TABLE OF CONTENTS
to pursue reinsurance opportunities with insurance companies, like AmTrust, that specialize in workers compensation for small businesses in low and medium hazard classes, commercial property and casualty program business for discrete industry segments that are underwritten by managing general agents with appropriate expertise and extended warranty and specialty risk programs that are characterized by low coverage limits and high volume. We believe we will be able to offer our prospective reinsureds expertise in underwriting and administering specialty property and casualty business.
Maiden Insurance has received a financial strength rating of A- (Excellent) from A.M. Best, which is the fourth highest of sixteen rating levels. A rating from A.M. Best indicates A.M. Bests opinion of our financial strength and ability to meet ongoing obligations to our future policyholders.
Market Opportunity
We believe that insurance companies that underwrite specialty property and casualty products, such as workers compensation for employers in specific low and medium hazard classes, commercial property and casualty programs for businesses in discrete industry segments and extended warranty and specialty risk programs, often do not receive appropriate consideration from reinsurers for their expertise, the risk profiles of their insureds, and the distinctions between their specialty products and general insurance products. We believe that this is especially true for small insurers. We believe the lack of reinsurance capacity with expertise in
specialty property and casualty insurance is one of the key constraints on the growth of the business and of the insurers that underwrite it.
We believe that our reinsurance arrangements with AmTrust provide us with an opportunity to participate in the profitable growth of AmTrusts premiums over a multi-year period and that this base business with AmTrust provides us with a platform to develop a substantial business with other insurers over time.
AmTrust Quota Share Business
AmTrust is a multinational specialty property and casualty insurance holding company, which currently transacts business through seven insurance company subsidiaries: Technology Insurance Company, Inc. (TIC), Rochdale Insurance Company (RIC), Wesco Insurance Company (WIC) and Associated Industries Insurance Company, Inc. (AIIC), which are domiciled in New Hampshire, New York, Delaware and Florida, respectively, and AII, AmTrust International Underwriters Limited (AIU) and IGI Insurance Company, Ltd. (IGI), which are domiciled in Bermuda, Ireland and England, respectively.
AmTrusts current majority stockholders acquired AmTrust and its subsidiaries, TIC and AII, from Wang Laboratories, Inc. in 1998 to focus on niche specialty and casualty markets.
AmTrust primarily underwrites insurance in three market segments: workers compensation for small businesses (average premium less than $5,000 per policy) in the United States; specialty risk and extended warranty coverage for consumer and commercial goods and custom designed coverages, such as accidental damage plans and payment protection plans offered in connection with the sale of consumer and commercial goods, in the United Kingdom, certain other European countries and the United States; and specialty middle-market property and casualty insurance, which consists of workers compensation, commercial auto and general liability programs
for policyholders in discrete industry segments that are generally underwritten by managing general agents.
AmTrust, through its insurance subsidiaries, is a direct insurer in the United States, the United Kingdom and other European countries, which means that it provides insurance coverage directly to policyholders. We are a reinsurer, which means that we assume a portion of the risks insured or reinsured by other insurance companies, such as AmTrust. AmTrust generally does not provide reinsurance for non-affiliates and we do not intend to conduct business as a direct insurer in any jurisdiction. Therefore, we believe our businesses provide complementary products and services.
TIC, RIC, WIC, AII and AIU are each rated A- by A.M. Best, which is the fourth highest of 16 rating levels. IGI, which AmTrust acquired in April 2007, and AIIC, which AmTrust acquired in September 2007, are not currently rated by A.M. Best. AII, TIC, and RIC have maintained the A- rating since 2003. WIC has maintained its rating since it was assigned by A.M. Best upon AmTrusts acquisition of WIC on June 1, 2006. AIU has maintained its A- rating since June 2007.