14 September 2017Insurance

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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More on this story

11 September 2017   AmTrust at Lloyd’s is looking to combine its three non-life Lloyd’s syndicates into a single entity, and has applied for the approval.
6 September 2017   New York-based AmTrust Financial Services said on Sept. 5 that it entered into a quota share reinsurance contract to reduce exposure to catastrophe and non-catastrophe events related to the business of its subsidiary Republic Companies effective August 1, 2017.
7 November 2017   AmTrust Financial Services has agreed to sell a 51 percent equity interest in certain parts of its US-based fee businesses to Madison Dearborn Partners, a private equity firm in a deal that values the business at $1.15 billion, plus up to an additional $50 million upon exit, subject to agreed thresholds.