Summary

AmTrust Financial Services, Inc. (AFSI) is a fast growing specialty property and casualty insurer focused on generating consistent underwriting profits. AmTrust operates in three business segments: small commercial business insurance, specialty risk and extended warranty, and specialty middle-market property and casualty insurance.

AFSI will release 2009 first quarter earnings following the close of the market on Tuesday, May 5, 2009.

On Wednesday, May 6 at 10:00 a.m. ET, the company will hold a conference call that can be accessed as follows: details

Q4 2008 Financial Press Release

• Quarterly basic operating earnings per share was $0.54 ($0.43 in 2007)
• Quarterly basic earnings per share was $0.42 ($0.38 in 2007)
• 2008 basic operating earnings per share was $2.08 ($1.45 in 2007)
• 2008 basic earnings per share was $1.38 ($1.50 in 2007)
• Return on equity on operating earnings for three months ended December 31, 2008 was 33.1%
• Return on equity on operating earnings for 2008 was 32.3%
• Book value per share was $6.54 as of December 31, 2008 ($6.51 as of December 31, 2007)
• The combined ratio for the fourth quarter was 77.3% (75.4% in 2007)
• The combined ratio for the year ended December 31, 2008 was 74.4% (83.2% in 2007)

Links and Resources

• Events and presentations
• SEC Filings
• Q4 2008 Conference Call Transcript

Operating earnings for the year were $125 million, a 44% increase. Our net income for the quarter was $25 million and for the year was $83 million. Our balance sheet is solid, our cash and liquidity are strong. Our small commercial business segment continues to perform well. They grew by 49% for the year. With the acquisition of UBI from Unitrin, we are continuing to diversify and expand our products….

We anticipate further book value growth during 2009 and beyond from successful operations and as our bond portfolio increases in value and credit markets stabilize, we will regain our unrealized losses, enabling our book value to grow at a faster rate than our earnings.

Notes

• Enjoy 80%+ renewal rates
• quarterly dividend of $0.05, around a 2% yield on
• excellent combined ratios
• went public late 2006
• 53% of business in US, 21% in UK, rest in Europe
• 61.6% of investment portfolio in AAA, 4.5% in AA, 25.1% in A, 6.3% in BBB+/-
• Excellent Return on equity; 21.2%, 24.7% and 21.3% for 2008, 2007 and 2006 respectively.
• Their spectacular earnings growth ground to a halt in 2008. Income per share from continuing
  operations for 2008 to 2004: $1.38, $1.50, $0.86, $0.80, $0.30
• Gross premium written for the same period continued their growth $1,110,574, $839,391, $526,074, $286,131, $210,851.

Can AFSI reignite their earning growth in 2009? If they do they may once again trade a high multiples to book value as they did in 2007.

Key Valuation Ratios

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