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 (June 2008)
16 slides from Amtrust Financial Services Inc 7.50% Dep Shs Rep 1/40th Pfd Ser D Usd25's investor presentation, Jun 19, 2008
Slide 1: AmTrust Financial
Exhibit 99.1 AmTrust Financial
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 NASDAQ ticker symbol “AFSI” Inside ownership 57% “A-” rating from A.M. Best We focus on underserved, niche markets: Low hazard Predictable Non-catastrophic Low volatility High ROE business model (22.7% annualized for Q1 2008)
Slide 4: Company Financial Highlights
Company Financial Highlights Gross Premium Written $839.4 Net Income from Continuing Operations $526.0 $286.1 $210.9 $97.5 $286.1 $210.9 $234.8 $97.5 $25.7 $189.7 $22.3 $21.5 $87.8 $47.9 $17.5 $51.9 $57.7 $89.8 $89.3 All graphs represent figures in millions 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 $89.3 MM GPW in Q1 2008 $87.8 MM $57.7 MM $308.8 MM GPW in 2007 $306.4 MM $224.2 MM US only (40 states and DC) Europe, US US only (nationwide) Main Street
Slide 6: Small Business Workers' Compensation
Small Business Workers’ Compensation We focus on low hazard small businesses Target Customers AmTrust Approach Result Low to mid hazard small Cost efficient expense $89.3 MM GPW Q1 2008 businesses control $308.8 MM GPW in 2007 Restaurants Paperless proprietary Historically high retention and Retail
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 $87.8 MM GPW in Q1 2008 of consumer and diligence and actuarial $306.4 MM GPW in 2007 commerc
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 $57.7 MM GPW in Q1 2008 operations diligence and actuarial $224.2 MM GPW in 2007 Workers’ compensa
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 June Sep. June 2002 2003 2003 2004 2005 2006 200
Slide 10: Maiden Transaction Rationale
Maiden Transaction Rationale Long-term capital partner for future growth Organic growth Acquisition of additional books of business Higher ROE Ability to write additional premium on existing capital base Ceding commission on reinsured premium Accretive to earnings per share $0.43 operating earnings
Slide 11: Financial Performance
Financial Performance We produce an underwriting profit by having consistent loss ratios and focusing on expenses As our premium has grown, we have: Increased our operating leverage – Combined ratio 77.2% for Q1 2008 vs. 89.1% for Q1 2007 Decreased our expense ratio – ER 20.5% Q1 2008 vs. 26.3% for
Slide 12: Recent Financial Results
Recent Financial Results Summary Income Statement ($ in millions) Q1 2008 2007 2006 Gross Premium Written $234.8 $839.4 $526.1 Net Premium Written 117.4 419.9 436.3 Net Premium Earned 97.4 444.2 329.0 Fee Income 6.3 20.4 12.4 Ceding Commission 20.2 59.1 - Net Investment Income and Realized Gains 8.3
Slide 13: Recent Financial Position
Recent Financial Position Balance Sheet Highlights ($ in millions except for book value per share) 3/31/08 12/31/07 12/31/06 Cash and Investments $1,464.0 $1,289.6 $824.2 Reinsurance Recoverable 320.2 281.9 44.1 Premiums Receivable, Net 296.8 257.8 147.8 Other 527.5 493.5 207.6 $2,608.6 $2,322.8 $1,
Slide 14: Investment Portfolio
Investment Portfolio Total invested assets as of 3/31/08 - $1.5 Billion 56.4% of fixed maturities are rated AAA or US Government and Agencies 90% of fixed maturities are rated A or better No exposure to sub-prime 1% 5% 29% 65% 14
Slide 15: Business Model
Business Model Continue to deliver 20%+ ROE through: Focus on underwriting profit: Economies of scale Lower expense ratio 20.5% net expense ratio for Q1 2008 Disciplined pricing and risk selection 56.6% net loss ratio for Q1 2008 Proprietary technology platform designed to process small policies Eff
Slide 16: AmTrust Financial
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