including alternative uses of available capital. The Company currently plans to reduce its share repurchases to a target of $30 million of its common shares over the next three months in order to use a portion of its available capital to support growth opportunities in its financial guaranty insurance and annuity reinsurance businesses, in addition to other strategic considerations. The timing, form and amount of any future share repurchases will be determined at the Company’s discretion and will depend on various factors, including alternative uses for capital, the Company’s regulatory capital position, rating agency capital considerations, availability of cash at the parent company, market conditions and legal and regulatory requirements. Any such share repurchases may be made from time to time through open‑market purchases or privately negotiated transactions, and there can be no assurance of the amount of share repurchases that will occur in the future. As of March 31, 2026, the estimated accretive effect of the cumulative repurchases of common shares since the beginning of 2013 was approximately: $68.14 per share in shareholders’ equity attributable to AGL, $71.47 per share in adjusted operating shareholders’ equity and $118.28 per share in adjusted book value (ABV). The Company considers the appropriate mix of debt and equity in its capital structure. The Company may in the future choose to issue new debt or redeem or purchase its existing debt. See “— Liquidity and Capital Resources — AGL and its U.S. Holding Companies.” Executive Summary This executive summary of management’s discussion and analysis highlights selected information and may not contain all of the information that is important to readers of this Quarterly Report. For a more detailed description of events, trends and uncertainties, as well as the capital, liquidity, credit, operational and market risks and the critical accounting policies and estimates affecting the Company, this Quarterly Report should be read in its entirety and in addition to the Company’s 2025 Annual Report on Form 10-K. The primary drivers of volatility in the Company’s net income include: loss and loss adjustment expense (LAE), changes in fair value of certain alternative investments, derivatives, FG VIEs, CIVs, trading securities and committed capital securities (CCS), as well as foreign exchange gains (losses), the level of refundings of insured obligations, the effects of any large transactions, settlements, commutations and loss mitigation strategies, among other factors. Changes in laws and regulations, among other factors, may also have a significant effect on reported net income or loss in a given reporting period. 71 Table of Contents Financial Performance of Assured Guaranty Financial Results First Quarter 2026 2025 (in millions, except per share amounts) GAAP Net income (loss) attributable to AGL $ 88 $ 176 Net income (loss) attributable to AGL per diluted share $ 1.91 $ 3.44 Weighted average diluted shares 45.4 50.7 Non-GAAP (1) Adjusted operating income (loss) $ 115 $ 162 Adjusted operating income per diluted share $ 2.50 $ 3.18 Weighted average diluted shares 45.4 50.7 Components of total adjusted operating income (loss) Financial Guaranty segment $ 102 $ 168 Annuity Reinsurance segment — — Asset Management segment 44 12 Corporate division (15) (20) Other (2) (16) 2 Adjusted operating income (loss) $ 115 $ 162 Financial Guaranty Segment Gross written premiums (GWP) $ 70 $ 35 Present value of new business production (PVP) (1) 73 39 Gross par written 7,511 5,002 As of March 31, 2026 As of December 31, 2025 Amount Per Share Amount Per Share (in millions, except per share amounts) Shareholders’ equity attributable to AGL $ 5,542 $ 124.28 $ 5,663 $ 125.32 Adjusted operating shareholders’ equity (1) 5,735 128.61 5,729 126.78 ABV (1) 8,416 188.74 8,424 186.43 Common shares outstanding (3) 44.6 45.2 ____________________ (1) See “— Non-GAAP Financial Measures” for a definition of the financial measures that were not determined in accordance with accounting principles generally accepted in the United States of America (GAAP), a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP measure, if available, and for additional details. (2) Relates to the effect of consolidating FG VIEs and CIVs. (3) See “— Overview — Key Business Strategies — Capital Management” above for information on common share repurchases. 72 Table of Contents Condensed Consolidated Results of Operations Condensed Consolidated Results of Operations Three Months Ended March 31, 2026 2025 (in millions) Revenues: Net earned premiums $ 82 $ 91 Net investment income 92 87 Net realized investment gains (losses) (15) (16) Fair value gains (losses) on derivatives 2 104 Fair value gains (losses) on CCS 6 2 Gains (losses) on FG VIEs (5) 1 Fair value gains (losses) on CIVs 9 19 Foreign exchange gains (losses) on remeasurement (19) 37 Fair value gains (losses) on trading securities 6 1 Asset management revenues 94 5 Other income (loss) 9 14 Total revenues 261 345 Expenses: Loss and LAE (benefit) 17 40 Benefit expense for annuity reinsurance contracts 7 — Interest expense 22 22 Amortization of deferred acquisition costs (DAC) 5 5 Employee compensation and benefit expenses 63 60 Asset management expenses 68 4 Other operating expenses 45 38 Total expenses 227 169 Income (loss) before income taxes and equity in earnings (losses) of investees 34 176 Equity in earnings (losses) of investees 31 53 Income (loss) before income taxes 65 229 Less: Provision (benefit) for income taxes (20) 44 Net income (loss) 85 185 Less: Noncontrolling interest (NCI) (3) 9 Net income (loss) attributable to Assured Guaranty Ltd. $ 88 $ 176 Effective tax rate (31.5) % 18.9 % First Quarter 2026 Compared with First Quarter 2025 Net income attributable to AGL for first quarter 2026 was lower compared with first quarter 2025 primarily due to the following: • a fair value gain on credit derivatives related to the resolution of the LBIE litigation of $103 million in first quarter 2025, • foreign exchange losses on remeasurement of $19 million in first quarter 2026, compared with gains of $37 million in first quarter 2025, and • lower equity in earnings of investees in first quarter 2026, primarily due to losses generated by the Company’s investment in a collateralized loan obligation (CLO) fund. 73 Table of Contents These decreases were partially offset by: • a discrete tax benefit of $33 million in first quarter 2026 resulting from the enactment of the U.K. Finance Act 2026, which clarified that certain Bermuda pre-regime deferred taxes are excluded from covered taxes under the Pillar Two global minimum tax framework, • the increase of $25 million in performance fees (net of related expenses) due to the impact of the payout of carried interest from the sale of the underlying asset in a single-asset fund in first quarter 2026, and • a lower loss and LAE in first quarter 2026 of $17 million, compared with a loss and LAE of $40 million in first quarter 2025. The Company’s effective tax rate reflects the proportion of income recognized by each of the Company’s operating subsidiaries in the jurisdiction in which they are taxed, with U.S. subsidiaries and foreign subsidiaries that have made an election to be a U.S. taxpayer taxed at the U.S. marginal corporate income tax rate of 21%, U.K. subsidiaries taxed at the U.K. marginal corporate tax rate of 25%, the French subsidiary taxed at the French marginal corporate tax rate of 25%, and AG Re and Cedar Personnel Ltd. taxed at the Bermuda marginal corporate tax rate of 15% starting January 1, 2025. See Item 1. Financial Statements, Note 12. Income Taxes. The following tables present pre-tax income by jurisdiction. Pre-tax Income (Loss) by Tax Jurisdiction First Quarter 2026 2025 (in millions) U.K. $ (8) $ (9) Foreign: U.S. $ 67 $ 194 Bermuda 10 46 France (4) (2) Total $ 65 $ 229 Adjusted Operating Income Adjusted operating income in first quarter 2026 was $115 million, compared with $162 million in first quarter 2025. The decrease was primarily due to a $103 million gain related to the resolution of the LBIE litigation in first quarter 2025 and a decrease of $22 million of equity in earnings of investees in first quarter 2026, primarily due to losses generated by the Company’s investment in a CLO fund, offset in part by a $33 million discrete tax benefit resulting from the enactment of the U.K. Finance Act 2026, a $25 million increase in performance fees, net of related expenses, due to the impact of the payout of carried interest from the sale of the underlying asset in a single-asset fund in first quarter 2026 and a $23 million decrease in loss expense in the public finance sector in first quarter 2026. See “— Results of Operations — Reconciliation to GAAP” for the reconciliation of net income (loss) attributable to AGL to adjusted operating income (loss). Book Value and ABV Shareholders’ equity attributable to AGL as of March 31, 2026 decreased compared with December 31, 2025, primarily due to unrealized losses on the investment portfolio, share repurchases and dividends, partially offset by net income. Adjusted operating shareholders’ equity increased primarily due to adjusted operating income, partially offset by share repurchases and dividends. ABV decreased primarily due to share repurchases, dividends and loss development, partially offset by adjusted operating income, GWP and the accretive effect of Assured Life Re Acquisition. See “— Non-GAAP Financial Measures” below for the reconciliation of shareholders’ equity attributable to AGL to adjusted operating shareholders' equity and ABV. On a per share basis, shareholders’ equity attributable to AGL decreased primarily due to unrealized losses on the investment portfolio. Adjusted operating shareholders’ equity and ABV increased as of March 31, 2026 compared with December 31, 2025, due, in part, to the accretive effect of the share repurchase program and Assured Life Re Acquisition. See “— Non-GAAP Financial Measures” for the reconciliation of shareholders’ equity attributable to AGL to adjusted operating shareholders’ equity and ABV. 74 Table of Contents Other Matters Middle East Conflict The Company’s surveillance and treasury functions reviewed the Company’s insurance and investment portfolios for exposure to the Middle East and identified no material direct exposure to the area. The Company’s direct insurance exposure to the area is generally limited to funded and unfunded commitments to fund finance facilities. When fund finance facilities are launched, they obtain aggregate commitments across numerous investors in the fund. For certain facilities guaranteed by the Company, a small minority of investors, generally sovereign wealth funds and pensions, are domiciled in the Middle East. Fund finance facilities guaranteed by the Company are always overcollateralized with uncalled capital commitments exceeding borrowings, and defaults of Middle East investors alone cannot cause a loss. Such facilities have additional mitigants, including the ability to call on performing investors to cover the obligations of defaulting investors and rights to sell defaulting positions to other investors at a discount. The Company rates all such insurance exposure investment grade. The most recent events around the Strait of Hormuz have caused oil prices to rise, which the Company believes has increased upward pressure on interest rates and inflation, especially in the U.K. For information on the impact on the Company of any future increases in interest rates and inflation, see “ — Overview — Economic Environment — Inflation" and " — Interest Rates.” Russia’s Invasion of Ukraine Russia’s invasion of Ukraine has led to the imposition of economic sanctions by many western countries against Russia and certain Russian individuals, dislocation in global energy markets, massive refugee movements and payment default by certain Russian credits. The economic sanctions imposed by western governments, along with decisions by private companies regarding their presence in Russia, continue to reduce western economic ties to Russia and to reshape global economic and political ties more generally, and the Company cannot predict all of the potential effects of the conflict on the world or the Company. The Company’s surveillance and treasury functions have reviewed the Company’s insurance and investment portfolios, respectively, and have identified no material direct exposure to Ukraine or Russia. In fact, the Company’s direct insurance exposure to Eastern Europe generally is limited to $196 million in net par outstanding as of March 31, 2026, consisting of the sovereign debt of Poland. The Company rates this exposure investment grade. 