AmTrust Financial Services, Inc.
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
, Fidelity National Financial, Inc.
and Arch Capital Group Ltd.
. All of these stocks sport the same Zacks Rank as AmTrust
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AMTRUST FIN SVC (AFSI): Free Stock Analysis
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