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) August 8, 2007

AmTrust Financial Services, Inc. 

(Exact name of registrant as specified in its charter)

Delaware	001-33143	04-3106389
(State or other jurisdiction	(Commission	IRS Employer
of incorporation)	File Number)	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

On August 8, 2007, AmTrust Financial Services, Inc. issued a press release announcing its results of operations for the second quarter ended June 30, 2007 and the scheduling of a conference call on August 9, 2007 with respect thereto. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K and is furnished as Exhibit 99.1 to this report.

Item 9.01FINANCIAL STATEMENTS AND EXHIBITS.

(a) Not applicable.

(b) Not applicable.

(c) Not applicable.

(d) Exhibits

Exhibit Number	Description
99.1	Press release dated August 8, 2007.

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)
DateAugust 8, 2007

/s/ Stephen Ungar

Stephen Ungar

Secretary

EX-99.1

Exhibit 99.1

For more information, please contact:

AmTrust Financial Services, Inc.

Hilly Gross	Ronald Pipoly, Jr.
Vice President, Investor Relations	Chief Financial Officer
212.220.7120 x7023	216.328.6116
hgross@amtrustgroup.com	rpipoly@amtrustgroup.com

For immediate release

August 8, 2007

AmTrust Financial Services, Inc. Reports Record Second Quarter

Net Income of $21.4 million

(New York) - AmTrust Financial Services Inc. (NASDAQ: AFSI), today reported net income of $21.4 million and revenues of $152.9 million for the second quarter 2007. “The second quarter results confirm the validity of our strategic growth objectives, as well as underscore the unique niche that AmTrust continues to occupy in specialized areas of insurance,” stated Barry Zyskind, president and chief executive officer.

In addition, AmTrust announced that it has no exposure to sub-prime mortgages. Virtually all of the mortgage-backed securities in the Company’s portfolio are government or agency-guaranteed.

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Second Quarter Overview:

The Company reported $21.4 million in net income, or $0.36 per basic share, for the quarter ended June 30, 2007.

Second Quarter and Six Months Highlights:

·   Net income from continuing operations up 121.4% for the second quarter of 2007 compared to the second quarter of 2006

·   Net income from continuing operations up 127.4% for the six months of 2007 compared to the six months of 2006

·   Quarterly operating earnings per basic share was $0.31

·   Quarterly net realized gains per basic share was $0.05

·   Quarterly earnings per basic share was $0.36

·   Six months ended June 30, 2007 earnings per basic share was $0.72

·   Annualized quarterly return on equity for the second quarter was 23.1%

·   Book value per basic share was $6.32 (as of June 30, 2007)

·   GAAP combined ratio for the second quarter was 90.0%

·   GAAP combined ratio for the six months ended was 89.6%

Second Quarter and Six Months Results:

Revenue:

Net revenue in the second quarter 2007 increased by $65.6 million or 75.1% to $152.9 million (excluding other investment gain on managed assets) from $87.3 million in the second quarter 2006. Net revenue for the six months ended June 30, 2007 increased by $127.6 million or 76.9% to $293.5 million (excluding other investment gain on managed assets) from $165.9 million in the second quarter 2006.

Net earned premium in the second quarter 2007 increased by $58.0 million or 80.1%, to $130.4 million from $72.4 million in the second quarter 2006. Net earned premium for the six months ended June 30, 2007 increased by $106.9 million or 75.2%, to $249.1 million from $142.2 million in the second quarter 2006. 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.

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Net investment income including realized gains and losses in the second quarter 2007 increased by $7.6 million or 71.7% to $18.2 million from $10.6 million in the second quarter 2006. Average invested assets for the three months ended June 30, 2007 was $896.5 million compared to $613.8 million for the three months ended June 30, 2006. Net investment income including realized gains and losses for the six months ended June 30, 2007 increased by $18.1 million or 103.4% to $35.6 million from $17.5 million in the first half of 2006. The primary reason for the increase is the growth in average invested assets over the periods.

Expenses:

The Company’s loss ratio for the quarter ended June 30, 2007 was 65.2% compared to 64.7% for the quarter ended June 30, 2006. The Company’s loss ratio for the six months ended June 30, 2007 was 64.0% compared to 63.7% for the six months ended June 30, 2006.

