v2.4.0.6

Segments | 3 Months Ended
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Mar. 31, 2012
Segments |
| 15. | Segments
The Company currently operates four business segments, Small Commercial Business; Specialty Risk and Extended Warranty; Specialty Program and Personal Lines Reinsurance. The “Corporate & Other” segment represents the activities of the holding company as well as a portion of service and fee revenue. In determining total assets (excluding cash and invested assets) by segment, the Company identifies those assets that are attributable to a particular segment such as deferred acquisition cost, reinsurance recoverable, goodwill, intangible assets and prepaid reinsurance while the remaining assets are allocated based on net written premium by segment. In determining cash and invested assets by segment, the Company matches certain identifiable liabilities such as unearned premium and loss and loss adjustment expense reserves by segment. The remaining cash and invested assets are then allocated based on net written premium by segment. Investment income and realized gains (losses) are determined by calculating an overall annual return on cash and invested assets and applying that overall return to the cash and invested assets by segment. Ceding commission revenue is allocated to each segment based on that segment’s proportionate share of the Company’s overall acquisition costs. Interest expense is allocated based on net written premium by segment. Income taxes are allocated on a pro-rata basis based on the Company’s effective tax rate. Additionally, management reviews the performance of underwriting income in assessing the performance of and making decisions regarding the allocation of resources to the segments. Underwriting income excludes, primarily, service and fee revenue, investment income and other revenues, other expenses, interest expense and income taxes. Management believes that providing this information in this manner is essential to providing Company’s shareholders with an understanding of the Company’s business and operating performance. During the three months ended March 31, 2012, the Company derived over ten percent of gross premium in its Specialty Risk and Extended Warranty segment from one broker of approximately $35,000. During the three months ended March 31, 2012, the Company derived ten percent of gross premium in its Specialty Program segment from two individual programs for an aggregate of approximately $20,400. The following tables summarize the results of operations of the business segments for the three months ended March 31, 2012 and 2011:
(Amounts in Thousands) |  | Small Commercial Business |  |  | Specialty Risk and Extended Warranty |  |  | Specialty Program |  |  | Personal Lines Reinsurance |  |  | Corporate and Other |  |  | Total |
Three months ended March 31, 2012: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gross written premium |  | $ | 232,351 |  |  | $ | 234,089 |  |  | $ | 104,638 |  |  | $ | 30,609 |  |  | $ | — |  |  | $ | 601,687 |
Net written premium |  |  | 118,890 |  |  |  | 141,161 |  |  |  | 69,117 |  |  |  | 30,609 |  |  |  | — |  |  |  | 359,777 |
Change in unearned premium |  |  | (26,562 | ) |  |  | (5,588 | ) |  |  | (9,456 | ) |  |  | (4,147 | ) |  |  | — |  |  |  | (45,753 | )
Net earned premium |  |  | 92,328 |  |  |  | 135,573 |  |  |  | 59,661 |  |  |  | 26,462 |  |  |  | — |  |  |  | 314,024 |
Ceding commission - primarily related party |  |  | 17,132 |  |  |  | 17,194 |  |  |  | 11,948 |  |  |  | — |  |  |  | — |  |  |  | 46,274 |
Loss and loss adjustment expense |  |  | (59,224 | ) |  |  | (83,443 | ) |  |  | (40,194 | ) |  |  | (17,068 | ) |  |  | — |  |  |  | (199,929 | )
Acquisition costs and other underwriting expenses |  |  | (42,930 | ) |  |  | (43,085 | ) |  |  | (29,939 | ) |  |  | (8,071 | ) |  |  | — |  |  |  | (124,025 | )
|  |  | (102,154 | ) |  |  | (126,528 | ) |  |  | (70,133 | ) |  |  | (25,139 | ) |  |  | — |  |  |  | (323,954 | )
Underwriting income |  |  | 7,306 |  |  |  | 26,239 |  |  |  | 1,476 |  |  |  | 1,323 |  |  |  | — |  |  |  | 36,344 |
Service and fee income |  |  | 15,435 |  |  |  | 18,218 |  |  |  | 9 |  |  |  | 6,876 |  |  |  | — |  |  |  | 40,538 |
Investment income and realized gain (loss) |  |  | 5,493 |  |  |  | 5,041 |  |  |  | 2,333 |  |  |  | 503 |  |  |  | — |  |  |  | 13,370 |
Other expenses |  |  | (14,123 | ) |  |  | (14,035 | ) |  |  | (6,105 | ) |  |  | (1,376 | ) |  |  | — |  |  |  | (35,639 | )
Interest expense |  |  | (2,810 | ) |  |  | (2,792 | ) |  |  | (1,215 | ) |  |  | (274 | ) |  |  | — |  |  |  | (7,091 | )
Foreign currency gain |  |  | — |  |  |  | 421 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 421 |
Gain on life settlement contracts |  |  | 37 |  |  |  | 35 |  |  |  | 15 |  |  |  | 3 |  |  |  | — |  |  |  | 90 |
