American Safety Insurance Holdings, Ltd. Reports Increase in Third Quarter Insurance Earnings.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 that earnings from insurance operations increased to $3.2 million in the third quarter of 2005 compared to $992,000 for the same quarter in 2004. Net earnings for the third quarter were $3.3 million, or $0.47 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, as compared to earnings of $3.3 million, or $0.45 per diluted share, for the third quarter of 2004. Insurance earnings for the nine months ended September September: see month. 30, 2005 increased to $9.8 million from $1.4 million for the nine months ended September 30, 2004. Net earnings for the nine months ended September 30, 2005 were $10.1 million, or $1.41 per diluted share, as compared to $11.0 million, or $1.49 per diluted share, for the nine months ended September 30, 2004. Net earnings are detailed as follows (in thousands):
Quarter Ended Nine Months Ended
September 30, September 30,
----------------- -----------------
2005 2004 2005 2004
-------- -------- -------- --------
Insurance Operations $3,192 $992 $9,845 $1,410
Real Estate Operations 142 2,288 335 5,807
Other 13 (22) (48) 3,787
-------- -------- -------- --------
Net Earnings $3,347 $3,258 $10,132 $11,004
======== ======== ======== ========
Third quarter highlights included: --Gross written premiums rose 11% to $61 million --Net earned premiums Earned premium is the portion of an insurance written premium which is considered "earned" by the insurer, based on the part of the policy period that the insurance has been in effect, and during which the insurer has been exposed to loss. decreased 10% to $31 million --Net investment income increased 44% to $3.7 million --The loss ratio improved to 63% from 69% --The combined ratio decreased to 98% from 101% The increase in insurance earnings for the quarter and the nine months ended September 30, 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 combined with increased investment income. The underwriting results for the quarter and the nine months ended September 30, 2005 were driven by an improved loss ratio, which for the quarter decreased to 63% from 69% and for the nine months decreased to 62% from 70% as compared to the same periods of 2004. The underwriting results for the quarter and nine months ended September 30, 2005 included a charge of $552,000 resulting from the commutation of a reinsurance treaty Reinsurance Treaty (June 18, 1887) Secret agreement between Germany and Russia. Arranged by Otto von Bismarck after the collapse of the Three Emperors' League, it provided that each party would remain neutral if either became involved in a war with a third nation, and that with a former reinsurer re·in·sure tr.v. re·in·sured, re·in·sur·ing, re·in·sures To insure again, especially by transferring all or part of the risk in a contract to a new contract with another insurance company. and a reinstatement Reinstatement The restoration of an insurance policy after it has lapsed for nonpayment of premiums. 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. premium accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. of $2.3 million on certain reinsurance contracts associated with the Company's discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: lines. The combined ratio decreased for the quarter to 98% from 101% and for the nine months decreased to 97% from 104% as compared to the same periods in 2004. The decrease in real estate earnings for the quarter and for the nine months ended September 30, 2005 was due to the substantial completion of the Company's real estate operations. Other items for the nine months ended September 30, 2004 include non-recurring earnings of $3.8 million, predominantly pre·dom·i·nant adj. 1. Having greatest ascendancy, importance, influence, authority, or force. See Synonyms at dominant. 2. due to the recovery on an impaired See assistive technology. note receivable note receivable A debt due from borrowers and evidenced by a written promise of payment. Note receivable, an entry on the asset side of many corporate balance sheets, indicates the dollar amount of loans due to be repaid by borrowers. . Total revenues for the third quarter of 2005 decreased 39% to $35 million compared to the same quarter of 2004 as a result of an expected decrease in real estate income. Net premiums earned for the third quarter of 2005 decreased 10% to $31 million compared to the same quarter of 2004 due to the accrual of reinstatement reinsurance premiums previously mentioned. Net investment income for the third quarter of 2005 increased 44% to $3.7 million from $2.5 million in the third 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 3.9% from 3.6%. Total revenues for the nine months ended September 30, 2005 decreased 30% to $114 million compared to the same period in 2004 as a result of the expected decrease in real estate income. Net premiums earned for the nine months ended September 30, 2005 remained unchanged at $100 million. Net investment income for the nine months ended September 30, 2005 increased 50% to $10.2 million from $6.8 million for the same period in 2004 due to increased invested assets and an increase in the annualized yield to 3.8% from 3.5%. Total invested assets increased 18% to $385 million from $327 million at December December: see month. 