AmTrust Q1 profit hit by cat losses, adverse reserve development

US specialty property/casualty insurance provider AmTrust Financial Services has seen its net profit plummet in the first quarter of 2017 due to natural catastrophes and prior year adverse development.

First quarter net income attributable to common stockholders dropped to $22.6 million from $84.0 million in the same period a year ago.
Operating earnings dropped to $55.7 million from $122.9 million over the period.

Chairman and CEO Barry Zyskind, said: "Operating earnings […] 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.”

Service and fee income increased 6.7 percent year-on-year to $137.5 million in the first quarter.

Gross written premium was up 17.2 percent year-on-year at $2.3 billion. The combined ratio deteriorated to 95.6 percent in the first quarter compared to 91.9 percent a year ago.

The first-quarter 2017 combined ratio of 95.6 percent 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 percent, Zyskind explained.

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