EFTA01184781.pdf

SUBJECT TO COMPLETION PRELIMINARY PRO.SPE.CTU$ SUPPLEMENT DATED MARCH S. 2016 k to PROSPECTUS SUPPLEMENT (To Prospectus datedJune II, 2015) O C. E 23 w 2-: Depositary Shares ...., 5. E .= O. N o = c z. C. 03 ..... vs 7, , a =. Ca r) E AmTrust FINANCIAL o E AmTrust Financial Services, Inc. Depositary Shares, Each Representing .1140w of a Share of % Non-Cumulative Preferred Stock, Series E C oi = We are offering depusitace shares. each of which represents a 1110th interns in a share of our '4 Non-Cum Preferred "--• en .° Stock. Series E. $0.01 par cable per share. $1.000 liquidation preference per share (equivalent to $25 per depositary share) (the e = -El "Series E Preferred Stork"). The depositary shares am trident's, by depository receipts. Earle depositary share entitles the holder. to co o 'L through the depositary, to a proportional fractional interest in all rights and preferences of the Series E Preferred Stock represented a' thereby (including any diridend, liquidation. redemption I rating rights). .a = ''• Dividends on she Series E Preferred Stock represented by die depositary shares when. as and if declared by one Board of Directors or a duly a. co authorized c aaaaaaaaittee of the Board will accrue tttttt be payable on the liquidation preference on a oats.. Wire basis. quarterly in co = armors on Me /5th day ofMarch. Jane. .Sepsember cord December of each year (each. a "dividend pay,.ttttt s dale. ), commencing on June 1S. a a 2016. at an anginal rate of 'lc. Distributions will be made in respect of the depositary shares representing the Series E Preferred Stock if and = == to the extent dividends me paid on the related Series E Preferred Stork. co r as 5 Dividends on the Series E Preferred Stock represensed by the depositary shares are not rumidosire. Accordingly. in the rant diridends :62 are not declared on the Series E Preferred Stock represented by the depositary shares for pa,mesis on any diridend payment date, then o. m those dividends will not accumulate and will not be pii,able. If we hare not declared a dividend before the diridend payment date fur E a) any dividend period. we will hare nu obligation to pm dividends for that period. whether or not diridends on the Series E in a w Preferred Stock represented by the depositary shares ore declared for any future dividend period. ..= 15 Su long as any Series F Preferred Stock remains outstanding. no dividend shall be paid or declared on our common stock or any of our = g'• ma other securities ranking junior to the Series I Preferred Stork (other than a dividend payable solely in common stork or in such other junior securities), unless the full dividends for the latest completed dividend period on all outstanding Series E Preferred Stock and any = ca parity stock hare been declared and paid or provided for. a)• = The Series F Preferred Stack represented t,, the depositary shares is not redeemable prior so March • 2021. On and after that date. a she Series F Preferred Stock represented by the depositary shares still be redeemable at our option, for cash, in whole or in part, at a co IS redemption price of $1,000 per share of Series E Preferred Stock represented by the depositary shares (equiralent to $25 per 0 Cr. •-• = depository share). plus any declared and unpaid dividends on the shares of Series E Preferred Stork represented by the depositary at z shares called fur redemption for prior dividend periods, if any. plus accrued but unpaid dividends (whether or not declared) thereon for ' = she then..current diridend period, to. but excluding, the date of redemption, without accumulation of any other undeclared dividends. ti 5.. ca = See "Description of the F Preferred Stock—Redemption" in this I perms supplement. The depositary shares representing the to ›, Series E Preferred Stork will be red I if and to the extent the related shares of Series E Preferred Stock are redeemed by us. a., E = Neither the depositary shares nor the Series F Preferred Stork rep,,,,, lied thereby hare a stated maturity, nor will they be subject to o o zu o ..- any sinking fund or mandatory redemption. The Series E Preferred Stork represented by the depositary shares will not hare rating co co rights. except as set forth under "Description of the Series E Preferred Stock—Voting Rights" in this prospectus supplement. A holder of a .6 depositary shares representing the Series E Preferred Stork will be entitled to direct the depositary how to vote in such circumstances. = a See "Description of the Depositary Shares—Woting Rights"in this prospectus supplement. .. c a There is currently no public market for the depositary shares or the Series E Preferred Stock represented thereby. We intend to apply to list the C.3 depositaryshares representing the Series E Preferred Stock on the New York Stock Exchange (-NYSE") under the symbol "Ana' PR E" If the E 'E application is approved, we expect trading to commence within 30 days