News Column

AmTrust Financial Services, Inc. Achieves Continued Momentum With Strong Fourth Quarter 2013 Operating Earnings(1) of $81.9 Million and Net Income Attributable to Common Stockholders of $64.7 Million

February 13, 2014

Book Value Per Common Share of $17.85, Up 15.3% Since December 31, 2012 Adjusted for 10% Stock Dividend

Financial Highlights

Fourth Quarter 2013

• Gross written premium of $1.06 billion, up 36.8%, and net earned premium of $707.6 million, up 84.6% from the fourth quarter 2012• Operating diluted EPS(1) of $1.03 compared to $0.70 in the fourth quarter 2012• Operating return on common equity(1) of 25.1% and return on common equity of 19.9%• Service and fee income of $93.0 million, up 71.9% from the fourth quarter 2012• Operating earnings(1) of $81.9 million compared to $53.4 million from the fourth quarter 2012• Net income attributable to common stockholders of $64.7 million compared to $55.3 million in the fourth quarter 2012• Diluted EPS of $0.82 compared with $0.72 in the fourth quarter 2012• Combined ratio of 89.9% compared to 90.5% in the fourth quarter 2012

Full Year 2013

• Gross written premium of $4.12 billion, up 49.7%, and net earned premium of $2.27 billion, up 59.7% over 2012• Operating diluted EPS(1) of $3.39 compared to $2.52 in 2012• Operating return on common equity(1) of 21.3% and return on common equity of 23.1%• Service and fee income of $331.6 million, up 92.6% from 2012• Operating earnings(1) of $264.6 million compared to $191.6 million in 2012• Net income attributable to common stockholders of $286.9 million compared to $178.0 million in 2012• Diluted EPS of $3.67 compared with $2.34 in 2012• Combined ratio of 90.5% compared to 90.1% in 2012• Book value per common share of $17.85, up from $15.48 at December 31, 2012AmTrust's stockholders' equity was $1.45 billion as of December 31, 2013

NEW YORK, Feb. 13, 2014 (GLOBE NEWSWIRE) -- AmTrust Financial Services, Inc. (Nasdaq:AFSI) ("the Company") today announced it continued to achieve strong business momentum reporting fourth quarter 2013 operating earnings(1) of $81.9 million, or $1.03 per diluted share, an increase of 53.3%, compared to $53.4 million, or $0.70 per diluted share, in the fourth quarter of 2012. Fourth quarter 2013 net income available to common stockholders totaled $64.7 million, or $0.82 per diluted share, an increase of 17.0% from $55.3 million, or $0.72 per diluted share, in the fourth quarter 2012. Fourth quarter 2013 annualized operating return on common equity(1) was 25.1% compared to 19.3% in the fourth quarter 2012. Fourth quarter 2013 annualized return on common equity was 19.9% compared to 19.9% in the fourth quarter 2012.

For 2013, operating earnings(1) totaled $264.6 million, or $3.39 per diluted share, an increase of 38.1%, compared to $191.6 million, or $2.52 per diluted share, in 2012. During 2013, net income attributable to common stockholders totaled $286.9 million, or $3.67 per diluted share, an increase of 61.2% from $178.0 million, or $2.34 per diluted share, in 2012. Operating return on equity(1) for 2013 was 21.3% compared to 18.8% in 2012. Return on equity was 23.1% compared to 17.5% in 2012. December 31, 2013 book value per share rose 15.3% to $17.85 from $15.48 as of December 31, 2012. Per share results for the fourth quarter and year reflect a 10% stock dividend declared by the Board of Directors on August 6, 2013.

Barry Zyskind, AmTrust Financial's Chief Executive Officer and President, stated, "Our strong fourth quarter and year end results underscore the excellent momentum that AmTrust continues to experience across all our business lines. This performance reflects several important factors that are advancing AmTrust's competitive edge. First, we focus on lines of business where we have sound expertise and that represent the potential for enhanced value. Second, we have been able to capitalize on AmTrust's strong financial position to grow our businesses both organically and to take advantage of attractive external opportunities where we can use our strengths to build value. Third, our business is supported by a strong balance sheet. Going forward, we will continue to build AmTrust consistent with our priority to grow the value of the enterprise for the long term benefits of all our stakeholders."

