American Safety Insurance Holdings, Ltd. Reports

37% Net Earnings Increase for the Year and 6% for the Fourth Quarter

Book Value per Outstanding Share Increases 16% for the Year to $21.53

 

HAMILTON, Bermuda, March 5, 2008 -American Safety Insurance Holdings, Ltd, (NYSE: ASI) today reported a 6% increase in fourth quarter net earnings to $6.8 million, or $0.61 per diluted share, from $6.4 million, or $0.59 per diluted share for the same period in 2006.

 

Net earnings for the year ended December 31, 2007 increased 37% to $28.2 million, or $2.56 per diluted share, as compared to $20.5 million, or $2.26 per diluted share for the same period of 2006. Book value per outstanding share increased 16% for the year to $21.53 from $18.59.

 

Financial highlights for the quarter and year included:

 

Gross premiums written decreased 14% for the quarter and 9% for the year.

Net premiums earned decreased 10% for the quarter and increased 1% for the year.

Net investment income increased 20% for the quarter and 39% for the year.

Loss ratio was 65.6% for the quarter compared to 67.1% for the same period of 2006.

Loss ratio was 61.3% for the year, compared to 62.9% for the previous year.

Combined ratio was 105% for the quarter compared to 97.8% for the same period of 2006.

Combined ratio was 97.4% for the year compared to 97.5% for the prior year.

Cash flow from operations was $67.0 million in 2007, compared to $70.7 million in 2006.

The annualized return on average equity was 12.6% for the quarter and 13.5% for the year compared to 12.1% and 12.4% for the comparable periods in 2006.

 

Fourth Quarter Results

 

Net earnings for the quarter increased 6% to $6.8 million, or $0.61 per diluted share compared to $6.4 million or $0.59 per diluted share for the same period 2006 due to strong investment income, generating an annualized return on average equity of 12.6%. The results include $1.8 million of prior year adverse reserve development, primarily related to the environmental product line, and a $2.3 million accrual of additional ceded premium triggered by environmental losses in the 2003 treaty year. With this accrual, the Company has ceded its maximum premium under this treaty. The reserve development and additional reinsurance premium increased the combined ratio for the quarter by 11 percentage points. Reserve development in our U.S. subsidiaries resulted in a tax benefit of $1.2 million. Results for the 2006 quarter were adversely affected by the accrual of a $1.9 million reinsurance reinstatement premium and $1.0 million of reserve development.

 

Revenues for the quarter totaled $42.5 million, a decrease of 7% over the 2006 quarter. Net premiums earned decreased $3.8 million, or 8%, due to the additional reinsurance premium and lower written premiums. Net investment income increased 20% to $7.8 million from $6.5 million for the same period of 2006 as average invested assets increased from $511 million in 2006 to $604 million in 2007. Net realized losses for the quarter were $223,000 compared to a gain of $839,000 in the 2006 quarter.

 


The following information was filed by American Safety Insurance Holdings Ltd (ASI) on Wednesday, March 5, 2008 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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