Amtrust Financial Services Inc 7.50% Dep Shs Rep 1/40th Pfd Ser D Usd25 · OTC:AFFS
Amtrust Financial Services Inc 7.50% Dep Shs Rep 1/40th Pfd Ser D Usd25 — AmTrust Financial Services — Investor Presentation (November 2007)
16 slides from Amtrust Financial Services Inc 7.50% Dep Shs Rep 1/40th Pfd Ser D Usd25's investor presentation, Nov 28, 2007
Slide 1: AmTrust Financial
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Slide 2: Forward Looking Statements
Forward Looking Statements This presentation may include forward-looking statements. These forward-looking statements include comments with respect to our objectives and strategies, and the results of our operations and business. By their nature, however, these forward-looking statements involve num
Slide 3: Who We Are
Who We Are Multinational specialty property and casualty insurance company Inside ownership 57% NASDAQ ticker symbol “AFSI” “A-” rating from A.M. Best We focus on underserved, niche markets: Low hazard Predictable Non-catastrophic Low volatility High ROE business model (24.8% annualized as of Septem
Slide 4: Company Financial Highlights
Company Financial Highlights Return on Equity Net Income from Continuing Operations (000’s) Quarterly Earnings Per Basic Share From Continuing Operations 12/31/06 3/31/07 6/30/07 9/30/07 *Annualized return on equity through 9/30/07 4
Slide 5: Business Overview
Business Overview Mix of Business Small Business Workers’ Specialty Risk and Extended Specialty Middle-Market P&C Compensation Warranty Insurance 2006 49.2% 25.3% 25.5% 9/30/07 39.7% 32.6 % 27.7% $258.9 MM GPW in 2006 $132.8 MM GPW in 2006 $134.3 MM in 2006 $235.5 MM through 9/30/07 $193.5 MM throug
Slide 6: Small Business Workers' Compensation
Small Business Workers’ Compensation We focus on low hazard small businesses Target Customers AmTrust Approach Result Average annual premium Expense control Cost efficient strategy less than $5,000 Paperless proprietary Historically high retention and Small employers – underwriting system renewal ra
Slide 7: Specialty Risk and Extended Warranty
Specialty Risk and Extended Warranty We provide extended warranties for a wide range of consumer and commercial goods Target Customers AmTrust Approach Result Manufacturers and retailers Extensive front-end Profit center or cost of consumer and diligence and actuarial reduction for client commercial
Slide 8: Specialty Middle Market P&C
Specialty Middle Market P&C Expansion of workers’ comp, general liability & commercial auto and property coverage Target Customers AmTrust Approach Result Retail, wholesale, service Extensive front-end Generated $164.0 MM of gross operations diligence and actuarial premium written for Workers’ compe
Slide 9: History of Disciplined Growth
History of Disciplined Growth Since 1998, we have grown our business organically and through: Key hires of underwriting teams in the US and Europe Opportunistic renewal rights transactions and acquisitions Dec. Early Dec. Aug. Dec. Feb. May June April Aug. July Nov. 2002 2003 2003 2004 2005 2006 200
Slide 10: Maiden Transaction Rationale
Maiden Transaction Rationale Long-term capital partner for future growth Organic Acquisition of additional books of business Higher ROE Ceding commission on reinsured premium Ability to write additional premium on existing capital base Annualized net written premium leverage with Maiden transaction
Slide 11: Business Model
Business Model Continue to deliver 20%+ ROE through: Focus on underwriting profit: Economies of scale Lower expense ratio 21.9% net expense ratio for the 9 months ended 9/30/07 Disciplined pricing and risk selection 64.0% net loss ratio for the 9 months ended 9/30/07 Proprietary technology platform
Slide 12: Financial Performance
Financial Performance We produce an underwriting profit by having consistent loss ratios and focusing on expenses As our premium has grown, we have: Increased our operating leverage Decreased our expense ratio $593.0 $526.0 98.4% 94.8% 95.1% 91.9% 85.9% $286.1 $210.9 $97.5 * Expenses were reduced by
Slide 13: Recent Financial Results
Recent Financial Results Summary Income Statement ($ in millions) 9/30/2007 2006 2005 Gross Premium Written $593.0 $526.1 $286.1 Net Premium Written 293.4 436.3 259.2 Net Premium Earned 330.9 329.0 216.0 Fee Income 16.7 12.4 8.2 Ceding Commission Revenue 40.1 - - Net Investment Income and Realized G
Slide 14: Recent Financial Position
Recent Financial Position Balance Sheet ($ in millions except for book value per share) 9/30/07 12/31/06 12/31/05 Cash and Investments $1,215.4 $785.9 $415.8 Reinsurance Recoverable 254.4 44.1 17.7 Premiums Receivable, Net 264.3 147.8 81.1 Goodwill & Intangible Assets 54.0 29.4 20.8 Other 419.8 178.
Slide 15: Investment Portfolio
Investment Portfolio Total invested asset as of 9/30/07 - $1.2 Billion 61.7% of fixed maturities are rated AAA or US Government and Agencies 90.4% of fixed maturities are rated A or better No exposure to sub-prime $24.2 $94.0 $288.8 $808.4 15
Slide 16: AmTrust Financial
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