following the initial issuance of the depositary shares representing the cu o E Series E Preferred Stock. tu o Investing in the depositary shares and the Series F Preferred Stock represented thereby howlers risks. See "Risk Factors a to cu beginning on page 5.1.5 of this prospectus supple ,ni and on page 2 of the accompanying prospectus. as ace" as the risks =- .c described in the documents incorporated by reference in this prospectus supplement and the accompanying prospectus, to read = ru — 05 al important factors you sl Id consider before making a decision to invest in the depositary shams. The depositary shares "C; are not expected to be rated and may be subject to the risks associated with non-investment grade securities. a _ n o — u, Per Share Teat" at Public offeringprice $ $ Z"' n Underwriting' discounts and COMMiesions $ $ Proceeds, before expenses, to.dinTrust Financial Services, Inc. $ $ c o .E 0 (I) Assumes MO exercise of the underwriters'orer-allotment option described below. 15.... )6 Ire have granted the underwriters an option to purchase up to an additional depositary shares within 30 days after the a n = date of this prospectus supplement at the public offering price, less the underwriting discount, solely to cover over-allotments, if any. Neither the Securities and Exchange Commission, any state securities commission or any other regulatory body has .E cu approtod or disapproved of these securities or passed. upon the adequacy or accuracy of this prospectus supplement or the accompanyingprospectus. Any representation to the contrary is a criminal offense. c ‘E,' The underwriters expect to deliver the depositary shares in book-quky form only through the facilities of The Depository Truitt o Company and. its participants, including Euroclear Rank S.A./ as operator of the Euroclear System, and Clearstream 7: .E Banking, secrete anottyme, on or about , 2016. E •-• Joint Rook-Running Managers 0 a E Morgan Stanley PBS Investment Bank IVells Fargo Securities es to a ea 1-. fa The date of this prospectua supplement is March. , 1016 EFTA01184781  You should rely only on the information contained or incorporated by reference in this prospectus supplement, the accompanying prospectus and in any free writing prospectus filed by us with the Securities and Exchange Commission, or the SEC, for use in connection with this offering. Neither we nor the underwriters have authorized anyone to provide you with different or additional information and, accordingly, you should not rely on any such information if it is provided to you. We are not, and the underwriters are not, making an offer to sell, or soliciting an offer to buy, any of these securities in any jurisdiction where such an offer or sale is not permitted. You should not assume that the information contained or incorporated by reference in this prospectus supplement, the accompanying prospectus or any such free writing prospectus is accurate as of any date other than the respective dates of the related documents or the incorporated documents, as the case may be. References in this prospectus supplement and the accompanying prospectus to "we," "us," "our," "the Company" or "AmTrust" or other similar terms refer to AmTrust Financial Services, Inc. and its consolidated subsidiaries, unless we state otherwise or the context indicates otherwise. Additionally, in this prospectus supplement and the accompanying prospectus, unless otherwise stated or the context otherwise requires, references to "dollars" or "Jr are to the lawfril currency of the United States. S•i EFTA01184782  TABLE OF CONTENTS Prospectus Supplement Prospectus Page Page ABOUT THIS PROSPECTUS ABOUT THIS PROSPECTUS SUPPLEMENT S-1 RISK FACTORS 2 SUMMARY S-2 SPECIAL NOTE REGARDING FORWARD- CORPORATE AND OTHER LOOKING STATEMENTS 2 INFORMATION S-6 WHERE YOU CAN FIND MORE THE OFFERING S-7 INFORMATION 3 SUMMARY HISTORICAL FINANCIAL INCORPORATION OF CERTAIN DATA S-12 INFORMATION BY REFERENCE 3 RISK FACTORS S-15 AMTRUST FINANCIAL SERVICES, USE OF PROCEEDS S-19 INC. 4 RATIO OF EARNINGS TO FIXED USE OF PROCEEDS 5 CHARGES AND PREFERRED STOCK RATIO OF EARNINGS TO FIXED DIVIDENDS S-20 CHARGES 5 CAPITALIZATION S-2 I SUMMARY DESCRIPTION OF DESCRIPTION OF THE SERIES E SECURITIES WE MAY OFFER 6 PREFERRED STOCK S-22 DESCRIPTION OF DEBT SECURITIES .... 6 DESCRIPTION OF THE DEPOSITARY DESCRIPTION OF COMMON STOCK 15 SHARES S-30 DESCRIPTION OF PREFERRED STOCK ... 