Business Moves

AmTrust, American Capital

New York-based AmTrust Financial Services, Inc. is making an investment in American Capital Acquisition Corp. in connection with the acquisition by ACAC of GMAC’s U.S. consumer property/ casualty insurance business.

AmTrust said it will initially invest approximately $42.5 million in a convertible preferred security. GMAC’s consumer property/ casualty insurance unit sells automobile coverages through independent agents in the U.S. It utilizes a network of 10,500 agents in 12 core markets, as well as exclusive relationships with 23 affinity partners.

GMAC’s U.S. consumer property/ casualty insurance business had net written premium in excess of $1 billion in 2008 that encompassed all 50 states. Its coverages include standard/preferred auto, RVs, non-standard auto and commercial auto. The investment includes 10 statutory insurance companies that write the automobile coverages for GMAC.

American Capital Acquisition Corp. is an affiliate of American Capital.

Partners, a newly formed acquisition corporation. The principal of ACAC was a founder of AmTrust Financial Services, Inc. and Maiden Holdings, Ltd.

“This investment is not only a very attractive preferred equity investment for AmTrust, but it provides strong strategic advantages as well,” said Barry Zyskind, president and CEO of AmTrust.

He cited as gains the immediate access to a new distribution force of 10,500 agents that could cross sell AmTrust products, along with the fee income the investment could generate for Amtrust.

The acquisition is expected to close in the first quarter of 2010.

Elephant

Virginia-based Elephant Insurance, a recently launched direct writer for auto insurance, has opened a new 26,000-square-foot office in Glen Allen. Elephant currently has 50 employees and plans to add an additional 100 by the end of next year.

Aquiline Capital, Conning

Private equity firm Aquiline Capital Partners LLC, which is run by Jeffrey Greenberg, has acquired insurance consulting and asset management provider Conning & Co. from Swiss Reinsurance Co. Ltd.

Conning & Co. reported the closing of the transaction today. Conning is headquartered in Hartford, Connecticut with additional offices in New York, London and Dublin. Terms of the deal were not disclosed. When the deal was announced in June, Conning said it would use Aquiline’s investment to strengthen its infrastructure, add to its services, acquire talent and pursue strategic opportunities.

Conning has about $70 billion of general account assets under management and $100 billion of total assets under contract.

New York-based Aquiline invests in financial services companies including property and casualty insurance, asset management and life insurance.

Greenberg, who had been chief executive of insurance broker Marsh & McLennan Cos., is the son of former American International Group Inc. Chief Executive Maurice “Hank” Greenberg.

Tower, AequiCap

New York-based property/casualty insurer Tower Group, Inc. has acquired the renewal rights to the workers’ compensation business of AequiCap Program Administrators, an underwriting agency based in Fort Lauderdale, Florida.

The company said that the business subject to the agreement primarily consists of small, low to moderate hazard workers’ compensation policies in Florida that are consistent with Tower’s current underwriting guidelines.

AequiCap’s employees involved in the servicing of the workers compensation business will become employees of Tower, according to the company. The business is expected to contribute approximately $40 million in premiums on an annual basis.

Michael H. Lee, president and CEO of Tower Group, Inc., said that through its CastlePoint operations, Tower has worked with AequiCap since 2007 to provide insurance services and thus is familiar with the business.