AmTrust Reports Second Quarter 2017 Net Income And Confidence In Long-Term Financial Strength

By: Jeff Hatch

August 09, 2017

AmTrust Financial Services, Inc. (Nasdaq:AFSI) today announced second quarter 2017 net income attributable to common stockholders of $5.8 million, or $0.03 per diluted share, compared to $127.2 million, or $0.73 per diluted share in the second quarter 2016. For the second quarter 2017, operating earnings were $72.9 million, or $0.40 per diluted share, compared to $135.3 million, or $0.77 per diluted share, in the second quarter 2016.
 
Net income and operating earnings in the current quarter were impacted by catastrophe losses of $16.1 million after-tax, or $0.09 per diluted share, ($24.8 million pre-tax).
 
"We took transformative steps in the second quarter, executing on a number of strategic initiatives to increase certainty and confidence in AmTrust's long-term financial strength, and appointing a new CFO," said Barry Zyskind, Chairman and Chief Executive Officer, AmTrust. "In particular, we enhanced our balance sheet and capital base through a $300 million equity investment by members of the Karfunkel family to further support our insurance business and organic growth opportunities. Our sale of approximately 86% of our equity position in National General simplifies our balance sheet and reduces concentration in our investment portfolio composition. The reinsurance agreement we entered provides up to $400 million of coverage for adverse net loss reserve development, in excess of our stated net loss reserves as of March 31, 2017, to insulate AmTrust from future reserve volatility. We undertook these actions with a long-term view for the Company and our shareholders, to demonstrate strength and stability to all of our partners, brokers, agents, and insureds, and to enhance our earnings consistency."
 
Mr. Zyskind continued, "Our second quarter financial results reflect disciplined sales execution and high policy retention levels with gross written premium of $2.2 billion, up 6.1%. We are focused on maintaining underwriting and pricing rigor in our target markets, and are taking a conservative stance toward our book of business in order to support future profitability and balance sheet strength."
 
Second Quarter 2017 Results
 
Total revenue was $1.6 billion, an increase of $0.2 billion, or 18.2%, from $1.4 billion in the second quarter 2016. Gross written premium was $2.2 billion, an increase of $0.1 billion, or 6.1%, from $2.1 billion in the second quarter 2016. Net written premium was $1.4 billion, an increase of $0.1 billion, or 8.2%, compared to $1.3 billion in the second quarter 2016. Net earned premium was $1.4 billion, an increase of $0.2 billion, or 16.8%, from $1.2 billion in the second quarter 2016. The combined ratio was 101.2%, compared to 91.3% in second quarter 2016, and the adjusted combined ratio was 95.9%, after giving effect to the adverse development cover.
 
Year-to-Date 2017 Results
 
Total revenue was $3.1 billion, an increase of $0.4 billion, or 16.0%, from $2.6 billion YTD 2016. Gross written premium was $4.5 billion, an increase of $459.8 million, or 11.5%, from $4.0 billion YTD 2016. Net written premium was $2.7 billion, an increase of $0.2 billion, or 9.1%, compared to $2.5 billion YTD 2016. Net earned premium was $2.6 billion, an increase of $347.2 million, or 15.4%, from $2.3 billion YTD 2016. The combined ratio was 98.6% compared to 91.6% YTD 2016. The adjusted combined ratio was 95.8% compared to 91.6% YTD 2016.
 
A summary of Q2 results is listed below along with a link to the earnings release. 
 
Financial Highlights
 
Second Quarter 2017 Highlights
 
Second quarter gross written premium of $2.2 billion and net earned premium of $1.4 billion, up 6.1% and 16.8%, respectively, from the second quarter 2016
Second quarter service and fee income of $168.4 million, up 35.5% from the second quarter of 2016
Second quarter net income attributable to common stockholders of $5.8 million, or $0.03 per diluted share, compared to $127.2 million, or $0.73 per diluted share, in the second quarter 2016
Second quarter operating earnings of $72.9 million, or $0.40 per diluted share, compared to $135.3 million, or $0.77 per diluted share, in the second quarter 2016
Second quarter gain of $68.4 million on sale of 10.6 million shares of National General stock
Second quarter loss ratio of 74.2% compared with 66.4% in the second quarter of 2016
Second quarter loss ratio of 68.9% after giving effect to the adverse development cover
Second quarter combined ratio of 101.2% compared with 91.3% in the second quarter 2016
Adjusted combined ratio of 95.9%, after giving effect to the adverse development cover, versus 91.3% in the second quarter 2016
Second quarter annualized return on common equity and annualized operating return on common equity of 0.9% and 11.4%, respectively
Board of Directors approves payment of quarterly dividend on common stock of $0.17
 
To view AmTrust Financial Services’ Q2 earnings release, visit the Investor Relations section at http://ir.amtrustfinancial.com/index.cfm or click on the following link: http://ir.amtrustfinancial.com/releasedetail.cfm?ReleaseID=1036573 

Filed Under: 2017, AmTrust, earnings, financial, Q2, share, Warrantech

3 Keys to Customer Satisfaction: Speed, Efficiency, Knowledge

By: Jeff Hatch

July 24, 2017

Customers want fast service or support from knowledgeable people where, when and how they prefer to receive it, based on results of a study the CMO Council published Tuesday.
 
