Attached files
| file | filename |
|---|---|
| 8-K - FORM8K20110803 - AMERICAN SAFETY INSURANCE HOLDINGS LTD | form8k2011080311.htm |
American Safety Insurance Holdings, Ltd.
Reports Second Quarter Financial Results
HAMILTON, Bermuda, August 3, 2011 – American Safety Insurance Holdings, Ltd. (NYSE:ASI) today reported net earnings of $4.1 million for the three months ended June 30, 2011, or $0.38 per diluted share, as compared to $6.2 million, or $0.58 per diluted share, for the same period of 2010.
Financial highlights for the quarter included1:
|
·
|
Net earned premiums increased 25% to $59.2 million
|
|
·
|
Property losses from U.S. storms were $5.1 million ($3.3 million after tax), contributing approximately 9 points to the combined ratio
|
|
·
|
The combined ratio was 105.8% compared to 99.4%
|
|
·
|
Operating cash flow was $8.1 million compared to $24.7 million
|
|
·
|
Book value was $29.76 per diluted share versus $29.00 at December 31, 2010
|
1All comparisons are with the same period last year unless stated otherwise.
Second Quarter Results
Total revenues in the quarter increased to $68.2 million from $56.8 million in 2010 primarily due to increases in net earned premiums across all insurance divisions. Investment income increased to $8.1 million while net realized gains and fee income decreased slightly.
The combined ratio of 105.8% consists of a loss ratio of 67.4% and an expense ratio of 38.4%, compared to 61.9% and 37.5%, respectively, for the same quarter of 2010. The loss ratio includes the impact from U.S. storm losses of $5.1 million, composed of $4.1 million in the ART division and $1.0 million in the E&S division. The increase in the expense ratio was primarily attributable to lower fronting fees in the ART division.
For the three months ended June 30, 2011, net operating earnings of $3.9 million compares to $5.7 million for the same quarter 2010. The decrease in net operating earnings is primarily due to the U.S. storm losses noted above. 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.
Year to Date Results
Net earnings for the six months ended June 30, 2011 were $12.0 million, or $1.11 per diluted share, compared to $12.7 million, or $1.19 per diluted share for the same period in 2010. Net earned premiums year to date increased 26% to $113.5 million. Pre-tax net realized gains on investments for the six months ended June 30 were $11.3 million compared to $1.5 million during the same period in 2010.
The combined ratio was 111.0%, composed of a loss ratio of 72.3% and an expense ratio of 38.7%. The increase in the loss ratio to 72.3% from 60.6% for the 2010 period is primarily due to catastrophe losses in the first quarter of $5 million and losses attributable to U.S. storms of $5.1 million in the second quarter. The decrease in the expense ratio to 38.7% for the six months ended June 30, 2011 from 40.2% in the same period in 2010 is due primarily to economies of scale associated with increased net earned premiums.
Invested assets increased 5.5% to $863.1 million at June 30, 2011 from $818.5 million at December 31, 2010. The pre-tax book yield realized during the six months on the investment portfolio was 3.7% compared to 4.1% for the same period in 2010.
Book value at June 30, 2011 increased to $29.76 per diluted share compared to $29.00 at December 31, 2010. Since December 31, 2010, the Company has repurchased 105,033 shares at an average price of $18.97 per share. There are 239,267 shares remaining under the current repurchase authorization.
1
Commenting on the results, Stephen R. Crim, President and Chief Executive Officer said, “The unprecedented U.S. storm activity during the second quarter negatively impacted financial results for the property and casualty insurance industry. While our losses did impact the quarterly results, they represented only 1% of our capital on an after tax basis. We continue our product diversification, which has been the driver of our premium growth, and the steady improvement in our expense ratio.”
Conference Call
A conference call to discuss second quarter 2011 results is scheduled for Thursday, August 4, 2011 at 9:00 a.m. (Eastern Daylight Time), which will be broadcast through Vcall’s Investor Calendar at www.investorcalendar.com, or the Company’s website at www.amsafety.com. If you are unable to participate at this time, a replay will be available for 30 days, beginning approximately two hours after the call. A transcript of the call will be available on the Company’s website beginning several days after the call.
