NEW YORK, Oct. 19, 2009 (GLOBE NEWSWIRE) -- AmTrust Financial Services, Inc. (Nasdaq:AFSI) announced today that it has entered into an agreement to make a strategic investment in American Capital Acquisition Corporation ("ACAC") in connection with the acquisition by ACAC of GMAC's U.S. consumer property and casualty insurance business. AmTrust will initially invest approximately $42.5 million dollars in a Convertible Preferred Security.
GMAC's consumer property and casualty insurance business is one of the leading writers of automobile coverages through independent agents in the United States. It utilizes a network of 10,500 agents in 12 core markets, as well as exclusive relationships with 23 affinity partners. GMAC's U.S. consumer property and casualty insurance business had a net written premium in excess of $1 billion dollars in 2008 that encompassed all fifty states. Its coverages include standard/preferred auto, RVs, non-standard auto and commercial auto. The investment includes ten statutory insurance companies that write the automobile coverages for GMAC.
Barry Zyskind, President and CEO of AmTrust, stated, "This investment is not only a very attractive preferred equity investment for AmTrust, but it provides strong strategic advantages as well. Primarily it provides us immediate access to a new distribution force of 10,500 agents that will be equipped to cross sell our AmTrust products. Additionally, this investment will generate substantial fee income for AmTrust, from both the development of our unique IT platform and for asset management services, as well as generate underwriting profits through the contemplated reinsurance agreement."
The acquisition is subject to regulatory approval and is expected to close in the first quarter of 2010.
About AmTrust Financial Services, Inc.
AmTrust Financial Services, Inc., headquartered in New York City, is a multinational insurance holding company, which, through its insurance carriers, offers specialty property and casualty insurance products, including workers' compensation, commercial automobile and general liability; extended service and warranty coverage. For more information about AmTrust, visit www.amtrustgroup.com, or call AmTrust toll-free at 866.203.3037.
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About American Capital Acquisition Corporation
American Capital Acquisition Corporation an affiliate of American Capital Partners, LLC is a newly formed acquisition corporation. The principal of ACAC was a founder of AmTrust Financial Services, Inc. (AFSI) and Maiden Holdings, Ltd. (MHLD), and has had a long successful history in financial services.