Some of the managing general agencies and fee businesses of global property/casualty insurer AmTrust Financial Services are set to be spun-off in a deal announced by AmTrust Financial Services, Inc. and Blackstone Credit & Insurance (BXCI).

Under a definitive agreement announced by the two firms, AmTrust and funds managed by BXCI will partner in the spin-off of certain MGAs in the U.S., United Kingdom, and Continental Europe that will create a new, independent company.

As part of the deal, AmTrust and the newly formed company will enter into a 10-year capacity agreement through which AmTrust will remain underwriter of the existing books of business offered through the MGAs.

Adam Karkowsky, who is currently President of AmTrust, will leave to become Chair and CEO of the new company.

The agreement includes seven AmTrust subsidiaries: ANV, Risico, Collegiate, AmTrust Nordic, Arc Legal, Qualis, and Abacus. These businesses provide diverse risk and insurance coverages including cyber excess and surplus, directors and officers, transaction risk insurance, professional indemnity, legal expense, mortgage and structured credit, warranty, agricultural workers compensation, income protection, accident and health (A&H), and residential and commercial niche property.

The new company is expected to have over 700 employees.

The brand name of the new company has not yet been announced.

Following the close of the transaction, AmTrust will remain a leading multinational insurance company with approximately 6,000 employees providing risk and insurance solutions with a broad offering across industries and classes globally.

According to the joint announcement from AmTrust and BXCI, Karkowsky’s leadership team at the new company will include Joseph Brecher, currently SVP, Head of Alternative Investments at AmTrust, in the role of chief financial officer, and Jacob Decter, currently chief strategy officer, Global Fee Businesses, at AmTrust, in the role of chief operating officer.

Barry Zyskind, Chairman and Chief Executive Officer, AmTrust, said, “We are very pleased to partner with Blackstone to unlock the substantial embedded value that we have built in our global MGA and fee businesses.”

“With this transaction, these businesses will be positioned to further invest in their operations, meaningfully grow their portfolio, and continue to deliver outstanding service to their clients,” he added in a media statement. “With our significant retained equity interest, AmTrust looks forward to participating in the future success of the new company,” he added, expressing confidence that Karkowsky and his team will “drive the new company to great heights.”

Said Karkowsky, “Bringing these businesses together as a standalone company creates a diversified, multinational MGA platform with significant value creation potential through organic growth, expanded partnerships, and acquisitions.”

Karkowsky’s previous insurance leadership experience includes prior roles as chief financial officer and executive vice president, Strategic Development and Mergers & Acquisitions. Before joining AmTrust in March 2011 and becoming president in December 2018, Karkowsky served in various finance and strategy roles in the private equity and insurance industries. He has been a member of the Board of Directors of AmTrust Financial Services, Inc. since January 2019.

Louis Salvatore, Senior Managing Director, BXCI, noted that “AmTrust has built an impressive franchise” and that BXCI is excited to support the new standalone MGA platform, “which should have significant tailwinds.”

“BXCI has extensive experience investing in and supporting insurance services businesses, helping them achieve their full potential. We look forward to partnering with AmTrust and the new company’s executive team to create long-term value,” Salvatore added.

The joint announcement describes BXCI as a leading credit investors with investments spanning the credit markets, including private investment grade, asset based lending, public investment grade and high yield, sustainable resources, infrastructure debt, collateralized loan obligations, direct lending and opportunistic credit. “We seek to generate attractive risk-adjusted returns for institutional and individual investors by offering companies capital needed to strengthen and grow their businesses,” the statement says. BXCI also provides investment management services for insurers.

The transaction has been approved by AmTrust’s Board of Directors. It is expected to close by year-end 2025, subject to customary closing conditions and regulatory approvals.

AmTrust Financial Services, Inc., is a multinational insurance holding company headquartered in New York, offering specialty property and casualty insurance products, including workers compensation, business owner policies, general liability and extended service and warranty coverage.

Source: AmTrust Financial Services, Blackstone Credit & Insurance (BXCI).