Together with SAP Hybris, the CMO Council last year conducted an online survey of 2,000 respondents, equally divided between men and women. Fifty percent were in the United States, and 25 percent each resided in Canada and Europe.
 
Among the findings:
 
52 percent mentioned fast response time as a key attribute of an exceptional customer experience;
47 percent said knowledgeable staff, ready to assist whenever and wherever needed, was key;
38 percent wanted an actual person to speak with at any time and place;
38 percent wanted information when and where they needed it;
9 percent wanted brand-developed social communities; and
8 percent wanted always-on automated services.
 
Consumers have a shortlist of critical channels they expect to have access to, the survey found, including the company's website, email, a phone number, and a knowledgeable person to speak with.
 
"The mindsets of consumers -- whether B2B or B2C -- are shifting, said Liz Miller, SVP of marketing at the CMO Council.
 
Marketers "have to start asking, 'Are we set up to be a responsive organization that looks at data, looks at analytics, understands what's coming in through CRM and is able to reflect that back through all touchpoints, including physical ones, quickly? Or are we simply waiting to react?'" she told CRM Buyer.
 
Serve Us Well or Die!
 
Angry customers hurt brands. The survey identified the following behaviors:
 
47 percent of respondents said they would stop doing business with a brand if they were continually frustrated;
33 percent were annoyed because of slow service or dealing with reps who knew nothing about their past history or purchases;
32 percent said they would email a company to complain; and
29 percent said they would tell their family and friends about their bad experience.
 
That's a possibility that Warrantech, which provides extended service plans and warranties nationwide, is well aware of.
 
The company on Tuesday announced a partnership with mobile workforce management ServicePower, which will let it instantly connect customers who have service needs with available repair technicians.
 
"Prompt response time is critical in our line of business," said Brian Weaver, director of service operations at Warrantech.
 
The teamup is expected to reduce overall customer turnover time by up to 10 percent across all verticals and "ultimately translate into commensurate lifts in clients' sales and customer retention," he told CRM Buyer.
 
The Customer Wish Conundrum
 
One problem marketers face is that customers appear to have conflicting desires, as shown by the survey results:
 
36 percent of respondents were angry about not being recognized for their loyalty;
12 percent wanted companies to recognize their history with the brand at any touchpoint;
10 percent wanted multiple touchpoints; and
23 percent felt they were being followed online.
 
That poses a conundrum for marketers.
 
"This survey did indicate the respondents wanted knowledgeable staff -- and for that, I'd argue part of the knowledge is knowing about the customer, not just the product, so that the advice can directly address the customer's unique problem," said Rob Enderle, principal analyst at the Enderle Group.
 
"Knowing about the customer improves the quality of the engagement," he told CRM Buyer.
That said, consumers don't care how companies do what they do -- they only care about the results, the CMO Council's Miller noted.
 
"It's a sausage factory. Consumers don't care how you make them, they just want tasty sausage. At the end of the day, consumers want to be treated like persons," she said.
 
"Each firm needs to survey their own customers, assess the impact and costs of changes, then formulate a strategy that applies uniquely to them," Enderle suggested. "Some may find that the cost/benefit ratio is still better with automation." 
 
ABOUT THE AUTHOR: Richard Adhikari has been an ECT News Network reporter since 2008. His areas of focus include cybersecurity, mobile technologies, CRM, databases, software development, mainframe and mid-range computing, and application development. He has written and edited for numerous publications, including Information Week and Computerworld. He is the author of two books on client/server technology. 

Filed Under: Consumer, satisfaction, service, ServicePower, Warrantech

Warrantech Improves Customer Experience by Reducing Service Time for Warranty Programs and Extended Service Plans

By: Jeff Hatch

July 18, 2017

Partnership with ServicePower Streamlines Repair Operations by Using Innovative Technology to Connect Customers to Technicians Instantly
 
July 18, 2017 09:00 AM Eastern Daylight Time
 
BEDFORD, Texas--(BUSINESS WIRE)--Warrantech, a leading national provider of extended service plans (ESPs) and warranties, announces a unique new offering that will improve the customer experience by reducing the amount of time it takes to service products.
 
