8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported)  February 22, 2007

AmTrust Financial Services, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-33143	04-3106389
(State or other jurisdiction of incorporation)	(Commission File Number)	IRS Employer Identification No.)

59 Maiden Lane, 6th Floor, New York, New York	10038
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (212) 220-7120

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.133-4 (c))

Item 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION

All of the information furnished in Items 2.02 and 9.01 of this report, including the accompanying exhibits, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise and shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, except to the extent expressly set forth by specific reference in such filing.

On February 22, 2007, AmTrust Financial Services, Inc. issued a press release announcing its results of operations for the fourth quarter and year ended December 31, 2006 and the scheduling of a conference call on February 23, 2006 with respect thereto. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K and is incorporated by reference to this Item 2.02 as if fully set forth herein.

Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(a) Not applicable.

(b) Not applicable.

(c) Not applicable.

(d) Exhibits. The information contained in this report 8-K, including Exhibit 99.1, shall not be deemed “filed” with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the Company under the Securities Act of 1933, as amended.

Number	Description
99.1	Press release dated February 22, 2007 reporting the results of operations for the quarter and year ended December 31, 2006 issued by AmTrust Financial Services, Inc.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AmTrust Financial Services, Inc

(Registrant)

Date       February 22, 2006
	/s/ Stephen Ungar
	Stephen Ungar Secretary

EX-99.1

For more information, please contact:

AmTrust Financial Services, Inc.

Mr. Hilly Gross Mr. Ronald Pipoly, Jr.

Vice President, Investor Relations Chief Financial Officer

212.220.7120 x7023 216.328.6116

hgross@amtrustgroup.comrpipoly@amtrustgroup.com

For immediate release

February 22, 2007

AmTrust Financial Services, Inc. Reports Record Fourth Quarter Net Income of $17.4 million

(New York) - AmTrust Financial Services, Inc. (NASDAQ: AFSI) today reported net income of $17.4 million and revenues of $120.2 million for the fourth quarter 2006. For the year ended December 31, 2006 the Company reported net income of $48.9 million and revenues of $384.0 million. “We are very pleased with our fourth quarter and year-end financials, reflecting strong growth, a responsible underwriting philosophy and diligent cost controls”, stated Barry Zyskind, president and chief executive officer.

Fourth Quarter Overview:

The Company reported $17.4 million in net income, or $0.29 per share, for the quarter ended December 31, 2006.

Fourth Quarter and Year Ended 2006 Highlights:

· Net income from continuing operations up 82.7% for the fourth quarter of 2006 compared to the fourth quarter of 2005

· Net income from continuing operations up 136.0% for year ended December 31, 2006 compared to the year ended December 31, 2005

· Quarterly earnings per share was $0.29

· Year ended December 31, 2006 earnings per share was $0.87

· Annualized quarterly return on equity for the fourth quarter was 21.0%

· Book value per share was $5.69 (as of December 31, 2006)

· GAAP combined ratio for the fourth quarter was 91.1%

· GAAP combined ratio for the year was 91.9%

Fourth Quarter and Year Ended 2006 Results:

Revenue and comprehensive earnings:

Net revenue in the fourth quarter 2006 increased by $54.8 million or 83.8% to $120.2 million from $65.4 million in the fourth quarter 2005. Net revenue for the year ended December 31, 2006 increased by $143.4 million or 59.6% to $384.0 million from $240.6 million for the year ended December 31, 2005.

Net earned premium in the fourth quarter 2006 increased by $45.4 million or 78.4%, to $103.2 million from $57.9 million in the fourth quarter 2005. Net earned premium for the year ended December 31, 2006 increased by $113.0 million or 52.3% to $329.0 from $216.0 million for the year ended December 31, 2005. The increase is primarily attributable to premium growth achieved through the successful integration of business acquired in renewal rights transactions as well as internal growth.

Net investment income including realized gains and losses in the fourth quarter 2006 increased by $8.7 million or 189.1% to $13.3 million from $4.6 million in the fourth quarter 2005. Net investment income including realized gains for the year ended December 31, 2006 increased by $26.0 million or 158.5% to $42.4 million from $16.4 million for the year ended December 31, 2005. The primary reasons for the increase in investment income were the Company’s successful liquidation of a subsidiary which generated $80.0 million in the second half of 2005 and the Company’s February 2006 private placement, which generated net proceeds of approximately $166.0 million. In addition, for the year ended December 31, 2006, the Company generated $168.5 million of positive cash flow from operations.

Comprehensive earnings, which include after-tax unrealized gains/loss from the investment portfolio, was $58.1 million , or $1.03 per share for the year ended December 31, 2006 compared to $10.4 million for the year ended December 31, 2005 or $0.38 per share.

Expenses:

The Company’s loss ratio for the quarter ended December 31, 2006 was 62.1% compared to 58.7% for the quarter ended December 31, 2005. The Company’s loss ratio for the year ended December 31, 2006 was 63.9% compared to 65.7% for the year ended December 31, 2005. The Company continues to see stable trends in its loss ratio.

Policy Acquisition Expense, Salaries and Benefits Expense and Other Insurance General and Administrative Expense for the year ended 2006 increased by $29.2 million to $92.4 from $63.2 million for the year ended December 31, 2005. Despite the increase, the expense ratio for the year ended December 31, 2006 decreased to 28.1% from 29.3% for the year ended December 31, 2005.

The decrease is the result of the Company’s ability to leverage its current infrastructure.

Interest expense in the fourth quarter 2006 increased to $1.7 million from $1.1 million in the fourth quarter of 2005. The increase is the result of the issuance by the Company in July 2006 of $30.0 million of trust preferred securities.

