AMERICAN SAFETY INSURANCE HOLDINGS LTD - FORM 8-K - EX-99.1 - PRESS RELEASE

Attached files

file	filename
8-K - FORM 8-K - AMERICAN SAFETY INSURANCE HOLDINGS LTD	d389900d8k.htm

Exhibit 99.1

LOGO

American Safety Insurance Holdings, Ltd.

Reports Second Quarter Financial Results

HAMILTON, Bermuda, August 1, 2012 – American Safety Insurance Holdings, Ltd. (NYSE:ASI) today reported net earnings of $2.2 million for the three months ended June 30, 2012, or $0.21 per diluted share, as compared to $4.1 million, or $0.38 per diluted share, for the same period of 2011.

Financial highlights for the quarter included¹:

•

Gross written premiums increased 6% to $87.5 million

•

Net earned premiums increased 5% to $62.0 million

•

Total revenues were $70.1 million compared to $68.2 million

•

The combined ratio was 107.1% compared to 105.6%

•

The combined ratio excluding net weather related property losses was 101.3% compared to 97.0%

•

Net operating earnings² exclusive of net weather related property losses were $5.2 million compared to $7.3 million

•

Annualized return on average equity (exclusive of realized and unrealized gains from investments) was 3.0%

•

Book value was $32.28 per diluted share versus $30.80 at December 31, 2011

¹	All comparisons are with the same period last year unless stated otherwise.

²	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.

Second Quarter Results

Total revenues in the quarter increased to $70.1 million from $68.2 million in 2011 driven by an increase in net earned premiums, partially offset by a decrease in investment income. Net earnings include $3.0 million of after-tax net weather related property losses compared to $3.4 million in the 2011 quarter.

The combined ratio of 107.1% consists of a loss ratio of 65.8% and an expense ratio of 41.3%, compared to 67.4% and 38.2%, respectively, for the same quarter of 2011. Pre-tax net weather related property losses in the 2012 quarter were $3.6 million (or 5.8 points) compared to $5.1 million (or 8.6 points) for the 2011 quarter. The expense ratio increase was attributable to: (a) lower acquisition costs in 2011 due to the impact of property catastrophe losses on profit commissions, (b) mix of business and (c) costs associated with growth initiatives.

Year to Date Results

Total revenues for the six months ended 2012 were $140.1 million compared to $142.0 million in 2011. Net earned premiums increased 9% to $123.4 million, and net realized gains decreased $11.3 million.

The combined ratio was 104.2% compared to 110.8%, composed of a loss ratio of 63.3% and an expense ratio of 40.9%, compared to 72.3% and 38.5%, respectively, in the prior year. The decrease in the loss ratio is primarily attributable to lower pre-tax net weather related property losses of $3.6 million (or 2.9 points) for the six months ended June 30, 2012 compared to $10.8 million (or 9.5 points) for the same period in 2011. The 2011 loss ratio also included $5.0 million (or 4.4 points) of prior year loss reserve strengthening in the Assumed Reinsurance division. The increase in the expense ratio is due to the same factors discussed in the quarter results.

Net earnings for the six months ended June 30, 2012, were $6.2 million, or $0.59 per diluted share, compared to $12.0 million, or $1.11 per diluted share, for the same period in 2011. Net earnings for the six months ended June 30, 2012, include after-tax net weather related property losses of $3.0 million and minimal net realized gains. For the same six months of 2011, after-tax net weather related property losses totaled $8.4 million and net realized gains of $11.3 million. Net operating earnings, exclusive of net weather related property losses, were $9.2 million compared to $9.1 million.

Invested assets increased 2.9% to $908.6 million at June 30, 2012, from $883.1 million at December 31, 2011. Book yield on the portfolio was 3.6% net of investment fees compared to 3.9% in 2011.

Commenting on the results, Stephen R. Crim, President and Chief Executive Officer said, “We achieved growth in the E&S and Reinsurance divisions, advancing our strategy to build scale in our product platform. During the quarter, the overall rate environment continued to improve, supporting our ability to generate growth in existing products. Based on our current capital position, we will repurchase shares under our current authorization and expect to complete it by the end of the year.”