2026 U.S. Operation in Venezuela On January 3, 2026, the U.S. executed an operation within Venezuela apprehending President Nicolas Maduro and his wife Cilia Flores who were taken to New York City and indicted in the U.S. Southern District Court of New York on several charges related to narcoterrorism. In light of this development, the Company’s surveillance and treasury functions have reviewed the Company’s insurance and investment portfolios, respectively, and have identified no direct exposure to Venezuela. The Company’s direct insurance exposure to South America is generally limited to $132 million in net par outstanding as of March 31, 2026, consisting of infrastructure finance in Colombia and Chile. The Company rates these exposures investment grade. Results of Operations Critical Accounting Estimates The preparation of financial statements in accordance with GAAP requires the application of accounting policies that often involve a significant degree of judgment and require the Company to make estimates and assumptions, based on available information, that affect the amounts of assets, liabilities, revenues and expenses reported in the condensed consolidated financial statements. Estimates are inherently subject to change and actual results could differ from those estimates, and the differences may be material to the condensed consolidated financial statements. Critical estimates and assumptions are periodically evaluated based on historical developments, market conditions, industry trends and other information that is reasonable under the circumstances. There can be no assurance that actual results will conform to estimates and assumptions and that reported results of operations will not be materially different in the future due to changes in these estimates and assumptions. 75 Table of Contents Listed below are the accounting estimates that the Company believes are most dependent on the application of judgment and assumptions. • Expected loss to be paid (recovered); • Liabilities for future policy benefits; • Acquisition date fair values of Assured Life Re’s assets and liabilities; • Fair value of certain assets and liabilities, primarily: • Investments (primarily alternative investments) • Assets and liabilities of FG VIEs • Derivatives; • Impairments of equity method investments and credit allowances for financial instruments; and • Income tax assets and liabilities, including the recoverability of all deferred tax assets (liabilities) and in particular the Bermuda deferred tax asset recorded in 2023. See Part II, Item 8, Financial Statements and Supplementary Data, Note 1, Business and Basis of Presentation, of the Company’s 2025 Annual Report on Form 10-K for the Company’s significant accounting policies which includes a reference to the applicable note where further details regarding the significant estimates and assumptions are provided, as well as Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk, of the Company’s 2025 Annual Report on Form 10-K for further details regarding the sensitivity analyses. Results of Operations by Segment The Company analyzes the operating performance of each segment using each segment’s adjusted operating income as described in Item 1. Financial Statements, Note 3. Segment Information. Financial Guaranty Segment Results Financial Guaranty Segment Results First Quarter 2026 2025 (in millions) Segment revenues Net earned premiums and credit derivative revenues $ 86 $ 134 Net investment income 88 86 Foreign exchange gains (losses) on remeasurement (1) 4 Fair value gains (losses) on trading securities 6 1 Other income (loss) 3 14 Total segment revenues 182 239 Segment expenses Loss expense (benefit) 17 (23) Amortization of DAC 5 5 Employee compensation and benefit expenses 54 52 Other operating expenses 31 30 Total segment expenses 107 64 Equity in earnings (losses) of investees 8 30 Segment adjusted operating income (loss) before income taxes 83 205 Less: Provision (benefit) for income taxes (19) 37 Segment adjusted operating income (loss) $ 102 $ 168 76 Table of Contents Net Earned Premiums and Credit Derivative Revenues Premiums are earned over the contractual lives, or in the case of insured obligations backed by homogeneous pools of assets, the remaining expected lives, of FG insurance contracts. The Company periodically estimates remaining expected lives of its insured obligations backed by homogeneous pools of assets and makes prospective adjustments for such changes in expected lives. Scheduled net earned premiums decrease each year unless replaced by a higher amount of new business or books of business acquired in business combinations. See Item 1. Financial Statements, Note 6. Contracts Accounted for as Financial Guaranty Insurance, Premiums, for additional information. Net earned premiums due to accelerations are attributable to changes in the expected lives of insured obligations driven by: (i) refundings of insured obligations; or (ii) terminations or modifications of insured obligations either through negotiated agreements or the exercise of the Company’s contractual rights to make claim payments on an accelerated basis. Refundings occur in the public finance market when municipalities and other public finance issuers pay down insured obligations prior to their originally scheduled maturities. Refundings tend to increase when issuers can refinance their debt obligations at lower rates than they are currently paying. The premiums associated with the insured obligations of municipalities and other public finance issuers are generally received upfront when the obligations are issued and insured. When issuers pay down insured obligations, the Company is no longer on risk for payment defaults and therefore accelerates the recognition of any remaining nonrefundable deferred premium revenue. The amortization of the Company’s outstanding book of business along with the previously high levels of refunding activity and the higher interest rate environment have led to a lower volume of refunding opportunities over the last several years. Terminations are generally negotiated agreements with beneficiaries resulting in the extinguishment of the Company’s FG insurance obligation. Terminations have historically been more common in the structured finance sector but may also occur in the public finance sector. While each termination may have different terms, they all result in the expiration of the Company’s insurance risk, the acceleration of the recognition of the associated deferred premium revenue and the reduction of any remaining premiums receivable. Financial Guaranty Segment Net Earned Premiums and Credit Derivative Revenues First Quarter 2026 2025 (in millions) Net earned premiums: FG insurance: Public finance Scheduled net earned premiums (1) $ 70 $ 68 Refundings, terminations and modifications (7) 5 Total public finance 63 73 Structured finance Scheduled net earned premiums (1) 17 17 Accelerations 1 — Total structured finance 18 17 Specialty insurance and reinsurance 2 1 Total net earned premiums 83 91 Credit derivative revenues 3 43 Total net earned premiums and credit derivative revenues $ 86 $ 134 ____________________ (1) Includes accretion of discount. Net earned premiums and credit derivative revenues decreased in first quarter 2026 compared with first quarter 2025 primarily due to credit derivative revenues related to the resolution of the LBIE litigation in first quarter 2025 (see Item 1. Financial Statements, Note 8. Derivatives) and negative refundings, terminations and modifications in first quarter 2026, which was a result of a significant modification of a large long-dated financial guaranty transaction, which was accounted for as an 77 Table of Contents extinguishment of the old policy and a recording of the corresponding replacement policy. As of March 31, 2026, $3.6 billion of net deferred premium revenue remained to be earned over the life of the FG insurance contracts. New Business Production Gross Written Premiums and New Business Production First Quarter 2026 2025 (in millions) GWP Public finance—U.S. $ 48 $ 25 Public finance—non-U.S. 8 (1) Structured finance—U.S. 6 7 Structured finance—non-U.S. 8 4 Total GWP $ 70 $ 35 PVP (1): Public finance—U.S. $ 48 $ 25 Public finance—non-U.S. 8 7 Structured finance—U.S. 7 2 Structured finance—non-U.S. 10 5 Total PVP $ 73 $ 39 Gross Par Written (1): Public finance—U.S. $ 3,957 $ 4,269 Public finance—non-U.S. 92 197 Structured finance—U.S. 1,534 121 Structured finance—non-U.S. 1,928 415 Total gross par written $ 7,511 $ 5,002 ____________________ (1) PVP and Gross Par Written in the table above are based on “close date,” when the transaction settles. See “— Non-GAAP Financial Measures — PVP or Present Value of New Business Production.” PVP was discounted at 4.5% and 5.0% in first quarter 2026 and first quarter 2026, respectively. GWP relates to FG insurance and reinsurance contracts for both FG and specialty business. FG insurance and reinsurance GWP includes: (i) amounts collected upfront on new business written; (ii) the present value of future contractual or expected premiums on new financial guaranty business written (discounted at risk-free rates); and (iii) the effects of changes in the estimated premium or lives of certain transactions in the in-force book of business. Specialty business GWP is recorded as premiums are due. Credit derivatives are accounted for at fair value and therefore not included in GWP. PVP and gross par written include the present value of future gross revenues and exposure, respectively, associated with a financial guaranty written by the Company that, under GAAP, is accounted for under Accounting Standards Codification (ASC) 460, Guarantees . The non-GAAP financial measure, PVP, includes upfront premiums and the present value of expected future installments on new business at the time of issuance, discounted at the approximate average pre-tax book yield of fixed-maturity securities purchased during the prior calendar year, for all contracts regardless of form or accounting model. See “— Non-GAAP Financial Measures” below. U.S. public finance GWP and PVP include transactions closed in both the primary and secondary markets. U.S. public finance GWP and PVP were nearly double in first quarter 2026 compared with first quarter 2025, primarily due to healthcare and infrastructure finance transactions that were written in first quarter 2026. While GWP and PVP both increased in first quarter 2026, compared with first quarter 2025, gross par written in first quarter 2026 decreased compared with first quarter 2025. The Company’s primary par written represented 53% of the total U.S. municipal market insured par sold in first quarter 2026, compared with 64% in first quarter 2025, and the Company’s penetration of all municipal issuance was 3.2% in first quarter 2026 compared with 3.9% in first quarter 2025. 78 Table of Contents Non-U.S. public finance GWP and PVP in first quarter 2026 included a secondary local authority transaction in the U.K. annual extensions of liquidity facilities, and a primary social housing transaction in France, marking the Company’s inaugural primary guarantee in the social housing market within the European Union. U.S. and non-U.S. structured finance GWP and PVP in first quarter 2026 were primarily attributable to fund finance and financial guarantees for life insurance capital management purposes. Business activity in the non-U.S. public finance and structured finance markets often has long lead times and therefore may vary from period to period. Income from Investments Net investment income is a function of the yield that the Company earns on available-for-sale fixed-maturity securities and short-term investments and the size of such portfolio. The investment yield on fixed-maturity securities is a function of market interest rates at the time of investment as well as the type, credit quality and maturity of the securities in this portfolio. Contingent value instruments (CVIs) issued by Puerto Rico and received as part of the resolution of defaulting Puerto Rico exposures in 2022 are classified as trading with changes in fair value reported in “fair value gains (losses) on trading securities” in the condensed consolidated statements of operations. The fair value of remaining CVIs as of March 31, 2026 and December 31, 2025 was $119 million and $114 million, respectively. Equity method investments in the Financial Guaranty segment include certain alternative investments. The income (loss) on such investments is reported in “equity in earnings (losses) of investees” and typically represents the Company’s share of earnings of its investees. As part of a stock redemption that occurred in the third quarter of 2025, certain alternative investments were distributed to AGMH, whose results are reported in the Corporate division. Financial Guaranty Segment Income from Investments First Quarter 2026 2025 (in millions) Net investment income Fixed-maturity securities, available-for-sale $ 79 $ 75 Short-term investments 7 9 Intercompany loans 2 2 Other invested assets 1 1 Investment income 89 87 Investment expenses (1) (1) Net investment income $ 88 $ 86 Fair value gains (losses) on trading securities $ 6 $ 1 Equity in earnings (losses) of investees CLOs $ (11) $ 8 Private healthcare investing 12 12 Asset-based/specialty finance 6 9 Commercial real estate finance 1 — Other — 1 Equity in earnings (losses) of investees $ 8 $ 30 Net investment income for first quarter 2026 increased compared with first quarter 2025, primarily due to a shift in the portfolio to higher yielding corporate securities, offset in part by $8 million of lower income from CLOs and Loss Mitigation Securities. Short-term investment income declined as a result of lower short-term interest rates and lower short-term average investment balances. The Company’s overall pre-tax book yield of available-for-sale fixed-maturity securities and short-term investments was 4.78% as of March 31, 2026 and 4.58% as of March 31, 2025. 