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Form 8-K Amtrust Financial Servic For: Aug 02

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August 2, 2016 7:09 AM EDT


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
 

Date of Report (Date of Earliest Event Reported)
August 2, 2016
  
AmTrust Financial Services, Inc.
(Exact name of registrant as specified in its charter)
 
Delaware
 
001-33143
 
04-3106389
(State or other jurisdiction
 
(Commission
 
(IRS Employer
of incorporation)
 
File Number)
 
Identification No.)
 
59 Maiden Lane, 43rd Floor, New York, New York
10038
(Address of principal executive offices)
 
(Zip Code)
 

Registrant’s telephone number, including area code
(212) 220-7120

 

 
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.133-4 (c))
 






 
 
Item 2.02
RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On August 2, 2016, AmTrust Financial Services, Inc.issued a press release announcing its results of operations for the second quarter ended June 30, 2016 and the scheduling of a conference call on August 2, 2016 with respect thereto. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K and is furnished as Exhibit 99.1 to this report.

 
Item 9.01
FINANCIAL STATEMENTS AND EXHIBITS.
 
(a)
Not applicable.
(b)
Not applicable.
(c)
Not applicable.
(d)
Exhibits.
Exhibit Number
 
Description
99.1

 
Press release dated August 2, 2016.
 




SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 
 
 
AmTrust Financial Services, Inc.
 
(Registrant)
 
Date
August 2, 2016
 
 
/s/ Stephen Ungar
 
Stephen Ungar
 
Senior Vice President, General Counsel and Secretary
 




    
AmTrust Financial Services, Inc. Reports Second Quarter 2016 Net Income Per Diluted Share(2) of $0.78 and Operating Earnings Per Diluted Share(1)(2) of $0.81
Book Value Per Common Share(2) of $15.10, Up 26% Since June 30, 2015
Financial Highlights
Second Quarter 2016

•
Gross written premium of $2.07 billion, up 23.5% compared to $1.68 billion in the second quarter 2015
•
Net earned premium of $1.18 billion, up 22.0% from $0.97 billion in the second quarter 2015
•
Net income attributable to common stockholders of $134.8 million compared to $70.7 million in the second quarter 2015
•
Operating earnings(1) of $140.3 million compared to $130.5 million in the second quarter 2015
•
Diluted EPS(2) of $0.78 compared to $0.42 in the second quarter 2015
•
Operating diluted EPS(1)(2) of $0.81 compared to $0.78 in the second quarter 2015
•
Annualized return on common equity of 21.1% and annualized operating return on common equity(1) of 21.9%
•
Service and fee income of $138.3 million, up 28% from $107.7 million in the second quarter 2015
•
Combined ratio of 91.7% compared to 90.5% in the second quarter 2015
•
Weighted average diluted shares outstanding(2) of 173.0 million, up 3% compared to 168.1 million in the second quarter 2015
•
Repurchased 3.58 million common shares at a weighted average price of $24.82 per share

Year-to-Date 2016

•
Gross written premium of $4.01 billion, up 17.5% compared to $3.41 billion YTD 2015
•
Net earned premium of $2.26 billion, up 17.6% from $1.92 billion YTD 2015
•
Net income attributable to common stockholders of $235.0 million compared to $225.4 million YTD 2015
•
Operating earnings(1) of $276.9 million compared to $251.9 million in YTD 2015
•
Diluted EPS(2) of $1.34 compared to $1.35 YTD 2015
•
Operating diluted EPS(1)(2) of $1.58 compared to $1.50 YTD 2015
•
Annualized return on common equity of 18.7% and annualized operating return on common equity(1) of 22.0%
•
Service and fee income of $282.5 million, up 28.0% from $220.6 million YTD 2015
•
Combined ratio of 91.4% compared to 89.8% in YTD 2015
•
Weighted average diluted shares outstanding(2) of 175.2 million, up 5% compared to 167.1 million in the second quarter 2015
•
Book value per common share(2) of $15.10, up 26% from $12.02 at June 30, 2015
•
AmTrust's stockholders' equity was $3.23 billion as of June 30, 2016, up 11.1% compared to $2.91 billion as of December 31, 2015
•
Repurchased 5.85 million common shares at a weighted average price of $24.72 per shares, year to date through July 27, 2016

