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 (September 2007)
15 slides from Amtrust Financial Services Inc 7.50% Dep Shs Rep 1/40th Pfd Ser D Usd25's investor presentation, Sep 5, 2007
Slide 1: AmTrust Financial
Exhibit 99.1 AmTrust Financial
Slide 2: Who We Are
Who We Are Multinational specialty property and casualty insurance company Founded in 1998 Founders: Michael and George Karfunkel, Barry Zyskind Inside ownership 57% NASDAQ ticker symbol “AFSI” “A-” rating from A.M. Best We focus on underserved, niche markets: Small business workers’ compensation (4
Slide 3: Company Overview
Company Overview Gross Premiums Written 2005 $286 MM 2006 $526 MM YTD 6/30/07 $400 MM Mix of Business Small Business Workers’ Specialty Risk and Extended Specialty Middle-Market P&C Compensation Warranty Insurance 2005 71.5% 28.5% 0% 2006 49.2% 25.3% 25.5% 6/30/07 42.1% 29.3% 28.6% US only (31 state
Slide 4: Small Business Workers' Compensation
Small Business Workers’ Compensation Target Customers AmTrust Approach Result Average annual premium Expense control Cost efficient strategy less than $5,000 Paperless proprietary Historically high retention Small employers – underwriting system and renewal rates (over typically underserved by 80%)
Slide 5: Small Business Workers' Compensation (cont'd)
Small Business Workers’ Compensation (cont’d) Premium Distribution by State (6 months ended June 30, 2007 ) 10.2% 5.8% 10.5% 11.8% 1.3% 4.1% 1.4% 1.5% 1.7% 3.3% 11% 2.7% Greater than 10% 25% Greater than 5% Less than 10% Less than 5% No Operations 5
Slide 6: 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 of Extensive front-end Profit center or cost consumer and commercial diligence and actuarial reduction for client
Slide 7: Specialty Middle Market P&C (Alea)
Specialty Middle Market P&C (Alea) Expansion of workers’ comp, general liability & commercial auto and property coverage Target Customers AmTrust Approach Result Retail, wholesale, service Extensive front-end Business integration operations covered diligence and actuarial on-going through 25 wholesa
Slide 8: History of Disciplined Growth
History of Disciplined Growth We have grown our business organically and through: Key hires of underwriting teams in the US and Europe Opportunistic renewal rights transactions Dec. Early Dec. Aug. Dec. Feb. May June April June July 2002 2003 2003 2004 2005 2006 2006 2006 2007 2007 2007 Renewal Rene
Slide 9: Renewal Rights Transaction Overview
Renewal Rights Transaction Overview Right to renew another carrier’s insurance policies without assuming historical liabilities Typically occur when an insurance company needs to raise cash quickly or exit line Opportunity to re-underwrite and cherry pick the book of business Access to historical lo
Slide 10: Business Model
Business Model Deliver high teens ROE through: Focus on earning underwriting profit Target at or below 95% combined ratio Proprietary technology platform designed to process small policies Effective tax rate of less than 30% 10
Slide 11: 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 $526.0 98.4% 94.8% 95.1% 91.9% 89.6% $399.7 $286.1 $210.9 $97.5 11
Slide 12: Recent Financial Results
Recent Financial Results Summary Income Statement ($ in millions) 6/30/2007 2006 2005 Gross Premiums Written $399.7 $526.1 $286.1 Net Premiums Written 324.1 436.3 259.2 Net Premiums Earned 249.1 329.0 216.0 Fee Income 8.8 12.4 8.2 Net Investment Income and Realized Gains 35.7 42.4 16.4 Loss and LAE
Slide 13: Recent Financial Position
Recent Financial Position Balance Sheet ($ in millions) 6/30/07 12/31/06 12/31/05 Cash and Investments $1,052.2 $785.9 $415.8 Reinsurance Recoverable 52.3 44.1 17.7 Premiums Receivable, Net 239.3 147.8 81.1 Goodwill & Intangible Assets 40.4 29.4 20.8 (2) (2) Other 269.8 178.2 77.5 1,654.0 1,185.4 61
Slide 14: Financial Objectives for Remainder of 2007 and 2008
Financial Objectives for Remainder of 2007 and 2008 At least 20% Organic Growth in Premiums Combined Ratio of 95% or better Investment Yield of at least 6.0% Effective Tax Rate less than 30% ROE of 15% or higher 14
Slide 15: AmTrust Financial
AmtTrust Financial AN AmtTrust FINANCIAL
AmTrust Financial Services — Investor Presentation (September 2007) on 6ix