79 Table of Contents Equity in earnings (losses) of investees for first quarter 2026 decreased compared with first quarter 2025, primarily due to losses in a CLO fund. Other Income (Loss) The decrease in “other income (loss)” in first quarter 2026 was primarily related to additional income in first quarter 2025 associated with the workout and purchase of bonds issued by a U.K. regulated utility to which the Company has insured exposure. Economic Loss Development (Benefit) The insured portfolio includes policies accounted for under several different accounting models depending on the characteristics of the contract and the Company’s control rights. For a discussion of methodologies and significant estimates for expected loss to be paid (recovered), see Part II, Item 8, Financial Statements and Supplementary Data, Note 4, Expected Loss to be Paid (Recovered), of the Company’s 2025 Annual Report on Form 10-K. The GAAP accounting policies for measurement and recognition for each type of contract are described in the notes listed below in Part II, Item 8, Financial Statements and Supplementary Data, of the Company’s 2025 Annual Report on Form 10-K: • Note 5 for contracts accounted for as insurance; • Note 6 for contracts accounted for as credit derivatives; • Note 8 for FG VIEs; and • Note 9 for fair value methodologies for credit derivatives and FG VIEs’ assets and liabilities. In order to efficiently evaluate and manage the economics of the entire insured portfolio, management compiles and analyzes expected loss information for all policies on a consistent basis. The discussion of losses that follows encompasses expected losses on all contracts in the insured portfolio regardless of accounting model, unless otherwise specified. Net expected loss to be paid (recovered) is equal to the present value of expected future cash outflows for loss and LAE payments, net of: (i) inflows for expected salvage, subrogation and other recoveries; (ii) excess spread on underlying collateral, as applicable; and (iii) amounts ceded to reinsurers. Assumptions used in the determination of the net expected loss to be paid (recovered) such as delinquency, severity, discount rates and expected time frames to recovery are consistent for each sector regardless of the accounting model used. Current risk-free rates are used to discount expected losses at the end of each reporting period. Therefore, changes in such rates from period to period affect economic loss development and loss and LAE. However, the effect of changes in discount rates is not indicative of actual credit impairment or improvement. The weighted average discount rates used to discount expected losses (recoveries) were 4.16% and 3.92% as of March 31, 2026 and December 31, 2025, respectively. The composition of economic loss development (benefit) by accounting model and by sector is presented in the tables that follow, and the drivers of economic loss development (benefit) are discussed below. Net Expected Loss to be Paid (Recovered) and Net Economic Loss Development (Benefit) by Accounting Model Net Expected Loss to be Paid (Recovered) Net Economic Loss Development (Benefit) As of First Quarter Accounting Model March 31, 2026 December 31, 2025 2026 2025 (in millions) FG insurance $ 129 $ 88 $ 44 $ 48 FG VIEs 12 13 — — Credit derivatives — — — (63) (1) Total $ 141 $ 101 $ 44 $ (15) (in billions) Net exposure rated BIG $ 8.64 $ 8.77 ___________________________________________ (1) Includes $63 million of recoveries related to the resolution of the LBIE litigation. 80 Table of Contents Net Expected Loss to be Paid (Recovered) Roll Forward by Sector First Quarter 2026 Sector Net Expected Loss to be Paid (Recovered) as of December 31, 2025 Net Economic Loss Development (Benefit) Net (Paid) Recovered Losses (1) Net Expected Loss to be Paid (Recovered) as of March 31, 2026 (in millions) Public finance: U.S. public finance $ (31) $ 45 $ (11) $ 3 Non-U.S. public finance 126 2 — 128 Public finance 95 47 (11) 131 Structured finance: U.S. RMBS (54) (2) 8 (48) Other structured finance 60 (1) (1) 58 Structured finance 6 (3) 7 10 Total $ 101 $ 44 $ (4) $ 141 First Quarter 2025 Sector Net Expected Loss to be Paid (Recovered) as of December 31, 2024 Net Economic Loss Development (Benefit) Net (Paid) Recovered Losses (1) Net Expected Loss to be Paid (Recovered) as of March 31, 2025 (in millions) Public finance: U.S. public finance $ 18 $ 29 $ (12) $ 35 Non-U.S. public finance 98 24 — 122 Public finance 116 53 (12) 157 Structured finance: U.S. RMBS (43) (3) 9 (37) Other structured finance 33 (65) 62 30 Structured finance (10) (68) 71 (7) Total $ 106 $ (15) $ 59 $ 150 ____________________ (1) Net of ceded paid losses, whether or not such amounts have been settled with reinsurers. Ceded paid losses are typically settled 45 days after the end of the reporting period. Such amounts are recorded as reinsurance recoverable on paid losses in “other assets.” The effect of changes in the risk-free rates included in economic loss development (benefit) was a benefit of $4 million in first quarter 2026 and a loss of $5 million in first quarter 2025. First Quarter 2026 Net Economic Loss Development Public Finance: The economic loss development of $45 million for U.S. public finance exposures was primarily attributable to Brightline Trains Florida LLC and Puerto Rico Electric Power Authority (PREPA). U.S. RMBS : The economic benefit for U.S. RMBS was $2 million and was primarily attributable to higher recoveries for charged-off second lien loans. See Item 1. Financial Statements, Note 5. Expected Loss to be Paid (Recovered), for additional information. 81 Table of Contents First Quarter 2025 Net Economic Loss Development Public Finance: The economic loss development of $29 million for U.S. public finance exposures was primarily attributable to PREPA. The economic loss development of $24 million for non-U.S. public finance exposures was primarily attributable to certain U.K. regulated utilities. U.S. RMBS : The economic benefit for U.S. RMBS was $3 million and was primarily attributable to higher recoveries for charged-off second lien loans and improved performance in certain transactions. Other Structured Finance : The benefit attributable to other structured finance of $65 million was primarily attributable to recoveries related to the resolution of the LBIE litigation (see Item 1. Financial Statements, Note 8. Derivatives). Financial Guaranty Segment Loss Expense The primary differences between net economic loss development and the amount reported as “loss and LAE (benefit)” in the condensed consolidated statements of operations are that loss and LAE (benefit): (i) considers deferred premium revenue in the calculation of loss reserves for FG insurance contracts; (ii) eliminates loss and LAE related to FG VIEs; and (iii) does not include estimated losses or benefits on credit derivatives. For FG insurance contracts, each transaction’s expected loss to be expensed is compared with the deferred premium revenue of that transaction. Expected loss to be expensed represents past or expected future net claim payments that have not yet been expensed. Such amounts will be expensed in future periods as deferred premium revenue amortizes into income on FG insurance policies. Expected loss to be expensed is the Company’s projection of incurred losses that will be recognized in future periods, excluding accretion of discount. When the expected loss to be expensed exceeds the deferred premium revenue, a loss is recognized in income for the amount of such excess. Therefore, the timing of loss recognition in income does not necessarily coincide with the timing of the actual credit impairment or improvement reported in net economic loss development. Transactions acquired in business combinations or seasoned portfolios assumed from legacy FG insurers (particularly BIG transactions) generally have large deferred premium revenue balances. To the extent that a BIG transaction has a large deferred premium revenue, the difference between economic development and loss and LAE may be significant. While expected loss to be paid (recovered) is an important measure that provides the present value of amounts that the Company expects to pay or recover in future periods regardless of accounting model, expected loss to be expensed is important because it represents the Company’s projection of net expected losses that will be recognized in the consolidated statements of operations in future periods as deferred premium revenue amortizes into income. For additional information on the expected timing of net expected losses to be expensed, see Item 1. Financial Statements, Note 6. Contracts Accounted for as Financial Guaranty Insurance. The amount of Financial Guaranty segment loss expense, which includes losses on policies regardless of form, is a function of the amount of economic loss development discussed above and the deferred premium revenue amortization in a given period, on a contract-by-contract basis. The following table presents the Financial Guaranty segment loss expense (benefit). 82 Table of Contents Financial Guaranty Segment Loss Expense (Benefit) First Quarter 2026 2025 (in millions) U.S. public finance $ 12 $ 36 Non-U.S. public finance 7 6 Structured finance: U.S. RMBS (1) — Other structured finance (1) (1) (65) Structured finance (2) (65) Total Financial Guaranty segment loss expense (benefit) $ 17 $ (23) ____________________ (1) First quarter 2025 includes $63 million of recoveries in connection with the resolution of the LBIE litigation (see Item 1. Financial Statements, Note 8. Derivatives). Annuity Reinsurance Segment Results Annuity Reinsurance Segment Results First Quarter 2026 (in millions) Segment revenues: Net investment income $ 5 Fair value gains (losses) on derivatives 5 Total segment revenues (1) 10 Segment expenses: Benefit expense for annuity reinsurance contracts (2) 7 Employee compensation and benefit expenses 2 Other operating expenses 2 Total segment expenses 11 Income (loss) before income taxes (1) Less: Provision (benefit) for income taxes (1) Segment adjusted operating income (loss) $ — ____________________ (1) Segment revenues include $5 million related to PRT and $5 million related to MYGA. (2) Benefit expense for annuity reinsurance contracts includes $4 million related to PRT and $3 million related to MYGA. On January 21, 2026, the Company entered the annuity reinsurance market through the acquisition of Warwick. See “— Overview — Key Business Strategies — Annuity Reinsurance.” Assured Life Re reinsures a block of PRT business, with future policy benefit reserves of $475 million, supported by a $594 million portfolio of fixed-maturity, short-term securities, cash, derivatives and other assets, as well as a block of MYGA business with a policyholder account value of $263 million, as part of a funds withheld coinsurance arrangement, for which the Company carries funds withheld receivable of $296 million. The assets supporting the PRT contract primarily consist of U.S. and U.K. corporate and government bonds, including a portfolio of inflation-linked bonds, as well as derivatives which economically hedge the currency, inflation and interest rate mismatches between the PRT liabilities, which are long-dated inflation-linked obligations denominated in pounds sterling, and the investment portfolio which includes certain U.S. dollar denominated and non-inflation linked securities. The MYGA policyholder account balances for annuity reinsurance contracts are supported by assets in a funds withheld arrangement with the cedant primarily consisting of mortgage and other asset-backed securities. 