NEW YORK, August 2, 2016 (GLOBE NEWSWIRE) -- AmTrust Financial Services, Inc. (Nasdaq: AFSI) (" the Company" or "AmTrust") today announced second quarter 2016 net income attributable to common stockholders was $134.8 million, or $0.78 per diluted share(2), compared to $70.7 million, or $0.42 per diluted share(2), in the second quarter 2015. For the second quarter 2016, operating earnings(1) was $140.3 million, or $0.81 per diluted share(2), compared to $130.5 million, or $0.78 per diluted share(2), in the second quarter of 2015. Annualized return on common equity was 21.1% for the second quarter of 2016 compared

1


to 14.3% for the second quarter of 2015. Second quarter 2016 annualized operating return on common equity(1) was 21.9% compared to 26.3% in the second quarter 2015.
Second Quarter 2016 Results
Total revenue was $1.39 billion, an increase of $0.28 billion, or 25%, from $1.11 billion in the second quarter 2015. Gross written premium was $2.07 billion, an increase of $0.39 billion, or 24%, from $1.68 billion in the second quarter of 2015. Net written premium was $1.27 billion, an increase of $0.26 billion, or 26%, compared to $1.01 billion in the second quarter 2015. Net earned premium was $1.18 billion, an increase of $0.21 billion, or 22%, from $0.97 billion in the second quarter 2015. The combined ratio was 91.7% compared to 90.5% in second quarter 2015.
Total service and fee income of $138.3 million increased $30.5 million, or 28%, from $107.7 million in the second quarter of 2015 and included $21.6 million from related parties in the second quarter 2016 compared to $21.3 million in the second quarter 2015.
Net investment income, excluding net realized gains and losses, totaled $50.7 million, an increase of 40% from $36.3 million in the second quarter of 2015. In addition, second quarter 2016 results included net realized investment gains of $15.1 million, or $9.8 million after-tax, on certain fixed income and equity investments compared with net realized investment loss of $2.6 million, or $1.7 million after-tax, in the second quarter of 2015.
Loss and loss adjustment expense totaled $784.4 million in the second quarter 2016, compared to $638.5 million in the second quarter 2015, and resulted in a loss ratio of 66.4% compared with 65.9% for the second quarter 2015.
Acquisition costs and other underwriting expense of $298.8 million increased $60.1 million from $238.7 million for the second quarter 2015. The expense ratio was 25.3% compared to 24.6% for the second quarter 2015. Ceding commissions, primarily related to the reinsurance agreements with Maiden Holdings, Ltd. ("Maiden"), totaled $144.0 million, up 11% from $129.2 million in the second quarter 2015.
Other expense of $133.0 million increased $34.8 million, or 36%, from $98.1 million in the second quarter 2015.
The effective tax rate was 15.9%, compared to 5.5% in the second quarter of 2015.
During the second quarter of 2016, the Company repurchased 3.58 million of its common shares at a weighted average price of $24.82 per share.
Year-to-Date 2016 Results
Total revenue was $2.66 billion, an increase of $0.44 billion, or 19.7%, from $2.22 billion YTD 2015. Gross written premium was $4.01 billion, an increase of $0.60 billion, or 17.5%, from $3.41 billion YTD 2015. Net written premium was $2.5 billion, an increase of $0.44 billion, or 21.3%, from $2.05 billion from YTD 2015. Net earned premium of $2.26 billion increased $337.7 million, or 17.6%, from $1.92 billion YTD 2015. The combined ratio was 91.4% compared to 89.8% YTD 2015.
Total service and fee income of $282.5 million increased $61.85 million, or 28.0%, from $220.6 million YTD 2015 and included $41.8 million from related parties in the first six months 2016 compared with $38.7 million YTD 2015.
Investment income, excluding net realized gains and losses, totaled $100.2 million, an increase of 41.4% from $70.9 million YTD 2015. In addition, YTD 2016 results included net realized investment gains of $23.1 million, or $15.0 million after-tax, on certain fixed income and equity investments compared with net realized investment gains of $13.0 million, or $8.5 million after-tax, in the same period in 2015.
Loss and loss adjustment expense totaled $1.50 billion YTD 2016, compared to $1.25 billion YTD 2015, and resulted in a loss ratio of 66.5% compared with 65.3% for the same period in 2015.
Acquisition costs and other underwriting expense of $563.4 million increased $93.1 million from $470.4 million YTD 2015. The expense ratio was 24.9%, an increase from 24.5% YTD 2015. Ceding commissions, primarily related to the reinsurance agreements with Maiden, totaled $282.3 million, up 14% from $247.9 million in YTD 2015.
Other expense of $261.2 million increased $64.6 million, or 33%, from $196.6 million YTD 2015.
The effective tax rate was 17.9%, compared to 17.9% from YTD 2015.