This report contains forward-looking statements. The forward-looking statements reflect the Company’s current views with respect to future events and financial performance, including catastrophe and other losses. Forward-looking statements involve risks and uncertainties which may cause actual results to differ materially, including developments in loss trends and adequacy and changes in loss reserves and actuarial assumptions.
About Us:
For 25 years, American Safety Insurance Holdings, Ltd. (NYSE:ASI), a Bermuda holding company, has offered innovative solutions outside the U.S. in the reinsurance and alternative risk markets through its subsidiaries, American Safety Reinsurance, Ltd. and American Safety Assurance, Ltd., and in the U.S. for specialty risks and alternative risk markets through its program administrator, American Safety Insurance Services, Inc., and insurance company subsidiaries and affiliates, American Safety Casualty Insurance Company, American Safety Indemnity Company and American Safety Risk Retention Group, Inc. and American Safety Assurance (Vermont), Inc.. As a group, ASI’s insurance subsidiaries and affiliates are rated “A” (Excellent) IX by A.M. Best. For additional information, please visit www.asih.bm.
Contacts:
|
American Safety Insurance Holdings, Ltd.
|
American Safety Administrative Services, Inc.
|
|
|
Investor Relations
|
Media Relations
|
|
|
Stephen R. Crim
|
Patrick Driscoll, CPA, CPCU
|
|
|
scrim@amsafety.bm
|
patrick.driscoll@amsafety.com
|
|
|
(441) 296-8560
|
(770) 916-1908
|
2
American Safety Insurance Holdings, Ltd. and Subsidiaries
Financial and Operating Highlights
(Unaudited) (in thousands)
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||
|
INCOME STATEMENT DATA:
Revenues:
|
||||||||||||||||
|
Direct earned premiums
|
$ | 60,801 | $ | 60,976 | $ | 118,456 | $ | 116,718 | ||||||||
|
Assumed earned premiums
|
13,851 | 9,270 | 25,135 | 18,290 | ||||||||||||
|
Ceded earned premiums
|
(15,502 | ) | (23,006 | ) | (30,073 | ) | (44,800 | ) | ||||||||
|
Net earned premiums
|
59,150 | 47,240 | 113,518 | 90,208 | ||||||||||||
|
Net investment income
|
8,050 | 7,929 | 15,486 | 15,834 | ||||||||||||
|
Net realized gains
|
194 | 509 | 11,302 | 1,520 | ||||||||||||
|
Fee income
|
786 | 1,155 | 1,651 | 2,248 | ||||||||||||
|
Other income
|
12 | 10 | 23 | 30 | ||||||||||||
|
Total revenues
|
68,192 | 56,843 | 141,980 | 109,840 | ||||||||||||
|
Expenses:
|
||||||||||||||||
|
Losses and loss adjustment expenses
|
39,869 | 29,251 | 82,129 | 54,652 | ||||||||||||
|
Acquisition expenses
|
13,347 | 8,995 | 25,208 | 18,825 | ||||||||||||
|
Other underwriting expenses
|
10,171 | 9,849 | 20,370 | 19,676 | ||||||||||||
|
Interest expense
|
354 | 685 | 740 | 1,444 | ||||||||||||
|
Corporate and other expenses
|
918 | 751 | 1,638 | 1,466 | ||||||||||||
|
Total expenses
|
64,659 | 49,531 | 130,085 | 96,063 | ||||||||||||
|
Earnings before income taxes
|
3,533 | 7,312 | 11,895 | 13,777 | ||||||||||||
|
Income tax expense (benefit)
|
(549 | ) | 950 | (581 | ) | 851 | ||||||||||
|
Net earnings
|
4,082 | 6,362 | 12,476 | 12,926 | ||||||||||||
|
Less: Net earnings attributable to the non-controlling interest
|
30 | 199 | 523 | 256 | ||||||||||||
|
Net earnings attributable to ASIH, Ltd.