83 Table of Contents The Company also maintains $22 million of fixed-maturity securities for Assured Life Re’s own account. See Item 1. Financial Statements, Note 7. Annuity Reinsurance. Asset Management Segment Results Asset Management Segment Results First Quarter 2026 2025 (in millions) Segment revenues $ 118 $ 6 Less: Segment expenses 68 4 Equity in earnings (losses) of investees 6 13 Segment adjusted operating income (loss) before income taxes 56 15 Less: Provision (benefit) for income taxes 12 3 Segment adjusted operating income (loss) $ 44 $ 12 Results in the table above primarily represent (i) equity in earnings (losses) of Sound Point $6 million in first quarter 2026 and $13 million in first quarter 2025 (Sound Point results are reported on a one quarter lag), net of the amortization of finite-lived intangible assets associated with the basis difference in Sound Point, and (ii) other asset management related income, including the impact of the payout of carried interest from the sale of the underlying asset in a single-asset fund. Corporate Division Results Corporate Division Results First Quarter 2026 2025 (in millions) Revenues Bargain purchase gain $ 6 $ — Other 2 4 Total revenues 8 4 Expenses Interest expense 24 24 Employee compensation and benefit expenses 7 8 Other operating expenses 12 8 Total expenses 43 40 Equity in earnings (losses) of investees 19 16 Adjusted operating income (loss) before income taxes (16) (20) Less: Provision (benefit) for income taxes (1) — Adjusted operating income (loss) $ (15) $ (20) In connection with the Assured Life Re Acquisition, the Company recognized a provisional bargain purchase gain of $6 million. See Item 1. Financial Statements, Note 2. Assured Life Re Acquisition, for additional information. Corporate division interest expense primarily relates to debt issued by the U.S. Holding Companies, and also includes intersegment interest expense. See “— Liquidity and Capital Resources — AGL and its U.S. Holding Companies, Intercompany Loans Payable” for additional information. Equity in earnings of investees in first quarter 2026 and first quarter 2025 relates to certain legacy alternative investments. Corporate division employee compensation and benefits expenses and other operating expenses are an allocation of expenses based on time studies and represent the costs incurred and time spent on holding company activities, capital management, corporate oversight and governance including the Board’s expenses, legal fees and other direct or allocated expense. Other operating expenses were higher in first quarter 2026 compared to first quarter 2025 primarily due to higher professional fees related to Assured Life Re Acquisition. 84 Table of Contents Other (Effect of Consolidating FG VIEs and CIVs) The effect of consolidating FG VIEs and CIVs and intersegment eliminations are presented in “other.” See Item 1. Financial Statements, Note 3. Segment Information. As described in Item 1. Financial Statements, Note 10. Variable Interest Entities, the types of entities the Company consolidates when it is deemed to be the primary beneficiary primarily include: (i) FG VIEs; (ii) CIVs; and (iii) annuity reinsurance VIEs that have been established as part of coinsurance arrangements with cedants in the annuity reinsurance business to hold assets supporting assumed blocks of business. The Company eliminates the effects of intercompany transactions between its FG VIEs and CIVs and its FG insurance and asset management subsidiaries, as well as intercompany transactions between CIVs. Consolidating FG VIEs (as opposed to accounting for the related FG insurance contracts in the Financial Guaranty segment) has a gross-up effect on the condensed consolidated financial statements, and includes: (i) the establishment of the FG VIEs’ assets and liabilities and related changes in fair value on the condensed consolidated financial statements; (ii) eliminating the premiums and losses/recoveries associated with the FG insurance contracts between the FG insurance subsidiaries and the FG VIEs; and (iii) eliminating the investment balances associated with the FG insurance subsidiaries’ purchases of the debt obligations of the FG VIEs. Consolidating investment vehicles in which the Company invests (as opposed to accounting for them as equity method investments) has a significant effect on assets, liabilities and cash flows, and includes: (i) the establishment of the assets and liabilities of the CIVs, and related changes in fair value; (ii) eliminating the equity method investments of the FG insurance subsidiaries, and related equity in earnings (losses) of investees; and (iii) establishing NCI for amounts not owned by the Company. The economic effect of AG’s ownership interests in CIVs is presented in the Financial Guaranty segment as “equity in earnings (losses) of investees,” while the effect of CIVs is presented as separate line items (“fair value gains (losses) on consolidated investment vehicles” and “noncontrolling interest”) on a consolidated basis. The table below reflects the effect of consolidating FG VIEs and CIVs on the condensed consolidated statements of operations. The amounts represent: (i) the revenues and expenses of the FG VIEs and the CIVs; and (ii) the consolidation adjustments and eliminations between consolidated FG VIEs or CIVs and the operating and investment subsidiaries. 85 Table of Contents Effect of Consolidating FG VIEs and CIVs on the Condensed Consolidated Statements of Operations Increase (Decrease) First Quarter 2026 2025 Effect on Financial Statement Line Item (in millions) Gains (losses) on FG VIEs (1) $ (5) $ 1 Fair value gains (losses) on CIVs 9 19 Equity in earnings (losses) of investees (2) (2) (6) Other (3) (26) (2) Effect on income before tax (24) 12 Less: Tax provision (benefit) (5) 1 Effect on net income (loss) (19) 11 Less: Effect on NCI (4) (3) 9 Effect on net income (loss) attributable to AGL $ (16) $ 2 By Type of VIE FG VIEs $ — $ — CIVs (16) 2 Effect on net income (loss) attributable to AGL $ (16) $ 2 ____________________ (1) Changes in fair value of the FG VIEs’ assets and liabilities reported in the statements of operations are attributable to factors other than (i) changes in the Company’s own credit risk on the FG VIEs’ liabilities with recourse; and (ii) unrealized gains and losses on available-for-sale fixed-maturity securities. (2) Represents the elimination of the equity in earnings (losses) of investees of the Company’s investments in certain alternative investments, primarily Sound Point funds. (3) Includes net earned premiums, net investment income, foreign exchange gains (losses) on remeasurement, intersegment asset management revenues, other income (loss) and loss and LAE (benefit). (4) Represents the proportion of consolidated FG VIEs and CIVs managed by Sound Point that is not attributable to the Company’s ownership interest. 86 Table of Contents Reconciliation to GAAP Reconciliation of Net Income (Loss) Attributable to AGL to Adjusted Operating Income (Loss) First Quarter 2026 First Quarter 2025 Total Per Diluted Share Total Per Diluted Share (in millions, except per share amounts) Net income (loss) attributable to AGL $ 88 $ 1.91 $ 176 $ 3.44 Less pre-tax adjustments: Realized gains (losses) on investments (15) (0.33) (16) (0.30) Non-credit impairment-related fair value gains (losses) on credit derivatives (2) (0.05) (2) (0.04) Fair value gains (losses) of freestanding derivatives in the Annuity Reinsurance segment (2) (0.04) — — Realized and unrealized fair value gains (losses) of the embedded derivative in funds withheld (2) (0.04) — — Fair value gains (losses) on CCS 6 0.13 2 0.03 Foreign exchange gains (losses) on remeasurement of certain assets and liabilities (18) (0.39) 33 0.64 Total pre-tax adjustments (33) (0.72) 17 0.33 Less tax effect on pre-tax adjustments 6 0.13 (3) (0.07) Adjusted operating income (loss) $ 115 $ 2.50 $ 162 $ 3.18 Gain (loss) related to FG VIE and CIV consolidation (net of tax provision (benefit) of $(5) and $1) included in adjusted operating income $ (16) $ (0.37) $ 2 $ 0.05 Net Realized Investment Gains (Losses) The table below presents the components of net realized investment gains (losses). Net Realized Investment Gains (Losses) First Quarter 2026 2025 (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 (16) (10) Net realized investment gains (losses) $ (15) $ (16) 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. Non-Credit Impairment-Related Unrealized Fair Value Gains (Losses) on Credit Derivatives Changes in the fair value of credit derivatives occur because of changes in the Company’s own credit rating and credit spreads, collateral credit spreads, notional amounts, credit ratings of the referenced entities, expected terms, realized gains (losses) and other settlements, interest rates and other market factors. The components of changes in fair value of credit derivatives related to credit derivative revenues and changes in expected losses are included in Financial Guaranty segment results. Non-credit impairment-related changes in unrealized fair value gains and losses on credit derivatives are not included in adjusted operating income because they do not represent actual claims or losses and are expected to reverse to zero as the exposure approaches its maturity date. Changes in the fair value of the Company’s credit derivatives that do not reflect actual or expected claims or credit losses have no impact on the Company’s statutory claims-paying resources, rating agency capital or regulatory capital positions. Unrealized gains (losses) on credit derivatives may fluctuate significantly in future periods. Except 87 Table of Contents for underlying credit impairment, which is recognized as loss expense in the Financial Guaranty segment, the fair value adjustments on credit derivatives in the insured portfolio are non-economic adjustments that reverse to zero over the remaining term of that portfolio. See Item 1. Financial Statements, Note 11. Fair Value Measurement, for additional information. Fair Value Gains (Losses) of Freestanding Derivatives in the Annuity Reinsurance Segment The Company purchases swaps and forwards to economically hedge foreign currency, interest rate and inflation risks in the annuity reinsurance business. These derivatives are freestanding and not in designated hedging relationships in accordance with GAAP. See Item 1. Financial Statements, Note 11. Fair Value Measurement, for additional information. Realized and Unrealized Fair Value Gains (Losses) of the Embedded Derivative in Funds Withheld The funds withheld arrangement includes the Company’s right to receive the total return on the assets supporting the funds withheld coinsurance agreement, which represents an embedded derivative. The fair value of this embedded derivative is included in funds withheld on the condensed consolidated balance sheets and the change in its fair value is based on the unrealized gains and losses of the underlying assets. The changes in fair value of the embedded derivative in funds withheld related to realized and unrealized gains and losses of the underlying investment portfolio are not included in adjusted operating income. See Item 1. Financial Statements, Note 11. Fair Value Measurement and “— Liquidity and Capital Resources — Investment Portfolio — Funds Withheld,” for additional information. Fair Value Gains (Losses) on CCS Fair value gains (losses) on CCS are heavily affected by, and in part fluctuate with, changes in market credit spreads and interest rates, and other market factors and are not expected to result in an economic gain or loss. See Item 1. Financial Statements, Note 11. Fair Value Measurement. Foreign Exchange Gains (Losses) on Remeasurement Foreign exchange losses of $18 million in first quarter 2026 and gains $33 million gain in first quarter 2025 were primarily related to certain assets and liabilities such as premiums receivables and insurance liabilities that are long term in nature. Foreign exchange gains and losses are mainly due to changes in the exchange rate of the pound sterling and, to a lesser extent, the euro relative to the U.S. dollar. Approximately 67% and 68% of gross premiums receivable, net of commissions payable, as of March 31, 2026 and December 31, 2025, respectively, are denominated in currencies other than the U.S. dollar. Premiums on European infrastructure and structured finance transactions typically are paid, in whole or in part, on an installment basis, whereas premiums on U.S. public finance transactions are often paid upfront. Future policy benefits for annuity reinsurance contracts are all denominated in pound sterling. The following table presents the foreign exchange rates as of the balance sheet dates. Foreign Exchange Rates U.S. Dollar Per Foreign Currency As of March 31, 2026 As of December 31, 2025 As of March 31, 2025 As of December 31, 2024 Pound sterling $1.323 $1.348 $1.292 $1.252 Euro $1.155 $1.175 $1.082 $1.035 Non-GAAP Financial Measures The Company discloses both: (i) financial measures determined in accordance with GAAP; and (ii) financial measures not determined in accordance with GAAP (non-GAAP financial measures). Financial measures identified as non-GAAP should not be considered substitutes for GAAP financial measures. The primary limitation of non-GAAP financial measures is the potential lack of comparability to financial measures of other companies, whose definitions of non-GAAP financial measures may differ from those of the Company. The Company’s management believes that many investors, analysts and financial news reporters use adjusted operating shareholders’ equity and/or ABV, each further adjusted to remove the effect of FG VIE and CIV consolidation, as the principal financial measures for valuing AGL’s current share price or projected share price and also as the basis of their 88 Table of Contents decision to recommend, buy or sell AGL’s common shares and provides information that is necessary for analysts to calculate their estimates of Assured Guaranty’s financial results in their research reports on Assured Guaranty. Adjusted operating income, further adjusted for the effect of