2


Total assets of approximately $21 billion as of June 30, 2016 increased approximately $4 billion, or 23%, from approximately $17 billion at December 31, 2015. Total cash, cash equivalents and investments of $9.04 billion increased $1.84 billion, or 26%, from $7.20 billion as of December 31, 2015. AmTrust's stockholder's equity of $3.23 billion increased 11% from $2.91 billion at December 31, 2015.
Through July 27, 2016, the Company has repurchased 5.85 million of its common shares at a weighted average price of $24.72 per share.
As of June 30, 2016, the Company's debt-to-capitalization ratio was 27.8%, compared with 25.8% as of December 31, 2015.
During the three months ended June 30, 2016, the Board of Directors declared cash dividends totaling $0.15 per share on the Company's common stock and cash dividends on the following series of non-cumulative preferred stock:
Series
 
Rate
 
Dividend
A
 
6.750%
 
$0.421875
B
 
7.250%
 
$0.453125
C
 
7.625%
 
$0.476563
D
 
7.500%
 
$0.468750
E
 
7.750%
 
$0.484380


3


Conference Call:
On August 2, 2016 at 10:00 AM ET, Chairman, President & CEO Barry Zyskind and CFO Ron Pipoly will review these results and discuss business conditions via a conference call and webcast that may be accessed as follows:
Toll-Free Dial-in:   (877) 755-7421
Toll Dial-in (Outside the U.S):   (973) 200-3087
Conference ID: 48118214
Webcast registration: http://ir.amtrustgroup.com/events.cfm
A replay of the conference call will be available at approximately 1:00 PM ET Tuesday, August 2, 2016 through Tuesday, August 9, 2016 at 11:59 PM ET. To listen to the replay, please dial (855) 859-2056 (within the U.S.) or (404) 537-3406 (outside the U.S.) and enter replay passcode 48118214, or access http://ir.amtrustgroup.com/events.cfm.
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. For more information about AmTrust, visit www.amtrustgroup.com, or call AmTrust toll-free at (855) 327-2223.
Forward Looking Statements
This news release contains "forward-looking statements" that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements are based on the Company's current expectations and beliefs concerning future developments and their potential effects on the Company. 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, risks associated with conducting business outside the United States, developments relating to existing agreements, disruptions to our business relationships with Maiden Holdings, Ltd., National General Holdings Corp., or ACP Re, Ltd., breaches in data security or other disruptions with our technology, heightened competition, changes in pricing environments, and changes in asset valuations. The forward-looking statements contained in this news release are made only as of the date of this release. The Company undertakes no obligation to publicly update any forward-looking statements except as may be required by law. 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 the Company's filings with the Securities and Exchange Commission, including its annual report on Form 10-K and its quarterly reports on Form 10-Q.
 
AFSI-F

CONTACT:
AmTrust Financial Services, Inc.
        
 
        
SVP Investor Relations
        
Elizabeth Malone, CFA
        
        
(646) 458-7924




4


 
AmTrust Financial Services, Inc.
Income Statement
(in thousands, except per share data)
(Unaudited)
 
 
 
 
 
 
 
Three Months Ended June 30,

Six Months Ended June 30,
 
 
2016

2015

2016

2015
Gross written premium
 
$
2,073,112

 
$
1,678,389

 
$
4,006,186

 
$
3,409,525

 
 
 

 
 

 
 

 
 

Net written premium
 
$
1,268,436

 
$
1,008,721

 
$
2,489,115

 
$
2,051,910

Change in unearned premium
 
(86,684
)
 
(39,751
)
 
(233,081
)
 
(133,563
)
Net earned premium
 
1,181,752

 
968,970

 
2,256,034

 
1,918,347

 
 
 
 
 
 
 
 
 
Service and fee income
 
138,270

 
107,737

 
282,471

 
220,623

Net investment income
 
50,745

 
36,283

 
100,160

 
70,856

Net realized and unrealized gain (loss) on investments
 
15,099

 
(2,642
)
 
