The transaction will result in the creation of a new independent company, which will operate under a new brand name to be announced in the future.
Under the terms of the agreement, AmTrust and the new company will establish a 10-year capacity arrangement. AmTrust will continue as the underwriter for the existing books of business offered through the MGAs.
The agreement covers seven AmTrust subsidiaries: ANV, Risico, Collegiate, AmTrust Nordic, Arc Legal, Qualis, and Abacus. These entities provide a range of risk and insurance coverages, including cyber excess and surplus, directors and officers, transaction risk insurance, professional indemnity, legal expense, mortgage and structured credit, warranty, agricultural workers’ compensation, income protection, accident and health, and residential and commercial niche property. The new company is expected to employ more than 700 people.
Adam Karkowsky (pictured above), currently president of AmTrust, will transition to serve as chairman and CEO of the new company. Karkowsky joined AmTrust in 2011 and became president in 2018. He has also been a member of the board of directors since 2019 and previously held roles as chief financial officer and executive vice president, strategic development and mergers & acquisitions.
His leadership team will include Joseph Brecher, currently senior vice president and head of alternative investments at AmTrust, who will become chief financial officer, and Jacob Decter, currently chief strategy officer, global fee businesses, who will serve as chief operating officer.
“We are very pleased to partner with Blackstone to unlock the substantial embedded value that we have built in our global MGA and fee businesses,” said Barry Zyskind, chairman and CEO of AmTrust.
After the transaction closes, AmTrust will continue to operate as a multinational insurance company with approximately 6,000 employees.
In addition to the spin-off, AmTrust has recently expanded its excess and surplus (E&S) division, bringing in senior industry talent and launching new product lines in property, environmental, and builders risk.
The company consolidated its primary, excess, and environmental products into a new brokerage casualty group, aiming to drive growth in the specialty market. Over the past 18 months, AmTrust has added experienced professionals from Crum & Forster, AXA XL, Ironshore, and Berkshire Hathaway Specialty Insurance to lead this expansion and oversee the new product lines.
What are your thoughts on this story? Please feel free to share your comments below.
