The agreement will see the US arm of the Zurich headquartered reinsurance giant - Swiss Reinsurance America Corp – provide cover for AmTrust’s US small commercial book, which is $2.9bn in projected written premium.
The deal will see Swiss Re assume approximately $1.05bn on an inforce, new and renewal basis.
The agreement commenced yesterday on 1 January and renews on an annual basis.
AmTrust said it was terminating its existing quota share with Maiden Re on a cut-off basis and would cede the unearned premium of the book from 31 December 2018 to Swiss Re.
TigerRisk and JLT Re acted as reinsurance intermediaries for the transaction.
Earlier in 2018, AmTrust entered into a new 50 percent quota share agreement with Everest Re covering the carrier’s projected $700mn of specialty program premiums.
AmTrust said will continue to partner with Maiden Re on other existing lines and expects to cede Maiden Re less than $500mn of written premium in 2019.
“AmTrust is pleased to partner with Swiss Re, one of the world’s strongest and longest-standing reinsurers, on this quota share agreement,” said Barry Zyskind, chairman and CEO of AmTrust.
“This reinsurance partnership for our US small commercial business provides AmTrust with an AM Best A+ rated partner who we believe will deliver significant value beyond the strength of its balance sheet, and provide us enhanced capital flexibility,” he added.
“The opportunity to partner with Swiss Re on this quota share is a vote of confidence in the strength of the AmTrust franchise, and our core business supporting small businesses across the US.”
The deal come as AmTrust’s $2.95bn take-private deal with Stone Point Capital finally came to a close at the end of last year when it was given the green light by regulators.
Closing the deal has been a lengthy process, with AmTrust chairman and CEO Barry Zyskind, his wife’s family the Karfunkels and backers led by private equity firm Stone Point first tabling a bid to take the carrier private back in January.
The offer was twice raised from an initial $12.25 a share to $13.50 a share in the wake of criticism over the perceived low price, and again in May to $14.75 a share after activist Carl Icahn revealed he had taken an almost 10 percent stake in AmTrust.
The higher price secured the approval of the proxy firms, which urged shareholders to vote in favour of the deal in a ballot that passed in June.