American Safety Insurance Holdings, Ltd.
Reports 32% Increase in Fourth Quarter Insurance Earnings; Book Value Per Share
Increases to $17.54

HAMILTON, Bermuda March 1, 2006 — American Safety Insurance Holdings, Ltd. (NYSE: ASI) today reported a 32% increase in earnings from insurance operations to $3.8 million for the quarter ended December 31, 2005 from $2.9 million for the same period in 2004. Net earnings from insurance operations for the year ended December 31, 2005 increased to $13.6 million from $4.3 million for the same period in 2004. Net earnings for the fourth quarter increased to $4.5 million or $0.63 per diluted share, from $3.8 million or $0.52 per diluted share in the same period in 2004. Net earnings for the year ended December 31, 2005 were $14.7 million or $2.05 per diluted share, as compared to $14.8 million or $2.01 per diluted share for the same period of 2004.

Net earnings are detailed as follows (in thousands):

                                              Quarter Ended                               Year Ended
                                              December 31,                               December 31,
                                        2005                 2004                 2005                 2004 

     Insurance Operations                 $3,773               $2,853              $13,618              $4,263
     Real Estate Operations                 (126)               2,010                  209               7,816
     Other                                   877               (1,110)                 829               2,678
                                   ----------------    -----------------    -----------------    ------------------
     Net Earnings                         $4,524               $3,753              $14,656             $14,757
                                   ================    =================    =================    ==================

Financial highlights in the quarter and year-end included:

o    Book value per share increased 9.4% for the year to $17.54.
o    Net earnings from insurance operations increased 32.3% for the quarter and 219.5% for the year.
o    Gross premiums written rose 5.5% for the quarter and 7.4% for the year.
o    Net premiums earned grew 7.1% for the quarter and 1.6% for the year.
o    Net investment income increased 39.5% for the quarter and 46.5% for the year.
o    Loss ratio improved to 59.1% for the quarter from 64.2% for the same period of 2004.
o    Loss ratio improved to 60.9% for the year from 68.6% for the previous year.
o    Combined ratio was 99.5% for the quarter compared to 98.5% for the same period of 2004.
o    Combined ratio improved to 97.8% for the year from 102.7% for the previous year.

Commenting on the results, Stephen R. Crim, President and Chief Executive Officer of American Safety Insurance Holdings, Ltd., said: “I am pleased with the continued premium growth and increased net earnings in our insurance operations, which have replaced the earnings previously generated by the real estate operations. Moreover, we have established a track record of solid insurance results, and have strengthened our infrastructure to position ourselves to take advantage of market opportunities. We intend to capitalize on favorable market conditions by increasing our net retentions on business we write, continuing to grow our core business lines, opportunistically developing new products for underserved markets and exploring acquisition opportunities.”

The increase in net earnings from insurance operations for the fourth quarter of 2005 was due to improved underwriting results in the Company’s core business lines and increased investment income. The fourth quarter underwriting results included the establishment of a valuation allowance of $1.3 million on reinsurance recoverables and prior year reserve development of $1.4 million. Absent these charges, the combined ratio for the quarter would have been 92.4%. The expected decrease in real estate earnings for the quarter was due to the substantial completion of the Company’s real estate operations. Earnings from other items of $877,000 for the quarter resulted from the settlement of the Principal Management, Inc. rescission litigation for an amount less than previously accrued. This settlement concludes all outstanding litigation associated with the rescission. Total revenues for the quarter decreased 19.8% to $42.2 million when compared to the same quarter of 2004 as a result of the expected decrease in real estate income. Net premiums earned in the quarter increased 7.1% to $38.1 million from $35.6 million in the same period in 2004. Net investment income for the quarter increased 39.5% to $4.1 million from $2.9 million in the fourth quarter of 2004 due to increased invested assets and an increase in the annualized yield to 4.1% from 3.7%.

The increase in insurance earnings for the year ended December 31, 2005 was due to improved underwriting results in the Company’s core business lines and increased investment income. The 2005 underwriting results included an accrual for reinsurance reinstatement premiums of $2.3 million from run-off lines; the establishment of a valuation allowance for reinsurance recoverables of $1.3 million; and prior year reserve development of $2.6 million. Absent these charges, the combined ratio for the year would have been 93.3%. The expected decrease in real estate earnings of $7.6 million for the year was due to the substantial completion of the Company’s real estate operations. Earnings from other items for the year were $829,000, primarily attributable to the settlement of the Principal Management, Inc. rescission litigation, as compared to $2.6 million for the same period in 2004, primarily attributable to the payment of an impaired notes receivable. Total revenues for the year decreased 27.4% to $155.9 million when compared to the same in 2004 as a result of the expected decrease in real estate income. Net premiums earned for the year increased 1.6% to $138.5 million from $136.4 million in the same period in 2004. Net investment income for the year increased 46.5% to $14.3 million from $9.8 million for the same period in 2004 due to increased invested assets and an increase in the annualized yield to 3.9% from 3.6%.

The Company’s book value per share increased 9.4% to $17.54 at December 31, 2005 from $16.04 at December 31, 2004, due primarily to the Company’s net earnings during the year, offset, in part, by a change in unrealized gains and losses on the Company’s investment portfolio during the year due to increases in interest rates.

Conference Call

A conference call to discuss fourth quarter and year-end 2005 results is scheduled for Thursday, March 2, 2006 at 9:00 a.m. (Eastern Time), which will be broadcast through the Investor Broadcast Network’s Vcall website at www.vcall.com or the Company’s website at www.americansafetyinsurance.com. A replay will be available on the Company’s website.

American Safety Insurance Holdings, Ltd. is a specialty insurance holding company, which, through its subsidiaries, provides innovative insurance solutions in the alternative insurance market for environmental remediation, contracting and other specialty risks. Additional information about the Company can be found at www.americansafetyinsurance.com. This press release contains forward-looking statements. These forward-looking statements reflect the Company’s current views with respect to future events and financial performance, including insurance market conditions, premium growth, acquisitions and new products and the Company’s real estate development project. Forward-looking statements involve risks and uncertainties which may cause actual results to differ materially, including competitive conditions in the insurance industry, levels of new and renewal insurance business, developments in loss trends, adequacy and changes in loss reserves and actuarial assumptions, timing or collectibility of reinsurance recoverables, market acceptance of new coverages and enhancements, changes in reinsurance costs and availability, potential adverse decisions in court and arbitration proceedings, the integration and other challenges attendant to acquisitions, and changes in levels of general business activity and economic conditions. For additional factors, which could influence the Company’s operating and financial performance, see the Company’s filings with the Securities and Exchange Commission.

Contacts:
American Safety Insurance Services, Inc.                          Cameron Associates
Stephen Crim or Steven Mathis                                     Kevin McGrath
(770) 916-1908                                                    (212) 245-4577


The following information was filed by American Safety Insurance Holdings Ltd (ASI) on Wednesday, March 1, 2006 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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