|
$ | 4,052 | $ | 6,163 | $ | 11,953 | $ | 12,670 | ||||||||
|
Net earnings per share:
|
||||||||||||||||
|
Basic
|
$ | 0.39 | $ | 0.60 | $ | 1.15 | $ | 1.23 | ||||||||
|
Diluted
|
$ | 0.38 | $ | 0.58 | $ | 1.11 | $ | 1.19 | ||||||||
|
Weighted average number of shares outstanding:
|
||||||||||||||||
|
Basic
|
10,429,188 | 10,246,100 | 10,436,848 | 10,288,718 | ||||||||||||
|
Diluted
|
10,764,542 | 10,589,708 | 10,776,398 | 10,616,956 | ||||||||||||
|
Loss ratio
|
67.4 | % | 61.9 | % | 72.3 | % | 60.6 | % | ||||||||
|
Expense ratio
|
38.4 | % | 37.5 | % | 38.7 | % | 40.2 | % | ||||||||
|
Combined ratio
|
105.8 | % | 99.4 | % | 111.0 | % | 100.8 | % | ||||||||
|
Net operating earnings:
|
||||||||||||||||
|
Net earnings attributable to ASIH, Ltd.
|
$ | 4,052 | $ | 6,163 | $ | 11,953 | $ | 12,670 | ||||||||
|
Less: Realized investment gains,
net of taxes
|
146 | 431 | 11,208 | 1,173 | ||||||||||||
|
Net operating earnings
|
$ | 3,906 | $ | 5,732 | $ | 745 | $ | 11,497 | ||||||||
|
At
|
||||||||
|
BALANCE SHEET DATA:
|
6/30/2011
|
12/31/2010
|
||||||
|
(unaudited)
|
||||||||
|
Total investments
|
$ | 863,081 | $ | 818,450 | ||||
|
Total assets
|
1,265,324 | 1,221,253 | ||||||
|
Unpaid losses and loss adjustment expenses
|
667,644 | 649,641 | ||||||
|
Total liabilities
|
941,084 | 902,719 | ||||||
|
Total shareholders’ equity
|
324,240 | 318,534 | ||||||
|
Book value per share-diluted
|
$ | 29.76 | $ | 29.00 | ||||
3
American Safety Insurance Holdings, Ltd. and Subsidiaries
Segment Data
(Unaudited) (Dollars in thousands)
|
Three Months Ended June 30, 2011
|
||||||||||||||||||||
|
Insurance
|
Other
|
|||||||||||||||||||
|
E&S
|
ART
|
Reinsurance
|
Run-off
|
Total
|
||||||||||||||||
|
Gross written premiums
|
$ | 43,929 | $ | 23,923 | $ | 15,028 | $ | (1 | ) | $ | 82,879 | |||||||||
|
Net earned premiums
|
29,085 | 15,616 | 14,450 | (1 | ) | 59,150 | ||||||||||||||
|
Fee & other income
|
(5 | ) | 770 | - | 33 | 798 | ||||||||||||||
|
Losses & loss adjustment expenses
|
17,885 | 12,830 | 9,153 | 1 | 39,869 | |||||||||||||||
|
Acquisition & other underwriting expenses
|
13,216 | 6,148 | 4,292 | (138 | ) | 23,518 | ||||||||||||||
|
Underwriting profit (loss)
|
(2,021 | ) | (2,592 | ) | 1,005 | 169 | (3,439 | ) | ||||||||||||
|
Net investment income
|
5,081 | 1,232 | 1,586 | 151 | 8,050 | |||||||||||||||
|
Pre-tax operating income (loss)
|
3,060 | (1,360 | ) | 2,591 | 320 | 4,611 | ||||||||||||||
|
Net realized gains
|
194 | |||||||||||||||||||
|
Interest and corporate expenses
|
1,272 | |||||||||||||||||||
|
Earnings before income taxes
|
3,533 | |||||||||||||||||||
|
Income tax benefit
|
(549 | ) | ||||||||||||||||||
|
Net earnings
|
$ | 4,082 | ||||||||||||||||||
|
Less: Net earnings attributable to the
non-controlling interest
|
30 | |||||||||||||||||||
|
Net earnings attributable to ASIH, Ltd.
