American Safety Insurance Holdings, Ltd. Reports 32% Increase in Fourth Quarter Insurance Earnings; Book Value Per Share Increases to $17.54.HAMILTON Hamilton, city, Bermuda Hamilton, city (1990 est. pop. 3,100), capital of Bermuda, on Bermuda Island. It is a port at the head of Great Sound, a huge lagoon and deepwater harbor protected by coral reefs. , Bermuda Bermuda (bûrmy  `də), British dependency (2005 est. pop. 65,400), 21 sq mi (53 sq km), comprising some 150 coral rocks, islets, and islands (of which some 20 are inhabited), in the -- American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Safety Insurance Holdings, Ltd.
(NYSE NYSESee: New York Stock Exchange : ASI ASI, n See Anxiety Sensitivity Index. ) today reported a 32% increase in earnings from insurance operations to $3.8 million for the quarter ended December December: see month. 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 di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. 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
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Financial highlights in the quarter and year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. included: --Book value per share increased 9.4% for the year to $17.54. --Net earnings from insurance operations increased 32.3% for the quarter and 219.5% for the year. --Gross premiums written rose 5.5% for the quarter and 7.4% for the year. --Net premiums earned grew 7.1% for the quarter and 1.6% for the year. --Net investment income increased 39.5% for the quarter and 46.5% for the year. --Loss ratio improved to 59.1% for the quarter from 64.2% for the same period of 2004. --Loss ratio improved to 60.9% for the year from 68.6% for the previous year. --Combined ratio was 99.5% for the quarter compared to 98.5% for the same period of 2004. --Combined ratio improved to 97.8% for the year from 102.7% for the previous year. Commenting on the results, Stephen Stephen, 1097?–1154, king of England (1135–54). The son of Stephen, count of Blois and Chartres, and Adela, daughter of William I of England, he was brought up by his uncle, Henry I of England, who presented him with estates in England and France and 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 Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. 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 Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. 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 The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. 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 The abrogation of a contract, effective from its inception, thereby restoring the parties to the positions they would have occupied if no contract had ever been formed. By Agreement litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. for an amount less than previously accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. . 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 annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. 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 accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. for reinsurance reinstatement Reinstatement The restoration of an insurance policy after it has lapsed for nonpayment of premiums. premiums of $2.3 million from run-off run-off n (in contest, election) → desempate m (= extra race); carrera de desempate run-off n (in contest, election) → 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 attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk 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 See assistive technology. 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 Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. 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 Thursday: see week. , 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 A contract under seal. A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. insurance holding company, which, through its subsidiaries, provides innovative insurance solutions in the alternative insurance market for environmental remediation Generally, remediation means providing a remedy, so environmental remediation deals with the removal of pollution or contaminants from environmental media such as soil, groundwater, sediment, or surface water for the general protection of human health and the environment or from a , contracting and other specialty risks. Additional information about the Company can be found at www.americansafetyinsurance.com. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . 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 ac·tu·ar·y n. pl. ac·tu·ar·ies A statistician who computes insurance risks and premiums. [Latin 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 arbitration Process of resolving a dispute or a grievance outside a court system by presenting it for decision to an impartial third party. Both sides in the dispute usually must agree in advance to the choice of arbitrator and certify that they will abide by the proceedings, the integration and other challenges attendant ATTENDANT. One who owes a duty or service to another, or in some sort depends upon him. Termes de la Ley, h.t. As to attendant terms, see Powell on Morts. Index, tit. Attendant term; Park on Dower, c. 1 7. 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.
