AmTrust Financial Services
Amtrust Financial Services, Inc. (Form: 8-K, Received: 05/08/2017 16:37:28)


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)
May 8, 2017
   
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))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)

Emerging growth company o    
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o





 
Item 2.02
RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On May 8, 2017, AmTrust Financial Services, Inc. (the "Company") issued a press release announcing its results of operations for the first quarter ended March 31, 2017 and the scheduling of a conference call on May 8, 2017 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 May 8, 2017.
 





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
May 8, 2017
 
 
/s/ Stephen Ungar
 
Stephen Ungar
 
Senior Vice President, General Counsel and Secretary
 





AMTRUSTLOGO1A01A01A01A02.JPG
AmTrust Financial Services, Inc. Reports First Quarter 2017 Net Income Per Diluted Share of $0.13 and Operating Earnings Per Diluted Share (1) of $0.32 , Including Catastrophe Losses of $0.10 Per Diluted Share
Book Value Per Common Share of $13.91 , Up 0.7% Since December 31, 2016
First Quarter Annualized Return on Common Equity and Annualized Operating Return on Common Equity (1) of 3.8% and 9.4% , Respectively

First Quarter 2017 Highlights

First quarter gross written premium of $2.3 billion and net earned premium of $1.2 billion , up 17.2% and 13.8% , respectively, from the first quarter 2016 (2)  
First quarter service and fee income of $137.5 million , up 6.7% from the first quarter 2016 (2)  
First quarter net income attributable to common stockholders of $22.6 million , or $0.13 per diluted share, compared to $84.0 million , or $0.47 per diluted share, in the first quarter 2016 (2)  
First quarter operating earnings (1) of $55.7 million , or $0.32 per diluted share, compared to $122.9 million , or $0.69 per diluted share, in the first quarter 2016 (2)  
First quarter combined ratio of 95.6% , compared with 91.9% , in the first quarter 2016 (2)  
First quarter catastrophe losses of $25.3 million (pre-tax), compared to $2.0 million (pre-tax) in the first quarter of 2016



NEW YORK, May 8th, 2017 (GLOBE NEWSWIRE) -- AmTrust Financial Services, Inc. (Nasdaq: AFSI) ("the Company" or "AmTrust") today announced first quarter 2017 net income attributable to common stockholders of $22.6 million , or $0.13 per diluted share, compared to $84.0 million , or $0.47 per diluted share in the first quarter 2016 (2) . For the first quarter 2017, operating earnings (1) was $55.7 million , or $0.32 per diluted share, compared to $122.9 million , or $0.69 per diluted share, in the first quarter 2016 (2) . Net income and operating earnings in the current year were impacted by catastrophe losses of $16.4 million after-tax ($25.3 million pre-tax), or $0.10 per diluted share.
“We achieved record gross written premium of $2.3 billion , driven by continued organic growth and contributions from prior acquisitions in our Small Commercial Business and Specialty Risk and Extended Warranty segments. Strong service and fee income and investment results also contributed to higher revenue, up 13.6% over the first quarter a year ago,” said Barry Zyskind, Chairman and Chief Executive Officer, AmTrust.
“Operating earnings of $55.7 million , or $0.32 per diluted share, reflect several items including primarily the impact of catastrophe losses related to wind and hail events in the personal lines business of Republic Companies, which is included in our Small Commercial Business segment, prior year adverse development related to one discontinued general liability program in our Specialty Program segment, higher professional service fees of approximately $17 million, and a higher effective tax rate compared with the prior year period. The first-quarter 2017 combined ratio of 95.6% includes approximately 2.1 percentage points related to the catastrophe events and 1.6 percentage points of prior year reserve development, resulting in an underlying combined ratio of 91.9%.”