FG VIE and CIV consolidation, enables investors and analysts to evaluate the Company’s financial results in comparison with the consensus analyst estimates distributed publicly by financial databases. GAAP requires the Company to consolidate entities where it is deemed to be the primary beneficiary which include FG VIEs, which the Company does not own and where its exposure is limited to its obligation under the FG insurance contract, and certain CIVs in which subsidiaries invest. The Company discloses the effect of FG VIE and CIV consolidation that is embedded in each non-GAAP financial measure, as applicable. The Company believes this information may also be useful to analysts and investors evaluating Assured Guaranty’s financial results. In the case of both the consolidated FG VIEs and the CIVs, the economic effect on the Company of each of the consolidated FG VIEs and CIVs is reflected primarily in the results of the Financial Guaranty segment. The Company’s management and AGL’s Board of Directors use non-GAAP financial measures further adjusted to remove the effect of FG VIE and CIV consolidation when the consolidation effects are not consistent with the Company’s economic interest or exposure to those entities (which the Company refers to as its core financial measures), as well as GAAP financial measures and other factors, to evaluate the Company’s results of operations, financial condition and progress towards long-term goals. The Company uses core financial measures in its decision-making process and as a basis for establishing target levels and awards under the Company’s executive incentive compensation programs. The financial measures that the Company uses to help determine compensation are: (i) adjusted operating income per share, further adjusted to remove the effect of FG VIE and CIV consolidation (core operating income per share); (ii) adjusted operating shareholders’ equity per share, further adjusted to remove the effect of FG VIE and CIV consolidation (core operating shareholders’ equity per share); (iii) ABV per share, further adjusted to remove the effect of FG VIE and CIV consolidation (core ABV per share); (iv) core operating return on equity, which is calculated as core operating income divided by the average of core operating shareholders’ equity at the beginning and end of the period; and (v) PVP. The following paragraphs define each non-GAAP financial measure disclosed by the Company and describe why it is useful. To the extent there is a directly comparable GAAP financial measure, a reconciliation of the non-GAAP financial measure and the most directly comparable GAAP financial measure is presented below. Adjusted Operating Income The Company’s management believes that adjusted operating income is a useful measure because it clarifies the understanding of the operating results of the Company and excludes certain items that, under U.S. GAAP, (i) may vary significantly from period to period due to near-term market conditions or are otherwise not directly comparable or reflective of the underlying performance of the Company’s business, (ii) result in asymmetrical accounting adjustments, and/or (iii) non-economic accounting adjustments. Adjusted operating income is defined as net income (loss) attributable to AGL, as reported under GAAP, adjusted for the following: 1) Elimination of realized gains (losses) on investments that are recognized in net income (loss) attributable to AGL, except for gains and losses on securities classified as trading. The timing of realized gains and losses, which depends largely on market credit cycles, can vary considerably across periods. The timing of sales is largely subject to the Company’s discretion and influenced by market opportunities, as well as the Company’s tax and capital profile. 2) Elimination of non-credit impairment-related fair value gains (losses) on credit derivatives that are recognized in net income (loss) attributable to AGL, which is the amount of fair value gains (losses) in excess of the present value of the expected estimated economic credit losses. Such fair value adjustments are heavily affected by, and in part fluctuate with, changes in market interest rates, the Company’s credit spreads and other market factors and are not expected to result in an economic gain or loss. 3) Elimination of changes in fair value of freestanding derivatives in the Annuity Reinsurance segment that economically hedge market movements in financial instruments and insurance liabilities (but are not in designated hedging relationships in accordance with GAAP). Certain mark-to-market movements of the hedged market risks are not reported in net income (loss) attributable to AGL, such as changes in the unrealized gains and losses on the available-for-sale investment portfolio due to fluctuations in exchange 89 Table of Contents rates, and interest rates, and certain components of changes in insurance liabilities as a result of changes in interest rates. In addition, the timing of the recognition of mark-to-market movements as a result of inflation changes may not match the timing of the corresponding derivative gain and loss recognition. 4) Elimination of the changes in fair value of the embedded derivative in funds withheld that are recognized in net income (loss) attributable to AGL related to realized and unrealized gains (losses) of the underlying investment portfolio, whose value may change significantly from period to period due to near term market conditions. 5) Elimination of fair value gains (losses) on CCS that are recognized in net income (loss) attributable to AGL. Such amounts are affected by changes in market interest rates, the Company’s credit spreads, price indications on the Company’s publicly traded debt and other market factors and are not expected to result in an economic gain or loss. 6) Elimination of foreign exchange gains (losses) on remeasurement of assets and liabilities such as net premium receivables and insurance liabilities that are long term in nature that are recognized in net income (loss) attributable to AGL. Long-dated receivables and insurance reserves represent the present value of future contractual or expected cash flows. Therefore, the current period’s foreign exchange remeasurement gains (losses) are not necessarily indicative of the total foreign exchange gains (losses) that the Company will ultimately recognize. 7) Income tax allocated to the adjustments above. Adjusted operating income per share is calculated by dividing adjusted operating income by the weighted average diluted shares. The method for calculating weighted average diluted shares is in accordance with GAAP. See “— Results of Operations — Reconciliation to GAAP” for a reconciliation of net income (loss) attributable to AGL to adjusted operating income (loss). Adjusted Operating Shareholders’ Equity and ABV The Company’s management believes that adjusted operating shareholders’ equity is a useful measure because it excludes the fair value adjustments that are not expected to result in economic gain or loss. The Company’s management uses ABV, further adjusted to remove the effect of FG VIE and CIV consolidation, to measure the intrinsic value of the Company, excluding franchise value. The Company’s management believes that ABV is a useful measure because it enables an evaluation of the Company’s in-force premiums and revenues net of expected losses. Adjusted operating shareholders’ equity per share and ABV per share, each further adjusted for FG VIE and CIV consolidation (core operating shareholders’ equity per share and core ABV per share, respectively), are two of the key financial measures used in determining the amount of certain long-term compensation elements to management and employees and used by rating agencies and investors. Adjusted operating shareholders’ equity is defined as shareholders’ equity attributable to AGL, as reported under GAAP, adjusted for the following: 1) Elimination of non-credit impairment-related fair value gains (losses) on credit derivatives that are reported on the consolidated balance sheet, which is the amount of fair value gains (losses) in excess of the present value of the expected estimated economic credit losses. Such fair value adjustments are heavily affected by, and in part fluctuate with, changes in market interest rates, credit spreads and other market factors and are not expected to result in an economic gain or loss. 2) Elimination of fair value gains (losses) on CCS that are reported on the consolidated balance sheet. Such amounts are affected by changes in market interest rates, the Company’s credit spreads, price indications on the Company’s publicly traded debt and other market factors and are not expected to result in an economic gain or loss. 3) Elimination of unrealized gains (losses) on investments that are recorded as a component of accumulated other comprehensive income (AOCI). The AOCI component of the fair value adjustment on the investment portfolio is not deemed economic because the Company generally holds these investments to maturity and therefore would not result in an economic gain or loss. 90 Table of Contents 4) Elimination of the fair value of freestanding derivatives in the Annuity Reinsurance segment that economically hedge market movements in financial instruments and insurance liabilities (but are not in designated hedging relationships in accordance with GAAP), such as changes in fair value on derivatives that hedge fluctuations in foreign exchange, interest rates and inflation on the available-for-sale investment portfolio. 5) Elimination of the unrealized gains (losses) of the underlying investments in funds withheld arrangements. 6) Income tax allocated to the adjustments above. ABV is adjusted operating shareholders’ equity, as defined above, further adjusted for the following: 1) Elimination of deferred acquisition costs, net. These amounts represent net deferred expenses that have already been paid or accrued and will be expensed in future accounting periods. 2) Addition of the net present value of estimated net future revenue. See below. 3) Addition of deferred income on insurance contracts (including deferred profit liability and, in the case of FG insurance contracts, the amount of deferred premium revenue in excess of expected loss to be expensed, net of reinsurance). 4) Income tax allocated to the adjustments above. Shares outstanding as of the end of the reporting period are used to calculate adjusted operating shareholders’ equity per share and ABV per share. The unearned premiums and revenues included in ABV will be earned in future periods, but actual earnings may differ materially from the estimated amounts used in determining current ABV due to changes in foreign exchange rates, prepayment speeds, terminations, modifications, credit defaults, changes in assumptions for or actual experience of the annuity insurance business and other factors. 91 Table of Contents Reconciliation of Shareholders’ Equity Attributable to AGL to Adjusted Operating Shareholders’ Equity and ABV As of March 31, 2026 As of December 31, 2025 Total Per Share Total Per Share (dollars in millions, except share amounts) Shareholders’ equity attributable to AGL $ 5,542 $ 124.28 $ 5,663 $ 125.32 Less pre-tax adjustments: Non-credit impairment-related fair value gains (losses) on credit derivatives 52 1.17 55 1.21 Fair value gains (losses) on CCS 28 0.62 22 0.48 Unrealized gains (losses) on investment portfolio (304) (6.80) (149) (3.28) Fair value gains (losses) of freestanding derivatives in the Annuity Reinsurance segment (3) (0.07) — — Fair value gains (losses) of the embedded derivative in funds withheld 1 0.01 — — Less taxes 33 0.74 6 0.13 Adjusted operating shareholders’ equity 5,735 128.61 5,729 126.78 Pre-tax adjustments: Less: DAC 197 4.42 192 4.25 Plus: Net present value of estimated net future revenue 190 4.27 194 4.30 Plus: Net deferred revenues on insurance contracts 3,358 75.30 3,367 74.51 Plus taxes (670) (15.02) (674) (14.91) ABV $ 8,416 $ 188.74 $ 8,424 $ 186.43 Gain (loss) related to FG VIE and CIV consolidation included in: Adjusted operating shareholders’ equity (net of tax provision (benefit) of $(2) and $2) $ (8) $ (0.19) $ 8 $ 0.18 ABV (net of tax provision (benefit) of $(3) and $1) (13) (0.29) 3 0.07 Net Present Value of Estimated Net Future Revenue The Company’s management believes that this amount is a useful measure because it enables an evaluation of the present value of estimated net future revenue for non-FG insurance contracts. This amount represents the net present value of estimated future revenue from these contracts (other than credit derivatives with net expected losses), net of reinsurance, ceding commissions and premium taxes. Future installment premiums are discounted at the approximate average pre-tax book yield of fixed-maturity securities purchased during the prior calendar year, other than Loss Mitigation Securities. The discount rate is recalculated annually and updated as necessary. Net present value of estimated future revenue for an obligation may change from period to period due to a change in the discount