Fourth Quarter 2013 Results

Total revenue was $816.4 million, an increase of $354.8 million, or 76.9%, from $461.5 million in the fourth quarter 2012. Gross written premium was $1.06 billion, an increase of $284.6 million, or 36.8%, from $773.6 million in the same period a year ago. Net written premium of $664.8 million rose $251.8 million, or 61.0%, from $413.0 million in the fourth quarter 2012. Net earned premium of $707.6 million increased $324.2 million, or 84.6%, from $383.4 million in the fourth quarter 2012. The combined ratio was 89.9% compared with 90.5% in fourth quarter 2012.

Total service and fee income of $93.0 million increased $38.9 million, or 71.9%, from $54.1 million in fourth quarter of 2012 and included $22.5 million from related parties in the fourth quarter 2013 compared with $8.8 million in the fourth quarter 2012.

Investment income, excluding net realized gains and losses, totaled $20.8 million, an increase of 10.2% from $18.9 million in the fourth quarter of 2012. In addition, fourth quarter 2013 results included net realized investment losses of $4.9 million, or $3.2 million after-tax, on certain fixed income and equity investments compared with net realized gains of $5.2 million, or $3.4 million after-tax, in the fourth quarter of 2012.

The Company's net gain on life settlements including non-controlling interest was $3.7 million compared to a net gain of $8.5 million in the fourth quarter of 2012. Operating earnings(1) included a gain on life settlement contracts of $2.0 million, net of non-controlling interest, compared to a gain of $4.5 million, net of non-controlling interest in the fourth quarter of 2012.

Loss and loss adjustment expense totaled $470.4 million in the fourth quarter 2013, an increase of $215.1 million from $255.3 million in the fourth quarter 2012 and resulted in a loss ratio of 66.5% compared with 66.6% for the fourth quarter 2012.

Acquisition costs and other underwriting expense of $165.7 million increased $73.9 million from $91.8 million for the fourth quarter 2012. The expense ratio was 23.4%, down from 23.9% in the fourth quarter 2012. Ceding commissions (5), primarily related to the reinsurance agreements with Maiden Holdings, Ltd. ("Maiden"), totaled $77.2 million, up 37.2% from $56.3 million in the fourth quarter 2012. During the three months ended December 31, 2013, AmTrust ceded $321.0 million of gross written premium and $275.5 million of earned premium to Maiden compared to $269.6 million of gross written premium and $214.9 million of earned premium ceded in the fourth quarter 2012.

Other expense of $79.5 million increased $12.1 million from $67.4 million in the fourth quarter 2012.

Full Year 2013 Results

Total revenue was $2.70 billion, an increase of $1.03 billion, or 61.7%, from $1.67 billion in 2012. Gross written premium was $4.12 billion, an increase of $1.37 billion, or 49.7%, from $2.75 billion in 2012. Net written premium was $2.57 billion, an increase of $0.92 billion, or 55.7%, from $1.65 billion in 2012. Net earned premium of $2.27 billion increased $0.85 billion, or 59.7%, from $1.42 billion in 2012.

The combined ratio was 90.5% compared with 90.1% in 2012.

Total service and fee income of $331.6 million increased $159.4 million, or 92.6%, from $172.2 million in 2012 and included $51.5 million from related parties in 2013, compared with $29.0 million in 2012.

Investment income, excluding net realized gains and losses, totaled $84.8 million, an increase of 24.4% from $68.2 million in 2012. In addition, 2013 results included net realized investment gains of $15.5 million, or $10.1 million after-tax, on certain fixed income and equity investments compared with a gain of $9.0 million, or $5.8 million after-tax, in 2012.

