AmTrust Financial Services, Inc. Announces Sale of Personal Lines Policy Management System to National General Holdings Corp. for $200 million
AmTrust Financial Services, Inc. announced today the sale of the personal lines policy management system (“policy management system”) it developed for National General Holdings Corp. (“National General”), to National General. AmTrust will receive total consideration of $200 million, payable in three equal installments.
Barry Zyskind, Chairman and Chief Executive Officer, AmTrust, 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 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.
Terms of the Sale Agreement
Under the terms of the sale agreement, National General will acquire the right, title and interests in the policy management system. The $200 million purchase price is payable in three equal installments with the first payment made upon the execution of the sale agreement, the second payment payable upon the six-month anniversary of the sale agreement, and the third payment payable upon the later of the completion of the full separation and transfer of the system to National General’s operating environment or the 18-month anniversary of the agreement.
About AmTrust Financial Services, Inc.
AmTrust Financial Services, Inc., a multinational insurance holding company headquartered in New York City, offers specialty property and casualty insurance products, including workers’ compensation, commercial automobile, general liability and extended service and warranty coverage through its primary insurance subsidiaries rated “A” (Excellent) by A.M. Best. AmTrust is included in the Fortune 500 list of largest companies. For more information about AmTrust visit www.amtrustfinancial.com.
Source: AmTrust.