rate or due to a change in estimated net future revenue for the obligation, which may change due to changes in foreign exchange rates, prepayment speeds, terminations, credit defaults or other factors that affect par outstanding or the ultimate maturity of an obligation. There is no corresponding GAAP financial measure. PVP or Present Value of New Business Production The Company’s management believes that PVP is a useful measure because it enables the evaluation of the value of new business production in the Financial Guaranty segment by taking into account the value of estimated future installment premiums on all new contracts underwritten in a reporting period as well as additional installment premiums and fees on existing contracts (which may result from supplements or fees or from the issuer not calling an insured obligation the Company projected would be called), regardless of form, which management believes GAAP GWP and changes in fair value of credit derivatives do not adequately measure. PVP in respect of contracts written in a specified period is defined as gross upfront and installment premiums received and the present value of gross estimated future installment premiums. Future installment premiums are discounted at the approximate average pre-tax book yield of fixed-maturity securities purchased during the prior calendar year, other than certain fixed-maturity securities such as Loss Mitigation Securities. The 92 Table of Contents discount rate is recalculated annually and updated as necessary. Under GAAP, financial guaranty installment premiums are discounted at a risk-free rate. Additionally, under GAAP, management records future installment premiums on FG insurance contracts covering non-homogeneous pools of assets based on the contractual term of the transaction, whereas for PVP purposes, management records an estimate of the future installment premiums the Company expects to receive, which may be based upon a shorter period of time than the contractual term of the transaction. Actual installment premiums may differ from those estimated in the Company’s PVP calculation due to factors including, but not limited to, changes in foreign exchange rates, prepayment speeds, terminations, amendments to policies, credit defaults or other factors that affect par outstanding or the ultimate maturity of an obligation. Reconciliation of GWP to PVP First Quarter 2026 First Quarter 2025 Public Finance Structured Finance Public Finance Structured Finance U.S. Non - U.S. U.S. Non - U.S. Total U.S. Non - U.S. U.S. Non - U.S. Total (in millions) GWP $ 48 $ 8 $ 6 $ 8 $ 70 $ 25 $ (1) $ 7 $ 4 $ 35 Less: Installment GWP and other GAAP adjustments (1) 14 8 6 8 36 2 (1) 6 4 11 Upfront GWP 34 — — — 34 23 — 1 — 24 Plus: Installment premiums and other (2) 14 8 7 10 39 2 7 1 5 15 PVP $ 48 $ 8 $ 7 $ 10 $ 73 $ 25 $ 7 $ 2 $ 5 $ 39 ___________________ (1) Includes the present value of new business on installment policies discounted at the prescribed GAAP discount rates, and GWP adjustments on existing installment policies due to changes in assumptions and other GAAP adjustments. (2) Includes the present value of future premiums and fees on new business paid in installments discounted at the approximate average pre-tax book yield of fixed-maturity securities purchased during the prior calendar year, other than certain fixed-maturity securities such as Loss Mitigation Securities. Insured Portfolio Financial Guaranty Exposure The following tables present information in respect of the financial guaranty insured portfolio to supplement the disclosures and discussion provided in Item 1. Financial Statements, Note 4. Outstanding Exposure. The following table presents the financial guaranty portfolio by sector, net of cessions to reinsurers. It includes all financial guaranty contracts outstanding as of the dates presented, regardless of the form written (i.e., credit derivative form or traditional FG insurance form) or the applicable accounting model (i.e., FG insurance, credit derivatives or FG VIE). 93 Table of Contents Financial Guaranty Portfolio Net Par Outstanding by Sector As of March 31, 2026 As of December 31, 2025 Sector (in billions) Public finance: U.S. public finance: General obligation $ 83.1 $ 82.3 Tax backed 36.0 36.1 Municipal utilities 31.6 31.4 Transportation 27.5 23.5 Healthcare 17.3 16.8 Infrastructure finance 11.2 15.1 Higher education 8.3 8.4 Renewable energy 0.2 0.2 Other public finance 1.2 1.2 Total U.S. public finance 216.4 215.0 Non-U.S. public finance: Regulated utilities 23.0 23.5 Infrastructure finance 15.7 16.0 Sovereign and sub-sovereign 8.1 8.3 Renewable energy 1.6 1.7 Pooled infrastructure 1.1 1.1 Total non-U.S. public finance 49.5 50.6 Total public finance 265.9 265.6 Structured finance: U.S. structured finance: Insurance reserve financings and securitizations 4.4 4.4 RMBS 1.3 1.4 Fund finance facilities 0.8 0.1 Pooled corporate obligations 0.6 0.6 Financial products 0.4 0.4 Other structured finance 0.8 1.0 Total U.S. structured finance 8.3 7.9 Non-U.S. structured finance: Fund finance facilities 2.5 1.6 Pooled corporate obligations 0.4 0.5 RMBS 0.2 0.2 Other structured finance 1.3 1.3 Total non-U.S. structured finance 4.4 3.6 Total structured finance 12.7 11.5 Total net par outstanding $ 278.6 $ 277.1 Exposure to Puerto Rico All of the Company’s insured exposure to various authorities and public corporations of Puerto Rico is rated BIG. The Company’s Puerto Rico net par and net debt service outstanding as of March 31, 2026 were $553 million and $632 million, respectively, compared with net par and net debt service outstanding as of December 31, 2025 of $553 million and $643 million, respectively. As of March 31, 2026, the Company’s only remaining outstanding unresolved insured Puerto Rico exposure subject to a payment default was PREPA, to which the Company had net par and debt service outstanding of $464 million and $528 94 Table of Contents million, respectively. As of December 31, 2025, the Company’s PREPA net par and debt service outstanding were $464 million and $537 million, respectively. See “—Liquidity and Capital Resources—Insurance Subsidiaries, Financial Guaranty Policies” below and Item 1. Financial Statements, Note 5. Expected Loss to be Paid (Recovered), for more information. The following table shows the scheduled amortization for PREPA. When PREPA defaults on its obligations, the Company is only required to pay the shortfall between the debt service due in any given period and the amount paid by PREPA; although in certain circumstances the Company may elect to pay such amounts on an accelerated basis. Amortization Schedule of PREPA Net Par Outstanding and Net Debt Service Outstanding As of March 31, 2026 Scheduled Net Par Amortization Scheduled Net Debt Service Amortization (in millions) 2026 (April 1 - June 30) $ — $ 2 2026 (July 1 - September 30) 106 114 2026 (October 1 - December 31) — 1 Subtotal 2026 106 117 2027 106 122 2028 68 80 2029 39 47 2030 44 52 2031-2037 101 110 Total $ 464 $ 528 Liquidity and Capital Resources AGL and its U.S. Holding Companies AGL directly owns (i) AG Re, an insurance company domiciled in Bermuda; and (ii) Assured Guaranty US Holdings Inc. (AGUS), a U.S. holding company with public debt outstanding. AGUS directly owns AGMH, a U.S. holding company with public debt outstanding. AGMH directly owns AG, an insurance company domiciled in Maryland. AGUS and AGMH are collectively referred to as the U.S. Holding Companies. Sources and Uses of Funds The liquidity of AGL and its U.S. Holding Companies is largely dependent on dividends, stock redemptions and other distributions from their operating subsidiaries (see “— Insurance Subsidiaries — Ordinary Dividends From Insurance Subsidiaries to Holding Companies” below) and access to external financing. The operating liquidity requirements of AGL and the U.S. Holding Companies include: • principal and interest on debt issued by AGUS and AGMH; • dividends on AGL’s common shares; and • the payment of operating expenses. AGL and its U.S. Holding Companies may also require liquidity to: • make capital investments in their operating subsidiaries and in alternative investments; • fund acquisitions of new businesses or expand insurance business; • purchase or redeem the Company’s outstanding debt; or • repurchase AGL’s common shares pursuant to AGL’s share repurchase authorization. In the ordinary course of business, the Company evaluates its liquidity needs and capital resources in light of holding company expenses and dividend policy, as well as rating agency considerations. The Company also subjects its cash flow projections and its assets to a stress test, maintaining a liquid asset balance of one and a half times its stressed operating company net cash flows over the next four quarters. Management believes that AGL will have sufficient liquidity to satisfy its 95 Table of Contents needs over the next twelve months. See “— Overview — Key Business Strategies, Capital Management” above for information on common share repurchases. External Financing From time to time, AGL and its subsidiaries have sought external debt or equity financing in order to meet their obligations. External sources of financing may or may not be available to the Company and, if available, the cost of such financing may not be acceptable to the Company. Long-Term Debt Obligations The Company has outstanding long-term debt issued by the U.S. Holding Companies. See Part II, Item 8, Financial Statements and Supplementary Data, Note 11, Long-Term Debt and Credit Facilities, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 and “— Guarantor and U.S. Holding Companies’ Summarized Financial Information” below. U.S. Holding Companies Long-Term Debt and Intercompany Loans As of March 31, 2026 As of December 31, 2025 (in millions) Effective Interest Rate Final Maturity Principal Amount AGUS - long-term debt 6.125% Senior Notes 6.125% 2028 $ 350 $ 350 3.15% Senior Notes 3.15% 2031 500 500 7% Senior Notes 6.40% 2034 200 200 3.6% Senior Notes 3.60% 2051 400 400 Series A Enhanced Junior Subordinated Debentures 3 month CME Term SOFR +2.64% 2066 150 150 AGUS long-term debt 1,600 1,600 AGUS - intercompany loans from: AG 3.50% 2029 200 200 AGRO 5.00% 2035 20 20 AGUS intercompany loans 220 220 Total AGUS long-term debt and intercompany loans 1,820 1,820 AGMH Junior Subordinated Debentures (1) 6.40% 2066 300 300 Total AGMH long-term debt 300 300 AGMH’s long-term debt purchased by AGUS (2) (154) (154) U.S. Holding Company long-term debt $ 1,966 $ 1,966 ____________________ (1) If the AGMH Junior Subordinated Debentures are outstanding after December 15, 2036, then the principal amount of the outstanding debentures will bear interest at One-Month Chicago Mercantile Exchange (CME) Term Secured Overnight Finance Rate (SOFR) plus 2.33%. (2) Represents principal amount of Junior Subordinated Debentures issued by AGMH that has been purchased by AGUS. From time to time, AGL and its subsidiaries have entered into intercompany loan facilities. For example, on October 25, 2013, AGL, as borrower, and AGUS, as lender, entered into a revolving credit facility pursuant to which AGL may, from time to time, borrow for general corporate purposes. Under the credit facility, AGUS committed to lend a principal amount not exceeding $225 million in the aggregate. The commitment under the revolving credit facility terminates on October 25, 2033 (the loan commitment termination date). The unpaid principal amount of each loan will bear semi-annual interest at a fixed rate equal to 100% of the then applicable interest rate as determined under Internal Revenue Code Section 1274(d). Accrued interest on all loans will be paid on the last day of each June and December and at maturity. AGL must repay unpaid principal amounts of the loans, if any, by the third anniversary of the loan commitment termination date. AGL has not drawn upon the credit facility. 