AmTrust Reports Significant Business Momentum For First Quarter 2014

By: Global Administrator

May 06, 2014

AmTrust Financial Services (AFSI), the parent company of Warrantech, recently issued first quarter earnings for 2014. The company showed significant business momentum in both top line revenue and premium growth (76.8%, compared to 36.8% in Q4 2013) and once again generated more than $1 billion in gross written premium (GWP) for the fourth straight quarter.

“Our significant return on shareholders’ equity and profit growth in the first quarter is the result of a long term strategy of leveraging the company’s unique capabilities and disciplined growth of the business,” said Barry Zyskind, President and CEO. “Improving market conditions will create even more opportunities to build shareholders’ value.”

On a first quarter basis, AFSI produced $1.67 billion in GWP and over $12 billion in total assets. Small Commercial Business contributed 56% of total company GWP and grew by 150% from 2013 to 2014 while lowering the combined ratio from a 91.6% to a 90.2%. This profitability improvement came entirely on the expense ratio side of the equation — an impressive performance from both organic and acquired growth and cost containment.

On a profitability basis, the company is running at a loss ratio of about 67% and an expense ratio of about 23%. Precisely, ASFI's Q1 combined ratio was 89.9%, which is an improvement upon the Q1 2013 combined ratio of 91.3%.

Lastly, the company booked $91 million in service and fee income in Q1, up 50% from the same time period last year. Most of that income was contributed by the warranty TPA businesses and IT services.

First Quarter 2014 Financial Highlights

  • Gross written premium of $1.67 billion, up 76.5%, and net earned premium of $829.1 million, up 103.2% from the first quarter 2013
  • Operating diluted EPS of $1.24 ($0.02 attributable to gain on life settlements) compared to $0.74 ($0.01 attributable to loss on life settlements) in the first quarter 2013
  • Annualized operating return on common equity of 27.8% and annualized return on common equity of 28.5%
  • Service and fee income of $91.0 million, up 50.3% from the first quarter 2013
  • Operating earnings of $97.4 million compared to $57.2 million from the first quarter 2013
  • Net income attributable to common stockholders of $99.9 million compared to $83.9 million in the first quarter 2013
  • Diluted EPS of $1.27 compared with $1.08 in the first quarter 2013
  • Combined ratio of 89.9% compared to 91.3% in the first quarter 2013
  • Book value per common share of $19.48, up from $17.85 at December 31, 2013
  • AmTrust’s stockholders’ equity was $1.58 billion as of March 31, 2014

To view AmTrust Financial Services’ full first quarter earnings release, visit the Investor Relations section at http://ir.amtrustgroup.com/ or click on the following link: http://ir.amtrustgroup.com/releasedetail.cfm?ReleaseID=844429

Filed Under: AmTrust, earnings, financial, gross, highlights, premium, Warrantech, written