(Source: PrimeNewswire)NEW YORK, Aug. 5, 2009 (GLOBE NEWSWIRE) -- AmTrust Financial Services, Inc. (Nasdaq:AFSI) today reported operating earnings of $31.8 million for the second quarter of 2009. Operating earnings is a non-GAAP financial measure defined by the Company as net income, excluding realized investment gains and losses, net of tax. During the second quarter of 2009, book value per share increased 18.7% to $8.04 per share. Gross written premium for the second quarter of 2009 was $270.2 million and net income was $26.8 million. For the six months ended June 30, 2009 the Company reported gross written premium of $537.8 million, operating earnings of $61.9 million and net income of $50.9 million.

During the second quarter of 2009, the Company incurred a realized loss on an after-tax basis of $5.0 million on its investment portfolio. The realized loss related to certain fixed income and equity investments.

Second Quarter Overview:

Total revenue in the second quarter increased by $9.0 million to $182.6 million or 5.2% from $173.6 million in the second quarter of 2008. The Company reported operating earnings of $31.8 million or basic operating earnings per share of $0.54 for the second quarter of 2009, an increase of 17.4% from the second quarter of 2008. Net income for the second quarter of 2009 was $26.8 million, or $0.45 basic earnings per share.

Second Quarter and Six Months Highlights:

    * Quarterly basic operating earnings per share was $0.54 ($0.46 in    2008)  * Quarterly basic earnings per share was $0.45 ($0.44 in 2008)  * Six months ended June 30, 2009 basic operating earnings per share    was $1.04 ($0.89 in 2008)  * Six months ended June 30, 2009 basic earnings per share was $0.86    ($0.81 in 2008)  * Annualized return on equity on operating earnings for the second    quarter was 28.9%  * Book value per share was $8.04 as of June 30, 2009 ($6.91 as of    June 30, 2008)  * The combined ratio for the second quarter was 79.6% (81.7% in 2008)  * The combined ratio for the six months ended June 30, 2009 was 79.6%    (79.6% in 2008) 

Second Quarter and Six Months Results:

Revenue:

Total revenue for the second quarter of 2009 increased $9.0 million or 5.2% to $182.6 million from $173.6 million for the second quarter of 2008. Net premium earned increased $20.9 million or 18.0% to $136.8 million during the second quarter of 2009 from $115.9 million during the second quarter of 2008. Gross written premium in the second quarter of 2009 decreased by $30.9 million to $270.2 million from $301.1 million for the second quarter of 2008.

Total revenue for the six months ended June 30, 2009 was $354.4 million, an increase of 16.7% from the six months ended June 30, 2008. Net premium earned increased $55.9 million or 26.2% to $269.2 during the six months ended June 30, 2008. Gross written premium in the six months ended June 30, 2009 increased by $2.0 million to $537.8 million from $535.8 million for the six months ended June 30, 2008.

Net written premium (gross written premium less cessions for reinsurance, including cessions to Maiden Insurance Company (Maiden)) in the second quarter of 2009 increased by $5.0 million or 3.8%, to $137.1 million from $132.1 million in the second quarter of 2008. For the six months ended June 30, 2009, net written premium increased $23.8 million or 9.5% to $273.3 million from $249.5 million for the six months ended June 30, 2008.

As previously disclosed, the Company entered into a reinsurance agreement with Maiden effective July 1, 2007. Under the terms of this reinsurance agreement, the Company ceded approximately $177.6 million and $251.0 million of written premium to Maiden in the six months ended June 30, 2009 and 2008, respectively. The Company's agreement with Maiden generated $31.0 million and $35.2 million of earned ceding commission for the second quarter of 2009 and 2008, respectively, and $58.6 million and $55.4 million of earned ceding commission for the six months ended June 30, 2009 and 2008, respectively. The agreement continues to enable the Company to leverage its balance sheet, increase its writings, decrease its expense ratio and, most importantly, increase its return on equity.

Commission and fee income (exclusive of ceding commission from Maiden) for the second quarter 2009 decreased by $0.8 million or 9.5% to $7.6 million from $8.4 million for the second quarter 2008. Commission and fee income for the six months ended June 30, 2009 increased by $0.4 million or 2.7% to $15.1 million from $14.7 million for the six months ended June 30, 2008.

Net investment income, excluding realized gains and losses in the second quarter 2009, was $13.6 million compared to $14.2 million in the second quarter 2008. Net investment income, excluding realized gains and losses for the six months ended June 30, 2009, was $27.1 million compared to $27.7 million for the six months ended June 30, 2008. During the three months ended June 30, 2009 and 2008, the Company realized investment losses of $5.0 million and $1.4 million, respectively, on an after-tax basis. For the six months ended June 30, 2009 and 2008, the Company realized investment losses of $11.0 million and $4.8 million, respectively, on an after-tax-basis.

Expenses:

The Company's loss ratio for the second quarter of 2009 was 56.0% compared to 63.9% for the second quarter of 2008. The Company's loss ratio for the six months ended June 30, 2009 was 56.3% compared to 60.6% for the six months ended December 31, 2008.