96 Table of Contents For more information, see the Company’s 2025 Annual Report on Form 10-K, Part II, Item 8. Financial Statements and Supplementary Data, Note 11, Long-Term Debt and Credit Facilities. Guarantor and U.S. Holding Companies’ Summarized Financial Information AGL fully and unconditionally guarantees the payment of the principal of, and interest on, the $1,450 million aggregate principal amount of notes issued by the U.S. Holding Companies, the $450 million aggregate principal amount of junior subordinated debentures issued by the U.S. Holding Companies, and the intercompany loans. The following tables include summarized financial information for AGL and the U.S. Holding Companies, excluding their investments in subsidiaries. As of March 31, 2026 AGL U.S. Holding Companies (in millions) Assets, excluding investments in subsidiaries Fixed-maturity securities (1) $ 12 $ 13 Ownership interest in Sound Point — 406 Other invested assets — 203 Short-term investments and cash 26 99 Receivables from affiliates (2) 67 — Dividend receivable from other subsidiaries 50 — Other assets 1 29 Liabilities Long-term debt — 1,705 Loans payable to affiliates — 220 Payable to affiliates (2) 21 15 Other liabilities 6 78 ____________________ (1) As of March 31, 2026, the weighted average durations of AGL’s and the U.S. Holding Companies’ fixed-maturity securities were 10.7 years and 1.3 years, respectively. (2) Primarily represents receivables and payables with non-guarantor subsidiaries. First Quarter 2026 AGL U.S. Holding Companies (in millions) Revenues $ — $ — Expenses Interest expense — 24 Other expenses 12 5 Income (loss) before provision for income taxes and equity in earnings (losses) of investees (12) (29) Equity in earnings (losses) of investees — 25 Net income (loss) excluding investments in subsidiaries (12) (13) 97 Table of Contents The following table presents significant cash flow items for AGL and the U.S. Holding Companies (other than investment income, operating expenses and taxes) related to distributions from subsidiaries and outflows for debt service, dividends and other capital management activities. AGL and U.S. Holding Companies Selected Cash Flow Items First Quarter 2026 AGL U.S. Holding Companies (in millions) Dividends received from U.S. Holding Companies $ 40 $ — Dividends received from other subsidiaries 30 79 Distributions from equity method investees (1) — 17 Interest paid on long-term debt — (20) Return of capital from other subsidiaries 12 — Dividends paid to AGL — (40) Dividends paid to AGL shareholders (19) — Repurchases of common shares (2) (75) — ____________________ (1) Includes distributions from Sound Point of $14 million and other alternative investments. (2) See Item 1. Financial Statements, Note 14. Shareholders’ Equity, for additional information about share repurchases and authorizations. Generally, dividends paid by a U.S. company to a Bermuda holding company are subject to a 30% withholding tax. After AGL became tax resident in the U.K., it became subject to the tax rules applicable to companies resident in the U.K., including the benefits afforded by the U.K.’s tax treaties. The income tax treaty between the U.K. and the U.S. reduces or eliminates the U.S. withholding tax on certain U.S. sourced investment income (to 5% or 0%), including dividends from U.S. subsidiaries to U.K. resident persons entitled to the benefits of the treaty. Insurance Subsidiaries The Company has several FG insurance subsidiaries. AG is an insurance subsidiary domiciled in Maryland. As of August 1, 2024, AG owns: (i) AGUK, an insurance subsidiary domiciled in the U.K.; and (ii) AGE, an insurance company domiciled in France. AGUK and AGE are collectively referred to as the European Insurance Subsidiaries. AG Re is an insurance company domiciled in Bermuda that owns AGRO, an insurance company that is also domiciled in Bermuda. The Company conducts its annuity reinsurance business through Assured Life Re, an insurance company domiciled in Bermuda which was acquired by the Company on January 21, 2026. Sources and Uses of Funds Liquidity of the insurance subsidiaries is primarily used to pay for: • operating expenses, • claims on the insured portfolio, • annuity reinsurance benefits, • dividends or other distributions to parent, • reinsurance premiums, • expansion of the insurance business, and • capital investments in their own subsidiaries and in alternative investments. Financial Guaranty Management believes that the FG insurance subsidiaries’ liquidity needs for the next twelve months can be met from current cash, short-term investments and operating cash flow, including premium collections and coupon payments as well as scheduled maturities and paydowns from their respective investment portfolios. The Company generally targets a balance of its most liquid assets including cash and short-term securities, U.S. Treasuries, agency RMBS and pre-refunded municipal bonds 98 Table of Contents equal to 1.5 times its projected operating company cash flow needs over the next four quarters. As of March 31, 2026, the Company intended to hold and had the ability to hold securities in an unrealized loss position until the date of anticipated recovery of amortized cost. Beyond the next twelve months, the ability of the operating subsidiaries to declare and pay dividends may be influenced by a variety of factors, including market conditions, general economic conditions and, in the case of the Company’s FG insurance subsidiaries, insurance regulations and rating agency capital requirements. FG insurance policies issued provide, in general, that payments of principal, interest and other amounts insured generally may not be accelerated by the holder of the obligation. Amounts paid by the Company therefore are typically in accordance with the obligation’s original payment schedule, unless the Company accelerates such payment schedule, at its sole option. Premiums received on financial guaranty contracts are paid either upfront or in installments over the life of the insured obligations. Payments made in settlement of the Company’s obligations arising from its insured portfolio may, and often do, vary significantly from year to year, depending primarily on the frequency and severity of payment defaults and whether the Company chooses to accelerate its payment obligations in order to mitigate future losses. For example, the Company made substantial claim payments in 2022 and 2024 in connection with the resolution of certain defaulting Puerto Rico credits. The Company is continuing its efforts to resolve the one remaining unresolved Puerto Rico insured exposure that is in payment default, PREPA. The Company had $464 million in insured net par outstanding of PREPA obligations as of March 31, 2026. For more information, see Item 1. Financial Statements, Note 5. Expected Loss to be Paid (Recovered). The terms of the Company’s credit default swap (CDS) contracts generally are modified from standard CDS contract forms approved by International Swaps and Derivatives Association, Inc. such that the circumstances giving rise to the Company’s obligation to make loss payments are similar to those for its FG insurance contracts. The documentation for certain CDS was negotiated to require the Company to also pay if the obligor were to become bankrupt or if the reference obligation were restructured. Furthermore, some CDS documentation requires the Company to make a payment due to an event that is unrelated to the performance of the obligation referenced in the credit derivative. If events of default or termination events specified in the credit derivative documentation were to occur, the Company may be required to make a cash termination payment to its swap counterparty upon such termination. Any such payment would probably occur prior to the maturity of the reference obligation and be in an amount larger than the amount due for that period on a “pay-as-you-go” basis. Annuity Reinsurance The Company expects liquidity needs related to the annuity reinsurance business to be funded by cash flows generated by interest income, maturities and sales of invested assets and the underlying investments in funds withheld arrangements. Cash flow needs include operating expenses and benefit payments for PRT, which do not have stated maturity dates and generally terminate upon the death of the annuitant or annuitant’s spouse, as well as MYGA assumed liabilities, which have stated maturities of typically three to five years. The Company has made assumptions to determine the estimated undiscounted cash flows of the PRT policy benefits including longevity, inflation, expenses, investment returns and other assumptions. Actual cash flows may differ materially from these estimates if there is significant variation in these assumptions. Management believes that Assured Life Re has sufficient liquidity to meet the payments required under these obligations and engages in active asset liability monitoring and hedging activities to mitigate the risk associated with mismatches in asset and liability cash flows. The portfolio of investments supporting the Assured Life Re obligations primarily consists of investment grade fixed-maturity securities including liquid government, corporate and structured credit securities. The Company may, from time to time, contribute additional capital to Assured Life Re depending on the amount of annuity liabilities it assumes in future reinsurance transactions. Ordinary Dividends From Insurance Subsidiaries to Holding Companies The Company anticipates that, for the next twelve months, amounts paid by AGL’s direct and indirect insurance subsidiaries as dividends or other distributions will be a major source of the holding companies’ liquidity. The insurance subsidiaries’ ability to pay dividends depends upon their financial condition, results of operations, cash requirements, other potential uses for such funds and compliance with rating agency requirements, and is also subject to restrictions contained in the insurance laws and related regulations of their states of domicile. 99 Table of Contents Statements and Supplementary Data, Note 14, Insurance Company Regulatory Requirements, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 for a discussion of the Company’s dividend restrictions applicable to AG, AG Re and AGRO. Dividend restrictions by insurance subsidiary are as follows: • Under Maryland’s insurance law, AG may, with prior notice to the Commissioner of its domiciliary regulator, the MIA, pay an ordinary dividend in an amount that, together with all dividends and distributions paid in the prior 12 months, does not exceed the lesser of 10% of its policyholders’ surplus (as of the prior December 31) or 100% of its adjusted net investment income during that period. “Adjusted net investment income” means the sum of (x) AG’s net investment income during the 12-month period ending December 31 of the preceding year (excluding realized capital gains and pro rata distributions of its own securities), and (y) AG’s net investment income (excluding realized capital gains) from the three calendar years prior to the preceding calendar year that has not already been paid out as dividends. The maximum amount available during 2026 for AG to distribute as ordinary dividends is approximately $245 million of which approximately $72 million is available for distribution in the second quarter of 2026. • The Company expects the amount of dividends available for distribution by AG Re in 2026 to be approximately $181 million. Based on applicable law and regulations, in 2026 AG Re has the capacity to declare and pay dividends in an aggregate amount up to 25% of the prior year total statutory capital and surplus (i.e., up to $292 million); provided that such payment cannot exceed AG Re’s unencumbered assets ($181 million as of March 31, 2026) or its statutory surplus ($268 million as of March 31, 2026). Additionally, in 2026 AG Re can make capital distributions in an aggregate amount up to $129 million without the prior approval of the Bermuda Monetary Authority (the Authority). • Under applicable law and regulations, Assured Life Re may declare and pay dividends during 2026, without prior approval of the Authority, in an aggregate amount equal to up to 25% of its total statutory capital and surplus as of the prior year end (or $41 million). Any such dividends would also be subject to the limitations that they may not exceed Assured Life Re’s statutory surplus or its unencumbered assets. As of March 31, 2026, Assured Life Re’s statutory surplus was zero and, accordingly, it had no dividend capacity at that date; its unencumbered assets were $25 million. In addition, Assured Life Re may make capital distributions during 2026 of up to $31 million in the aggregate without prior approval of the Authority. Given Assured Life Re’s focus on capital intensive growth initiatives, it does not expect to declare or pay any dividends or to make any capital distributions during 2026. Ordinary Dividends From Insurance Company Subsidiaries to Holding Companies First Quarter 2026 2025 (in millions) Dividends declared by AG Re to AGL (1) $ 80 $ — Dividends declared by AG to U.S. Holding Companies 29 72 ___________________ (1) In first quarter 2026, AG Re declared a dividend of $50 million, which was paid in the second quarter of 2026. Committed Capital Securities AG is party to an arrangement that enables it to access, at its discretion, up to $400 million of capital, at any time, and has the right to use such capital for any purpose, including to pay claims. See Item 1. Financial Statements, Note 11. Fair Value Measurement. Federal Home Loan Bank Membership In the fourth quarter of 2025, AG became a member of the Federal Home Loan Bank of New York (FHLBNY), thereby gaining access to collateralized FHLBNY borrowings as an additional source of liquidity. The Board has authorized a maximum borrowing capacity of $600 million. As of March 31, 2026, the Company had not borrowed any funds or pledged any collateral under the FHLBNY program. 