Other Matters:

Shareholders Equity as of December 31, 2006 increased to $341.0 million from $118.4 million as of December 31, 2005. The increase was due in large measure to the issuance of 25.6 million shares of common stock in a private placement, which generated net proceeds of approximately $166.0 million as well as earnings for the year ended December 31, 2006. In connection with the private placement, the Company converted its outstanding preferred shares into 10.3 million shares of common stock.

As of December 31, 2006 the Company’s debt-to-equity ratio was 24.2%. The Company’s debt relates to three trust preferred securities offerings in which the Company participated in 2005 and 2006.

Conference Call:

On Friday, February 23, 2007 at 10a.m. ET, the company will hold a conference call that can be accessed as follows:

Dial-in: 800.819.9193

In order to participate in the conference call, you must register at:

http://ir.amtrustgroup.com

A live broadcast of the call will be available on-line at the above website. An on-line replay will follow shortly after the call.

In addition, a telephonic replay will be available for seven days and can be accessed by dialing 719.457.0820 or 888.203.1112. Enter replay passcode 1271994.

About AmTrust Financial Services, Inc.

AmTrust Financial Services, Inc., headquartered in New York City, is a multinational specialty property and casualty holding company, which, through its insurance carriers, offers specialty property and casualty insurance products, including workers’ compensation, commercial automobile and general liability; extended service and warranty coverage. For more information about AmTrust, visit www.amtrustgroup.com, or call AmTrust toll-free at 866.203.3037.

Forward Looking Statement:

This news release contains “forward-looking statements” which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements are based on the Company’s current expectations and beliefs concerning future developments and their potential effects on the Company. There can be no assurance that actual developments will be those anticipated by the Company. Actual results may differ materially from those projected as a result of significant risks and uncertainties, including non-receipt of the expected payments, changes in interest rates, effect of the performance of financial markets on investment income and fair values of investments, development of claims and the effect on loss reserves, accuracy in projecting loss reserves, the impact of competition and pricing environments, changes in the demand for the Company’s products, the effect of general economic conditions, adverse state and federal legislation, regulations and regulatory investigations into industry practices, developments relating to existing agreements, heightened competition, changes in pricing environments, and changes in asset valuations. The Company undertakes no obligation to publicly update any forward-looking statements.

###

AmTrust Financial Services, Inc.
Income Statement
(in thousands, except per share data)
	Year Ended December 31,						Three Months Ended December 31,
	2006			2005			2006			2005
Gross Written Premium	$	526,074		$	286,131		$	153,071		$	57,950
Revenue:
Premium Income
Net Premiums Written	$	436,314		$	259,213		$	121,971		$	55,470
Change in Unearned Premium		107,302			43,183			18,730			(2,414	)
		329,012			216,030			103,241			57,884
Fee Income		12,403			8,196			3,468			2,924
Finance and Interest Income		27,583			11,534			8,623			3,328
Net Realized Gains		14,783			4,875			4,648			1,285
Other		244			-			244			-
		55,013			24,605			16,983			7,537
Total Revenue		384,025			240,635			120,224			65,421
Loss and Loss Adjustment Expense		210,140			142,006			64,132			33,971
Policy Acquisition Expenses		43,302			30,082			16,195			7,230
Salaries and Benefits		28,277			13,903			8,531			3,278
Other insurance General and administrative expense		20,804			19,257			5,216			7,494
Other Underwriting Expenses		10,561			5,805			1,688			2,125
Other		244			-			244			-
		313,328			211,053			96,006			54,098
Income from Continuing operations		70,697			29,582			24,218			11,323
Other Income (Expense)
Foreign Currency Gain		833			388			376			388
Interest Expense		(5,326	)		(2,784	)		(1,673	)		(1,050	)
		(4,493	)		(2,396	)		(1,297	)		(662	)
Income from Continuing Operations before Provision for Income Taxes		66,204			27,186			22,921			10,661
Provision for Income taxes		17,779			6,666			5,721			1,247
Net income from continuing operations		48,425			20,520			17,200			9,414
Foreign currency gain on discontinued operations		-			21,745			-			1,173
Gain (loss) from discontinued operations		431			(4,706	)		181			(1,247	)
		431			17,039			181			(74	)
Net Income		48,856			37,559			17,381			9,340
Preferred Stock Dividends		-			(1,200	)		-			-
Net income available to common shareholders	$	48,856		$	36,359		$	17,381		$	9,340
Earnings per common share
Income (Loss) from Continuing Operations	$	0.86		$	0.80		$	0.29		$	0.39
Income (Loss) from Discontinued Operations		0.01			0.71			-			-
	$	0.87		$	1.51		$	0.29		$	0.39
Weighted average number of shares outstanding		56,315			24,089			59,959			24,089
Combined Ratio		91.9	%		95.0	%		91.1	%		89.8	%
Annualized Return on Equity (1)		21.1	%		17.3	%		20.8	%		20.8	%
Earnings Per Share	$	0.87		$	1.51		$	0.29		$	0.39
Comprehensive Earnings Per Share	$	1.03		$	0.38		$	0.34		$	0.24

(1) - Calculated by dividing by net income without currency gain and discontinued operations by the average shareholders' equity. The calculations have been annualized

AmTrust Financial Services, Inc.

Balance Sheet Highlights

(in thousands)

	December 31,
	2006		2005
Invested assets	$	725,954	$	299,965
Cash and cash equivalents		59,917		115,847
Premiums receivables		147,779		81,070
Intangible assets		27,256		20,752
Total Assets		1,185,953		612,890
Loss and loss expense reserves		295,805		168,007
Unearned premium		323,155		156,802
Junior subordinate debt		82,476		51,548
Total Stockholders' equity	$	341,040	$	118,411