AmTrust Financial Services, Inc. Announces Sale of Personal Lines Policy Management System to National General Holdings Corp....
14 September 2017 - 9:30PM
AmTrust Financial Services, Inc. (Nasdaq:AFSI)
(“AmTrust”) announced today the sale of the
personal lines policy management system (“policy management
system”) it developed for National General Holdings Corp.
(“National General”), to National General. AmTrust will receive
total consideration of $200 million, payable in three equal
installments.
Barry Zyskind, Chairman and Chief Executive
Officer, AmTrust, said, “With this sale, which will be immediately
accretive to AmTrust’s tangible book value, we are unlocking value
that we created through our technological expertise. The proceeds
will further strengthen our balance sheet and the transaction
demonstrates our commitment to simplifying our organization and
financial disclosure.”
Since 2010, AmTrust has provided National
General and its affiliates information technology development
services in connection with the development and licensing of the
policy management system. Under the terms of the initial agreement,
National General was entitled to acquire the license royalty-free
in 2023.
In 2016, development, support and licensing fees
from National General related to the policy management system
generated approximately $26 million in pre-tax income ($17.1
million after tax) for AmTrust.
Terms of the Sale Agreement
Under the terms of the sale agreement, National
General will acquire the right, title and interests in the policy
management system. The $200 million purchase price is payable in
three equal installments with the first payment made upon the
execution of the sale agreement, the second payment payable upon
the six-month anniversary of the sale agreement, and the third
payment payable upon the later of the completion of the full
separation and transfer of the system to National General’s
operating environment or the 18-month anniversary of the
agreement.
About AmTrust Financial Services,
Inc.
AmTrust Financial Services, Inc., a
multinational insurance holding company headquartered in New York
City, offers specialty property and casualty insurance products,
including workers' compensation, commercial automobile, general
liability and extended service and warranty coverage through its
primary insurance subsidiaries rated "A" (Excellent) by A.M. Best.
AmTrust is included in the Fortune 500 list of largest companies.
For more information about AmTrust visit
www.amtrustfinancial.com.
Forward-Looking Statements
This news release contains certain
forward-looking statements that are intended to be covered by the
safe harbors created by the Private Securities Litigation Reform
Act of 1995. When we use words such as “anticipate,” “intend,”
“plan,” “believe,” “estimate,” “expect,” or similar expressions, we
do so to identify forward-looking statements. Examples of
forward-looking statements include the plans and objectives of
management for future operations, including those relating to
future growth of our business activities and availability of funds,
projections of the impact of potential errors or misstatements in
our financial statements, and estimates of the impact of material
weaknesses in our internal control over financial reporting, and
are based on current expectations that involve assumptions that are
difficult or impossible to predict accurately and many of which are
beyond our control. Actual results may differ materially from those
expressed or implied in these statements as a result of significant
risks and uncertainties, including, but not limited to, non-receipt
of expected payments from insureds or reinsurers, changes in
interest rates, a downgrade in the financial strength ratings of
our insurance subsidiaries, the effect of the performance of
financial markets on our investment portfolio, the amounts, timing
and prices of any share repurchases made by us under our share
repurchase program, development of claims and the effect on loss
reserves, accuracy in projecting loss reserves, the cost and
availability of reinsurance coverage, the effects of emerging claim
and coverage issues, changes in the demand for our products, our
degree of success in integrating acquired businesses, the effect of
general economic conditions, state and federal legislation,
regulations and regulatory investigations into industry practices,
the impact of known or potential errors or misstatements in our
financial statements, our ability to timely and effectively
remediate the material weaknesses in our internal control over
financial reporting and implement effective internal control over
financial reporting and disclosure controls and procedures in the
future, risks associated with conducting business outside the
United States, the impact of Brexit, developments relating to
existing agreements, disruptions to our business relationships with
Maiden Holdings, Ltd. or National General Holdings Corp., breaches
in data security or other disruptions with our technology,
heightened competition, changes in pricing environments, and
changes in asset valuations. Additional information about these
risks and uncertainties, as well as others that may cause actual
results to differ materially from those projected, is contained in
our filings with the SEC, including our Annual Report on Form 10-K
and our quarterly reports on Form 10-Q. The projections and
statements in this news release speak only as of the date of this
release and we undertake no obligation to update or revise any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by
law.
For more information, please
contact:
AmTrust Financial Services,
Inc.Chaya CooperbergChief Communications Officer & SVP
Corporate
Affairschaya.cooperberg@amtrustgroup.com 646.458.3332
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