100 Table of Contents Investment Portfolio As of March 31, 2026, the Company had $6,875 million of available-for-sale fixed-maturity securities, of which $6,189 million were managed by four investment managers: three for the financial guaranty subsidiaries and one for the annuity reinsurance subsidiary. The Company’s principal objectives in managing its investment portfolio for the financial guaranty subsidiaries are to support the highest possible ratings for each operating company, manage investment risk within the context of the underlying portfolio of insurance risk, maintain sufficient liquidity to cover unexpected stress in the insurance portfolio and maximize after-tax net investment income. The Company’s principal objectives in managing its investment portfolio for the annuity reinsurance subsidiary are to invest in assets with a close cashflow profile to the expected profile of payments of the subsidiary and to be appropriately duration matched against the subsidiary’s liability cashflows. In accordance with their respective investment guidelines, the Company’s investment managers for the financial guaranty subsidiaries are also required to maintain their portion of the Company’s investment portfolio with an overall credit quality rated at a minimum of A+/A1/A+ by S&P/Moody’s/Fitch Ratings Inc. The Company’s annuity reinsurance subsidiary seeks to maintain an investment grade overall credit quality for its reinsured investment portfolios. Changes in interest rates affect the value of the Company’s fixed-maturity securities. As interest rates fall, the fair value of fixed-maturity securities generally increases and, as interest rates rise, the fair value of fixed-maturity securities generally decreases. The Company’s portfolio of fixed-maturity securities primarily consists of investment-grade, liquid instruments. Other invested assets include other alternative investments, which are generally less liquid. For more information about the investment portfolio and a detailed description of the Company’s valuation of investments, see Item 1. Financial Statements, Note 9. Investments, and Note 11. Fair Value Measurement. Investment Portfolio Carrying Value As of March 31, 2026 December 31, 2025 (in millions) Fixed-maturity securities, available-for-sale $ 6,875 $ 6,369 Fixed-maturity securities, trading (1) 127 124 Short-term investments 768 903 Other invested assets (2) 1,136 1,091 Total (3) $ 8,906 $ 8,487 ____________________ (1) Includes primarily CVIs received as part of resolutions of Puerto Rico exposures in 2022, which are not rated. (2) Excludes investments in Sound Point funds that were consolidated and reported in “assets of consolidated investment vehicles” as of December 31, 2025. See Item 1. Financial Statements, Note 10. Variable Interest Entities. (3) March 31, 2026 includes $603 million related to annuity reinsurance consisting of $597 million of fixed-maturity, available-for-sale securities and $6 million of short-term investments. The Company’s available-for-sale fixed-maturity securities had a duration of 5.4 years and 4.9 years as of March 31, 2026 and December 31, 2025, respectively. Available-for-Sale Fixed-Maturity Securities By Rating The following table summarizes the ratings distributions of the Company’s available-for-sale fixed-maturity securities as of March 31, 2026 and December 31, 2025. Ratings generally reflect the lower of Moody’s and S&P classifications, except for (i) Loss Mitigation Securities rated BIG, and (ii) CLO equity tranches, which are not rated. See Item 1. Financial Statements, Note 9. Investments, for additional information. 101 Table of Contents Distribution of Available-for-Sale Fixed-Maturity Securities by Rating As of Rating March 31, 2026 December 31, 2025 AAA 13.2 % 13.3 % AA 33.9 34.6 A 27.8 26.1 BBB 18.1 17.4 BIG 4.2 4.7 Not rated 2.8 3.9 Total 100.0 % 100.0 % Other Investments Other invested assets, which are generally less liquid than fixed-maturity securities, primarily consist of the ownership interest in Sound Point and alternative investments across a variety of strategies. See “— Commitments” below. Sound Point and Alternative Investments As of March 31, 2026 (1) As of December 31, 2025 Investments CIVs (2) Consolidated Investments CIVs Consolidated (in millions) Fixed-maturity securities, available-for-sale $ 227 $ — $ 227 $ 282 $ — $ 282 Fixed-maturity securities, trading 8 — 8 10 — 10 Other invested assets: Ownership interest in Sound Point 406 — 406 415 — 415 CLOs 70 — 70 85 — 85 Private healthcare investing 201 — 201 187 — 187 Asset-based/specialty finance 116 — 116 184 (57) 127 Private minority stakes in alternative asset manager 109 — 109 95 — 95 Commercial real estate finance 101 — 101 81 — 81 Other 133 — 133 101 — 101 Subtotal $ 1,371 $ — $ 1,371 $ 1,440 $ (57) $ 1,383 Assets of CIVs, net of non-redeemable noncontrolling interest $ — $ — $ — $ — $ 77 $ 77 ____________________ (1) The alternative investments, which do not include the Company’s ownership interest in Sound Point, had an inception-to-date annualized internal rate of return of 12%. (2) During first quarter 2026, the Company deconsolidated a CIV related to its investments with Sound Point. As of March 31, 2026, the Company did not consolidate any CIVs. 102 Table of Contents Effect of Ownership Interest in Sound Point and Alternative Investments on Condensed Consolidated Statements of Operations First Quarter 2026 First Quarter 2025 Investments CIVs Consolidated Investments CIVs Consolidated (in millions) Net investment income $ 10 $ — $ 10 $ 12 $ — $ 12 Net realized investment gains (losses) (14) — (14) — — — Fair value gains (losses) on trading securities — — — 1 — 1 Equity in earnings (losses) of investees: Ownership interest in Sound Point 6 — 6 13 — 13 Alternative investments: CLOs (11) — (11) 8 — 8 Private healthcare investing 15 — 15 12 — 12 Asset-based/specialty finance 6 (2) 4 9 (6) 3 Private minority stakes in alternative asset manager 14 — 14 14 — 14 Commercial real estate finance 1 — 1 — — — Other 2 — 2 3 — 3 Equity in earnings (losses) of investees 33 (2) 31 59 (6) 53 Subtotal $ 29 $ (2) $ 27 $ 72 $ (6) $ 66 Fair value gains (losses) on CIVs, net of non-redeemable NCI $ — $ 5 $ 5 $ — $ 10 $ 10 Commitments The Company has agreed to invest an aggregate amount of $1.5 billion in alternative investments, which includes $1 billion in Sound Point managed investments, subject to certain conditions precedent. Unfunded commitments for alternative investments as of March 31, 2026 were $554 million. See Item 1. Financial Statements, Note 9. Investments, for a description of the alternative investments agreement with Sound Point. Restricted Assets 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 Item 1. Financial Statements, 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. Funds Withheld The following table summarizes the underlying investments within the Company’s funds withheld. See Item 1. Financial Statements, Note 7. Annuity Reinsurance, for additional information. 103 Table of Contents Components of Underlying Assets in Funds Withheld As of March 31, 2026 (in millions) RMBS $ 49 Commercial mortgage-backed securities 108 Asset-backed securities 75 Commercial loans 29 Total investments 261 Cash, cash equivalents and short-term investments 33 Accrued investment income 2 Total funds withheld, net of allowance for credit losses $ 296 The following table summarizes the components of the change in funds withheld, which is reported in “fair value gains (losses) on derivatives” in the condensed consolidated statements of operations. Change in Fair Value of Embedded Derivatives in Funds Withheld First Quarter 2026 (in millions) Net investment income on funds withheld $ 5 Net realized investment gains (losses) on funds withheld (1) Net unrealized investment gains (losses) on funds withheld (1) Total change in funds withheld $ 3 Lease Obligations The Company has entered into several lease agreements for office space in Bermuda, New York, London, Paris, and other locations with various lease terms. See Part II, Item 8, Financial Statements and Supplementary Data, Note 16, Leases, of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, for a table of minimum lease obligations and other lease commitments. FG VIEs and CIVs The Company manages its liquidity needs by evaluating cash flows without the effect of consolidating FG VIEs and CIVs; however, the Company’s condensed consolidated financial statements include the effect of consolidating FG VIEs and CIVs. The primary sources and uses of cash at Assured Guaranty’s FG VIEs and CIVs are as follows: • FG VIEs. The primary sources of cash in FG VIEs are the collection of principal and interest on the collateral supporting the debt obligations, and the primary uses of cash are the payment of principal and interest due on the debt obligations. The insurance subsidiaries are not primarily liable for the debt obligations issued by the VIEs they insure and would only be required to make payments on those insured debt obligations in the event that the issuer of such debt obligations defaults on any principal or interest due and only for the amount of the shortfall. AGL’s and its insurance subsidiaries’ creditors do not have any rights with regard to the collateral supporting the debt issued by the FG VIEs. • CIVs. The primary sources and uses of cash in the CIVs include using capital to make investments, generating cash income from investments, paying expenses and distributing cash flow to investors. The assets and liabilities of the Company’s CIVs are held within separate legal entities. The assets of the CIVs are not available to creditors of the Company, other than creditors of the applicable CIVs. In addition, creditors of the CIVs have no recourse against the assets of the Company, other than the assets of such applicable CIVs. Liquidity available at the Company’s CIVs is not available for corporate liquidity needs, except to the extent of the Company’s investment in the funds, subject to redemption provisions. 104 Table of Contents See Item 1. Financial Statements, Note 10. Variable Interest Entities, for additional information. Condensed Consolidated Cash Flow Summary The summarized condensed consolidated statements of cash flows in the table below present the cash flow effect for the aggregate of the Financial Guaranty, Annuity Reinsurance and Asset Management segments and Corporate division, separately from the aggregate effect of consolidating FG VIEs and CIVs. Summarized Condensed Consolidated Cash Flows First Quarter 2026 2025 (in millions) Net cash flows provided by (used in) operating activities, excluding FG VIEs and CIVs operating cash flows $ 46 $ 87 FG VIEs and CIVs operating cash flows 144 — Net cash flows provided by (used in) operating activities 190 87 Net cash flows provided by (used in) investing activities, excluding FG VIEs and CIVs investing cash flows (7) 130 FG VIEs and CIVs investing cash flows (53) 4 Net cash flows provided by (used in) investing activities (60) 134 Net cash flows provided by (used in) financing activities, excluding FG VIEs and CIVs financing cash flows Dividends paid (19) (19) Repurchases of common shares (75) (120) Other (20) (27) FG VIEs and CIVs financing cash flows (100) (4) Net cash flows provided by (used in) financing activities (1) (214) (170) Effect of exchange rate changes (2) 3 Increase (decrease) in cash and cash equivalents and restricted cash (86) 54 Cash and cash equivalents and restricted cash at beginning of period 419 128 Cash and cash equivalents and restricted cash at the end of the period $ 333 $ 182 ____________________ (1) Claims paid on consolidated FG VIEs are presented in the condensed consolidated statements of cash flows as a component of paydowns on FG VIEs’ liabilities in financing activities as opposed to operating activities. Cash flows from operating activities were inflows of $190 million in first quarter 2026 and inflows of $87 million in first quarter 2025. The first quarter 2026 cash flow from operations attributable to FG VIEs and CIVs includes proceeds from sales of investments of a CIV, which were used to fund distributions and was subsequently deconsolidated. The first quarter 2025 cash flow from operations includes the receipt of $97 million in satisfaction of the judgment the Company was awarded and its recoveries in connection with the resolution of the LBIE litigation. Investing activities primarily consisted of net sales (purchases) of fixed-maturity securities and short-term investments and paydowns on, and sales of, FG VIEs’ assets. During first quarter 2026, the Company paid $145 million (net of cash acquired), to acquire Assured Life Re. See Item 1. Financial Statements, Condensed Consolidated Statements of Cash Flows, and Note 5. Expected Loss to be Paid (Recovered), for additional information. Financing activities primarily consist of (i) AGL share repurchases and dividends, and (ii) paydowns of FG VIEs’ liabilities. In addition, first quarter 2026 cash flows include distributions to noncontrolling interests from a CIV. From April 1, 2026 through May 6, 2026, the Company repurchased an additional 350 thousand common shares. As of May 6, 2026, the Company was authorized to purchase $147 million of its common shares. For more information about the Company’s share repurchases and authorizations, see Item 1. Financial Statements, Note 14. Shareholders’ Equity. 105 Table of Contents