Conference Call

A conference call to discuss second quarter 2012 results is scheduled for Thursday, August 2, 2012, 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.

This press release 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, 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

American Safety Insurance Holdings, Ltd. and Subsidiaries

Financial and Operating Highlights

(Unaudited)

(dollars in thousands)


	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
INCOME STATEMENT DATA:
Revenues:
Direct earned premiums	$	60,595		$	60,801		$	121,123		$	118,456
Assumed earned premiums		15,259			13,851			29,124			25,135
Ceded earned premiums		(13,837	)		(15,502	)		(26,818	)		(30,073	)

Net earned premiums		62,017			59,150			123,429			113,518
Net investment income		7,402			8,050			15,214			15,486
Net realized gains (losses)		(13	)		194			39			11,302
Fee income		717			786			1,385			1,651
Other income		12			12			25			23

Total revenues		70,135			68,192			140,092			141,980

Expenses:
Losses and loss adjustment expenses		40,819			39,869			78,100			82,129
Acquisition expenses		14,337			13,239			29,081			24,994
Other underwriting expenses		12,013			10,171			22,764			20,370
Interest expense		367			354			785			740
Corporate and other expenses		848			1,026			2,104			1,852

Total expenses		68,384			64,659			132,834			130,085

Earnings before income taxes		1,751			3,533			7,258			11,895
Income tax (benefit) expense		(234	)		(549	)		872			(581	)

Net earnings		1,985			4,082			6,386			12,476
Less: Net earnings (loss) attributable to the non-controlling interest		(182	)		30			163			523

Net earnings attributable to ASIH, Ltd.	$	2,167		$	4,052		$	6,223		$	11,953

Net earnings per share:
Basic	$	0.21		$	0.39		$	0.61		$	1.15

Diluted	$	0.21		$	0.38		$	0.59		$	1.11

Weighted average number of shares outstanding:
Basic		10,256,634			10,429,188			10,238,667			10,436,848

Diluted		10,555,222			10,764,542			10,544,627			10,776,398

Loss ratio		65.8	%		67.4	%		63.3	%		72.3	%
Expense ratio		41.3	%		38.2	%		40.9	%		38.5	%

Combined ratio		107.1	%		105.6	%		104.2	%		110.8	%

Net operating earnings:
Net earnings attributable to ASIH, Ltd.	$	2,167		$	4,052		$	6,223		$	11,953
Less: Realized investment gains (losses), net of taxes		(13	)		146			20			11,208

Net operating earnings	$	2,180		$	3,906		$	6,203		$	745


BALANCE SHEET DATA:	June 30, 2012			December 31, 2011
		(unaudited	)
Total investments	$	908,626		$	883,099
Total assets		1,328,057			1,286,532
Unpaid losses and loss adjustment expenses		698,465			680,201
Total liabilities		977,683			951,852
Total shareholders’ equity		350,374			334,680
Book value per share-diluted	$	32.28		$	30.80

American Safety Insurance Holdings, Ltd. and Subsidiaries

Segment Data

(Unaudited)

(dollars in thousands)


	Three Months Ended June 30, 2012
	Insurance									Other
	E&S			ART			Reinsurance			Run-off			Total
Gross written premiums	$	50,448		$	21,498		$	15,603		$	—		$	87,549
Net written premiums		39,735			14,579			15,603			—			69,917
Net earned premiums		33,600			13,157			15,260			—			62,017
Fee & other income		—			738			—			(9	)		729
Losses & loss adjustment expenses		20,221			11,875			8,751			(28	)		40,819
Acquisition & other underwriting expenses***		15,140			5,865			4,471			874			26,350

Underwriting profit (loss)		(1,761	)		(3,845	)		2,038			(855	)		(4,423	)
Net investment income		4,285			1,348			1,595			174			7,402

Pre-tax operating income (loss)		2,524			(2,497	)		3,633			(681	)		2,979
Net realized gains		—			—			—			—			(13	)
Interest and corporate expenses****		—			—			—			—			1,215

Earnings before income taxes		—			—			—			—			1,751
Income tax expense		—			—			—			—			(234	)

Net earnings		—			—			—			—		$	1,985
Less: Net earnings attributable to the non-controlling interest		—			—			—			—			(182	)