|
$ | 4,052 | ||||||||||||||||||
|
Loss ratio
|
61.5 | % | 82.2 | % | 63.3 | % |
NM
|
67.4 | % | |||||||||||
|
Expense ratio
|
45.5 | % | 34.4 | % | 29.7 | % |
NM
|
38.4 | % | |||||||||||
|
Combined ratio
|
107.0 | % | 116.6 | % | 93.0 | % |
NM
|
105.8 | % | |||||||||||
|
Three Months Ended June 30, 2010
|
||||||||||||||||||||
|
Insurance
|
Other
|
|||||||||||||||||||
|
E&S
|
ART
|
Reinsurance
|
Run-off
|
Total
|
||||||||||||||||
|
Gross written premiums
|
$ | 36,478 | $ | 23,885 | $ | 12,215 | $ | - | $ | 72,578 | ||||||||||
|
Net earned premiums
|
24,242 | 12,901 | 10,097 | - | 47,240 | |||||||||||||||
|
Fee & other income
|
203 | 873 | 55 | 34 | 1,165 | |||||||||||||||
|
Losses & loss adjustment expenses
|
13,720 | 8,479 | 7,052 | - | 29,251 | |||||||||||||||
|
Acquisition & other underwriting expenses
|
11,918 | 3,687 | 2,896 | 343 | 18,844 | |||||||||||||||
|
Underwriting profit (loss)
|
(1,193 | ) | 1,608 | 204 | (309 | ) | 310 | |||||||||||||
|
Net investment income
|
5,385 | 1,139 | 1,178 | 227 | 7,929 | |||||||||||||||
|
Pre-tax operating income (loss)
|
4,192 | 2,747 | 1,382 | (82 | ) | 8,239 | ||||||||||||||
|
Net realized gains
|
509 | |||||||||||||||||||
|
Interest and corporate expenses
|
1,436 | |||||||||||||||||||
|
Earnings before income taxes
|
7,312 | |||||||||||||||||||
|
Income tax expense
|
950 | |||||||||||||||||||
|
Net earnings
|
$ | 6,362 | ||||||||||||||||||
|
Less: Net earnings attributable to the
non-controlling interest
|
199 | |||||||||||||||||||
|
Net earnings attributable to ASIH, Ltd.
|
$ | 6,163 | ||||||||||||||||||
|
Loss ratio
|
56.6 | % | 65.7 | % | 69.8 | % |
NM
|
61.9 | % | |||||||||||
|
Expense ratio
|
48.3 | % | 21.8 | % | 28.1 | % |
NM
|
37.5 | % | |||||||||||
|
Combined ratio
|
104.9 | % | 87.5 | % | 97.9 | % |
NM
|
99.4 | % | |||||||||||
4
American Safety Insurance Holdings, Ltd. and Subsidiaries
Segment Data
(Unaudited) (Dollars in thousands)
|
Six Months Ended June 30, 2011
|
||||||||||||||||||||
|
Insurance
|
Other
|
|||||||||||||||||||
|
E&S
|
ART
|
Reinsurance
|
Run-off
|
Total
|
||||||||||||||||
|
Gross written premiums
|
$ | 79,924 | $ | 45,801 | $ | 31,500 | $ | (1 | ) | $ | 157,224 | |||||||||
|
Net earned premiums
|
57,079 | 29,971 | 26,469 | (1 | ) | 113,518 | ||||||||||||||
|
Fee & other income
|
- | 1,630 | - | 44 | 1,674 | |||||||||||||||
|
Losses & loss adjustment expenses
|
35,638 | 21,844 | 24,647 | - | 82,129 | |||||||||||||||
|
Acquisition & other underwriting expenses
|
26,326 | 12,461 | 7,211 | (420 | ) | 45,578 | ||||||||||||||