In 2013, net gain on life settlements including non-controlling interest was $3.8 million compared to $13.8 million in 2012. Operating earnings(1) included a gain on life settlement contracts of $2.0 million, net of non-controlling interest, compared to a gain of $6.7 million, net of non-controlling interest in 2012.

Loss and loss adjustment expense totaled $1.52 billion in 2013, an increase of $594.7 million from $922.7 million in 2012 and resulted in a loss ratio of 67.0% compared with 65.0% in 2012.

Acquisition costs and other underwriting expense of $533.2 million increased $177.2 million from $356.0 million in 2012. The expense ratio was 23.5%, down from 25.1% in 2012. Ceding commissions (5), primarily related to the reinsurance agreements with Maiden, totaled $276.6 million, up $79.6 million, or 40.4% from $197.0 million a year ago. During 2013, AmTrust ceded $1,150.4 million of gross written premium and $987.5 million of earned premium to Maiden compared to $846.5 million of gross written premium and $730.3 million of earned premium ceded in 2012.

Other expense of $291.6 million increased $113.9 million from $177.7 million in 2012.

Total assets of approximately $11.3 billion increased $3.9 billion, or 52.5%, from $7.4 billion at December 31, 2012. Total cash, cash equivalents and investments of $4.6 billion increased $1.9 billion, or 70.5%, from $2.7 billion as of December 31, 2012. AmTrust's stockholder's equity of $1.45 billion increased 26.7% from $1.14 billion at December 31, 2012.

On August 12, 2013, the Company completed the sale of ten-year notes at 6.125% in the aggregate amount of $250 million. As of December 31, 2013, the Company's long-term debt-to-capitalization ratio was 27.9% compared with 20.9% as of December 31, 2012.

In September 2013, the Company paid a ten percent stock dividend. As a result, all prior years' share amounts have been adjusted.

During 2013, the Board of Directors declared cash dividends totaling $0.56 per share. The Company completed a $115 million preferred share offering on June 10, 2013, for which it declared a per share dividend of $0.8672 during 2013.

(1) References to operating earnings, operating diluted EPS, and operating return on equity are Non-GAAP financial measures defined by the Company as net income attributable to common stockholders, diluted earnings per share and return on equity, in each case excluding after-tax net realized investment gain or (loss) on securities, non-cash amortization of certain intangible assets, non-cash interest on convertible senior notes net of tax, foreign currency transaction gain or loss, gain resulting from a decrease in the ownership percentage of an equity investment in an unconsolidated subsidiary (related party) net of tax and acquisition gain, net of tax. Please see the Non-GAAP Financial Measures table at the end of this release for important information about the use of these Non-GAAP measures and their reconciliation to GAAP.

Conference Call:

On February 13, 2014 at 9:00 AM ET, CEO Barry Zyskind and CFO Ron Pipoly will review these results and discuss business conditions via a conference call and webcast that may be accessed as follows:

Toll-Free Dial-in:   877.755.7421

Toll Dial-in (Outside the U.S):   973.200.3087

Webcast registration: http://ir.amtrustgroup.com/events.cfm

A replay of the conference call will be available at approximately 12:00 PM ET Thursday, February 13, 2014 through February 20, 2014 at 11:59 PM ET. To listen to the replay, please dial 855.859.2056 (within the U.S.) or 404.537.3406 (outside the U.S.) and enter replay passcode 47399503, or access http://ir.amtrustgroup.com/events.cfm.

About AmTrust Financial Services, Inc.

AmTrust Financial Services, Inc., headquartered in New York City, is a multinational insurance holding company, which, through its insurance carriers, offers specialty property and casualty insurance products, including workers' compensation, commercial automobile and general liability; extended service and warranty coverage. For more information about AmTrust, visit www.amtrustgroup.com, or call AmTrust toll-free at 855.327.2223.