18 CERTAIN U.S. FEDERAL INCOME TAX DESCRIPTION OF DEPOSITARY CONSIDERATIONS S-35 SHARES 20 CERTAIN ERISA CONSIDERATIONS .... S-40 DESCRIPTION OF WARRANTS 23 UNDERWRITING S•4I DESCRIPTION OF UNITS 24 WHERE YOU CAN FIND MORE PLAN OF DISTRIBUTION 25 INFORMATION; INCORPORATION BY LEGAL MATTERS 28 REFERENCE S-47 EXPERTS 28 LEGAL MATTERS S-48 EXPERTS S•48 S-ii EFTA01184783  ABOUT THIS PROSPECTUS SUPPLEMENT This prospectus supplement is a supplement to the accompanying prospectus that is also a part of this document. The accompanying prospectus is part of a registration statement that we filed with the SEC using a shelf registration process. Under the shelf registration process, from time to time, we may offer debt securities. common stock, preferred stock, depositary shares, warrants and units. In the accompanying prospectus. we provide you with a general description of the securities we may offer from time to time under this shelf registration statement. In this prospectus supplement. we provide you with specific information about the depositary shares that we are selling in this offering and the Series E Preferred Stock represented thereby. Both this prospectus supplement and the accompanying prospectus include, or incorporate by reference, important information about us, the securities being offered and other information you should know before making a decision to invest in the depositary shares. This prospectus supplement also adds to. updates and changes information contained or incorporated by reference in the accompanying prospectus. If any specific information regarding the depositary shares or the Series E Preferred Stock represented thereby in this prospectus supplement is inconsistent with the more general description of the securities in the accompanying prospectus, you should rely on the information contained in this prospectus supplement. You should read this prospectus supplement, the accompanying prospectus and any free writing prospectus we file with the SEC in connection with this offering, as well as the additional information described under "Where You Can Find More Information; Incorporation by Reference" in this prospectus supplement. before making a decision to invest in the depositary shares. In particular, you should review the information under the heading "Risk Factors" included in our Annual Report on Form 10-K for the year ended December 31, 2015, which is incorporated by reference herein. S- I EFTA01184784  SUMMARY The information below is only a summary ofmore detailed information included elsewhere or incorporated by reference in this prospectus supplement and the accompanying prospectus. This summary does not contain all the information that you should consider before making a decision to invest in the securities in this offering. The other information is important, so please read this entire prospectus supplement and the accompanying prospectus, as well as the information incorporated by reference herein, cart:frilly. In particular, you should review the information under the heading "Risk Factors" in this prospectus supplement, the accompanying prospectus and included in our Annual Report on Fonn 10-Kfor the year ended December 31, 2015. OUR COMPANY Business Overview AmTrust Financial Services, Inc. is a Delaware corporation that was acquired by its principal stockholders in 1998 and began trading on the NASDAQ Global Select Market on November 13, 2006. We underwrite and provide property and casualty insurance products, including workers' compensation, commercial automobile, general liability and extended service and warranty coverage, in the United States and internationally to niche customer groups that we believe are generally underserved within the broader insurance market. Our business model focuses on achieving superior returns and profit growth with the careful management of risk. We pursue these goals through geographic and product diversification, as well as an in-depth understanding of our insured exposures. Our product mix includes, primarily, workers' compensation, extended warranty and other commercial property/casualty insurance products. Our workers' compensation and property/casualty insurance policyholders in the United States are generally small and middle market businesses. Our extended warranty customers are manufacturers, distributors and retailers of commercial and consumer products. We have also built a strong and growing distribution of extended warranty and specialty risk products, including liability and other property/casualty products, in Europe. The majority of our products are sold through independent third- party brokers, agents, retailers or administrators. Our strategy is to target small to middle size customer markets throughout the U.S. and Europe where our proprietary technology platform enables us to efficiently manage the high volume of policies and claims that result from serving large numbers of small policyholders and warranty contract holders. The technology we have developed offers a level of service that is a competitive advantage in these high volume, lower risk markets by enhancing our ability to service, underwrite and adjudicate claims. Additionally, ow ability to maintain and analyze high volumes of loss data over a long historical period allows us to better manage and forecast the underlying risk inherent in the portfolio. Since our inception in 1998, we have grown both organically and through an opportunistic