Through a partnership with mobile workforce management platform ServicePower, Warrantech will now instantly connect customers who have service needs with available repair technicians. By using technology to schedule service appointments in real-time, Warrantech will dramatically reduce the average time it takes for repairs to be made to customer products.
 
Warrantech, a subsidiary of AmTrust Financial Services, Inc., provides innovative extended service plans, vehicle service contracts and warranty programs to retailers, dealers, distributors and manufacturers in numerous consumer and automotive markets.
 
ServicePower dispatches experienced third party contractors to repair product under contract through its contractor management solution, while improving warranty claim management through real time adjudication logic and collaborative business intelligence. Warrantech leverages improved visibility of each repair and real time data analysis to streamline and improve service operations.
 
“We are always looking to provide our large enterprise customers with an advantage in the competitive markets in which they operate,” said Ariel Gorelik, COO of Warrantech. “We believe this partnership with ServicePower will be positive for customers because it will make repairs quick and easy to schedule and we believe it’s positive for technicians because it eliminates the hassle of scheduling service times.”
 
“Warrantech operates in a complex industry serving many sectors and thousands of consumers,” said Marne Martin, CEO at ServicePower. “ServicePower prides itself on offering software solutions that minimize complexity, providing a real-time picture of field activities so that better-informed decisions can be made and executed to offer the best possible customer experience. That another project was delivered efficiently and on budget is further evidence to prospective customers that you can trust ServicePower to deliver.”
 
About Warrantech
 
Warrantech is a subsidiary of AmTrust Financial Services, a Fortune 500, multinational property and casualty holding company that is rated "A" (Excellent) by A.M. Best Company for their financial strength and stability. An innovative, technology-driven company, AmTrust brings its financial strength to Warrantech, enabling it to offer a unique, bundled approach that includes both underwriting and administration. This creates transparency and visibility to information that enables customers to change and create plans that are both highly customized and profitable.
 
About ServicePower
 
For companies providing field based services, ServicePower offers a field service and mobile workforce management platform facilitating hybrid workforce management, enabling organizations to save money, improve customer satisfaction and drive new revenue by efficiently managing both captive and 3rd party service providers. ServicePower uniquely combines customer entitlement and real time communications, schedule and route optimization, work order, asset and inventory management, service and maintenance contract management, contractor management and dispatch, warranty and claims management, field mobility, and business intelligence of all field service interactions, in a single solution.
 
ServicePower also offers a fully managed network of 3rd party service providers to enable rapid and high-quality on-demand “spill-over” servicing at peak times and in hard-to-reach locations across North America and the Europe.
 
For more information, visit www.servicepower.com
 
Contacts
Warrantech
John Eddy, 212-319-3451, ext. 648
or
ServicePower
Jenniffer L. Breitenstein, 703-287-8900

Filed Under: extended, plans, service, ServicePower, Warrantech

AmTrust Financial On Board as Diamond National Corporate Partner

By: Jeff Hatch

July 12, 2017

AmTrust Financial Services, a multinational provider of insurance and warranty services and parent company of NIADA Certified Pre-Owned program administrator Warrantech, has joined with NIADA as a Diamond-level National Corporate Partner.  
 
Operating through its partners and subsidiaries – Warrantech, AmTrust Specialty Risk, Warranty Solutions and NIADA Certified Pre-Owned – AmTrust offers dealerships unique, customized solutions designed to fit their specific business needs.
 
The AmTrust team includes automotive industry experts and vehicle service contract/insurance industry veterans, expertise that translates to a comprehensive perspective with insight that enables the company to uncover hidden growth opportunities and structure programs that offer a high-value proposition for dealers and their customers.
 
AmTrust’s real-world expertise guides its team of trainers to help dealers refine sales strategies and build customer loyalty and enhance brand image.
 
The company’s vertical integration allows it to provide any combination of program management solutions, from turnkey operations with full underwriting, marketing, dealer training, sales support and administration services to a la carte services and hybrid solutions. 
 
Last month, AmTrust announced it has been named to the prestigious Fortune 500 list for the first time. The list, which includes the largest companies in the U.S. by total revenue, is recognition of AmTrust’s financial strength and stability. The company’s revenue rose 18 percent in 2016, reaching $5.45 billion. 
 
AmTrust’s partnership with NIADA gives dealers access to the only nationally recognized independent CPO program, which lets your customers know your business and the vehicles you are selling are held to a higher standard.
 
For more information, visit www.amtrustgroup.com or call 800-723-1154.