Forward Looking Statements

This news release contains "forward-looking statements" that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements are based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. Actual results may differ materially from those expressed or implied in these statements as a result of significant risks and uncertainties, including, but not limited to, non-receipt of expected payments from insureds or reinsurers, changes in interest rates, a downgrade in the financial strength ratings of our insurance subsidiaries, the effect of the performance of financial markets on our investment portfolio, our estimates of the fair value of our life settlement contracts, development of claims and the effect on loss reserves, accuracy in projecting loss reserves, the cost and availability of reinsurance coverage, the effects of emerging claim and coverage issues, changes in the demand for our products, our degree of success in integrating acquired businesses, the effect of general economic conditions, state and federal legislation, regulations and regulatory investigations into industry practices, risks associated with conducting business outside the United States, developments relating to existing agreements, disruptions to our business relationships with Maiden Holdings, Ltd., National General Holding Corp., or third party agencies and warranty administrators, breaches in data security or other disruptions involving our technology, heightened competition, changes in pricing environments, and changes in asset valuations. The forward-looking statements contained in this news release are made only as of the date of this release. The Company undertakes no obligation to publicly update any forward-looking statements except as may be required by law. Additional information about these risks and uncertainties, as well as others that may cause actual results to differ materially from those projected, is contained in the Company's filings with the Securities and Exchange Commission, including its annual report on Form 10-K and its quarterly reports on Form 10-Q.

AFSI-F

AmTrust Financial Services, Inc.
Income Statement
(in thousands, except per share data)
(Unaudited)
         
         
 Three Months EndedYear Ended
  December 31,December 31,
 2013201220132012
Gross written premium$1,058,238$773,645$4,116,911$2,749,326
         
Net written premium$664,774$413,012$2,565,673$1,648,037
Change in unearned premium 42,788 (29,625) (299,683) (229,185)
Net earned premium 707,562 383,387 2,265,990 1,418,852
         
Service and fee income 92,963 54,064 331,559 172,174
Investment income, net 20,800 18,876 84,819 68,167
Net realized gain (4,936) 5,213 15,527 8,981
Other revenues 108,827 78,153 431,905 249,322
Total revenue 816,389 461,540 2,697,895 1,668,174
Loss and loss adjustment expense 470,416 255,313 1,517,361 922,675
Acquisition costs and other underwriting expense (5) 165,745 91,796 533,162 356,005
Other expense (5) 79,500 67,413 291,617 177,709
Total expenses 715,661 414,522 2,342,140 1,456,389
Income before other, provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest 100,728 47,018 355,755 211,785
Other income (expense):        
Interest expense (10,602) (7,205) (34,691) (28,508)
Net gain on life settlement contracts net of profit commission 3,720 8,520 3,800 13,822
Foreign currency gain (loss) (8,956) 2,743 (6,533) (242)
Gain on acquisition (5) 57,352
Total other income (expenses) (15,838) 4,058 19,928 (14,928)
Income before provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest 84,890 51,076 375,683 196,857
Provision for income taxes (5) 19,413 (7,395) 98,019 21,292
Equity in earnings of unconsolidated subsidiaries (related party) 1,029 636 11,566 9,295
Net income 66,506 59,107 289,230 184,860
Non-controlling interest 159 (3,794) 1,633 (6,873)
Net income attributable to AmTrust stockholders$66,665$55,313$290,863$177,987
Dividends on preference shares (1,941)  — (3,989)
Net income attributable to AmTrust common stockholders$64,724$55,313$286,874$177,987
Operating earnings attributable to AmTrust common stockholders (1)$81,887$53,427$264,588$191,646
 
AmTrust Financial Services, Inc.
Income Statement
(in thousands, except per share data)
(Unaudited)
         
