American Safety Insurance Holdings, Ltd. Reports a 12.5% Increase in First Quarter Earnings.HAMILTION, 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 12.5% increase in net earnings for the three months ended March 31, 2006, to $4.1 million, or $0.57 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, compared to $3.6 million, or $0.50 per diluted share, for the same period of 2005. Financial highlights in the quarter included: --Book value increased to $17.66 per outstanding share and $16.65 per diluted share. --Net investment income increased 44.0% to $4.5 million. --Net premiums written decreased 8.7% to $33.6 million. --Net premiums earned increased 1.3% to $35.1 million. --The combined ratio increased to 99.6% from 94.5%. The 2006 first quarter results include a $2.8 million charge related to the settlement of a prior year claim. The settlement reduced net premiums earned by $1.8 million due to 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. reinstatement Reinstatement The restoration of an insurance policy after it has lapsed for nonpayment of premiums. premiums, and increased losses and loss adjustment expenses by $1.0 million. Net of $1.3 million in minority interest and taxes, the impact of the settlement of the claim on net earnings was $1.5 million. The combined ratio for the quarter increased to 99.6%, comprised of a loss ratio of 63.2% and an expense ratio of 36.4%. The claim settlement increased the loss ratio by 5.7 percentage points and the expense ratio by 1.8 percentage points. The 2005 first quarter combined ratio was 94.5%, comprised of a loss ratio of 60.0% and expense ratio of 34.5%. Revenues for the quarter totaled $40.0 million compared to $40.1 million in 2005 as increased premiums earned, investment income and realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. on investments significantly offset the non-recurring real estate income generated during the first quarter of 2005. Book value per outstanding share increased to $17.66 from $17.54 at December December: see month. 31, 2005 due to net earnings of $4.1 million, partially offset by an increase in net unrealized losses 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 investments due to changes in market 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, "Overall it was a solid quarter for the Company. We produced a 12.5% improvement in net earnings despite the negative impact of this claim, which primarily arose from our run-off run-off n (in contest, election) → desempate m (= extra race); carrera de desempate run-off n (in contest, election) → workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. line. We do not expect a recurrence recurrence /re·cur·rence/ (-ker´ens) the return of symptoms after a remission.recur´rent re·cur·rence n. 1. of this type of claim in the future. Excluding the effect of the claim, net premiums written declined $1.4 million and net premiums earned increased $2.2 million for the quarter. The decline in net premiums written was driven primarily by decreased premium writings in our construction line. Within our excess and surplus lines segment, we experienced strong premium growth in our ProStar Online environmental liability, environmental impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. liability, excess liability and surety An individual who undertakes an obligation to pay a sum of money or to perform some duty or promise for another in the event that person fails to act. surety n. products during the first quarter. I remain confident that we will achieve premium growth during 2006 by increasing our net retentions on business we write, growing our core business lines and developing new products for underserved markets." Conference Call A conference call to discuss first quarter 2006 results is scheduled for Thursday Thursday: see week. , April 27, 2006 at 9:00 a.m. (Eastern Time), which will be broadcast through Vcall's Investor Calendar at www.investorcalendar.com or the Company's website at www.americansafetyinsurance.com. If you are unable to participate at this time, a replay will be available for 30 days, beginning approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. two hours after the call. American Safety Insurance Holdings, Ltd., (NYSE:ASI), offers customized insurance products and solutions to small and medium sized businesses in industries that it believes are underserved by the standard insurance market. ASI provides excess and surplus lines and alternative risk transfer products through its U.S. program administrator, American Safety Insurance Services, Inc., its insurance company subsidiaries, American Safety Casualty Insurance Company and American Safety Indemnity Recompense for loss, damage, or injuries; restitution or reimbursement. An indemnity contract arises when one individual takes on the obligation to pay for any loss or damage that has been or might be incurred by another individual. Company, and its non-subsidiary affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. , American Safety Risk Retention Group, Inc. ASI specializes in 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. these products for insureds with environmental risks and construction risks as well as in developing programs for other 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. classes of risk. ASI is rated "A" Excellent VIII by A.M. Best. 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. 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 Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2005 as filed with the Securities and Exchange Commission.
