American Safety Insurance Holdings, Ltd. Reports an Increase of 73% in Net Earnings to $7.1 Million.HAMILTON, Bermuda -- American Safety Insurance Holdings, Ltd. (NYSE NYSE See: New York Stock Exchange : ASI ASI, n See Anxiety Sensitivity Index. ) today reported a 73% increase in first quarter net earnings to $7.1 million, or $0.65 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 $4.1 million, or $0.57 per diluted share, for the same period in 2006. Financial highlights for the quarter included: * Gross premiums written When a non-life insurance company closes a contract to provide insurance against loss, the revenues (premiums) expected to be received over the life of the contract are called gross premiums written. increased 5% to $55.4 million. * Net premiums written rose 16% to $38.8 million. * Net premiums earned grew 11% to $38.4 million. * Investment income increased 59% to $7.2 million. * Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses was $19 million compared to $10 million for the same period of 2006. * Combined ratio was 95.5% compared to 99.5% for same period of 2006. * Loss ratio was 62.4% compared to 63.9% for the same period of 2006. * Expense ratio decreased to 33.1% from 35.6% for the same period of 2006. * 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. return on average equity was 14.2% compared to 12.5% for the same period of 2006. * Book value per share increased to $19.37 from $18.59 as of December 31, 2006. First Quarter Results The increase in net earnings for the quarter was primarily due to increased investment income and 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. Investment income was $7.2 million for the quarter, a 59% increase over the same period in 2006 due to greater invested assets and improved yields. Invested assets increased 35% over March 31, 2006 due to the proceeds from the 2006 equity offering, increased market value of the portfolio and cash flow from operations. The investment yield increased 82 basis points to 5.2% as compared to 4.3% in the 2006 quarter. The combined ratio for the quarter was 95.5%, composed of a loss ratio of 62.4% and an expense ratio of 33.1%. The first quarter 2006 combined ratio, which was negatively impacted by the settlement of a prior year claim, was 99.5%, with a loss ratio of 63.9% and an expense ratio of 35.6%. The 2006 prior year claim settlement reduced net premiums earned by $1.8 million and increased losses and loss adjustment expense by $1 million. Commenting on the results, Stephen R. Crim, President and Chief Executive Officer of American Safety Insurance Holdings, Ltd., said, "Growth in many of our core business lines in addition to the efforts to diversify our product portfolio resulted in a 5% increase in gross premiums written over 2006. We continued to exercise underwriting discipline in the softening softening /sof·ten·ing/ (sof´en-ing) malacia. softening a change of consistency, with loss of firmness or hardness. market, resulting in a substantial decrease in our construction premium writings in western states during the quarter. Net premiums written during the quarter increased by 16%, driven primarily by premium growth in environmental, increased retentions in specialty programs and premium production in assumed 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. . While the impact of the soft market on our construction results will make it more difficult, we believe our product diversification strategy will provide the opportunity to achieve our previously announced growth targets for 2007. Annualized return on average equity increased by nearly two percentage points over 2006 to 14.2%, despite the increased capital from the common equity offering completed last June. We remain on track to effectively deploy the new capital and increase shareholder value." 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. regarding insurance market conditions, gross premium growth, net premium growth and combined ratio. 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 proceedings, the integration and other challenges attendant 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. [TABLE OMITTED] [TABLE OMITTED] |
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