 Three Months EndedYear Ended
  December 31,December 31,
 2013201220132012
Earnings per common share:        
Basic earnings per share$0.87$0.75$3.86$2.42
Diluted earnings per share$0.82$0.72$3.67$2.34
Operating diluted earnings per share (2)$1.03$0.70$3.39$2.52
Weighted average number of basic shares outstanding 74,481 73,640 74,163 73,269
Weighted average number of diluted shares outstanding 79,059 76,187 77,984 75,620
Combined ratio 89.9% 90.5% 90.5% 90.1%
Return on equity 19.9% 19.9% 23.1% 17.5%
Operating return on equity (3) 25.1% 19.3% 21.3% 18.8%
Reconciliation of net realized gain(loss):        
Other-than-temporary investment impairments $—$(1,757) $—$(2,965)
Impairments recognized in other comprehensive income
  (1,757) (2,965)
Net realized gains on sale of investments (4,936) 6,970 15,527 11,946
Net realized gains$(4,936)$5,213$15,527$8,981
 
AmTrust Financial Services, Inc.
Balance Sheet Highlights
(in thousands)
(Unaudited)
     
     
 December 31, 2013December 31, 2012
Cash, cash equivalents and investments$4,597,189$2,696,402
Premium receivables 1,615,758 1,251,262
Goodwill and intangible assets 665,393 532,839
Loss and loss expense reserves 4,484,017 2,426,400
Unearned premium 2,679,550 1,773,593
Trust preferred securities 123,714 123,714
Convertible senior notes 164,218 161,218
Senior notes 250,000
Preferred shares 115,000
AmTrust's stockholders' equity 1,449,644 1,144,121
Book value per common share$17.85$15.48
 
AmTrust Financial Services, Inc.
Non-GAAP Financial Measures
(in thousands, except per share data)
(Unaudited)
         
         
 Three Months EndedYear Ended
  December 31,December 31,
 2013201220132012
Reconciliation of net income attributable to AmTrust common stockholders to operating earnings:        
Net income attributable to AmTrust common stockholders$64,724$55,313$286,874$177,987
Less: Net realized gains (loss) net of tax (3,208) 3,389 10,093 5,838
Non cash amortization of intangible assets (10,877) (5,374) (31,667) (17,165)
Non cash interest on convertible senior notes net of tax (503) 1,128 (1,950) (2,090)
Foreign currency transaction gain (loss) (2,575) 2,743 (152) (242)
Gain resulting from decrease in ownership percentage of equity investment in unconsolidated subsidiary (related party) net of tax 5,619
Acquisition gain net of tax 40,343
Operating earnings attributable to AmTrust common stockholders (1)$81,887$53,427$264,588$191,646
Reconciliation of diluted earnings per share to diluted operating earnings per share:        
Diluted earnings per share$0.82$0.72$3.67$2.34
Less: Net realized gain (loss) net of tax (0.04) 0.04 0.13 0.08
Non cash amortization of intangible assets (0.14) (0.06) (0.41) (0.23)
Non cash interest on convertible senior notes net of tax 0.01 (0.02) (0.03)
Foreign currency transaction gain (loss) (0.03) 0.03
Gain resulting from decrease in ownership percentage of equity investment in unconsolidated subsidiary (related party) net of tax 0.07
Acquisition gain net of tax 0.51
Operating diluted earnings per share (2)$1.03$0.70$3.39$2.52
Reconciliation of return on common equity to operating return on common equity:        
Return on common equity 19.9% 19.9% 23.1% 17.5%
Less: Net realized gain (loss) net of tax (1.0)% 1.1% 0.8% 0.6%
Non cash amortization of intangible assets (3.2)% (1.8)% (2.6)% (1.7)%
Non cash interest on convertible senior notes net of tax (0.2)% 0.4% (0.2)% (0.2)%
Foreign currency transaction gain (loss) (0.8)% 0.9% —% —%
Gain resulting from decrease in ownership percentage of equity investment in unconsolidated subsidiary (related party) net of tax —% —% 0.5% —%
Acquisition gain net of tax —% —% 3.3% —%
Operating return on common equity (3) 25.1% 19.3% 21.3% 18.8%


(1) Operating earnings is a non-GAAP financial measure defined by the Company as net income attributable to AmTrust common stockholders less after-tax realized investment gain (loss), non-cash amortization of intangible assets, non-cash interest on convertible senior notes net of tax, foreign currency transaction gain (loss), gain resulting from a decrease in the ownership percentage of an equity investment in an unconsolidated subsidiary (related party) net of tax and acquisition gain, net of tax and should not be considered an alternative to net income. The Company believes operating earnings are a more relevant measure of the Company's profitability because operating earnings contain the components of net income upon which the Company's management has the most influence and excludes factors outside management's direct control and non-recurring items. The Company's measure of operating earnings may not be comparable to similarly titled measures used by other companies.