American Safety Insurance Holdings, Ltd. and Subsidiaries
Financial and Operating Highlights
(Unaudited)
Three Months Ended
March 31,
---------------------------
2006 2005
------------ ------------
INCOME STATEMENT DATA:
Revenues:
Direct and assumed premiums earned $ 56,595,812 $ 55,252,062
Ceded premiums earned (21,538,347) (20,631,451)
------------ ------------
Net premiums earned 35,057,465 34,620,611
Net investment income 4,543,643 3,156,381
Net realized gains 362,984 52,232
Real estate income - 2,309,000
Other income 64,070 1,949
------------ ------------
Total revenues 40,028,162 40,140,173
------------ ------------
Expenses:
Losses and loss adjustment expenses 22,155,055 20,781,044
Acquisition expenses 6,977,322 7,126,379
Payroll and related expenses 3,542,467 2,966,986
Real estate expenses 67,040 2,264,529
Interest expense 903,046 266,679
Other expenses 2,738,489 2,249,508
Minority interest (472,456) 587,898
------------ ------------
Total expenses 35,910,963 36,243,023
------------ ------------
Earnings before income taxes 4,117,199 3,897,150
Income taxes 16,200 250,807
------------ ------------
Net earnings $ 4,100,999 $ 3,646,343
============ ============
Net earnings per share:
Basic $ 0.61 $ 0.54
============ ============
Diluted $ 0.57 $ 0.50
============ ============
Average number of shares outstanding:
Basic 6,762,687 6,791,476
============ ============
Diluted 7,164,244 7,265,523
============ ============
GAAP combined ratio 99.6% 94.5%
BALANCE SHEET DATA: March 31, December 31,
2006 2005
---------------------------
Total investments $421,543,709 $415,496,577
Total assets 709,574,544 697,134,863
Unpaid losses and loss adjustment expenses 403,197,196 394,872,581
Loans payable 37,793,777 37,810,099
Total liabilities 589,867,046 578,699,616
Total shareholders' equity 119,707,498 118,435,247
Book value per outstanding share $ 17.66 $ 17.54
American Safety Insurance Holdings, Ltd. and Subsidiaries
Financial and Operating Highlights
(Unaudited)
Three Months Ended
March 31,
-------------------
2006 2005
----------------------------------------------------------------------
PREMIUM SUMMARY (in Thousands)
Gross Premiums Written:
Excess and Surplus Lines Segment
Environmental $ 12,641 $ 13,594
Construction 23,064 27,053
Surety 870 497
-------- --------
Total Excess and Surplus Lines Segment 36,575 41,144
Alternative Risk Transfer Segment
Specialty Programs 16,345 22,743
Fully Funded 263 317
-------- --------
Total Alternative Risk Transfer Segment 16,608 23,060
Runoff 0 7
-------- --------
Total Gross Premiums Written $ 53,183 $ 64,211
======== ========
Net Premiums Written:
Excess and Surplus Lines Segment
Environmental $ 8,071 $ 10,967
Construction 20,353 22,185
Surety 440 250
-------- --------
Total Excess and Surplus Lines Segment 28,864 33,402
Alternative Risk Transfer Segment
Specialty Programs 4,526 3,270
Fully Funded 188 133
-------- --------
Total Alternative Risk Transfer Segment 4,714 3,403
Runoff 0 (35)
-------- --------
Total Net Premiums Written $ 33,578 $ 36,770
======== ========
Net Premiums Earned:
Excess and Surplus Lines Segment
Environmental $ 8,320 $ 8,745
Construction 21,035 21,104
Surety 353 219
-------- --------
Total Excess and Surplus Lines Segment 29,708 30,068
Alternative Risk Transfer Segment
Specialty Programs 4,981 4,309
Fully Funded 368 89
-------- --------
Total Alternative Risk Transfer Segment 5,349 4,398
Runoff 0 155
-------- --------
Total Net Premiums Earned $ 35,057 $ 34,621
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