American Safety Insurance Holdings, Ltd. Reports Net Earnings of $5.5 Million (Business Wire)
Tue, 28 Apr 2009 21:12:00 Etc/GM
Financial highlights for the quarter included:
- Gross premiums written decreased 6% to $50.9 million.
- Net premiums earned increased 17% to $44.7 million.
- Net investment income increased 6% to $7.8 million.
- Cash flow from operations was $14.2 million compared to $1.8 million use of cash for the same period of 2008.
- Combined ratio was 101.1% compared to 100.4% for the same period of 2008.
- Loss ratio was 60.6% compared to 57.9% for the same period of 2008.
- Expense ratio decreased to 40.5% from 42.5% for the same period of 2008.
- Book value per share increased to $21.35 from $21.12 at December 31, 2008.
- Annualized return on average equity was 10.0% compared to 9.8% for the same period of 2008.
First Quarter Results
Revenues for the quarter increased to $53.4 million, compared to $46.6 million for the 2008 first quarter, due primarily to a $6.6 million increase in net premiums earned for the quarter. Investment income totaled $7.8 million, an increase of $0.5 million, due to the growth in the investment portfolio as a result of positive cash flow. Despite the higher revenues, operating earnings, defined as net earnings excluding realized gains and losses, for the quarter were relatively flat at $5.6 million compared to $5.5 million for the same period in 2008, due to the impact of a higher loss ratio.
The combined ratio for the quarter was 101.1%, composed of a loss ratio of 60.6% and an expense ratio of 40.5%, compared to a combined ratio of 100.4%, with a loss ratio of 57.9% and an expense ratio of 42.5%, for the 2008 first quarter. The increase in the loss ratio was due primarily to one reinsurance treaty in our assumed reinsurance product line that we non-renewed. This treaty incepted in the second quarter of 2008 and was fully earned in the first quarter 2009. The decrease in the expense ratio for the quarter was due to growth in revenue exceeding the increase in operating costs and to lower acquisition costs in the assumed reinsurance business as we shift our focus from quota share to excess of loss treaties.
Book value per share increased to $21.35 compared to $21.12 at December 31, 2008, due to net earnings in the quarter partially offset by a $3.1 million increase in net unrealized losses.
Commenting on the results, Stephen R. Crim, President and Chief Executive Officer of American Safety Insurance Holdings, Ltd., said, “The first quarter results are in line with our expectations, including a decline in gross premiums written and an improvement in the Company’s expense ratio. Earnings for the quarter were solid, driven by improved investment income from a growing portfolio due to continued strong cash flow. I am pleased with the results for the quarter in the face of a competitive insurance market and a difficult economy.”
Conference Call
A conference call to discuss first quarter 2009 results is scheduled for Wednesday, April 29, 2009 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.bm. 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 and non-GAAP financial measures. The 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 impact of new accounting standards. 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 assumptions, timing or collectability 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.
About Us:
American Safety Insurance Holdings, Ltd. (NYSE:ASI - News), a Bermuda holding company, offers 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) VIII by A.M. Best. For additional information, please visit www.asih.bm.
