AmTrust Financial released its 2017 Q1 earnings statement on May 8, after pursuing an audit and having to restate a few years of earnings due to financial reporting concerns. Cleaning up its accounting issues turned out to cost more than $33 million.

AmTrust’s category of “other” expenses, which came in at $129.3 million during Q1, was up 26 percent or $33.6 million from the same period in 2016. AmTrust said the number spiked due to higher administrative, consulting and auditing costs connected with its restatement of previously issued consolidated financial statements.

In March, the New York-based insurer delayed its 2016 annual report by a few weeks in order to conduct an audit and restate financial statements for the year as well as related disclosures for 2014 and 2015. Those restatements led to a 7.2 percent decline of net income attributable to common stockholders in 2014 and an 11.2 percent drop in 2015. AmTrust said the reports of its former independent auditor BDO USA were at issue. The company has since said it has boosted its internal financial controls, and created a chief accounting officer position.

AmTrust’s broader results for Q1 were mixed. While catastrophe losses hurt, AmTrust booked higher premiums, reported a lower profit and kept its combined ratio under the all-important 100.

Net income hit $22.6 million, or $0.13 per diluted share, down from $84 million, or $0.47 per diluted share in the 2016 first quarter. Net investment income, however, ticked higher, landing at $63.3 million, up more than 28 percent from $49.4 million in the 2016 first quarter.

Barry Zyskind, AmTrust’s chairman and CEO, said in prepared remarks that the results stem from both organic growth and prior acquisitions in the company’s Small Commercial Business and Specialty Risk and Extended Warranty Segments. Service and fee income and investment results also helped, he said.

AmTrust’s Q1 combined ratio was 95.6. That’s worse than the 91.9 reported in the 2016 first quarter.

What’s more, gross written premium and net earned premium during the quarter reached $2.3 billion and $1.2 billion respectively, up 17.2 percent and 13.8 percent, respectively, over the same period last year.

Q1 catastrophe losses were $25.3 million, pre-tax, compared to a $2 million pretax catastrophe loss in the 2016 first quarter.

AmTrust also made note of its category of “other” expenses, which came it at $129.3 million during Q1, up 26 percent or $33.6 million from the same period in 2016. AmTrust said the number spiked due to higher administrative, consulting and auditing costs connected with its restatement of previously issued consolidated financial statements.

Source: AmTrust Financial