acquisition strategy. We believe we approach acquisitions conservatively, and our strategy is to take relatively modest integration and balance sheet risk. Our acquisition activity has involved the purchase of companies, renewal rights to established books of insurance portfolios, access to distribution networks and the hiring of established teams of underwriters with expertise in our specialty lines. We are committed to driving long-term shareholder value and industry-leading returns on equity by continuing to execute on our lower risk, lower volatility business model and leveraging technology to help maintain a more efficient cost structure, consistently generate solid underwriting profits and ensure strong customer service and retention rates. Additionally, we are focused on further enhancing our economies of scale by opportunistically expanding our geographic reach and product set, growing our network of agents and other distributors, developing new client relationships and executing our acquisition strategy. We are also focused on maintaining our disciplined approach to capital management while maximizing an appropriate risk-adjusted return on our growing investment portfolio. We continue to carefully monitor and maintain appropriate levels of reserves and seek to minimize our reinsurance recoverable exposure in order to maintain a strong balance sheet. S-2 EFTA01184785 We intend to expand our business and capital base to take advantage of profitable growth opportunities while maintaining or improving our M. Best ratings. Our principal insurance subsidiaries are rated "A" (Excellent) by M. Best Company (`M. Best"), which is the third highest of 16 rating levels. Competition The insurance industry, in general, is highly competitive and there is significant competition in the commercial business insurance sector. Competition in the insurance business is based on many factors, including coverage availability, claims management, safety services, payment terms, premium rates, policy terms, types of insurance offered, overall financial strength. financial ratings assigned by independent rating organizations, such as . Best, and reputation. Some of the insurers with which we compete have significantly greater financial. marketing and management resources than we do. In the future, we may also compete with new market entrants. Our competitors include other insurance companies, state insurance pools and self-insurance funds. We generally target niche sectors and clients where the market is not as competitive as the broader market and where we have particular expertise and provide differentiated offerings compared to our competitors. More than one hundred insurance companies participate in the workers' compensation market in the United States. The insurance companies with which we compete vary by state and by the industries we target. We believe our com..ive advantages include our efficient underwriting and claims management practices and systems and our . Best ratings of "A" (Excellent). In addition, we believe our lower processing costs allow us to competitively price our insurance products. We believe the niche markets in the Specialty Risk and Extended Warranty sector in which we do business are less competitive than most other insurance sectors (including workers' compensation insurance). We believe our Specialty Risk and Extended Warranty teams are recognized for their knowledge and expertise in these targeted markets. Nonetheless, we face significant competition, including several internationally well-known insurers that have significantly greater financial, marketing and management resources and experience than we have. We believe that our competitive advantages include our ownership of both a U.S. warranty provider and a U.K. warranty provider, which enables us to directly administer the business, the ability to provide technical assistance to non-affiliate warranty providers, experienced underwriting, resourceful claims management practices and good relations with warranty administrators in the European Union, Asia and the United States. Our Specialty Program segment employs a niche strategy of targeting smaller businesses, which helps to differentiate our offerings from those of our competitors. Most of our competing carriers pursue larger risks. We do not compete for high exposure business and underwrite lower hazard classes of business where service and execution are the basis for attracting and retaining business as opposed to providing the lowest price. Our competitive M. Best rating and financial size allow us to compete favorably for target business. Underwriting and Claims Management Philosophy We believe that proactive and prompt claims management is essential to reducing losses and lowering loss adjustment expenses and enables us to more effectively and accurately measure reserves. To this end, we utilize our proprietary technology and extensive database of loss history in order to appropriately price and structure policies, maintain lower levels of loss, enhance ow ability to accurately predict losses, and maintain lower claims costs than the industry as a whole. We believe a strong underwriting foundation is best accomplished through careful risk selection and continuous evaluation of underwriting guidelines relative to loss experience. We are committed to a consistent and thorough review of each new underwriting opportunity and our portfolio as a whole, and, where permissible and appropriate, we customize the terms, conditions and exclusions of our coverage in order to manage risk and enhance profitability. S-3 EFTA01184786 Business Segments We manage our business through three segments, Small Commercial Business, Specialty Risk and Extended Warranty, and Specialty Program, which are based on the products we provide and the markets we serve. The following table provides our gross written premium by segment for the years ended December 31. 2015, 2014 and 2013: Year Ended December 31. (Amounts in Thousands) 2015 2014 2013 Small Commercial Business $3,320450 $2,999,714 $1,659,980 Specialty Risk and Extended Warranty 2,158,921 1,983,052 1,511,649 Specialty Program 1,319,966 1,105,199 879,455 Corporate and Other<' 65,827 Total $6,799,537 $6,087,965 $4,116,911 (I) Corporate and other includes a former segment related to a personal lines quota share with National General Holdings Corp.'s personal lines insurance companies. On August I, 2013, we received notice, effective August 1, 2013, that our participation in the personal lines quota share was terminated on a run-off basis. Additional financial information regarding our segments is presented in our Annual Report on Form 10-K for the year ended December 31, 2015, which is incorporated by reference herein. See "Where You Can Find More Information; Incorporation by Reference" in this prospectus supplement. Distribution We market our Small Commercial Business products through unaffiliated third parties that typically charge us a commission. We market our Specialty Risk and Extended Warranty products through unaffiliated third parties that, in lieu of a commission, charge an administrative fee, based on the policy amount, to the manufacturer or retailer that offers the extended warranty or accidental damage coverage plan. Accordingly. the success of our business is dependent upon our ability to motivate these third parties to sell our products and support them in their sales efforts. The Specialty Program business is distributed through a limited number of qualified general and wholesale agents who charge us a commission. We restrict our agent network to experienced, professional agents that have the requisite licensing to conduct business with us. We incentivize the sales organizations through profit sharing arrangements to assure the profitability of the business written. Acquisitions and Strategic Investments We have grown at an above•industry average rate through a combination of organic growth and strategic acquisitions of other companies or selected books of businesses. We have balanced our opportunistic acquisition strategy with a conservative approach to risk. We will continue to evaluate the acquisition of companies, distribution networks and renewal rights, and other alternative types of transactions as they present themselves. We seek transactions that we believe can be accretive to earnings and return on equity. For a more detailed description of our major acquisition and strategic investment activity during 2015 and 2014, and our investment in National General Holdings Corp., see "Item I. Business—Acquisitions and Strategic Investments" in our Annual Report on Form 10•K for the year ended December 31, 2015, which is incorporated by reference herein. Geographic Diversity Our insurance subsidiaries domiciled in the United States are collectively licensed to provide workers compensation insurance and commercial property and casualty insurance, including service contract S•4 EFTA01184787 reimbursement coverages related to our Specialty Risk and Extended Warranty segment. in 50 states, the District of Columbia and Puerto Rico, and in the year ended December 31, 2015, we wrote commercial property and casualty in 50 states and the District of Columbia. Through our insurance subsidiaries, we are licensed to provide specialty risk and extended warranty coverage in 50 states and the District of Columbia, and in Ireland and the United Kingdom and, pursuant to European Union law, certain other European Union member states. Through our subsidiary. AmTrust at Lloyd's, we are licensed to underwrite business internationally in locations where Lloyd's is licensed. Based on coverage plans written or renewed in 2015, 2014 and 2013, the European Union accounted for approximately 54%, 57% and 72%, respectively, of ow Specialty Risk and Extended Warranty business and in 2015, the United