(2) Diluted operating earnings per share is a non-GAAP financial measure defined by the Company as net income attributable to AmTrust common stockholders less after-tax realized investment gain (loss), non-cash amortization of intangible assets, non-cash interest on convertible senior notes net of tax, foreign currency transaction gain (loss), gain resulting from a decrease in the ownership percentage of an equity investment in an unconsolidated subsidiary (related party) net of tax and acquisition gain, net of tax divided by the weighted average diluted shares outstanding for the period and should not be considered an alternative to diluted earnings per share. The Company believes that diluted earnings per share provides investors with a valuable measure of the Company's operating performance for the same reasons that the underlying measure, operating earnings, is considered a better measure of operating performance. The Company's measure of diluted operating earnings per share may not be comparable to similarly titled measures used by other companies.

(3) Operating return on equity is a non-GAAP financial measure defined by the Company as net income attributable to AmTrust common stockholders less after-tax realized investment gain (loss), non-cash amortization of intangible assets, non-cash interest on convertible senior notes net of tax, foreign currency transaction gain (loss), gain resulting from a decrease in the ownership percentage of an equity investment in an unconsolidated subsidiary (related party) net of tax and acquisition gain, net of tax divided by the average shareholders' equity for the period and should not be considered an alternative to return on equity. The Company believes that operating return on equity provides investors with a valuable measure of the Company's operating performance for the same reasons that the underlying measure, operating earnings, is considered a better measure of operating performance. The Company's measure of operating return on equity may not be comparable to similarly titled measures used by other companies.

 Three Months EndedYear Ended
  December 31,December 31,
 2013201220132012
Reconciliation of net income attributable to AmTrust common stockholders to income from operations(4):        
Net income attributable to AmTrust common stockholders$64,724$55,313$286,874$177,987
Less: Net realized gains (loss) net of tax (3,208) 3,389 10,093 5,838
Non cash amortization of intangible assets (10,877) (5,374) (31,667) (17,165)
Non cash interest on convertible senior notes net of tax (503) 1,128 (1,950) (2,090)
Foreign currency transaction gain (loss) (2,575) 2,743 (152) (242)
Gain resulting from decrease in ownership percentage of equity investment in unconsolidated subsidiary (related party) net of tax 5,619
Acquisition gain net of tax 40,343
Preferred dividend (1,941) (3,989)
Income from operations (4)$83,828$53,427$268,577$191,646


(4) Income from Operations is a non-GAAP financial measure defined by the Company as net income attributable to AmTrust common stockholders less after-tax realized investment gain (loss), non-cash amortization of intangible assets, non-cash interest on convertible senior notes net of tax, foreign currency transaction gain (loss), gain resulting from a decrease in the ownership percentage of an equity investment in an unconsolidated subsidiary (related party) net of tax, acquisition gain, net of tax and preferred dividends and should not be considered as an alternative to net income. The Company believes income from operations is a more relevant measure of the Company's profitability because income from operations contains the components of net income upon which the Company's management has the most influence and excludes factors outside management's direct control and non-recurring items. The Company's measure of income from operations may not be comparable to similarly titled measures used by other companies.

