AmTrust Financial Services

AmTrust Financial Services is a New York City-based multinational property and casualty insurance group serving commercial and specialty-risk customers. Founded in 1998 by brothers George Karfunkel and Michael Karfunkel, the company developed around insurance products for small and medium-sized businesses and subsequently expanded into specialty programs, middle-market property and casualty coverage, reinsurance-related activities and extended-warranty products. Its insurance portfolio includes workers’ compensation, general liability, commercial property, business owners policies, commercial automobile liability, excess and surplus lines, cyber liability, employment practices liability and other tailored forms of commercial protection. Through managing general agents and affiliated insurance companies, AmTrust also provides program business designed for particular industries, occupations and distribution channels. Its small-commercial business has included coverage for restaurants, retail establishments, physicians, professional offices and other businesses in low- and medium-hazard classes. The company’s operations have been organized into broad business areas including small commercial business insurance, specialty risk and extended warranty insurance, and specialty middle-market property and casualty insurance. Extended-warranty and payment-protection offerings have been associated with consumer and commercial goods sold in the United States and Europe. The group has operated through more than 20 insurance companies and subsidiaries, including entities in the United States, the United Kingdom, continental Europe and Latin America. AmTrust became a public company when its shares began trading on the NASDAQ Global Select Market in November 2006. The company later underwent a major ownership transition. In November 2018, it completed a go-private transaction through a merger with Evergreen Parent, L.P., an entity formed with Stone Point Capital-managed private-equity funds and members of the Karfunkel-Zyskind family. In January 2019, its preferred stock and subordinated notes were voluntarily delisted and deregistered, completing the transition away from public-market reporting. The company’s leadership has included Barry Zyskind, who served as chairman and chief executive officer, and Adam Karkowsky, who became chief financial officer in 2017 and president in December 2019. AmTrust has also maintained relationships with major reinsurers; a 2019 quota-share arrangement with Swiss Re covered a projected portfolio of U.S. small-commercial business. In 2020, the U.S. Securities and Exchange Commission announced a settlement concerning allegations about disclosures related to the company’s actuarial loss-reserve estimation process. AmTrust agreed to pay a civil penalty without admitting or denying the allegations. AmTrust’s present brand identity is centered on commercial insurance and risk-transfer services rather than consumer personal-lines insurance. Its positioning combines broad property and casualty capabilities with specialized underwriting, delegated programs, warranty products and geographic reach across North America and selected European markets. Public information about post-privatization ownership, financial results and detailed operating performance is more limited than during its period as a listed company.