1



First Quarter 2017 Results
Total revenue was $1.4 billion , an increase of $171.5 million , or 13.6% , from $1.3 billion in the first quarter 2016 (2) . Gross written premium was $2.3 billion , an increase of $333.2 million , or 17.2% , from $1.9 billion in the first quarter 2016. Net written premium was $1.3 billion , an increase of $123.4 million , or 10.1% , compared to $1.2 billion in the first quarter 2016. Net earned premium was $1.2 billion , an increase of $148.3 million , or 13.8% , from $1.1 billion in the first quarter 2016. The combined ratio was 95.6% compared to 91.9% in first quarter 2016 (2) .
Total service and fee income of $137.5 million increased $8.7 million , or 6.7% , from $128.8 million in the first quarter 2016 (2) and included $20.3 million from related parties in the first quarter 2017 compared to $20.2 million in the first quarter 2016.
Net investment income, excluding net realized gains and losses on investments, totaled $63.3 million , an increase of 28.1% from $49.4 million in the first quarter 2016. Total cash and invested assets increased 6.4% to $9.8 billion as of March 31, 2017 compared to $9.2 billion as of December 31, 2016 . In addition, first quarter 2017 results included net realized investment gains on investments of $8.6 million , or $5.6 million after-tax, on fixed maturity and equity investments compared with net realized investment gains of $8.0 million , or $5.2 million after-tax, in the first quarter of 2016.
Loss and loss adjustment expense totaled $840.3 million in the first quarter 2017, compared to $715.1 million in the first quarter 2016, and resulted in a loss ratio of 68.7% compared with 66.6% for the first quarter 2016.
Acquisition costs and other underwriting expense of $328.2 million increased $55.7 million from $272.5 million for the first quarter 2016 (2) . The expense ratio was 26.9% compared to 25.3% for the first quarter 2016. Ceding commissions, primarily related to the reinsurance agreements with Maiden Holdings, Ltd. ("Maiden"), totaled $156.9 million, up 12.4% from $139.6 million in the first quarter 2016.
Other expense of $162.9 million increased $33.6 million , or 26.0% , from $129.3 million in the first quarter 2016 (2) , reflecting higher administrative, consulting and auditing costs associated with the Company's restatement of its previously issued consolidated financial statements.
The effective tax rate was 31.6% , compared to 17.2% in the first quarter 2016 (2) . The effective tax rate increased in the first quarter of 2017 as a greater percentage of the Company's taxable income was generated in jurisdictions with higher tax rates as compared to the first quarter of 2016 , and an increase in deemed U.S. taxable income inclusions from foreign operations that the Company acquired in fiscal year 2016 .
Total assets of approximately $23.9 billion as of March 31, 2017 increased approximately $1.3 billion , or 5.6% , from approximately $22.6 billion at December 31, 2016 . AmTrust's stockholder's equity of $3.3 billion increased 0.8% from $3.3 billion at December 31, 2016 .
As of March 31, 2017 , the Company's debt-to-capitalization ratio was 28.6% , compared with 27.7% as of December 31, 2016 .
During the three months ended March 31, 2017 , the Board of Directors declared cash dividends totaling $0.17 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%
 
$0.484375
F
 
6.950%
 
$0.434375

2



Conference Call:
On May 8, 2017 at 5:30 PM ET, Chairman & CEO Barry Zyskind and EVP & 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: 12271541
Webcast registration: http://ir.amtrustgroup.com/events.cfm
A replay of the conference call will be available at approximately 8:30 PM ET Monday, May 8, 2017 through Monday, May 15, 2017 at 8:30 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 12271541, 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 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.

AFSI-F


3



CONTACT:
AmTrust Financial Services, Inc.
        
 
        
Chief Communications Officer & SVP Corporate Affairs
        
Chaya Cooperberg
        
chaya.cooperberg@amtrustgroup.com
        
(646) 458-3332
 

4



AmTrust Financial Services, Inc.
Income Statements
(in thousands, except per share data)
(Unaudited)
 
 
 
 
 
 
 
Three Months Ended March 31,

 
 
2017

2016 (2)

 
 
 
 
As Restated
 
Gross written premium
 
$
2,266,280

 
$
1,933,074

 
 
 
 

 
 

 
Net written premium
 
$
1,344,066

 
$
1,220,679

 
Change in unearned premium
 
(121,534
)
 
