This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

A.M. Best Comments On The Ratings Of AmTrust Financial Services, Inc. Following Announced Transaction With Tower Group International, Ltd.

A.M. Best Co. has commented that the financial strength rating of A (Excellent) and issuer credit ratings (ICR) of “a” of the subsidiaries of AmTrust Financial Services, Inc. (AmTrust) (headquartered in New York, NY) (NASDAQ:AFSI) as well as its ICR of “bbb” and debt ratings are unchanged following the recent announcement of its transaction with Tower Group International, Ltd. (Tower) (Bermuda). The outlook for all ratings is stable.

Under the terms of the transaction, which involves multiple parties, ACP Re Ltd (ACP Re) (Bermuda) has agreed to acquire 100% of the outstanding stock of Tower. In addition, AmTrust will enter into a 100% quota share reinsurance agreement and provide a cut-through endorsement on a portion of Tower’s commercial lines business, which will be effective January 1, 2014. AmTrust intends to reinsure not less than 60% on a prospective basis of the approximately $290 million of unearned premium relating to Tower’s commercial business.

Upon completion of ACP Re’s merger with Tower, AmTrust intends to acquire the commercial lines renewal rights and assets, including several of Tower’s domestic insurance subsidiaries, to support the commercial lines business. Furthermore, similar to the acquisition of the commercial lines business, National General Holdings Corporation (National General) (Delaware) will acquire the renewal rights and assets, including several insurance subsidiaries, of Tower’s personal lines insurance operations. The purchase price of the subsidiaries acquired by AmTrust and National General will be equal to the statutory tangible book value of the acquired companies. ACP Re will retain all liabilities at the time of sale of the acquired companies through a reinsurance agreement that will be fully collateralized.

AmTrust has historically maintained excellent risk-adjusted capitalization and has reported strong operating results driven by an experienced management team, emphasis on technology and focus on low hazard and predictable books of business. In addition, a significant portion of AmTrust’s growth has been driven by successfully executing on renewal rights transactions, which is similar to the transaction with Tower. Based on management’s expectations, the additional premium generated by this transaction is manageable considering AmTrust’s current premium and surplus levels. A.M. Best expects the renewal rights acquisition to positively impact AmTrust’s earnings and for the company to continue to maintain excellent risk adjusted capitalization that supports the acquisition of the additional business.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%
YHOO $36.60 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs