AmTrust Financial
Exhibit 99.1
Who We Are
Multinational specialty property and casualty insurance company
Founded in 1998
Founders: Michael and George Karfunkel, Barry Zyskind
Inside ownership 57%
NASDAQ ticker symbol “AFSI”
“A-” rating from A.M. Best
We focus on underserved, niche markets:
Small business workers’ compensation (42.1% of GPW 6 months ended
June 30, 2007)
Specialty risk and extended warranty (29.3% of GPW 6 months ended
June 30, 2007)
Specialty middle-market property and casualty (28.6% of GPW 6 months
ended June 30, 2007)
We have grown our business organically and through opportunistic renewal
rights transactions
High teens ROE business model
2
Company Overview
US only (31 states and DC)
$205 MM GPW in 2005
$258.9 MM GPW in 2006
$168.1 MM through 6/30/07
Insured Profile
Average premium < $5,000
Europe, US
$81 MM GPW in 2005
$132.8 MM GPW in 2006
$117.3 MM through 6/30/07
Warranty coverage for selected
consumer and commercial goods
50.6% of GPW through 6/30/07
was written outside US
US only (nationwide)
Entered through renewal rights
transaction from Alea
$446 MM GPW (2004) and over
$250 MM (9/30/05) for Alea
$134.3 MM in 2006
$114.3 MM through 6/30/07
Specialty Middle-Market P&C
Insurance
Specialty Risk and Extended
Warranty
Small Business Workers’
Compensation
Mix of Business
25.3%
28.5%
49.2%
71.5%
2006
2005
25.5%
0%
Gross Premiums Written
$526 MM
$286 MM
2006
2005
29.3%
42.1%
6/30/07
28.6%
$400 MM
YTD 6/30/07
3
Small Business Workers’ Compensation
Target Customers
Average annual premium
less than $5,000
Small employers –
typically underserved by
larger carriers
Average 6 employees
Low to mid hazard
profile
Underserved segment,
competitors include
state funds and
regional carriers
AmTrust Approach
Expense control
Paperless proprietary
underwriting system
Risks individually
underwritten
Prompt response to
agents and insureds
8,000 active agents
Result
Cost efficient strategy
Historically high retention
and renewal rates (over
80%)
Historical organic premium
growth of over 15%
annually
Target combined ratio
of 95% or better
4
Small Business Workers’ Compensation (cont’d)
Premium Distribution by State
(6 months ended June 30, 2007 )
11%
11.8%
5.8%
1.5%
2.7%
10.5%
10.2%
3.3%
1.4%
4.1%
25%
Greater than 5% Less than 10%
Less than 5%
No Operations
Greater than 10%
1.3%
1.7%
5
Specialty Risk and Extended Warranty
We provide extended warranties for a wide range of
consumer and commercial goods
Target Customers
Manufacturers and retailers of
consumer and commercial
goods
Geography
Europe (50.6% of GPW for
6 months ended 6/30/07)
US (49.4% of GPW for
6 months ended 6/30/07)
AmTrust Approach
Extensive front-end
diligence and actuarial
review for each new
product and client
Develop customized and
strictly defined policy
forms that fit the needs
of the client
Proactively managing
claims and adjusting
premiums if needed
Result
Profit center or cost
reduction for client
Cost effective for
warranty buyer
Profitable for AmTrust
6
Specialty Middle Market P&C (Alea)
Target Customers
Retail, wholesale, service
operations covered
through 25 wholesale
agents
Lines of business:
Workers’ compensation
(37%), general liability
(22%), commercial auto
liability (28%), other (13%)
AmTrust Approach
Extensive front-end
diligence and actuarial
review for each new
product and client
Develop customized and
strictly defined policy
forms that fit the needs
of the client
Leverage proprietary
technology systems
to process business
efficiently
Result
Business integration
on-going
Most of Alea’s former
senior management,
underwriting and support
team have joined AmTrust
Generated $114.3 MM
of gross premiums written
for the 6 months ended
6/30/07
Expansion of workers’ comp, general liability & commercial auto
and property coverage
7
We have grown our business organically and through:
Key hires of underwriting teams in the US and Europe
Opportunistic renewal rights transactions
History of Disciplined Growth
Princeton Insurance
Company
Total book of business:
Approximately $111 MM
Dec.
2002
Renewal
Rights
Early
2003
Hired European
specialty risk and
extended warranty
insurance team hired in
London
Key Hires
Dec.
2003
The Covenant Group
Total book of business:
Approximately $62 MM
Renewal
Rights
Aug.
2004
Associated Industries
Insurance Company
Total book of business:
Approximately $100 MM
Renewal
Rights
Alea US
Small-, Middle-market
P&C book
Total book of business:
Approximately $450 MM
for 2004
Dec.
2005
Renewal
Rights
May
2006
Renewal
Rights
Muirfield Underwriters
Total book of business:
Approximately $60 MM
June
2006
Shell
Acquisition
Acquisition of Wesco
Insurance Co. (WIC), from
HSBC Insurance Co., an
affiliate of HIG
Feb.
2006
Raised ~$166 MM to
finance acquisition of
renewal rights of Alea
and fund growth in
existing businesses
144A Offering
April
2007
Acquisition of IGI
Group, Ltd.
Acquisition
June
2007
Acquisition
Announce plans
to acquire
Associated Industries
Insurance Services, Inc.
Expected to close in 3 rd
quarter 2007
July
2007
40% quota-share
reinsurance
agreement with
Maiden Insurance Co.
Reinsurance
Agreement
8
Renewal Rights Transaction Overview
Typically occur when an insurance company needs to raise cash quickly or exit line
Opportunity to re-underwrite and cherry pick the book of business
Access to historical loss data
Seasoned book of business
Hire key employees
Policy renewals at sole discretion of AmTrust
Continuing payments to selling carrier only if policies renewed by AmTrust
Continue relationships with agents
Right to renew another carrier’s insurance policies without assuming historical liabilities
These have been highly profitable, low risk transactions for AmTrust
9
Business Model
Deliver high teens ROE through:
Focus on earning underwriting profit
Target at or below 95% combined ratio
Proprietary technology platform designed to process small policies
Effective tax rate of less than 30%
10
Financial Performance
$97.5
$210.9
$526.0
91.9%
95.1%
94.8%
98.4%
We produce an underwriting profit by having consistent loss ratios and focusing on expenses
As our premium has grown, we have:
Increased our operating leverage
Decreased our expense ratio
$286.1
$399.7
89.6%
11
Recent Financial Results
Summary Income Statement
($ in millions)
Gross Premiums Written
Net Premiums Written
Net Premiums Earned
Fee Income
Net Investment Income and Realized Gains
Loss and LAE Expense
Acquisition Expense
Salaries and G&A Expense
Pretax Income from Continuing Operations
Income Tax Expense
Net Income from Continuing Operations
Annualized ROE from Net Income from Continuing Operations
Net Loss Ratio
Net Expense Ratio
Net Combined Ratio
2005
$286.1
259.2
216.0
8.2
16.4
142.0
30.1
33.4
29.6
6.7
$20.1
17.3%
65.7%
29.4%
95.1%
2006
$526.1
436.3
329.0
12.4
42.4
210.1
43.3
49.0
70.7
17.8
$48.4
21.1%
63.9%
28.1%
91.9%
6/30/2007
$399.7
324.1
249.1
8.8
35.7
159.6
32.0
31.5
59.5
16.6
$42.9
23.8%
64.0%
25.6%
89.6%
12
Recent Financial Position
Balance Sheet
($ in millions)
Cash and Investments
Reinsurance Recoverable
Premiums Receivable, Net
Goodwill & Intangible Assets
Other
Loss and LAE Reserve
Unearned Premium Reserve
(1)
Junior Subordinate Debentures
Other
Common Equity & APIC
Shareholders' Equity
Total Liabilities and Shareholders' Equity
1.
Trust Preferred Securities.
2.
Includes assets managed on behalf of others.
Preferred Stock
Book Value Per Share
12/31/05
$415.8
17.7
81.1
20.8
77.5
612.9
168.0
156.8
51.6
118.1
494.5
58.4
118.4
$612.9
60.0
12/31/06
$785.9
44.1
147.8
29.4
178.2
1,185.4
295.8
323.2
82.5
143.4
844.9
340.5
340.5
$1,185.4
-
$5.68
(2)
(2)
6/30/07
$1,052.2
52.3
239.3
40.4
269.8
1,654.0
386.0
452.0
123.7
287.6
1,249.3
379.2
379.2
$1,654.0
-
$6.32
(2)
(2)
13
Financial Objectives for Remainder
of 2007 and 2008
At least 20% Organic Growth in Premiums
Combined Ratio of 95% or better
Investment Yield of at least 6.0%
Effective Tax Rate less than 30%
ROE of 15% or higher
14
AmTrust Financial