Filed Under: AmTrust, corporate, Diamond, national, NIADA, partner, service, Warrantech, warranty

All In

By: Jeff Hatch

July 07, 2017

Getting Your Staff On Board With Your CPO Program Begins With Asking Five Key Questions
 
So you’ve decided to enter the certified pre-owned business. Now how do you get your staff involved in order to make sure the project actually makes a difference to your bottom line? 
 
Fact is, most programs started by dealerships turn out to be stop-and-start affairs. The initiatives work fine when they are new, but once the spotlight is off they fade away into the darkness. 
 
There’s an old saying in golf that you can’t win a tournament on Thursday, but you can lose it that day. Another golf adage says on that first day you set yourself up for success on Sunday.
 
That’s how it is with any program started in a dealership.
 
The watchers and waiters predict the demise of the program and then watch it die because no one participated – specifically, them. Then they brag about how they knew this program would never work.
 
But an effort from everyone could have made the vision a reality. That’s why it is essential to get buy-in from everybody in the store at the beginning and reinforce that commitment throughout the entire process. 
 
Everyone must understand the mission, because anyone who is not engaged can be the clog that causes the program to fail. 
 
Getting buy-in starts way before opening day. 
 
It is important in the acquisition of buy-in that essential people are made to feel like part of the initial decision-making process. The earlier they feel part of the process, the harder they will work to make the program a success. 
 
That starts with a clear enunciation of the problem we are trying to solve. If there is no problem to solve, then why start a new endeavor? 
 
Usually the problem is the need for more sales, more profit or a combination of both, which translates into the continued success of the store. 
 
The different departments will look at new programs in a much different manner. But they all must be brought in, because unless they see a process that has benefits to them and their department, they will not be part of its success.  
 
In the sales model of Harold C. Cash and W.J.E. Crissy, two college professors who wrote an often-cited work on sales psychology, the findings showed while it is important to have a proper introduction, the need awareness module is the most important part of the sale, because it opens the door to a solution. 
 
Unless there is an awareness of the need for a product or service, the call to action – which is sales – will go unheeded. 
 
Clearly laying out the need will help the department heads arrive at the conclusion you want them to. 
 
The old car guys always defined sales as “giving the customer enough information to allow them to arrive at the conclusion you want them to.” Once they buy into that conclusion, they will be sold and it will become their program. 
 
So how do you accomplish that? 
 
As renowned leadership authority Stephen Covey said, you need to begin with the end in mind.
 
In a speech to the graduating class of the Harvard Graduate School of Education, dean James Ryan claimed that there were five essential questions that must be asked of any enterprise to find the motivation for long-term success. 
 
The first of those questions is: Wait, what? That’s about slowing down the flow of information coming in and gaining clarity about the project. 
 
The employee team must understand the idea before they can advocate for the program. Or, as Harvard sociology professor Rakesh Khurana said, “You must emphasize inquiry before there can be advocacy.” 
 
The team may say they are behind a program to make the owner happy, but until they can think like the owner and understand how certified pre-owned can create a different outcome for the future of the business, there will be no dedication.
 
“Wait, what?” is the question that must be asked once you arrive at the conclusion that you need a certified pre-owned program to be competitive in the marketplace and create a long-term commitment with your customers. The reason is that a long-term commitment is what millennials are looking for when they buy cars. 
 
So the answer to, “Wait, what?” is, “We are going to sell the same vehicles, purchased from the same locations – so there is no change in your vehicles – but with a guarantee from you that the customer is going to have a worry-free ownership experience. We establish that worry-free experience by providing a warranty on our vehicles, even the vehicles with 140,000 miles on them, if they pass inspection.” 
 
What happens with your staff when you’re explaining your desire to change your relationship with your customers? They hear Charlie Brown’s teacher: “Wah-wah-wah-wah.” Then you hit on something important. Suddenly, it’s, “Wait, what?” 
 
That’s right. This is how we are going to compete with new car franchises for customers and dominate the local competition – by giving our customers more and elevating our reputation in the community. In other words, we are going to unlevel the playing field.
 
As your salespeople settle back into reality, the next question is, “Who is going to pay for this relationship?” 
 
Certainly, creating an environment that will allow customers to feel comfortable with the purchase of cars from your lot will create repeat business in the long run. But who pays in the short term is what salespeople fear the most. 
 
The quick answer is, like everything in the car business, it is paid for by the customers. Salespeople sell from invoice – since the warranty cannot be charged for, certification becomes an invoice item. 
 
