AmTrust Financial Inks Deal to Acquire ARI Mutual Insurance - Analyst Blog

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AmTrust Financial Services, Inc. AFSI inked a deal to acquire ARI Mutual Insurance Company - one of the largest commercial automobile carriers in New Jersey. The transaction, which is still pending regulatory and policyholder approval, is predicted to close by the fall of 2015.

Headquartered in Newtown, PA, ARI Mutual Insurance works in partnership with independent agents to provide creative solutions according to the changing needs of the marketplace. The company writes commercial automobile insurance in New Jersey and has recently entered the Pennsylvania and Maryland markets. The company wrote premiums worth $58 million in 2014.

AmTrust Financial will purchase ARI after the latter converts to a stock company from a mutual one. The company went on to sign a quota-share reinsurance agreement with ARI as the first step toward the eventual acquisition.

With this acquisition AmTrust Financial will gain access to a number of regional commercial insurance products and related distribution channels of ARI Mutual Insurance.

Of late, AmTrust Financial - that currently sports a Zacks Rank #1 (Strong Buy) - has been adopting the inorganic route to expand its business. In 2014, the company made some major acquisitions like the takeover of Insco Insurance Services, Inc. in January. It also bought Tower Renewal Rights from Tower Group International, Ltd in the same month. Additionally, in Oct 2014, AmTrust Financial acquired a Florida-based workers' compensation insurer - Comp Options Insurance Company, Inc. - from an affiliate of Blue Cross & Blue Shield of Florida.

Earlier this month, the company completed the acquisition of CorePointe - a wholly owned subsidiary of CorePointe Group LLC.

AmTrust Financial's solid liquidity position with cash and cash equivalents ($902.7 million as of Dec 31, 2014, up 8.8%) cushions its inorganic growth initiatives.

Other Stocks to Consider

Other stocks worth considering in the property and casualty sector are Allied World Assurance Company Holdings, AG AWH , Fidelity National Financial, Inc. FNF and Arch Capital Group Ltd. ACGL . All of these stocks sport the same Zacks Rank as AmTrust Financial.

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AMTRUST FIN SVC (AFSI): Free Stock Analysis Report

FNF GROUP (FNF): Free Stock Analysis Report

ARCH CAP GP LTD (ACGL): Free Stock Analysis Report

ALLIED WORLD AS (AWH): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: FNF , ACGL ,

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