(146,397
)
 
Net earned premium
 
1,222,532

 
1,074,282

 
 
 
 
 
 
 
Service and fee income
 
137,496

 
128,805

 
Net investment income
 
63,325

 
49,415

 
Net realized gain on investments
 
8,615

 
7,975

 
Other revenue
 
209,436

 
186,195

 
Total revenue
 
1,431,968

 
1,260,477

 
Loss and loss adjustment expense
 
840,334

 
715,073

 
Acquisition costs and other underwriting expense
 
328,215

 
272,468

 
Other expense
 
162,853

 
129,267

 
Total expense
 
1,331,402

 
1,116,808

 
Income before other income (expense), provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest
 
100,566

 
143,669

 
Other income (loss):
 
 

 
 

 
Interest expense
 
(23,601
)
 
(15,874
)
 
Gain on life settlement contracts net of profit commission
 
8,610

 
10,730

 
Foreign currency loss
 
(17,968
)
 
(38,233
)
 
Gain on acquisition
 

 
9,678

 
Total other income (loss)
 
(32,959
)

(33,699
)
 
Income before provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest
 
67,607

 
109,970

 
Provision for income taxes
 
21,356

 
18,960

 
Equity in earnings of unconsolidated subsidiaries (related parties)
 
3,957

 
5,776

 
Net income
 
50,208

 
96,786

 
Net income attributable to redeemable non-controlling interest and non-controlling interest of subsidiaries
 
(11,005
)
 
(4,017
)
 
Net income attributable to AmTrust Financial Services, Inc.
 
$
39,203


$
92,769


Dividends on preferred stock
 
(16,571
)
 
(8,791
)
 
Net income attributable to AmTrust common stockholders
 
$
22,632


$
83,978


Operating earnings (1)  attributable to AmTrust common stockholders
 
$
55,739

 
$
122,886

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

5



AmTrust Financial Services, Inc.
Income Statements
(in thousands, except per share data)
(Unaudited)
 
 
 
 
 
 
Three Months Ended March 31,

 
 
2017

2016 (2)

 
 
 
 
As Restated
 
Earnings per common share:
 
 

 
 

 
Basic earnings per share
 
$
0.13

 
$
0.48

 
Diluted earnings per share
 
$
0.13

 
$
0.47

 
Operating diluted earnings per share  (1)
 
$
0.32

 
$
0.69

 
Weighted average number of basic shares outstanding
 
170,864

 
175,585

 
Weighted average number of diluted shares outstanding
 
172,692

 
177,927

 
Combined ratio
 
95.6
%
 
91.9
%
 
Return on common equity
 
3.8
%
 
14.7
%
 
Operating return on equity (1)
 
9.4
%
 
21.6
%
 
Net realized gain on investments:
 
 

 
 

 
Total other-than-temporary impairment loss
 
$

 
$

 
Portion of loss recognized in other comprehensive income
 

 

 
Net impairment losses recognized in earnings
 

 

 
Net realized gain recognized on available for sale securities
 
11,630

 
5,272

 
Net unrealized gain (loss) on trading securities and other investments
 
(3,015
)
 
2,703

 
Net realized investment gain
 
$
8,615

 
$
7,975

 

  
AmTrust Financial Services, Inc.
Balance Sheets Highlights
(in thousands, except book value per common share)
 
 
 
 
 
 
 
 
 
March 31, 2017
 
December 31, 2016
 
 
 
(Unaudited)
 
(Audited)
 
Cash, cash equivalents and investments
 
$
9,826,971

 
$
9,235,666

 
Premium receivables, net
 
2,946,344

 
2,802,167

 
Goodwill and intangible assets
 
1,251,262

 
1,243,125

 
Loss and loss adjustment expense reserves
 
10,630,162

 
10,140,716

 
Unearned premium
 
5,199,465

 
4,880,066

 
Debt
 
1,306,701

 
1,234,900

 
Preferred stock
 
913,750

 
913,750

 
AmTrust's stockholders' equity
 
3,296,455

 
3,269,103

 
Book value per common share
 
$
13.91

 
$
13.81

 
 