AmTrust Financial Services was founded in 1998 by brothers George Karfunkel and Michael Karfunkel. It developed as a property and casualty insurer with a strong emphasis on commercial customers, especially small and medium-sized businesses. Its early and continuing offerings included workers’ compensation and other forms of commercial coverage. The company expanded its underwriting platform over time. Its small-commercial business served lower- and medium-hazard occupations such as restaurants, retail stores, physicians and professional offices. Alongside direct small-business insurance, AmTrust developed specialty program business distributed through managing general agents. These programs included workers’ compensation, general liability, commercial automobile liability, excess and surplus lines and other specialized property and casualty products. AmTrust also broadened its portfolio beyond conventional commercial policies. Its specialty-risk and extended-warranty activities included accidental-damage plans and payment-protection plans associated with consumer and commercial goods in the United States and Europe. The company’s wider organization came to include specialty middle-market property and casualty insurance and insurance subsidiaries operating across North America, the United Kingdom, continental Europe and other selected international markets. In 2005, Ronald E. Pipoly became chief financial officer. AmTrust reached the public markets on November 13, 2006, when its shares began trading on the NASDAQ Global Select Market. During the public-company period, the group continued to expand its product lines, subsidiaries and international platform. Barry Zyskind, Michael Karfunkel’s son-in-law, became chairman in 2016 while retaining his chief executive and other leadership responsibilities. Adam Karkowsky became chief financial officer in 2017 and later assumed the presidency in December 2019. A major ownership change occurred in November 2018. AmTrust completed a go-private transaction by merging with Evergreen Parent, L.P., an entity established with private-equity funds managed by Stone Point Capital and members of the Karfunkel-Zyskind family. In January 2019, the company voluntarily delisted and deregistered its preferred stock and subordinated notes. This transition reduced the amount of public financial and operating information available compared with the company’s listed period. The company continued to use reinsurance as part of its risk-management structure. In January 2019, it entered into a quota-share agreement with Swiss Re for U.S. small-commercial business. The arrangement transferred an agreed share of premiums and associated underwriting exposure to Swiss Re and covered in-force, new and renewal business. AmTrust’s public history also includes regulatory scrutiny of its financial disclosures. On June 17, 2020, the SEC filed a complaint against AmTrust and former CFO Ronald E. Pipoly. The complaint alleged that disclosures through the end of 2015 did not adequately explain the actuarial process used to estimate loss reserves, including the process for reporting management’s best estimate. AmTrust settled by agreeing to a $10.3 million civil penalty without admitting or denying the allegations. Pipoly separately agreed to monetary sanctions totaling $237,499, including disgorgement and interest. The brand remains associated with commercial property and casualty insurance, specialty risk transfer and warranty-related products. Its business is conducted through a network of affiliated insurance companies and subsidiaries, with the United States, the United Kingdom and mainland Europe among its principal markets.

1. 2020SEC settlement

   AmTrust agrees to a $10.3 million civil penalty in a settlement concerning alleged deficiencies in loss-reserve disclosure.

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2. 2019Preferred securities and notes delisted

   AmTrust voluntarily delists and deregisters its preferred stock and subordinated notes.

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3. 2018Take-private transaction completed

   AmTrust merges with Evergreen Parent, L.P. and becomes privately held.

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4. 2017Adam Karkowsky becomes CFO

   Adam Karkowsky is appointed chief financial officer.

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5. 2016Barry Zyskind becomes chairman

   Barry Zyskind assumes the chairmanship while continuing as chief executive officer and president.

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6. 2006Public-market listing

   AmTrust begins trading on the NASDAQ Global Select Market on November 13.

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7. 2005Ronald E. Pipoly becomes CFO

   Ronald E. Pipoly is appointed chief financial officer.

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8. 1998AmTrust is founded

   George Karfunkel and Michael Karfunkel establish AmTrust Financial Services as a property and casualty insurance business.

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A commercial property and casualty insurance provider combining small-business underwriting, specialty programs, extended-warranty solutions and tailored coverage for middle-market and other specialized risks.

• Small-commercial workers’ compensationCommercial insurance

  Workers’ compensation coverage for small businesses, including employers in restaurants, retail, medical practices, professional offices and other low- and medium-hazard occupations. The product addresses statutory workers’ compensation obligations and related workplace-injury claims.

• Commercial property insuranceProperty insurance

  Coverage for commercial buildings, business contents, equipment and other property exposures. It may be provided as part of broader commercial packages or tailored for particular industries and customer segments.

• General liability insuranceLiability insurance

  Commercial liability protection for third-party bodily injury, property damage and related claims arising from business operations, products or premises. AmTrust offers this coverage both through conventional commercial products and specialty programs.

• Business owners policiesSmall-business insurance

  Packaged insurance for eligible small businesses that combines selected property and liability protections in a single commercial policy structure. The offering is intended to simplify coverage for smaller commercial accounts.

• Cyber liability insuranceSpecialty liability insurance

  Specialty coverage addressing cyber-related exposures, which can include data incidents, network events, privacy claims and associated response costs, subject to the terms and limits of the applicable policy.

• Employment practices liability insuranceSpecialty liability insurance

  Protection for employers against selected claims involving employment practices, such as alleged wrongful termination, discrimination, harassment or related workplace actions.

