AmTrust sells management policy system for $200m
Property/casualty insurer AmTrust said on Sept. 14 that it sold a personal lines policy management system to National General for $200 million.
AmTrust developed the management system for National General and will receive the payment in three equal instalments.
AmTrust CEO Barry Zyskind, said: "With this sale, which will be immediately accretive to AmTrust's tangible book value, we are unlocking value that we created through our technological expertise. The proceeds will further strengthen our balance sheet and the transaction demonstrates our commitment to simplifying our organization and financial disclosure."
Since 2010, AmTrust has provided National General and its affiliates with information technology development services in connection with the development and licensing of the policy management system. Under the terms of the initial agreement, National General was entitled to acquire the license royalty-free in 2023.
In 2016, development, support and licensing fees from National General related to the policy management system generated approximately $26 million in pre-tax income ($17.1 million after tax) for AmTrust.
Under the terms of the sale agreement, National General will acquire the right, title, and interests in the policy management system.
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