Policy Acquisition Expense, Salaries and Benefits Expense and Other Insurance General and Administrative Expense for the quarter ended June 30, 2007 increased by $11.4 million to $32.4 million from $21.0 million for the quarter ended June 30, 2006. Despite the increase, the expense ratio for the quarter ended June 30, 2007 decreased to 24.8% from 29.0% for the quarter ended June 30, 2006. Policy Acquisition Expense, Salaries and Benefits Expense and Other Insurance General and Administrative Expense for the six months ended June 30, 2007 increased by $22.3 million to $63.5 million from $41.2 million for the six months ended June 30, 2006. Despite the increase, the expense ratio for the quarter ended June 30, 2007 decreased to 25.5% from 29.0% for the six months ended June 30, 2006.

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The decreases are the result of the Company’s ability to leverage its current infrastructure.

Interest expense in the second quarter 2007 increased to $2.5 million from $1.0 million in the second quarter of 2006. The increase is the result of the issuance by the Company in the last twelve months of $70.0 million of trust preferred securities.

Other Matters:

Shareholders’ Equity as of June 30, 2007 increased to $379.2 million from $306.9 million as of June 30, 2006.

As of June 30, 2007 the Company’s debt-to-capitalization ratio was 24.6%. The Company’s debt relates to four trust preferred securities offerings in which the Company participated in between 2005 and March 2007.

Conference Call:

On August 9, 2007 at 10 a.m. ET, the company will hold a conference call that can be accessed as follows:

Dial-in: 866.409.1555

Passcode: 6234315

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 888.203.1112. Enter replay passcode 6234315.

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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.

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AmTrust Financial Services, Inc.
Income Statement
(in thousands, except per share data)
(Unaudited)
	Three Months Ended June 30,						Six Months Ended June 30,
	2007			2006			2007			2006
Gross premium written	$	210,020		$	113,732		$	399,693		$	237,010
Premium income
Net premium written	$	163,522		$	97,991		$	324,141		$	208,744
Change in unearned premium		33,102			25,556			75,029			66,499
		130,420			72,435			249,112			142,245
Fee income		4,292			4,229			8,782			6,115
Investment income, net		13,234			6,086			24,625			11,421
Net realized gains		4,962			4,515			11,022			6,091
Other investment gain on managed assets		2,191			-			1,901			-
		24,679			14,830			46,330			23,627
Total revenue		155,099			87,265			295,442			165,872
Loss and loss adjustment expense		84,999			46,884			159,556			90,658
Policy acquisition expenses		17,447			8,149			32,030			16,472
Salaries and benefits		9,921			6,614			18,933			11,732
Other insurance general and administrative expense		5,004			6,256			12,578			13,039
Other underwriting expenses		3,427			4,850			6,540			5,826
		120,798			72,753			229,637			137,727
Income from continuing operations		34,301			14,512			65,805			28,145
Other income (expense)
Foreign currency gain (loss)		629			(113	)		119			(15	)
Loss from equity investment		(215	)		-			(215	)		-
Interest expense		(2,531	)		(1,030	)		(4,335	)		(2,243	)
		(2,117	)		(1,143	)		(4,431	)		(2,258	)
Income from continuing operations before provision for income taxes		32,184			13,369			61,374			25,887
Provision for income taxes		8,597			3,816			16,599			7,075
Minority interest in net loss of subsidiary		2,191			-			1,901			-
Income from continuing operations		21,396			9,553			42,874			18,812
Discontinued operations		-			250			-			250
Net income available to common shareholders	$	21,396		$	9,803		$	42,874		$	19,062
Earnings per common share:
Basic earnings per share	$	0.36		$	0.16		$	0.72		$	0.36
Diluted earnings per share	$	0.35		$	0.16		$	0.71		$	0.36
Weighted average number of basic shares outstanding		59,959			59,943			59,959			52,289
Weighted average number of diluted shares outstanding		60,535			59,943			60,297			52,289
Combined ratio		90.0	%		93.7	%		89.6	%		92.7	%
Annualized return on equity		23.1	%		12.9	%		23.8	%		17.9	%

AmTrust Financial Services, Inc.

Balance Sheet Highlights

(in thousands)

(Unaudited)

		June 30,		December 31,
		2007		2006
Cash, cash equivalents and investments, net	$	929,654	$	785,780
Premiums receivables		239,257		147,779
Goodwill and intangible assets		40,376		29,369
Total assets		1,653,950		1,223,715
Loss and loss expense reserves		385,961		295,805
Unearned premium		451,995		323,155
Junior subordinate debt		123,714		82,476
Total stockholders' equity	$	379,187	$	340,479