NEW YORK, Jan. 21, 2014 (GLOBE NEWSWIRE) -- AmTrust Financial Services, Inc. (Nasdaq: AFSI ) ("the Company" or "AmTrust") announced the receipt of regulatory approval to complete an agreement between a subsidiary of the Company and several Tower Group International, Ltd ("Tower") subsidiaries to enter into a 100% quota share reinsurance agreement and provide a cut-through endorsement to (the "Cut Through Reinsurance Agreement") at least 60% of Tower's in force Commercial Lines policies and on most new and renewal Commercial Lines Business. AmTrust has agreed to accept 65% to 70% of unearned premium with respect to in-force Commercial Lines policies. The agreement is effective as of January 1, 2014 for losses occurring on or after January 1, 2014. The Company will pay a 20% ceding commission to Tower on all Tower premium subject to the Cut Through Reinsurance Agreement.
"AmTrust has successfully completed this important initial step of the transaction. Obtaining regulatory approval for the Cut Through Reinsurance Agreement allows us to work quickly to preserve the Commercial Lines Business Tower has built over the last 15 years. We look forward to working with Tower to provide our solid balance sheet, proprietary technology and extensive industry experience to Tower's Commercial Lines Business," commented Barry Zyskind, AmTrust's President and CEO. "Tower's Commercial Lines Business associated with the Cut Through Reinsurance Agreement will be a welcome addition to our growing organization and accretive to shareholder value."
About the Tower transaction.
On January 6, 2014, AmTrust announced that a subsidiary of the Company had entered into an agreement with Tower to provide a Cut Through Reinsurance Agreement as well as other agreements to transition a majority of Tower's Commercial Lines Business to AmTrust. Simultaneously with this agreement, ACP Re Ltd, ("ACP Re"), a privately held Bermuda corporation, and Tower pursuant to which a subsidiary of ACP Re has agreed to acquire 100% of the outstanding stock of Tower for $3.00 per share and merge with Tower, subject to regulatory and shareholder approval. In addition, National General Holdings Corp., a specialty personal lines property/casualty insurer, agreed to acquire the renewal rights and assets of the personal lines insurance operations of Tower.
For additional information on AmTrust's transaction with Tower, please see AmTrust's 8k filed with the Securities and Exchange Commission on January 7, 2014.
About AmTrust Financial Services, Inc.
AmTrust Financial Services, Inc., headquartered in New York City, is a multinational insurance holding company, which, through its insurance carriers, offers specialty property and casualty insurance products, including workers' compensation, commercial automobile and general liability; extended service and warranty coverage. 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. There can be no assurance that actual developments will be those anticipated by 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, our estimates of the fair value of our life settlement contracts, 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 third party agencies and warranty administrators, 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.
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AmTrust Financial Services, Inc. Investor Relations Elizabeth Malone CFA 646.458.7924 Media Kekst & Company Andrea Calise 212.521.4845 Robert Siegfried 212.521.4832
