AmTrust Financial Services reported significant net losses in the 2017 third quarter, a dip in gross written premium and a skyrocketing combined ratio.
Net losses hit $174.7 million, or $0.89 per diluted share, versus $80.7 million in net income, or $0.47 per diluted share in the 2016 third quarter. AmTrust’s gross written premium of just under $2 billion and net earned premium of $1.19 billion were down 2.1 percent and 0.3 percent, respectively, from the same period a year ago.
AmTrust’s combined ratio reached 134.4 for the quarter compared to 93.2 last year
As with many other insurers, AmTrust dealt with higher catastrophe losses stemming from hurricanes and other extreme weather events. But AmTrust President and CEO Barry Zyskind emphasized that the company continues to focus on raising money, improving its balance sheet and promoting longer-term stability.
“Over the past seven months, we have fundamentally transformed the company’s balance sheet,” Zyskind said in prepared remarks. “The initiatives we took earlier this year, including a capital raise of $300 million and the sale of the personal lines policy management system to National General Holdings for $200 million, have significantly strengthened our capital base.”
Zyskind also noted other moves AmTrust took earlier this week. The company will make about $950 million by selling a majority equity interest in some of its U.S.-based fee business to private equity firm Madison Dearborn Partners. He said the deal should add about $6 per share in net tangible book value and about $3.50 per share in net book value.
AmTrust also boosted prior-year reserves during the quarter by $327 million.
A.M. Best reacted cautiously to AmTrust’s moves, placing the company’s credit and financial strength ratings under review, with negative implications.
AmTrust said its net investment income during Q3 reached $61.1 million, up 2 percent from $59.9 million in the 2016 third quarter.
Source: AmTrust Financial Group