23,074

 
13,011

Other revenue
 
204,114

 
141,378

 
405,705

 
304,490

Total revenue
 
1,385,866

 
1,110,348

 
2,661,739

 
2,222,837

Loss and loss adjustment expense
 
784,393

 
638,475

 
1,499,466

 
1,251,758

Acquisition costs and other underwriting expense
 
298,803

 
238,710

 
563,437

 
470,386

Other expense
 
132,970

 
98,130

 
261,156

 
196,587

Total expense
 
1,216,166

 
975,315

 
2,324,059

 
1,918,731

Income before other income (expense), provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest
 
169,700

 
135,033

 
337,680

 
304,106

Other income (loss):
 
 

 
 

 
 

 
 

Interest expense
 
(19,738
)
 
(9,646
)
 
(37,438
)
 
(19,901
)
Loss on extinguishment of debt
 
—

 
—

 
—

 
(4,714
)
Gain on life settlement contracts net of profit commission
 
12,676

 
3,096

 
23,406

 
14,469

Foreign currency loss
 
(26,435
)
 
(47,320
)
 
(62,108
)
 
(7,366
)
Gain on acquisition
 
39,097

 
—

 
48,775

 
—

Total other income (loss)
 
5,600


(53,870
)
 
(27,365
)
 
(17,512
)
Income before provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest
 
175,300

 
81,163

 
310,315

 
286,594

Provision for income taxes
 
27,918

 
4,472

 
55,644

 
51,284

Equity in earnings of unconsolidated subsidiaries (related parties)
 
4,802

 
4,042

 
10,578

 
9,571

Net income
 
152,184

 
80,733

 
265,249

 
244,881

Redeemable non-controlling interest and non-controlling interest
 
(5,817
)
 
(1,346
)
 
(9,834
)
 
(5,429
)
Net income attributable to AmTrust stockholders
 
$
146,367


$
79,387


$
255,415


$
239,452

Dividends on preferred stock
 
(11,576
)
 
(8,639
)
 
(20,367
)
 
(14,008
)
Net income attributable to AmTrust common stockholders
 
$
134,791


$
70,748


$
235,048


$
225,444

Operating earnings(1) attributable to AmTrust common stockholders
 
$
140,335

 
$
130,518

 
$
276,939

 
$
251,944

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

5


AmTrust Financial Services, Inc.
Income Statement
(in thousands, except per share data)
(Unaudited)
 
 
 
 
 
 
 
Three Months Ended June 30,

Six Months Ended June 30,
 
 
2016

2015

2016

2015
Earnings per common share:
 
 

 
 

 
 

 
 

Basic earnings per share (2)
 
$
0.79

 
$
0.43

 
$
1.36

 
$
1.38

Diluted earnings per share (2)
 
$
0.78

 
$
0.42

 
$
1.34

 
$
1.35

Operating diluted earnings per share (1)(2)
 
$
0.81

 
$
0.78

 
$
1.58

 
$
1.50

Weighted average number of basic shares outstanding (2)
 
171,160

 
164,716

 
173,334

 
163,494

Weighted average number of diluted shares outstanding (2)
 
173,025

 
168,068

 
175,215

 
167,116

Combined ratio
 
91.7
%
 
90.5
%
 
91.4
%
 
89.8
%
Return on equity
 
21.1
%
 
14.3
%
 
18.7
%
 
24.2
%
Operating return on equity (1)
 
21.9
%
 
26.3
%
 
22.0
%
 
27.1
%
Reconciliation of net realized gain (loss):
 
 

 
 

 
 

 
 

Other-than-temporary investment impairments
 
$
(16,956
)
 
$
(1,466
)
 
$
(16,956
)
 
$
(2,482
)
Impairments recognized in other comprehensive income
 
—

 
—

 
—

 
—

 
 
(16,956
)
 
(1,466
)
 
(16,956
)
 
(2,482
)
Net realized gain (loss) on sale of investments
 
32,055

 
(1,176
)
 
40,030

 
15,493

Net realized gain (loss)
 
$
15,099

 
$
(2,642
)
 
$
23,074

 
$
13,011


  
AmTrust Financial Services, Inc.
Balance Sheet Highlights
(in thousands, except book value per common share)
(Unaudited)
 
 
 
 
 
 
 
