AmTrust Financial Services has entered into a definitive agreement with Blackstone Credit & Insurance (BXCI) to spin off certain Managing General Agencies and fee-based businesses in the U.S., U.K., and Continental Europe into a new independent company jointly backed by AmTrust and funds managed by BXCI.
These businesses reportedly provide diverse risk and insurance coverages, including cyber excess and surplus, directors and officers, transaction risk insurance, professional indemnity, legal expense, mortgage and structured credit, warranty, agricultural workers’ compensation, income protection, accident and health, and residential and commercial niche property.
AmTrust said it will enter into a ten-year capacity agreement with the newly formed company, under which it will continue underwriting the existing books of business distributed through the MGAs.
The transaction is expected to close by year-end 2025, subject to customary closing conditions and regulatory approvals.
Further, the new company will operate under a new brand name, which AmTrust stated will be announced at a later date.
Notably, Adam Karkowsky, who is currently President of AmTrust, will leave to become Chairman and CEO of the new company.
Karkowsky, a longtime AmTrust executive and board member, has held senior roles including president, CFO, and head of strategy, with broad experience in insurance, private equity, and M&A.
Karkowsky’s leadership team at the new company will include Joseph Brecher, currently SVP, Head of Alternative Investments at AmTrust, in the role of Chief Financial Officer, and Jacob Decter, currently Chief Strategy Officer, Global Fee Businesses, at AmTrust, in the role of Chief Operating Officer.
Karkowsky commented, “Bringing these businesses together as a standalone company creates a diversified, multinational MGA platform with significant value creation potential through organic growth, expanded partnerships, and acquisitions.
“I deeply appreciate the opportunities I have had at AmTrust and am grateful for what we achieved together.
“I look forward to working with our talented team in the U.S., UK, and Europe, in the delivery of services for our brokers, partners and clients, with the support of our partners AmTrust and Blackstone.”
Barry Zyskind, Chairman and Chief Executive Officer, AmTrust, said, “We are very pleased to partner with Blackstone to unlock the substantial embedded value that we have built in our global MGA and fee businesses.
“With this transaction, these businesses will be positioned to further invest in their operations, meaningfully grow their portfolio, and continue to deliver outstanding service to their clients.
“With our significant retained equity interest, AmTrust looks forward to participating in the future success of the new company. I am confident in the strength and experience of Adam and the leadership team to drive the new company to great heights.”
Louis Salvatore, Senior Managing Director, BXCI, noted, “AmTrust has built an impressive franchise and we are excited to support the new standalone MGA platform, which should have significant tailwinds.
“BXCI has extensive experience investing in and supporting insurance services businesses, helping them achieve their full potential. We look forward to partnering with AmTrust and the new company’s executive team to create long-term value.”
About the Author