Net earnings attributable to ASIH, Ltd.		—			—			—			—		$	2,167

Loss ratio		60.2	%		90.3	%		57.3	%		*NM			65.8	%
Expense ratio		45.1	%		39.0	%		29.3	%		NM			41.3	%

Combined ratio**		105.3	%		129.3	%		86.6	%		NM			107.1	%


	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 written premiums		34,413			17,140			14,864			(1	)		66,416
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***		12,412			5,916			4,249			833			23,410

Underwriting profit (loss)		(1,217	)		(2,360	)		1,048			(802	)		(3,331	)
Net investment income		5,081			1,232			1,586			151			8,050

Pre-tax operating income (loss)		3,864			(1,128	)		2,634			(651	)		4,719
Net realized gains		—			—			—			—			194
Interest and corporate expenses****		—			—			—			—			1,380

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		42.7	%		33.0	%		29.4	%		NM			38.2	%

Combined ratio**		104.2	%		115.2	%		92.7	%		NM			105.6	%

*	NM = Ratio is not meaningful

**	The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of losses and loss adjustment expenses, acquisition expenses, and other underwriting expenses net of fee income to earned premiums.

***	Reclassifications between divisions and segments were made to allocate indirect corporate overhead costs.

****	Excise taxes have been classified as corporate expenses resulting in a reclassification of expenses for prior year.

American Safety Insurance Holdings, Ltd. and Subsidiaries

Segment Data

(Unaudited)

(dollars in thousands)


	Six Months Ended June 30, 2012
	Insurance									Other
	E&S			ART			Reinsurance			Run-off			Total
Gross written premiums	$	89,059		$	42,676		$	29,579		$	—		$	161,314
Net written premiums		70,468			30,722			29,579			—			130,769
Net earned premiums		64,750			29,501			29,178			—			123,429
Fee & other income		—			1,402			—			8			1,410
Losses & loss adjustment expenses		39,138			21,862			17,100			—			78,100
Acquisition & other underwriting expenses***		29,057			12,253			8,801			1,734			51,845

Underwriting profit (loss)		(3,445	)		(3,212	)		3,277			(1,726	)		(5,106	)
Net investment income		8,910			2,778			3,216			310			15,214

Pre-tax operating income (loss)		5,465			(434	)		6,493			(1,416	)		10,108
Net realized gains		—			—			—			—			39
Interest and corporate expenses****		—			—			—			—			2,889

Earnings before income taxes		—			—			—			—			7,258
Income tax benefit		—			—			—			—			872

Net earnings		—			—			—			—		$	6,386
Less: Net earnings attributable to the non-controlling interest		—			—			—			—			163

Net earnings attributable to ASIH, Ltd.		—			—			—			—		$	6,223

Loss ratio		60.4	%		74.1	%		58.6	%		*NM			63.3	%
Expense ratio		44.9	%		36.8	%		30.2	%		NM			40.9	%

Combined ratio**		105.3	%		110.9	%		88.8	%		NM			104.2	%


	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 written premiums		64,015			32,046			30,366			(1	)		126,426
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***		24,633			11,964			7,114			1,653			45,364

Underwriting profit (loss)		(3,192	)		(2,207	)		(5,292	)		(1,610	)		(12,301	)
Net investment income		9,896			2,352			2,935			303			15,486

Pre-tax operating income (loss)		6,704			145			(2,357	)		(1,307	)		3,185
Net realized gains		—			—			—			—			11,302
Interest and corporate expenses****		—			—			—			—			2,592

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		43.2	%		34.5	%		26.9	%		NM			38.5	%

Combined ratio**		105.6	%		107.4	%		120.0	%		NM			110.8	%

*	NM = Ratio is not meaningful

**	The U.S. GAAP combined ratio is a measure of underwriting performance and represents the relationship of losses and loss adjustment expenses, acquisition expenses, and other underwriting expenses net of fee income to earned premiums.

***	Reclassifications between divisions and segments were made to allocate indirect corporate overhead costs.

****	Excise taxes have been classified as corporate expenses resulting in a reclassification of expenses for prior year.

Attached files

Stock widget

Investing forum

AMERICAN SAFETY INSURANCE HOLDINGS LTD Reports

Also read