Kingdom, Italy and France accounted for approximately 44%, 24% and 6%, respectively, of our European Specialty Risk and Extended Warranty business. Reinsurance We believe reinsurance is a valuable tool to appropriately manage the risk inherent in our insurance portfolio as well as to enable us to reduce earnings volatility and generate stronger returns. We also utilize reinsurance agreements to increase our capacity to write a greater amount of profitable business. Our insurance subsidiaries utilize reinsurance agreements to transfer portions of the underlying risk of the business we write to various affiliated and third-party reinsurance companies. Reinsurance does not discharge or diminish our obligation to pay claims covered by the insurance policies we issue; however, it does permit us to recover certain incurred losses from our reinsurers and our reinsurance recoveries reduce the total aggregate amount of losses that we may incur as a result of a covered loss event. The total amount, cost and limits relating to the reinsurance coverage we purchase may vary from year to year based upon a variety of factors, including the availability of quality reinsurance at an acceptable price and the level of risk that we choose to retain for our own account. For a more detailed description of our reinsurance arrangements, including our quota share reinsurance agreement with Maiden Reinsurance Ltd. ("Maiden Reinsurance"). see "Reinsurance" in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2015, which is incorporated by reference herein. Ratings Our principal insurance subsidiaries are each rated "A" (Excellent) by M. Best. An "A" rating is the third highest of the 16 categories used by M. Best, and is assigned to companies that have, in M. Best's opinion, an excellent ability to meet their ongoing obligations to policyholders. Many insurance buyers, agents and brokers use the ratings assigned by M. Best and other agencies to assist them in assessing the financial strength and overall quality of the companies from which they are considering purchasing insurance. These ratings were derived from an in-depth evaluation of these subsidiaries' balance sheet strengths, operating performances and business profiles. M. Best evaluates, among other factors, the company's capitalization, underwriting leverage, financial leverage, asset leverage, capital structure, quality and appropriateness of reinsurance. adequacy of reserves, quality and diversification of assets, liquidity, profitability, spread of risk, revenue composition. market position, management, market risk and event risk. M. Best ratings are intended to provide an independent opinion of an insurer's ability to meet its obligations to policyholders and are not an evaluation directed at investors. S-5 EFTA01184788  CORPORATE AND OTHER INFORMATION Our principal executive offices are located at 59 Maiden Lane, 43 rd Floor, New York, New York 10038, and our telephone number at that location is (212) 220.7120. Our website address is Our intemet website and the information contained therein or connected thereto are not intended to be incorporated by reference into this prospectus supplement and the accompanying prospectus. This prospectus supplement refers to brand names, trademarks, service marks and trade names of us and other companies and organizations, and these brand names, trademarlcs, service marks and trade names are the property of their respective holders. EFTA01184789  THE OFFERING The following is a brief summary of certain terms of this offering. For a more complete description of the terms of the Series E Preferred Stock and the depositary shares representing the Series E Preferred Stock, see "Description of the Series E Preferred Stock" and "Description of the Depositary Shares" in this prospectus supplement and "Description of Preferred Stock" and "Description ofDepositary Shares" in the accompanying prospectus. Issuer AmTrust Financial Services, Inc. ("AmTrust") Securities offered depositary shares (or depositary shares if the underwriters exercise their over-allotment option in full), each representing a I/40'h interest in a share of % Non-Cumulative Preferred Stock, Series E (the "Series E Preferred Stock"). $0.01 par value per share, with a liquidation preference of $1.000 per share (equivalent to $25 per depositary share). of AmTrust. Each holder of a depositary share will be entitled, through the depositary, in proportion to the applicable fraction of a share of the Series E Preferred Stock represented by such depositary share, to all the rights and preferences of the Series E Preferred Stock represented thereby (including dividend, voting, redemption and liquidation rights). We may from time to time elect to issue additional depositary shares representing Series E Preferred Stock, and all the additional depositary shares would be deemed to form a single series with the depositary shares offered hereby. Dividends