specialty property and casualty insurance business; (11) failure of specialty insurance program partners to properly market, underwrite or administer policies; (12) inability to obtain reinsurance coverage on expected terms; (13) loss of key relationships for production of business in specialty property and casualty and insurance distribution businesses or the inability to secure such additional relationships to produce expected results; (14) the impact of catastrophic public health, environmental or natural events, or global or regional conflicts; (15) credit risks related to large single risks, risk concentrations and correlated risks; (16) risks associated with adverse selection as Ambac’s financial guarantee insurance portfolio runs off; (17) the risk that Ambac’s risk management policies and practices do not be able to generateanticipate certain risks and/or the significant amountmagnitude of cash needed to service its debt and financial obligations, and may not be able to refinance its indebtedness; (19)potential for loss; (18) restrictive covenants in agreements and instruments maythat impair Ambac’s ability to pursue or achieve its business strategies; (20)(19) adverse effects on operating results or the Company’s financial position resulting from measures taken to reduce financial guarantee risks in its insured portfolio; (21)(20) disagreements or disputes with Ambac's insurance regulators; (22) default by one or more of Ambac's portfolio investments, insured issuers or counterparties; (23)(21) loss of control rights in transactions for which we provide insurance duefinancial guarantee insurance; (22) inability to a finding that Ambac has defaulted; (24) adverse tax consequences or other costs resulting from the characterizationrealize expected recoveries of the AAC’s surplus notes or other obligations as equity; (25)financial guarantee losses; (23) risks attendant to the change in composition of securities in the Ambac’s investment portfolio; (26)(24) adverse impacts from changes in prevailing interest rates; (27) our results of operation may be adversely affected by(25) events or circumstances that result in the impairment of our intangible assets and/or goodwill that was recorded in connection with Ambac’s acquisition of 80% of the membership interests of Xchange; (28) risks associated with the expected discontinuance of the London Inter-Bank Offered Rate; (29)acquisitions; (26) factors that may negatively influence the amount of installment premiums paid to the Ambac; (30) market risks impacting assets in the Ambac’s investment portfolio or the value of our assets posted as collateral in respect of interest rate swap transactions; (31) risks relating to determinations of amounts of impairments taken on investments; (32)(27) the risk of litigation, and regulatory inquiries, investigations, claims or investigations,proceedings, and the risk of adverse outcomes in connection therewith, which could have a material adverse effect on Ambac’s business, operations, financial position, profitability or cash flows; (33)therewith; (28) the Company’s ability to adapt to the rapid pace of regulatory change; (29) actions of stakeholders whose interests are not aligned with broader interests of the Ambac's stockholders; (34)(30) system security risks, data protection breaches and cyber attacks; (35) changes in accounting principles or practices that may impact Ambac’s reported financial results; (36)(31) regulatory oversight of Ambac Assurance UK Limited ("(“Ambac UK"UK”) and applicable regulatory restrictions may adversely affect our ability to realize value from Ambac UK or the amount of value we ultimately realize; (37) operational risks, including with respect to internal processes, risk and investment models, systems and employees, and(32) failures in services or products provided by third parties; (38) Ambac’s financial position(33) political developments that may prompt departures of key employees and may impactdisrupt the its abilityeconomies where the Company has insured exposures; (34) our inability to attract and retain qualified executives, senior managers and employees; (39)other employees, or the loss of such personnel; (35) fluctuations in foreign currency exchange rates could adversely impactrates; (36) failure to realize our business expansion plans or failure of such plans to create value; (37) greater competition for our specialty property and casualty insurance business and/or our insurance distribution business; (38) loss or lowering of the insured portfolio in the event of loss reserves or claim payments denominated in a currency other than US dollarsAM Best rating for our property and the value of non-US dollar denominated securities in our investment portfolio; (40)casualty insurance company subsidiaries; (39) disintermediation within the insurance industry that negatively impacts our managing general agency/underwriting business; (41)or greater competition from technology-based insurance solutions or non-traditional insurance markets; (40) changes in law or in the functioning of the healthcare market that impair the business model of our accident and health managing general underwriter; and (42)(41) other risks and uncertainties that have not been identified at this time.

In addition to existing MGA/Us and other distributors.acquisitions, de novo MGA/U formations will be a core element of the Insurance Distribution segment's growth strategy.

Xchange isCirrata's businesses are compensated for itstheir services primarily by commissions paid by insurance companiescarriers for underwriting, structuring and/or administering polices and, in the case of ESL,some cases for managing claims under an agency agreement.agreements. Commission revenues are usually based on a percentage of the premiums paid by the insured. Xchange isplaced. The businesses are also eligible to receive profit sharing contingent commissions on certain programs (mostly LM and STM) based on the underwriting results of the policies it writes,they write, which may cause some variability in revenue and earningearnings recognition. Business written byCommission revenues experience seasonality during the year, primarily from Xchange is generally concentratedwhose ESL programs are mostly underwritten in January and July which may result isresulting in revenue and earnings concentrations in the first and third quarters each calendar year. Xchange's core expensesGiven the recent acquisitions and potential de

The Company's policies and procedures relating to risk assessment and risk management are overseen by its Board of Directors. The Board of Directors takes an enterprise-wide approach to risk management oversight that is designed to support the Company's business plans at a level of risk considered by the Board to be reasonable. A fundamental part of risk assessment and risk management is not only understanding the risks the Company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for the Company. The Board of Directors periodically reviews the Company's business plan, factoring risk management into account. It also approves the Company's risk appetite statements, which articulate the Company's tolerance for certain risks and describes the general types of risk that the Company accepts, within certain parameters, or attempts to avoid.

While the Board of Directors has the ultimate oversight responsibility for the risk management process, various committees of the Board also have responsibilities related to risk assessment and risk management, and management has responsibility for managing the risks to which the Company is exposed and reporting on such matters to the Board of Directors and applicable Board committees.