A.M. Best Affirms Ratings Of AmTrust Financial Services, Inc. And Its Subsidiaries

A.M. Best Co. has affirmed the financial strength rating (FSR) of A (Excellent) and issuer credit ratings (ICR) of “a” of the property/casualty subsidiaries of AmTrust Financial Services, Inc. (AFSI) (New York, NY) [NASDAQ: AFSI] also known as AmTrust Group (AmTrust). Concurrently, A.M. Best has affirmed the ICR of “bbb” of AFSI. The outlook for all ratings is stable. (See below for a detailed list of the companies.)

The rating actions reflect AmTrust’s balance sheet strength, profitable underwriting and operating performance within its niche market segments and access to additional capital to support expanding operations from its parent, AFSI, if needed. AmTrust has been successful in executing its business plan, which is focused on growth through acquisitions of renewal rights offerings and established books of business at appropriate rates, terms and conditions. This enables AmTrust to further benefit from its expandable underwriting platform to drive expense savings.

Partially offsetting these positive rating factors are AmTrust’s continued significant growth in both premium volume and associated liabilities in recent years, primarily achieved through renewal rights transactions and the inherent risk associated with expansion into new markets and integrating new business.

AFSI’s adjusted debt-to-total capital of 19.2% and its adjusted debt-to-tangible capital of 26.7% at the first quarter of 2012 were within A.M. Best’s expectations at its current rating level. Combined with its availability to a $150 million credit facility and operating company dividend capacity, AFSI has ample liquidity to meet its corporate obligations. AFSI maintains a strong interest coverage ratio that is well within A.M. Best’s guidelines for its ratings.

Key rating factors that may lead to future positive rating actions include the organization outperforming its peers for an extended period of time. However, negative rating actions could result if the group’s operating performance falls markedly short of A.M. Best’s expectations or if risk-adjusted capitalization significantly declines.

The FSR of A (Excellent) and ICRs of “a” have been affirmed for the following property/casualty subsidiaries of AmTrust Financial Services, Inc.:

  • AmTrust International Insurance, Ltd.
  • Technology Insurance Company, Inc.
  • Rochdale Insurance Company
  • Wesco Insurance Company
  • Milwaukee Casualty Insurance Company
  • Security National Insurance Company
  • AmTrust Insurance Company of Kansas
  • AmTrust Lloyd’s Insurance Company of Texas
  • AmTrust International Underwriters Limited
  • AmTrust Europe Limited
  • Associated Industries Insurance Company, Inc.

The methodology used in determining these ratings is Best’s Credit Rating Methodology , which provides a comprehensive explanation of A.M. Best’s rating process and contains the different rating criteria employed in the rating process. Key criteria utilized include: “Risk Management and the Rating Process for Insurance Companies”; “Insurance Holding Company and Debt Ratings”; “Understanding BCAR for Property/Casualty Insurers”; “Assessing Country Risk”; “Catastrophe Analysis in A.M. Best Ratings”; “The Treatment of Terrorism Risk in the Rating Evaluation”; and “Rating Members of Insurance Groups.” Best’s Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.

Founded in 1899, A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2012 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Copyright Business Wire 2010

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