Dividends on the Series E Preferred Stock represented by the depositary shares, when, as and if declared by the Board of Directors of AmTrust or a duly authorized committee of the Board, will accrue and be payable on the liquidation preference amount from, and including, the original issue date, on a noncumulative basis, quarterly in arrears on each dividend payment date, at an annual rate of %. Dividends on the Series E Preferred Stock represented by the depositary shares will be computed on the basis of a 360-day year consisting of twelve 30•day months. Any dividends declared or payable on the Series E Preferred Stock represented by the depositary shares will be distributed to holders of depositary shares in the manner described under "Description of the Depositary Shares— Dividends and Other Distributions" in this prospectus supplement. Dividends on the Series E Preferred Stock represented by the depositary shares are not cumulative. Accordingly, in the event dividends are not declared on the Series E Preferred Stock represented by the depositary shares for payment on any dividend payment date, then such dividends will not accumulate and will not be payable. If our Board of Directors or a duly authorized committee of the Board has not declared a dividend before the dividend payment date for any dividend period. we will have no obligation to pay dividends for such dividend period after the dividend payment date for that dividend period, whether or not dividends on the Series E Preferred Stock represented by the depositary shares are declared for any future dividend period. S-7 EFTA01184790  During any dividend period, so long as any Series E Preferred Stock represented by the depositary shares remains outstanding. unless the full dividends for the latest completed dividend period on all outstanding shares of Series E Preferred Stock have been declared and paid: • no dividend shall be paid or declared on our common stock or other junior stock, other than a dividend payable solely in common stock or in such other junior stock; • no common stock or other junior stock shall be purchased, redeemed or otherwise acquired for consideration by us, directly or indirectly (other than (1) as a result of a reclassification of junior stock for or into other junior stock, or the exchange or conversion of one share of junior stock for or into another share of junior stock, (2) through the use of the proceeds of a substantially contemporaneous sale of junior stock or (3) in connection with grants or settlements of grants pursuant to any equity compensation plan adopted by us) nor shall any monies be paid to or made available for a sinking fund for the redemption of such stock; and • no shares of Series E Preferred Stock represented by the depositary shares or parity stock shall be repurchased, redeemed or otherwise acquired for consideration by us other than pursuant to pro rata offers to purchase all, or a pro rata portion. of the Series E Preferred Stock represented by the depositary shares and such parity stock except by conversion into or exchange for junior stock. For any dividend period in which dividends are not paid in full upon the Series E Preferred Stock represented by the depositary shares and any parity stock, all dividends declared for such dividend period with respect to the Series E Preferred Stock represented by the depositary shares and such parity stock shall be declared on a pro rata basis. See "Description of the Series E Preferred Stock— Dividends" and "Description of the Depositary Shares— Dividends and Other Distributions" in this prospectus supplement. Dividend Payment Dates Dividends on the Series E Preferred Stock represented by the depositary shares will be payable on the 15th day of March, June, September and December of each year, commencing on June 15, 2016. If any date on which dividends would otherwise be payable is not a business day, then the dividend payment date will be the next succeeding business day with the same force and effect as if made on the original dividend payment date. Dividend Periods A dividend period is the period from and including a dividend payment date to but excluding the next dividend payment date, except that the initial dividend period will commence on and include the original issue date of the Series E Preferred Stock represented by the depositary shares and will end on and exclude the June 15,2016 dividend payment date. Assuming an initial issue date of . 2016, the dividend for the initial dividend period will be approximately $ per share of Series E Preferred Stock represented by the depositary shares. 