• Specialty program insuranceProgram business

  Property and casualty programs developed for defined industries, occupations or affinity groups and distributed through managing general agents. The segment has included workers’ compensation, general liability, commercial auto liability and excess and surplus lines.

• Extended warranty and accidental-damage plansWarranty and specialty risk

  Plans associated with consumer and commercial goods that provide protection for accidental damage or extended product-related risks. These offerings have been sold in the United States and Europe in connection with goods transactions.

• ReinsuranceReinsurance

  Risk-transfer arrangements that allow AmTrust and its affiliated insurers to manage underwriting exposure. The company’s 2019 quota-share agreement with Swiss Re illustrates its use of reinsurance for a portion of its U.S. small-commercial portfolio.

• 2019Enter a quota-share agreement with Swiss ReOther

  AmTrust sought to transfer part of the underwriting exposure associated with its U.S. small-commercial insurance business.

  What changed. The company entered a quota-share agreement with Swiss Reinsurance America Corp. covering in-force, new and renewal U.S. small-commercial business.

  Aftermath. Swiss Re was projected to assume a portion of the covered business and related underwriting risk.

  Projected written premiums and projected assumed premiums. Approximately $2.9 billion in projected written premiums, with Swiss Re projected to assume approximately $1.05 billion (2019)

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• 2019Complete the transition away from public securities marketsStrategy

  Following the 2018 take-private transaction, AmTrust reorganized its public-market obligations.

  What changed. The company voluntarily delisted and deregistered all series of preferred stock and subordinated notes.

  Aftermath. AmTrust continued as a privately held insurance group with less public disclosure than during its listed period.

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• 2018Proceed with a take-private transactionM&A

  AmTrust’s owners and financial sponsors pursued a transaction to remove the company from the public markets.

  What changed. AmTrust merged with Evergreen Parent, L.P., an entity formed with Stone Point Capital-managed funds and the Karfunkel-Zyskind family.

  Aftermath. The company became privately held and subsequently delisted and deregistered its preferred stock and subordinated notes.

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• 2020SEC loss-reserve disclosure settlementControversy

  The SEC alleged that AmTrust’s disclosures through the end of 2015 did not adequately describe the actuarial process used to report management’s best estimate of loss reserves. AmTrust settled without admitting or denying the allegations and agreed to pay a $10.3 million civil penalty. Former CFO Ronald E. Pipoly agreed to separate monetary sanctions totaling $237,499.

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• 2019AmTrust delists preferred stock and subordinated notes

  The company voluntarily delisted and deregistered all series of preferred stock and subordinated notes after the take-private transaction.

  Other
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• 2019AmTrust enters quota-share agreement with Swiss Re

  AmTrust entered a quota-share agreement with Swiss Re covering U.S. small-commercial business, transferring a portion of the associated underwriting risk.

  Other
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• 2018AmTrust completes take-private transaction

  AmTrust merged with Evergreen Parent, L.P., an entity formed with Stone Point Capital-managed funds and the Karfunkel-Zyskind family, and ceased operating as a publicly traded company.

  M&A
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• 2018AmTrust recognized as a NorthCoast 99 Best Places to Work winner

  AmTrust was listed among the NorthCoast 99 Best Places to Work winners, following recognition in the preceding year as well.

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• 2017Adam Karkowsky appointed chief financial officer

  Adam Karkowsky succeeded Ronald E. Pipoly as chief financial officer.

  Leadership change
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• 2016Barry Zyskind becomes chairman

  Barry Zyskind was appointed chairman in addition to his existing leadership responsibilities as chief executive officer, president and chairman of the executive committee.

  Leadership change
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• 2006AmTrust begins trading on NASDAQ Global Select Market

  AmTrust Financial Services became a publicly traded company on November 13, 2006, when its shares began trading on the NASDAQ Global Select Market.

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1. AmTrust Financial Services
2. SEC Charges AmTrust Financial Services and Former CFO with Disclosure Failures
3. AmTrust Financial Services official website