|
Underwriting profit (loss)
|
(4,885 | ) | (2,704 | ) | (5,389 | ) | 463 | (12,515 | ) | |||||||||||
|
Net investment income
|
9,896 | 2,352 | 2,935 | 303 | 15,486 | |||||||||||||||
|
Pre-tax operating income (loss)
|
5,011 | (352 | ) | (2,454 | ) | 766 | 2,971 | |||||||||||||
|
Net realized gains
|
11,302 | |||||||||||||||||||
|
Interest and corporate expenses
|
2,378 | |||||||||||||||||||
|
Earnings before income taxes
|
11,895 | |||||||||||||||||||
|
Income tax benefit
|
(581 | ) | ||||||||||||||||||
|
Net earnings
|
$ | 12,476 | ||||||||||||||||||
|
Less: Net earnings attributable to the non-controlling interest
|
523 | |||||||||||||||||||
|
Net earnings attributable to ASIH, Ltd.
|
$ | 11,953 | ||||||||||||||||||
|
Loss ratio
|
62.4 | % | 72.9 | % | 93.1 | % |
NM
|
72.3 | % | |||||||||||
|
Expense ratio
|
46.1 | % | 36.1 | % | 27.2 | % |
NM
|
38.7 | % | |||||||||||
|
Combined ratio
|
108.5 | % | 109.0 | % | 120.3 | % |
NM
|
111.0 | % | |||||||||||
|
Six Months Ended June 30, 2010
|
||||||||||||||||||||
|
Insurance
|
Other
|
|||||||||||||||||||
|
E&S
|
ART
|
Reinsurance
|
Run-off
|
Total
|
||||||||||||||||
|
Gross written premiums
|
$ | 66,106 | $ | 42,119 | $ | 23,670 | $ | - | $ | 131,895 | ||||||||||
|
Net earned premiums
|
46,394 | 24,064 | 19,750 | - | 90,208 | |||||||||||||||
|
Fee & other income
|
349 | 1,704 | 171 | 54 | 2,278 | |||||||||||||||
|
Losses & loss adjustment expenses
|
26,883 | 14,894 | 12,876 | (1 | ) | 54,652 | ||||||||||||||
|
Acquisition & other underwriting expenses
|
23,428 | 8,424 | 5,971 | 678 | 38,501 | |||||||||||||||
|
Underwriting profit (loss)
|
(3,568 | ) | 2,450 | 1,074 | (623 | ) | (667 | ) | ||||||||||||
|
Net investment income
|
10,834 | 2,268 | 2,266 | 466 | 15,834 | |||||||||||||||
|
Pre-tax operating income (loss)
|
7,266 | 4,718 | 3,340 | (157 | ) | 15,167 | ||||||||||||||
|
Net realized gains
|
1,520 | |||||||||||||||||||
|
Interest and corporate expenses
|
2,910 | |||||||||||||||||||
|
Earnings before income taxes
|
13,777 | |||||||||||||||||||
|
Income tax expense
|
851 | |||||||||||||||||||
|
Net earnings
|
$ | 12,926 | ||||||||||||||||||
|
Less: Net earnings attributable to the non-controlling interest
|
256 | |||||||||||||||||||
|
Net earnings attributable to ASIH, Ltd.
|
$ | 12,670 | ||||||||||||||||||
|
Loss ratio
|
57.9 | % | 61.9 | % | 65.2 | % |
NM
|
60.6 | % | |||||||||||
|
Expense ratio
|
49.8 | % | 27.9 | % | 29.4 | % |
NM
|
40.2 | % | |||||||||||
|
Combined ratio
|
107.7 | % | 89.8 | % | 94.6 | % |
NM
|
100.8 | % | |||||||||||
5