More importantly, offering a warranty creates value in the upsell. Most of the dealerships in the NIADA Certified Pre-Owned program report upsell numbers of 65 percent or better. 
“With 65 to 75 percent of the customers buying the upsell service contract, it isn’t hard to see how quickly this becomes a profit center,” said Natalie Suarez, national director of the NIADA program for administrator Warrantech. “Keep in mind that with NIADA if the customer buys the upsell, the dealer does not pay for the certification warranty.” 
 
That means that with a concentration on selling extended service contracts, the customers pay for this program along with providing a new source of gross profit. 
 
The service department’s concerns come from their fear of the unknown. Those guys know about programs that pay 80 percent or limit repair charges, making every repair a fight with customers and the claims department. 
 
To get service buy-in, find a program that pays retail parts and labor. 
 
Surveys show customers currently using the dealership’s repair facility will repeat their purchase with that dealer almost 65 percent of the time when they’re ready to purchase a different vehicle. If your certified program allows a disappearing deductible – which brings customers back to your facility – it has the dual benefit of creating more profit in service and selling more cars. 
 
The “Wait, what?” answer for service is, “We are going to cover people for a longer time, giving them a better car-buying experience and creating at least two new profit opportunities.” 
 
Getting your team together early and laying out the need awareness with “I wonder” starts a collective discussion that leads to the conclusion you desire. 
 
For example: I wonder what would be the result if we developed a reputation for giving used car customers a new car experience. I wonder how we could accomplish that. 
 
When the staff is involved all the way from “I wonder” to program inception, it is hard for them not to be engaged.    
 
The next question in Ryan’s process is: “Couldn’t we at least…?” Couldn’t we at least look into a program? Couldn’t we at least lay out the parameters of what this would look like? 
 
Once that is opened, you get past the original disagreements and dissenters and move on to mapping out a process, even if your staff is not entirely sure where you are going to finish with it.
 
Next is: How can I help?
 
John Kennedy stirred the country by saying, “Ask not what your country can do for you. Ask what you can do for your country. Not what America will do for you, but what together we can do.” 
 
In this case, everybody needs to ask, “How can I help?” 
 
It’s instinctive in humans to help out. There is a human function called the rule of psychological reciprocity, which means we treat others as they treat us. Asking the staff for help creates a desire for them to put an effort into the final decision. It gives them a feeling of importance and empowers them by recognizing their expertise. 
 
The dealer asking how he or she can help and the staff asking themselves about their path to success and how can they play a vital part in it can lead those who buy-in to do extraordinary things to ensure the continued success and viability of the program.
 
The final question is, “What truly matters?” 
 
“This is the question,” Ryan explained, “that gets to the heart of your own beliefs and convictions.” 
 
Allowing the staff to participate in the certified pre-owned journey to its conclusion is the way to capture the future of your market – because CPO is the future of the used automobile market. 
 
Your staff is likely to adopt the program as theirs and as imperative to their future. When your staff shares what truly matters and what is your heart’s desire, your ideologically synchronized management team becomes a powerful force in the market place. 
 
So how do you set yourself up to win on Sunday by the way you play on Thursday? 
 
First, get the right program – one that pays retail parts and labor, and has an unremitting drive for customer service as shown by Better Business Bureau and other monitoring agencies. 
 
Quite simply, you have to have a program to compete with factory certification programs. The strength of the factory programs is name association with the manufacturer of the automobiles being purchased. That is tough to overcome. 
 
But by using a nationally known entity backed by the same organization that operates the OEM’s programs, you can give your program credibility.
 
Once you have the right program, set your dealership up to succeed by assembling your key people – managers, finance, service, used vehicle buyers and the person who will be doing the certified vehicle inspections – and spending quality time together debating and analyzing the five questions: “Wait, what?,” “I wonder,” “Couldn’t we at least…?,” “How can I help?,” and, “What truly matters?” 
 
When you arrive at the conclusion that the success of everyone and the dealership is tied to capturing the future, and the CPO program you’ve picked will help in accomplishing that goal, you’ll have developed a program that will continue paying dividends well into the future – and a team dedicated to keeping the process going.
 
ABOUT THE AUTHOR: William Carr is a longtime auto industry veteran in sales, management and training and a regional training manager for Warrantech Automotive, Inc. administrator of the NIADA Certified Pre-Owned program. For more information on the NIADA CPO program, visit www.niadacertified.com/dealers
 
This article originally appeared in the May 2017 edition of Used Car Dealer magazine and can be found online at: http://bit.ly/2tQIYLK 

Filed Under: Bill, Carr, certified, CPO, customer, dealership, NIADA, program, service, vehicles

Displaying results 1-5 (of 85)
 |<  < 1 2 3 4 5 6 7 8 9 10  >  >|