5-8 EFTA01184791 Redemption On and after March , 2021, the Series E Preferred Stock represented by the depositary shares will be redeemable at our option, in whole or in part. at a redemption price equal to $1.000 per share (equivalent to $25 per depositary share) plus declared and unpaid dividends on the shares of Series E Preferred Stock represented by the depositary shares called for redemption for prior dividend periods, if any, plus accrued but unpaid dividends (whether or not declared) thereon for the then-current dividend period, to, but excluding, the date of redemption, without accumulation of any other undeclared dividends. The depositary shares representing the Series E Preferred Stock will be redeemed if and to the extent that the related shares of Series E Preferred Stock are redeemed by us. Our ability to redeem the Series E Preferred Stock represented by the depositary shares as described above may be limited by the terms of our agreements governing our existing and future indebtedness and by the provisions of other existing and future agreements. The Series E Preferred Stock represented by the depositary, shares will not be subject to any sinking fund or other obligation of ours to redeem, purchase or retire the Series E Preferred Stock. See "Description of the Series E Preferred Stock—Redemption" and "Description of the Depositary Shares—Redemption" in this prospectus supplement. Ranking The Series E Preferred Stock represented by the depositary shares: • will rank senior to our common stock and any other junior stock with respect to the payment of dividends and distributions upon our liquidation, dissolution or winding-up. Junior stock includes our common stock and any other class or series of our capital stock that ranks junior to the Series E Preferred Stock represented by the depositary shares either as to the payment of dividends or as to the distribution of assets upon our liquidation, dissolution or winding-up; • will rank at least equally with each other class or series of our capital stock ranking on parity with the Series E Preferred Stock represented by the depositary shares, which we refer to as parity stock, as to dividends and distributions upon our liquidation, dissolution or winding-up. Parity stock includes our previously issued 6.75% Non-Cumulative Preferred Stock, Series A. $0.01 par value per share, $25 liquidation preference per share (the "Series A Preferred Stock"), our previously issued 7.25% Non- Cumulative Preferred Stock, Series B, $0.01 par value per share. $1,000 liquidation preference per share (the "Series B Preferred Stock"), represented by depositary shares, our previously issued 7.625% Non-Cumulative Preferred Stock, Series C, $0.01 par value per share, $1,000 liquidation preference per share (the "Series C Preferred Stock"), represented by depositary shares, and our previously issued 7.50% Non•Cumulative Preferred Stock. Series D. $0.01 par value per share, $1,000 liquidation preference per share (the "Series D Preferred Stock"), represented by depositary shares: and S-9 EFTA01184792  • will rank junior to each other class or series of our capital stock that by its terms ranks senior to the Series E Preferred Stock represented by the depositary shares as to dividends and distributions upon our liquidation or dissolution or winding-up. As of the date of this prospectus supplement, we do not have any outstanding shares or series of our capital stock that ranks equally with or senior to the Series E Preferred Stock represented by the depositary shares with respect to the payment of dividends and distribution of assets upon our liquidation, dissolution or winding up, other than the Series A Preferred Stock, the Series B Preferred Stock represented by depositary shares, the Series C Preferred Stock represented by depositary shares and the Series D Preferred Stock represented by depositary shares. As of the date hereof, we have 4,600.000 shares of Series A Preferred Stock outstanding having an aggregate liquidation preference of $115,000,000, 105,000 shares of Series B Preferred Stock represented by depositary shares outstanding having an aggregate liquidation preference of $105,000,000, 80,000 shares of Series C Preferred Stock represented by depositary shares outstanding having an aggregate liquidation preference of $80,000,000 and 182500 shares of Series D Preferred Stock represented by depositary shares outstanding having an aggregate liquidation preference of $182,500,000. Liquidation Rights Upon any voluntary or involuntary liquidation, dissolution or winding- up of AmTrust, holders of shares of the Series E Preferred Stock represented by the depositary shares and, in turn, the depositary shares are entitled to receive out of our assets available for distribution to stockholders, before any distribution is made to holders of common stock or other junior stock, a liquidating distribution in the amount of the liquidation preference of $1,000 per share of such Series E Preferred Stock represented by the depositary shares (equivalent to $25 per depositary share) plus any declared and unpaid dividends, without accumulation of any undeclared dividends. Distributions will be made pro rata as to the Series E Preferred Stock represented by the depositary