(5) During the three months ended December 31, 2013, the Company began netting ceding commission with acquisition costs and other underwriting expenses. In prior periods, ceding commission earned was presented as a component of revenue. The amounts included in acquisition costs and other underwriting expense were $77,222 and $276,556 for the three months ended and year ended December 31, 2013, respectively. The amounts reclassified into acquisition costs and other underwriting expense were $56,298 and $196,982 for the three months ended and year ended December 31, 2012, respectively. Additionally, the Company reclassified certain amounts related to its Luxembourg reinsurance companies to reflect the reduction of its deferred tax liability related to its utilization of equalization reserves as a reduction of provision for income taxes rather than a reduction of acquisition costs and other underwriting expenses. The reclassified amounts involved increasing acquisition costs and other underwriting expenses by $1,855 and other expenses by $16,389 and reducing provision for income taxes by $18,244 for the three months ended December 31, 2012. For the year ended December 31, 2012, the reclassified amounts involved increasing acquisition costs and other underwriting expenses by $9,274 and other expenses by $16,389 and reducing provision for income taxes by $25,663. The impact of the aforementioned reclassifications had no impact on net income. These reclassifications increased our combined ratio to 90.5% and 90.1% for the three months ended and year ended December 31, 2012, respectively, from 90.1% and 89.5% for the same periods, respectively. The Company also recorded a retrospective gain on acquisition of $1,566 related to the acquisitions of Car Care, Sequoia and First Non Profit Insurance Company during the three months ended March 31, 2013 and June 30, 2013, which resulted in an increase in net income of $1,215.

Segment Information
(in thousands, except percentages)
(Unaudited)
         
         
 Three Months EndedYear Ended
  December 31,December 31,
 2013201220132012
Gross written premium        
Small Commercial Business$470,892$243,659$1,659,980$933,740
Specialty Risk and Extended Warranty 382,569 351,596 1,511,649 1,118,710
Specialty Program 205,843 149,939 879,455 578,735
Personal Lines Reinsurance (1,066) 28,451 65,827 118,141
 $1,058,238$773,645$4,116,911$2,749,326
Net written premium        
Small Commercial Business$303,130$117,729$935,313$474,381
Specialty Risk and Extended Warranty 221,984 174,029 944,081 624,555
Specialty Program 140,726 92,803 620,452 430,960
Personal Lines Reinsurance (1,066) 28,451 65,827 118,141
 $664,774$413,012$2,565,673$1,648,037
Net earned premium        
Small Commercial Business$316,716$106,863$833,812$416,565
Specialty Risk and Extended Warranty 216,151 148,658 811,837 541,573
Specialty Program 159,201 98,796 520,371 348,568
Personal Lines Reinsurance 15,494 29,070 99,970 112,146
 $707,562$383,387$2,265,990$1,418,852
Loss Ratio:        
Small Commercial Business 66.0% 65.1% 65.8% 65.0%
Specialty Risk and Extended Warranty 66.4% 66.8% 67.2% 63.0%
Specialty Program 67.4% 68.5% 68.2% 68.4%
Personal Lines Reinsurance 69.0% 64.5% 68.2% 64.5%
Total 66.5% 66.6% 67.0% 65.0%
Expense Ratio:        
Small Commercial Business 26.1% 26.1% 25.5% 26.6%
Specialty Risk and Extended Warranty 16.6% 19.1% 18.6% 20.8%
Specialty Program 26.7% 26.9% 26.6% 28.2%
Personal Lines Reinsurance 30.5% 30.5% 30.5% 30.5%
Total 23.4% 23.9% 23.5% 25.1%
Combined Ratio:        
Small Commercial Business 92.1% 91.2% 91.3% 91.6%
Specialty Risk and Extended Warranty 83.0% 85.9% 85.8% 83.8%
Specialty Program 94.1% 95.4% 94.9% 96.6%
Personal Lines Reinsurance 99.5% 95.0% 98.7% 95.0%
Total 89.9% 90.5% 90.5% 90.1%

CONTACT: AmTrust Financial Services, Inc. Investor Relations Elizabeth Malone CFA beth.malone@amtrustgroup.com 646.458.7924 Media Contact Kekst & CompanyAndrea CaliseAndrea-calise@kekst.com 212.521.4845 Robert Siegfriedrobert-siegfried@kekst.com 212-521-4832



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Source: AmTrust Financial Services, Inc.


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