American Safety Insurance Holdings, Ltd. Reports Second Quarter Financial Results

American Safety Insurance Holdings, Ltd. (NYSE:ASI) today reported net earnings of $2.2 million for the three months ended June 30, 2012, or $0.21 per diluted share, as compared to $4.1 million, or $0.38 per diluted share, for the same period of 2011.

Financial highlights for the quarter included 1 :
  • Gross written premiums increased 6% to $87.5 million
  • Net earned premiums increased 5% to $62.0 million
  • Total revenues were $70.1 million compared to $68.2 million
  • The combined ratio was 107.1% compared to 105.6%
  • The combined ratio excluding net weather related property losses was 101.3% compared to 97.0%
  • Net operating earnings 2 exclusive of net weather related property losses were $5.2 million compared to $7.3 million
  • Annualized return on average equity (exclusive of realized and unrealized gains from investments) was 3.0%
  • Book value was $32.28 per diluted share versus $30.80 at December 31, 2011

1All comparisons are with the same period last year unless stated otherwise.

2 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.

Second Quarter Results

Total revenues in the quarter increased to $70.1 million from $68.2 million in 2011 driven by an increase in net earned premiums, partially offset by a decrease in investment income. Net earnings include $3.0 million of after-tax net weather related property losses compared to $3.4 million in the 2011 quarter.

The combined ratio of 107.1% consists of a loss ratio of 65.8% and an expense ratio of 41.3%, compared to 67.4% and 38.2%, respectively, for the same quarter of 2011. Pre-tax net weather related property losses in the 2012 quarter were $3.6 million (or 5.8 points) compared to $5.1 million (or 8.6 points) for the 2011 quarter. The expense ratio increase was attributable to: (a) lower acquisition costs in 2011 due to the impact of property catastrophe losses on profit commissions, (b) mix of business and (c) costs associated with growth initiatives.

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