AmTrust Financial Services Inc., beginning 2019 as a private company, disclosed some leadership changes and a broad strategic plan.
The specialty commercial property/casualty insurer completed its $2.95 billion privatization plan on Nov. 28, 2018, according to the company. Moving ahead, it expects to double down on its focus on specialty commercial insurance products.
There are also some executive changes. With its new status in place, AmTrust announced retirements of two longtime leaders. Michael Saxon, executive vice president for U.S. Commercial Lines, and Max Caviet, chief executive officer of AmTrust International Ltd., the company’s European parent holding company, retired effective Dec. 31, 2018.
Saxon had been with the company since 2001, and Caviet is a veteran going back to 2003. Saxon will continue as a consultant, as vice chairman of AmTrust North America.
In addition AmTrust Chief Operating Officer Christopher Longo resigned effective Dec. 31, 2018 to pursue other opportunities following the completion of the company’s privatization plan. Longo has been with the company since 2001.
Saxon will be succeeded by Christopher Foy and Caviet by Peter Dewey.
Foy will serve as executive vice president and head of North American Commercial P&C, with responsibility for North American commercial business and specialty programs segments. Foy joined AmTrust in 2016 as president of AmTrust Underwriters, with responsibility for the specialty program business segment. Before AmTrust, Foy was president and owner of Total Program Management, a specialty managing general agency. Previously, he was senior vice president at Clarendon National Insurance Co. specializing in MGAs and program business nationwide.
Dewey will serve as executive vice president, head of International, with oversight of AmTrust’s international business. Dewey joined AmTrust in 2003 and has served as CEO at AmTrust at Lloyd’s since 2014. Prior to joining AmTrust at Lloyd’s, Dewey was chief underwriting officer of AmTrust’s Specialty Risk & Warranty Division overseeing a team of actuaries, underwriters and risk management professionals. Before AmTrust, Dewey was an underwriter with Trenwick International Ltd., and prior to that he worked for an MGA as an underwriting manager.
Going Private; New Reinsurance Deals
AmTrust shareholders approved the go-private deal last June. The acquisition was spearheaded by an entity formed by private equity funds managed by Stone Point Capital, along with AmTrust Chairman and CEO Barry Zyskind and founders George Karfunkel and Leah Karfunkel. They acquired the 45 percent of the company’s shares that both the Karfunkels and Zyskinds didn’t already own or control.
In July, not long after shareholders approved the privatization plan, A.M. Best downgraded the company’s financial strength and credit ratings,, citing adverse development of prior years’ loss reserves that occurred in 2016 and 2017. The insurer’s financial strength rating was downgraded to “A-” (Excellent) from “A.” Its long-term issuer credit dipped to “a-” from “a.”
A.M. Best said the privatization plan had a neutral impact on the rating.
The company has said that even though it will operate as a private company, it is maintaining its public filer status with the Securities and Exchange Commission, enabling access to public financing if needed in the future. A.M. Best said the ability of management to assess long-term plans removed from the shorter-term focus of public equity markets “should allow for improved development and implementation of those plans.”
In an early step toward its future financial strategy, AmTrust disclosed on Jan. 2, 2019 that it entered into a quota share agreement with Swiss Re for 2019, covering U.S. small commercial business worth $2.9 billion in projected written premiums. Swiss Re plans to assume $1.05 billion on an in-force, new and renewal basis, and the agreement will renew annually. At the same time, AmTrust will terminate its existing quota share with Maiden Re regarding the same business and cede the unearned premium from this as of Dec. 31, 2018 to Swiss Re.
Zyskind framed the Swiss Re transaction as a “vote of confidence in the strength of the AmTrust franchise and our core business supporting small businesses across the U.S.”
Earlier in 2018, AmTrust entered into a new 50 percent quota share agreement with Everest Re, covering its projected $700 million of Specialty Program premiums. AmTrust will continue to partner with Maiden Re on other existing lines and expects to cede Maiden Re less than $500 million of written premium in 2019.
Strategic Plan
AmTrust’s strategic plan, known as AmTrust Forward, outlines a continued focus on being a specialty commercial property/casualty insurer.
“We believe we can achieve this by focusing on local markets and niche products where we can add significant value,” Zyskind said in prepared remarks. “As a private company, we have the opportunity to return to the core of what made AmTrust so successful over the past 20 years and manage our business for long-term success through sustainably profitable future growth.”
AmTrust offers small commercial property/casualty insurance including workers compensation, specialty risk and extended warranty in the U.S. and internationally.
*A version of this story ran previously in our sister publication Insurance Journal.