6



AmTrust Financial Services, Inc.
Non-GAAP Financial Measures
(in thousands, except per share data)
(Unaudited)   
 
 
 
 
 
 
 
 
Three Months Ended March 31,

 
 
2017

2016 (2)

 
 
 
 
As Restated
 
Reconciliation of net income attributable to AmTrust common stockholders to operating earnings (1) :
 
 

 
 

 
Net income attributable to AmTrust common stockholders
 
$
22,632

 
$
83,978

 
Less: Net realized gain on investments
 
8,615

 
7,975

 
Non-cash amortization of intangible assets
 
(19,091
)
 
(10,612
)
 
Non-cash interest on convertible senior notes
 
(1,648
)
 
(1,537
)
 
Foreign currency loss
 
(17,968
)
 
(38,233
)
 
Gain on acquisition
 

 
9,678

 
Tax effect of adjustments reflected above (3)
 
(3,015
)
 
(6,179
)
 
Operating earnings (1)  attributable to AmTrust common stockholders
 
$
55,739

 
$
122,886

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

 
 

 
Diluted earnings per share
 
$
0.13

 
$
0.47

 
Less: Net realized gain on investments
 
0.05

 
0.05

 
Non-cash amortization of intangible assets
 
(0.11
)
 
(0.06
)
 
Non-cash interest on convertible senior notes
 
(0.01
)
 
(0.01
)
 
Foreign currency loss
 
(0.10
)
 
(0.22
)
 
Gain on acquisition
 

 
0.06

 
Tax effect of adjustments reflected above (3)
 
(0.02
)
 
(0.04
)
 
Operating diluted earnings per share  (1)
 
$
0.32

 
$
0.69

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

 
 

 
Return on common equity
 
3.8
 %
 
14.7
 %
 
Less: Net realized gain on investments
 
1.5
 %
 
1.4
 %
 
Non-cash amortization of intangible assets
 
(3.2
)%
 
(1.9
)%
 
Non-cash interest on convertible senior notes
 
(0.3
)%
 
(0.3
)%
 
Foreign currency loss
 
(3.1
)%
 
(6.8
)%
 
Gain on acquisition
 
 %
 
1.7
 %
 
Tax effect of adjustments reflected above (3)
 
(0.5
)%
 
(1.0
)%
 
Operating return on common equity  (1)
 
9.4
 %
 
21.6
 %
 
 

(1)
References to operating earnings attributable to AmTrust common stockholders ("Operating Earnings"), operating diluted earnings per share ("EPS"), and operating return on common equity are non-GAAP financial measures. Operating earnings is defined by the Company as net income attributable to AmTrust common stockholders less net realized gain on investments, non-cash amortization of intangible assets, non-cash interest on convertible senior notes, foreign currency loss, gain on acquisition and the income tax impact on certain of these aforementioned adjustments. 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.


7




(2)
In connection with the preparation, review and audit of the Company's consolidated financial statements required to be included in its Annual Report on Form 10-K for the year ended December 31, 2016, management identified certain errors in the Company's historical financial statements, resulting in a conclusion by the Audit Committee of the Company's Board of Directors, in consultation with management and the Company's current and former independent registered public accounting firms, that the Company's previously issued consolidated financial statements for the first three quarters of fiscal year 2016 needed to be restated. The Restatement corrects errors primarily related to: (1) upfront recognition of the portion of warranty contract revenue associated with administration services, instead of recognizing the revenue over the life of the contract; and (2) bonuses that were expensed in the year paid but that should have been accrued as earned based on ASC 270, Interim Reporting , and ASC 450, Contingencies . The Company has also identified other adjustments that have been corrected as part of this Restatement. The table below summarizes the effects of the Restatement adjustments recorded to the previously reported three month period ended March 31, 2016:

 
 
Three Months Ended March 31, 2016
 
(In thousands, except for share information)
 
As Restated
 
As Previously Reported
 
 
 