Provision for income taxes |  |  | (2,514 | ) |  |  | (7,347 | ) |  |  | 773 |  |  |  | (1,565 | ) |  |  | (524 | ) |  |  | (11,177 | )
Equity in earnings of unconsolidated subsidiaries – related party |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,364 |  |  |  | 2,364 |
Non-controlling interest |  |  | (53 | ) |  |  | (53 | ) |  |  | (23 | ) |  |  | (5 | ) |  |  | — |  |  |  | (134 | )
Net income attributable to AmTrust Financial Services, Inc. |  | $ | 8,771 |  |  | $ | 25,727 |  |  | $ | (2,737 | ) |  | $ | 5,485 |  |  | $ | 1,840 |  |  | $ | 39,086 |
(Amounts in Thousands) |  | Small Commercial Business |  |  | Specialty Risk and Extended Warranty |  |  | Specialty Program |  |  | Personal Lines Reinsurance |  |  | Corporate and Other |  |  | Total |
Three months ended March 31, 2011: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gross written premium |  | $ | 140,716 |  |  | $ | 227,748 |  |  | $ | 49,976 |  |  | $ | 25,587 |  |  | $ | — |  |  | $ | 444,027 |
Net written premium |  |  | 77,651 |  |  |  | 104,547 |  |  |  | 26,234 |  |  |  | 25,587 |  |  |  | — |  |  |  | 234,019 |
Change in unearned premium |  |  | (15,790 | ) |  |  | (19,970 | ) |  |  | 4,536 |  |  |  | (2,457 | ) |  |  | — |  |  |  | (33,681 | )
Net earned premium |  |  | 61,861 |  |  |  | 84,577 |  |  |  | 30,770 |  |  |  | 23,130 |  |  |  | — |  |  |  | 200,338 |
Ceding commission - primarily related party |  |  | 18,325 |  |  |  | 12,899 |  |  |  | 4,460 |  |  |  | — |  |  |  | — |  |  |  | 35,684 |
Loss and loss adjustment expense |  |  | (36,763 | ) |  |  | (57,424 | ) |  |  | (19,705 | ) |  |  | (14,804 | ) |  |  | — |  |  |  | (128,696 | )
Acquisition costs and other underwriting expenses |  |  | (34,756 | ) |  |  | (26,648 | ) |  |  | (12,312 | ) |  |  | (7,518 | ) |  |  | — |  |  |  | (81,234 | )
|  |  | (71,519 | ) |  |  | (84,072 | ) |  |  | (32,017 | ) |  |  | (22,322 | ) |  |  | — |  |  |  | (209,930 | )
Underwriting income |  |  | 8,667 |  |  |  | 13,404 |  |  |  | 3,213 |  |  |  | 808 |  |  |  |  |  |  |  | 26,092 |
Service and fee income |  |  | 5,241 |  |  |  | 16,506 |  |  |  | 4 |  |  |  | — |  |  |  | 3,438 |  |  |  | 25,189 |
Investment income and realized gain (loss) |  |  | 5,750 |  |  |  | 5,515 |  |  |  | 2,603 |  |  |  | 739 |  |  |  | — |  |  |  | 14,607 |
Other expenses |  |  | (7,312 | ) |  |  | (9,021 | ) |  |  | (2,431 | ) |  |  | (1,432 | ) |  |  | — |  |  |  | (20,196 | )
Interest expense |  |  | (1,359 | ) |  |  | (1,677 | ) |  |  | (452 | ) |  |  | (266 | ) |  |  | — |  |  |  | (3,754 | )
Foreign currency loss |  |  | — |  |  |  | (284 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (284 | )
Gain on life settlement contracts |  |  | 6,837 |  |  |  | 8,436 |  |  |  | 2,273 |  |  |  | 1,340 |  |  |  | — |  |  |  | 18,886 |
Provision for income taxes |  |  | (2,661 | ) |  |  | (4,908 | ) |  |  | (778 | ) |  |  | (177 | ) |  |  | (513 | ) |  |  | (9,037 | )
Equity in earnings of unconsolidated investment – related parties |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,819 |  |  |  | 1,819 |
Non-controlling interest |  |  | (2,947 | ) |  |  | (3,635 | ) |  |  | (980 | ) |  |  | (577 | ) |  |  | — |  |  |  | (8,139 | )
Net income attributable to AmTrust Financial Services, Inc. |  | $ | 12,216 |  |  | $ | 24,336 |  |  | $ | 3,452 |  |  | $ | 435 |  |  | $ | 4,744 |  |  | $ | 45,183 |
The following tables summarize long lived assets and total assets of the business segments as of March 31, 2012 and December 31, 2011:
(Amounts in Thousands) |  | Small Commercial Business |  |  | Specialty Risk and Extended Warranty |  |  | Specialty Program |  |  | Personal Lines Reinsurance |  |  | Corporate and other |  |  | Total |
As of March 31, 2012: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property and equipment, net |  | $ | 25,283 |  |  | $ | 25,125 |  |  | $ | 10,929 |  |  | $ | 2,464 |  |  | $ | — |  |  | $ | 63,801 |
Goodwill and intangible assets |  |  | 180,800 |  |  |  | 165,010 |  |  |  | 22,702 |  |  |  | — |  |  |  | — |  |  |  | 368,512 |
Total assets |  |  | 2,523,163 |  |  |  | 2,462,815 |  |  |  | 957,172 |  |  |  | 152,238 |  |  |  | — |  |  |  | 6,095,388 |
As of December 31, 2011: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property and equipment, net |  | $ | 17,767 |  |  | $ | 30,811 |  |  | $ | 10,762 |  |  | $ | 2,213 |  |  | $ | — |  |  | $ | 61,553 |
Goodwill and intangible assets |  |  | 123,976 |  |  |  | 167,782 |  |  |  | 22,858 |  |  |  | — |  |  |  | — |  |  |  | 314,616 |
Total assets |  |  | 2,150,824 |  |  |  | 2,482,018 |  |  |  | 912,476 |  |  |  | 133,429 |  |  |  | — |  |  |  | 5,678,747 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 131 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 + Details
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