June 30, 2016
 
December 31, 2015
Cash, cash equivalents and investments
 
$
9,036,079

 
$
7,199,535

Premium receivables
 
2,562,165

 
2,115,653

Goodwill and intangible assets
 
999,251

 
800,045

Loss and loss adjustment expense reserves
 
9,097,408

 
7,208,367

Unearned premium
 
4,819,255

 
4,014,728

Trust preferred securities
 
214,748

 
118,226

Convertible senior notes
 
168,435

 
165,361

6.125% Senior notes
 
248,048

 
247,911

7.25% Subordinated Notes due 2055
 
145,140

 
145,078

7.50% Subordinated Notes due 2055
 
130,628

 
130,572

5.75% Note Payable
 
104,685

 
—

Preferred stock
 
626,250

 
482,500

AmTrust's stockholders' equity
 
3,230,685

 
2,909,060

Book value per common share (2)
 
$
15.10

 
$
13.79

 






6


AmTrust Financial Services, Inc.
Non-GAAP Financial Measures
(in thousands, except per share data)
(Unaudited)  
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,

Six Months Ended June 30,
 
 
2016

2015

2016
 
2015
Reconciliation of net income attributable to AmTrust common stockholders to operating earnings (1):
 
 

 
 

 
 

 
 

Net income attributable to AmTrust common stockholders
 
$
134,791

 
$
70,748

 
$
235,048

 
$
225,444

Less: Net realized gain (loss) on investments net of tax
 
9,814

 
(1,717
)
 
14,998

 
8,457

Non-cash amortization of intangible assets
 
(12,798
)
 
(9,282
)
 
(23,410
)
 
(19,872
)
Non-cash interest on convertible senior notes net of tax
 
(1,538
)
 
(1,451
)
 
(3,075
)
 
(3,005
)
Loss on extinguishment of debt
 
—

 
—

 
—

 
(4,714
)
Foreign currency transaction loss
 
(26,435
)
 
(47,320
)
 
(62,108
)
 
(7,366
)
Acquisition gain net of tax
 
25,413

 
—

 
31,704

 
—

Operating earnings (1) attributable to AmTrust common stockholders
 
$
140,335

 
$
130,518

 
$
276,939

 
$
251,944

Reconciliation of diluted earnings per share to diluted operating earnings per share (1)(2):
 
 

 
 

 
 

 
 

Diluted earnings per share
 
$
0.78

 
$
0.42

 
$
1.34

 
$
1.35

Less: Net realized gain (loss) on investments net of tax
 
0.05

 
(0.01
)
 
0.09

 
0.05

Non-cash amortization of intangible assets
 
(0.07
)
 
(0.06
)
 
(0.13
)
 
(0.11
)
Non-cash interest on convertible senior notes net of tax
 
(0.01
)
 
(0.01
)
 
(0.02
)
 
(0.02
)
Loss on extinguishment of debt
 
—

 
—

 
—

 
(0.03
)
Foreign currency transaction loss
 
(0.14
)
 
(0.28
)
 
(0.36
)
 
(0.04
)
Acquisition gain net of tax
 
0.14

 
—

 
0.18

 
—

Operating diluted earnings per share (1)(2)
 
$
0.81

 
$
0.78

 
$
1.58

 
$
1.50

Reconciliation of return on common equity to operating return on common equity: (1)
 
 

 
 

 
 

 
 

Return on common equity
 
21.1
 %
 
14.3
 %
 
18.7
 %
 
24.2
 %
Less: Net realized gain (loss) on investments net of tax
 
1.4
 %
 
(0.3
)%
 
1.2
 %
 
0.9
 %
Non-cash amortization of intangible assets
 
(1.9
)%
 
(1.9
)%
 
(1.9
)%
 
(2.3
)%
Non-cash interest on convertible senior notes net of tax
 
(0.2
)%
 
(0.3
)%
 
(0.2
)%
 
(0.3
)%
Loss on extinguishment of debt net of tax
 
—
 %
 
—
 %
 
—
 %
 
(0.5
)%
Foreign currency transaction loss
 
(3.8
)%
 
(9.5
)%
 
(4.9
)%
 
(0.7
)%
Acquisition gain net of tax
 
3.7
 %
 
—
 %
 
2.5
 %
 
—
 %
Operating return on common equity (1)
 