 
 
 
 
Service and fee income
 
$
128,805

 
$
144,201

 
Total revenue
 
1,260,477

 
1,275,873

 
 
 
 
 
 
 
Acquisition costs and other underwriting expense
 
272,468

 
264,634

 
Other expense
 
129,267

 
128,186

 
Total expense
 
1,116,808

 
1,107,893

 
Income before other income (expense), provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest
 
143,669

 
167,980

 
Interest expense
 
(15,874
)
 
(17,700
)
 
Foreign currency loss
 
(38,233
)
 
(35,673
)
 
 
 
 
 
 
 
Income before provision for income taxes, equity in earnings of unconsolidated subsidiaries and non-controlling interest
 
109,970

 
135,015

 
Provision for income taxes
 
18,960

 
27,726

 
Net income
 
96,786

 
113,065

 
Net income attributable to AmTrust Financial Services, Inc.
 
92,769

 
109,048

 
Net income attributable to AmTrust common stockholders
 
83,978

 
100,257

 
Operating earnings (1)  attributable to AmTrust common stockholders
 
122,886

 
136,604

 
Basic earnings per share
 
$
0.48

 
$
0.57

 
Diluted earnings per share
 
$
0.47

 
$
0.56

 
Operating diluted earnings per share (1)  
 
$
0.69

 
$
0.77

 
Return on common equity
 
14.7
%
 
16.2
%
 
Operating return on common equity (1)
 
21.6
%
 
22.1
%
 

(3)
The Company calculated the income tax effect of certain adjustments using the U.S. federal statutory income tax rate of 35%. Specifically, realized gain on investments is predominantly U.S. sourced and, therefore, is subject to tax at 35%. In addition, gain on acquisition is both U.S. and foreign sourced gain that is ultimately subject to tax at 35%. The Company does not report non-cash amortization of intangible assets, non-cash interest on convertible senior notes, or foreign currency loss net of tax.

8



AmTrust Financial Services, Inc.
Segment Information
(in thousands, except percentages)
(Unaudited)
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
 
 
2017
 
2016
 
 
 
 
 
As Restated
 
Gross written premium
 
 

 
 

 
Small Commercial Business
 
$
1,257,285

 
$
1,066,132

 
Specialty Risk and Extended Warranty
 
732,442

 
529,446

 
Specialty Program
 
276,553

 
337,496

 
 
 
$
2,266,280

 
$
1,933,074

 
Net written premium
 
 

 
 

 
Small Commercial Business
 
$
658,979

 
$
624,528

 
Specialty Risk and Extended Warranty
 
510,208

 
337,833

 
Specialty Program
 
174,879

 
258,318

 
 
 
$
1,344,066

 
$
1,220,679

 
Net earned premium
 
 

 
 

 
Small Commercial Business
 
$
553,625

 
$
504,094

 
Specialty Risk and Extended Warranty
 
473,490

 
321,841

 
Specialty Program
 
195,417

 
248,347

 
 
 
$
1,222,532

 
$
1,074,282

 
Loss Ratio:
 
 

 
 

 
Small Commercial Business
 
68.2
%
 
66.0
%
 
Specialty Risk and Extended Warranty
 
66.0
%
 
65.5
%
 
Specialty Program
 
76.9
%
 
69.0
%
 
Total
 
68.7
%
 
66.6
%
 
Expense Ratio:
 
 

 
 

 
Small Commercial Business (2)
 
27.9
%
 
26.5
%
 
Specialty Risk and Extended Warranty (2)
 
25.0
%
 
22.7
%
 
Specialty Program (2)
 
28.2
%
 
26.6
%
 
Total
 
26.9
%
 
25.3
%
 
Combined Ratio:
 
 

 
 

 
Small Commercial Business (2)
 
96.1
%
 
92.5
%
 
Specialty Risk and Extended Warranty (2)
 
91.0
%
 
88.2
%
 
Specialty Program (2)
 
105.1
%
 
95.6
%
 
Total
 
95.6
%
 
91.9
%
 


9