American Safety Insurance Holdings, Ltd. and Subsidiaries
Financial and Operating Highlights
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------------------------------------------
2005 2004 2005 2004
------------- ------------- ------------- -------------
INCOME
STATEMENT
DATA:
Revenues:
Direct and
assumed
premiums
earned $ 61,611,215 $ 59,027,141 $231,437,482 $227,715,755
Ceded
premiums
earned (23,467,913) (23,426,474) (92,901,413) (91,325,127)
------------- ------------- ------------- -------------
Net
premiums
earned 38,143,302 35,600,667 138,536,069 136,390,628
Net
investment
income $ 4,078,960 $ 2,923,261 $ 14,315,891 $ 9,772,722
Net realized
gains (losses) (34,238) 88,296 (54,101) 208,135
Real estate
income 0 13,900,257 3,000,078 67,967,125
Other income 20,252 126,178 76,286 317,784
------------- ------------- ------------- -------------
Total
revenues $ 42,208,276 $ 52,638,659 $155,874,223 $214,656,394
------------- ------------- ------------- -------------
Expenses:
Losses and
loss
adjustment
expenses $ 22,537,259 $ 22,857,780 $ 84,406,158 $ 93,503,285
Acquisition
expenses 7,809,639 6,449,736 28,511,675 26,528,722
Payroll and
related
expenses 3,637,213 2,534,333 12,130,136 10,297,037
Real estate
expenses 352,066 10,387,602 2,439,022 55,480,408
Other
expenses 4,875,197 3,954,341 13,158,004 9,635,383
Minority
interest 77,859 376,366 515,233 988,202
Expense due
to rescission (1,362,423) 1,426,577 (1,334,162) (229,568)
------------- ------------- ------------- -------------
Total
expenses 37,926,810 47,986,735 139,826,066 196,203,469
------------- ------------- ------------- -------------
Earnings
before
income
taxes 4,281,466 4,651,924 16,048,157 18,452,925
Income taxes (242,549) 899,329 1,391,747 3,695,950
------------- ------------- ------------- -------------
Net
earnings $ 4,524,015 $ 3,752,595 $ 14,656,410 $ 14,756,975
============= ============= ============= =============
Net earnings
per share:
Basic $ 0.67 $ 0.56 $ 2.18 $ 2.15
============= ============= ============= =============
Diluted $ 0.63 $ 0.52 $ 2.05 $ 2.01
============= ============= ============= =============
Average number
of shares
outstanding:
Basic 6,736,379 6,739,978 6,736,938 6,863,619
============= ============= ============= =============
Diluted 7,167,921 7,200,686 7,163,892 7,342,879
============= ============= ============= =============
GAAP combined
ratio 99.5% 98.5% 97.8% 102.7%
BALANCE SHEET December 31, December 31,
DATA: 2005 2004
Total
investments $415,496,577 $329,042,420
Total assets 697,134,863 584,159,976
Unpaid losses
and loss
adjustment
expenses 394,872,581 321,623,730
Total
liabilities 578,699,616 475,380,293
Total
shareholders'
equity 118,435,247 108,779,683
Book value per
share $ 17.54 $ 16.04
American Safety Insurance Holdings, Ltd. and Subsidiaries
Financial and Operating Highlights
(Unaudited)
Three Months Year
Ended Ended
December 31, December 31,
----------------- -------------------
2005 2004 2005 2004
-------- -------- --------- ---------
PREMIUM SUMMARY (in Thousands)
Gross Premiums Written:
Excess and Surplus Lines
Segnent
Environmental $11,331 $11,278 $ 51,014 $ 44,157
Construction (Previously
Excess and Surplus) 25,746 25,795 95,406 96,905
Surety 813 499 2,581 1,725
-------- -------- --------- ---------
Total Excess and
Surplus Lines Segment 37,890 37,572 149,001 142,787
Alternative Risk Transfer
Segment
Specialty Programs 17,442 14,842 85,138 76,264
Fully Funded 1,456 938 3,822 1,281
-------- -------- --------- ---------
Total Alternative Risk
Transfer Segment 18,898 15,780 88,960 77,545
Runoff 98 559 (81) 1,243
-------- -------- --------- ---------
Total Gross Premiums Written 56,886 53,911 237,880 221,575
======== ======== ========= =========
Net Premiums Written:
Excess and Surplus Lines
Segment
Environmental $ 8,365 $ 8,777 $ 41,477 $ 35,024
Construction (Previously
Excess and Surplus) 22,162 20,876 78,026 77,894
Surety 407 266 1,345 1,174
-------- -------- --------- ---------
Total Excess and
Surplus Lines Segment 30,934 29,919 120,848 114,092
Alternative Risk Transfer
Segment
Specialty Programs 5,236 3,822 19,712 17,273
Fully Funded 583 257 2,037 257
-------- -------- --------- ---------
Total Alternative Risk
Transfer Segment 5,819 4,079 21,749 17,530
Runoff 98 453 (2,045) 299
-------- -------- --------- ---------
Total Net Premiums Written 36,851 34,451 140,552 131,921
======== ======== ========= =========
Net Premiums Earned:
Excess and Surplus Lines
Segment
Environmental $10,017 $ 8,819 $ 38,081 $ 32,152
Construction (Previously
Excess and Surplus) 22,513 21,648 81,908 79,781
Surety 337 296 1,148 1,138
-------- -------- --------- ---------
Total Excess and
Surplus Lines Segment 32,867 30,763 121,137 113,071
Alternative Risk Transfer
Segment
Specialty Programs 4,826 3,817 18,297 16,516
Fully Funded 352 89 956 89
-------- -------- --------- ---------
Total Alternative Risk
Transfer Segment 5,178 3,906 19,253 16,605
Runoff 98 932 (1,854) 6,715
-------- -------- --------- ---------
Total Net Premiums Earned 38,143 35,601 138,536 136,391
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