21.9
 %
 
26.3
 %
 
22.0
 %
 
27.1
 %
 












7






(1)
References to operating earnings, operating diluted EPS, and operating return on common equity are non-GAAP financial measures. Operating earnings ("Operating Earnings") is defined by the Company as net income attributable to AmTrust common stockholders less after-tax realized gain (loss) on investments, non-cash amortization of intangible assets, non-cash interest on convertible senior notes, net of tax, loss on extinguishment of debt, foreign currency transaction gain (loss), and acquisition gain, net of tax. Operating Earnings should not be considered an alternative to net income. Operating diluted earnings per share is defined by the Company as Operating Earnings divided by the weighted average diluted shares outstanding for the period and should not be considered an alternative to diluted earnings per share. Operating return on common equity is defined by the Company as Operating Earnings divided by the average common equity for the period and should not be considered an alternative to return on common equity. The Company believes Operating Earnings, operating diluted earnings per share, and operating return on common equity are more relevant measures of the Company's profitability because Operating Earnings, operating diluted earnings per share, and operating return on common equity contain the components of net income upon which the Company's management has the most influence and excludes factors outside management's direct control and non-recurring items. The Company's measure of Operating Earnings, operating diluted earnings per share, and operating return on common equity may not be comparable to similarly titled measures used by other companies.
(2)
On February 2, 2016, the Company's stock split on a two-for-one basis. As a result, the Company retrospectively adjusted all share and per share amounts in 2015 to reflect the impact of the stock split.


8



AmTrust Financial Services, Inc.
Segment Information
(in thousands, except percentages)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2016
 
2015
 
2016
 
2015
Gross written premium
 
 

 
 

 
 

 
 

Small Commercial Business
 
$
1,060,558

 
$
875,829

 
$
2,126,690

 
$
1,776,948

Specialty Risk and Extended Warranty
 
651,561

 
479,863

 
1,181,007

 
950,733

Specialty Program
 
360,993

 
322,697

 
698,489

 
681,844

 
 
$
2,073,112

 
$
1,678,389

 
$
4,006,186

 
$
3,409,525

Net written premium
 
 

 
 

 
 

 
 

Small Commercial Business
 
$
601,638

 
$
517,392

 
$
1,226,166

 
$
1,040,632

Specialty Risk and Extended Warranty
 
447,061

 
306,784

 
784,894

 
594,473

Specialty Program
 
219,737

 
184,545

 
478,055

 
416,805

 
 
$
1,268,436

 
$
1,008,721

 
$
2,489,115

 
$
2,051,910

Net earned premium
 
 

 
 

 
 

 
 

Small Commercial Business
 
$
572,978

 
$
483,059

 
$
1,077,072

 
$
907,050

Specialty Risk and Extended Warranty
 
357,884

 
283,968

 
679,725

 
613,099

Specialty Program
 
250,890

 
201,943

 
499,237

 
398,198

 
 
$
1,181,752

 
$
968,970

 
$
2,256,034

 
$
1,918,347

Loss Ratio:
 
 

 
 

 
 

 
 

Small Commercial Business
 
66.8
%
 
65.1
%
 
66.4
%
 
64.9
%
Specialty Risk and Extended Warranty
 
64.6
%
 
65.3
%
 
65.1
%
 
64.3
%
Specialty Program
 
67.8
%
 
68.7
%
 
68.4
%
 
67.6
%
Total
 
66.4
%
 
65.9
%
 
66.5
%
 
65.3
%
Expense Ratio:
 
 

 
 

 
 

 
 

Small Commercial Business
 
26.2
%
 
25.8
%
 
26.1
%
 
25.8
%
Specialty Risk and Extended Warranty
 
22.1
%
 
20.2
%
 
21.8
%
 
20.8
%
Specialty Program
 
27.9
%
 
28.1
%
 
27.0
%
 
27.2
%
Total
 
25.3
%
 
24.6
%
 
24.9
%
 
24.5
%
Combined Ratio:
 
 

 
 

 
 

 
 

Small Commercial Business
 
93.0
%
 
90.9
%
 
92.5
%
 
90.7
%
Specialty Risk and Extended Warranty
 
86.7
%
 
85.5
%
 
86.9
%
 
85.1
%
Specialty Program
 
95.7
%
 
96.8
%
 
95.4
%
 
94.8
%
Total
 
91.7
%
 
90.5
%
 
91.4
%
 
89.8
%


9

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