MARKET SHARE? WHO CARES? INSURER AMBAC THRIVES AS IT DIVERTS FROM MUNIS TO CHANCIER BOND SECTORS.

Crain's New York Business, January, 1999 by Birger, Jon

1998 was a strange year for Ambac Financial Group Inc. For the first time since it went public eight years ago, Ambac lost its position as the No. 2 insurer of municipal bonds. Yet as Ambac fell to fourth place in its bread-and-butter business, the firm's stock far outperformed those of its publicly held rivals, surging 31% last year, versus a 12% gain for Financial Security Assurance Inc.

and a 2% decline for industry leader MBIA Inc. The disconnect between Ambac's stock price and its muni market share reflects Ambac's decreasing reliance upon muni bonds. In the face of 10 years of declining premiums, Ambac decided to stop offering steep price discounts to municipal clients. While holding firm on prices led to a loss in business, Ambac was not concerned....

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