31, 2004. The Company's book value per share increased 6.4% to $17.06 at September 30, 2005 from $16.04 at December 31, 2004, due to the contribution of net earnings during the nine months ended September 30, 2005 offset in part by the change in unrealized loss Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. on the Company's investment portfolio during the year due to increases in interest rates. 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 that increases in earnings from our insurance operations have remained strong and we continue to be successful in replacing lost earnings from our discontinued real estate operations. While the marketplace has become more competitive, our underwriting results continue to improve due to our focus on underserved markets. Looking ahead, we see continued opportunities for profitable growth through acquisitions and the introduction of new products, in addition to assuming more risk on selected areas of our insurance business." 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 Harbour Village 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
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- ---------------------------
2005 2004 2005 2004
----------------------------------------------------------------------
INCOME STATEMENT
DATA:
Revenues:
Direct and
assumed
premiums
earned $55,497,873 $58,581,683 $169,826,267 $168,688,614
Ceded premiums
earned (24,260,302) (24,000,183) (69,433,500) (67,898,653)
------------ ------------ ------------- -------------
Net premiums
earned 31,237,571 34,581,500 100,392,767 100,789,961
Net investment
income 3,653,075 2,529,210 10,236,931 6,849,461
Net realized
gains 24,602 99,567 (19,863) 119,839
Real estate
income - 19,938,557 3,000,078 54,066,868
Other income 20,278 46,982 56,034 191,606
------------ ------------ ------------- -------------
Total
revenues $34,935,526 $57,195,816 $113,665,947 $162,017,735
------------ ------------ ------------- -------------
Expenses:
Losses and loss
adjustment
expenses $19,580,076 $23,730,614 $61,868,899 $70,645,505
Acquisition
expenses 6,692,005 6,954,856 20,702,036 20,078,986
Payroll and
related
expenses 2,344,439 2,433,557 8,492,923 7,762,704
Real estate
expenses (601,506) 16,605,783 2,086,956 45,092,806
Other expenses 2,577,721 2,687,602 8,282,807 5,681,042
Minority
interest (93,408) 275,182 445,874 611,836
Expense due to
rescission 5,832 59,825 28,261 (1,656,145)
------------ ------------ ------------- -------------
Total
expenses $30,505,159 $52,747,419 $101,907,756 $148,216,734
------------ ------------ ------------- -------------
Earnings
before
income taxes 4,430,367 4,448,397 11,758,191 13,801,001
Income taxes 1,083,069 1,190,605 1,625,796 2,796,621
------------ ------------ ------------- -------------
Net earnings $3,347,298 $3,257,792 $10,132,395 $11,004,380
============ ============ ============= =============
Net earnings per
share:
Basic $0.50 $0.47 $1.50 $1.59
============ ============ ============= =============
Diluted $0.47 $0.45 $1.41 $1.49
============ ============ ============= =============
Average number of
shares
outstanding:
Basic 6,702,609 6,876,380 6,737,126 6,905,133
============ ============ ============= =============
Diluted 7,146,664 7,275,259 7,172,497 7,394,730
============ ============ ============= =============
GAAP combined
ratio 97.9% 101.3% 97.1% 104.2%
============ ============ ============= =============
BALANCE SHEET DATA: September 30, December 31,
2005 2004
Total investments
excluding real
estate $384,924,205 $327,036,980
Total assets 649,704,251 584,159,976
Unpaid losses and
loss adjustment
expenses 369,314,017 321,623,730
Total liabilities 535,347,490 475,380,293
Total
shareholders'
equity 114,356,761 108,779,683
Book value per
share $17.06 $16.04
American Safety Insurance Holdings, Ltd. and Subsidiaries
Financial and Operating Highlights
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2005 2004 2005 2004
----------------------------------------------------------------------
PREMIUM SUMMARY (in Thousands)
Gross Written Premium:
Environmental $12,393 $10,589 $39,683 $32,879
Excess and Surplus 21,625 23,731 69,660 71,110
Program Business 25,926 19,772 70,062 61,765
Other 647 484 1,589 1,910
--------- --------- --------- ---------
Total 60,591 54,576 180,994 167,664
--------- --------- --------- ---------
Net Written Premium:
Environmental 8,988 8,569 33,112 26,247
Excess and Surplus 17,524 18,546 55,864 57,018
Program Business 6,618 5,867 15,930 13,451
Other (1,640) 27 (1,205) 754
--------- --------- --------- ---------
Total 31,490 33,009 103,701 97,470
--------- --------- --------- ---------
Net Earned Premium:
Environmental 9,542 8,697 28,064 23,333
Excess and Surplus 18,433 19,733 59,395 58,133
Program Business 4,993 4,968 14,075 12,699
Other (1,730) 1,183 (1,141) 6,625
--------- --------- --------- ---------
Total $31,238 $34,581 $100,393 $100,790
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