American Safety Insurance Holdings, Ltd. (NYSE:ASI) today reported net earnings of $6.2 million for the three months ended September 30, 2012, or $0.60 per diluted share, as compared to $5.8 million, or $0.54 per diluted share, for the same period of 2011.
Financial highlights for the quarter included
- Gross written premiums increased 8% to $79.1 million
- Net earned premiums increased 7% to $63.1 million
- Total revenues were $77.4 million compared to $68.1 million
- The combined ratio was 106.9% compared to 101.1%
- The combined ratio excluding weather related property losses was 103.7% compared to 101.1%
- Annualized return on average equity (exclusive of realized and unrealized gains from investments) was 2.9%
- Book value was $34.13 per diluted share versus $30.80 at December 31, 2011
All comparisons are with the same period last year unless stated otherwise.
Third Quarter Results
The increase in total revenues was driven by a $4.1 million increase in net earned premiums and a $5.7 million increase in net realized gains offset in part by a reduction of $0.8 million in investment income.
The combined ratio of 106.9% consists of a loss ratio of 63.9% and an expense ratio of 43.0%, compared to 60.8% and 40.3%, respectively, for the same quarter of 2011. Pre-tax weather related property losses in the 2012 quarter were $2.0 million (or 3.2 points in the loss ratio) compared to no impact from weather related losses for the 2011 quarter. The expense ratio increase was attributable to: (a) higher acquisition costs in 2012, due primarily to profit commissions, (b) mix of business and (c) costs associated with growth initiatives.
Net operating earnings were $2.1 million compared to $5.8 million. The decrease in operating earnings is attributable to higher weather related losses, lower investment income and increased expenses primarily associated with growth initiatives. Net operating earnings (loss) is a non-GAAP financial measure defined by the Company as net earnings adjusted for net realized gains (losses), net of applicable taxes.