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American Safety Insurance Holdings, Ltd. and Subsidiaries |
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Financial and Operating Highlights |
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(In thousands) |
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Three Months Ended
March 31, |
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| 2009 | 2008 | |||
| PREMIUM SUMMARY (in thousands) | ||||
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Gross Premiums Written: |
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Excess and Surplus Lines Segment |
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| Environmental | $12,414 | $13,247 | ||
| Construction | 4,528 | 8,864 | ||
| Products Liability | 1,983 | 1,365 | ||
| Excess | 1,861 | 2,461 | ||
| Property | 2,451 | 1,849 | ||
| Surety | 2,601 | 2,025 | ||
| Healthcare | 3,002 | 1,742 | ||
| Total Excess & Surplus Lines Segment | 28,840 | 31,553 | ||
| Alternative Risk Transfer Segment | ||||
| Specialty Programs | 13,655 | 14,275 | ||
| Assumed Reinsurance Segment | 8,398 | 8,526 | ||
| Total Gross Premiums Written | $50,893 | $54,354 | ||
| Net Premiums Written: | ||||
| Excess and Surplus Lines Segment | ||||
| Environmental | $10,112 | $ 8,927 | ||
| Construction | 3,723 | 6,213 | ||
| Products Liability | 1,651 | 1,080 | ||
| Excess | 256 | 221 | ||
| Property | 1,786 | 1,297 | ||
| Surety | 1,876 | 1,697 | ||
| Healthcare | 1,952 | 1,132 | ||
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Total Excess & Surplus Lines Segment |
21,356 |
20,567 | ||
| Alternative Risk Transfer Segment | ||||
| Specialty Programs | 9,490 | 9,413 | ||
| Assumed Reinsurance Segment | 8,884 | 8,526 | ||
| Total Net Premiums Written | $39,730 | $38,506 | ||
| Net Premiums Earned: | ||||
| Excess and Surplus Lines Segment | ||||
| Environmental | $ 8,954 | $ 8,606 | ||
| Construction | 6,544 | 10,353 | ||
| Products Liability | 1,382 | 1,015 | ||
| Excess | 433 | 179 | ||
| Property | 1,486 | 726 | ||
| Surety | 2,002 | 1,626 | ||
| Healthcare | 2,263 | 84 | ||
| Total Excess & Surplus Lines Segment | 23,064 | 22,589 | ||
| Alternative Risk Transfer Segment | ||||
| Specialty Programs | 10,660 | 7,766 | ||
| Assumed Reinsurance Segment | 10,956 | 7,694 | ||
| Total Net Premiums Earned | $44,680 | $38,049 | ||
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American Safety Insurance Holdings, Ltd. and Subsidiaries |
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Financial and Operating Highlights |
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(In thousands except per share data and percentages) |
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Three Months Ended
March 31, |
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| (Unaudited) | ||||||
| 2009 | 2008 | |||||
| INCOME STATEMENT DATA: | ||||||
| Revenues: | ||||||
| Direct and assumed premiums earned | $ 61,819 | $ 54,062 | ||||
| Ceded premiums earned | (17,139 | ) | (16,013 | ) | ||
| Net premiums earned | 44,680 | 38,049 | ||||
| Net investment income | 7,790 | 7,327 | ||||
| Net realized (losses) gains | (44 | ) | 504 | |||
| Fee income | 933 | 727 | ||||
| Other income | 19 | 15 | ||||
| Total revenues | 53,378 | 46,622 | ||||
| Expenses: | ||||||
| Losses and loss adjustment expenses | 27,073 | 22,030 | ||||
| Acquisition expenses | 10,204 | 9,076 | ||||
| Payroll and related expenses | 5,818 | 4,485 | ||||
| Other underwriting expenses | 3,028 | 3,317 | ||||
| Interest expense | 741 | 832 | ||||
| Corporate and other expenses | 682 | 576 | ||||
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Total expenses |
47,546 |
40,315 |
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| Earnings before income taxes | 5,832 | 6,307 | ||||
| Income taxes | 208 | 148 | ||||
| Net earnings before noncontrolling interest | $ 5,624 | $ 6,159 | ||||
| Less: Net earnings attributable to the noncontrolling interest | 79 | 138 | ||||
| Net earnings | $ 5,545 | $ 6,021 | ||||
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Net earnings per share: |
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| Basic | $0.54 | $. 56 | ||||
| Diluted | $0.53 | $ .55 | ||||
| Weighted average number of shares outstanding: | ||||||
| Basic | 10,286,089 | 10,695,706 | ||||
| Diluted | 10,474,968 | 10,990,235 | ||||
| Loss Ratio | 60.6 | % | 57.9 | % | ||
| Expense Ratio | 40.5 | % | 42.5 | % | ||
| GAAP combined ratio | 101.1 | % | 100.4 | % | ||
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American Safety Insurance Holdings, Ltd. and Subsidiaries |
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Financial and Operating Highlights (continued) |
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(In thousands except per share data) |
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| As of | ||||
| BALANCE SHEET DATA: | 3/31/2009 | 12/31/2008 | ||
| (unaudited) | ||||
| Total investments | $ 687,209 | $673,739 | ||
| Total assets | 1,036,776 | 1,026,364 | ||
| Unpaid losses and loss adjustment expenses |
603,328 |
586,647 |
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| Total liabilities | 813,626 | 809,340 | ||
| Total shareholders’ equity | 219,989 | 217,024 | ||
| Book value per share | $21.35 | $ 21.12 | ||
Contact:
American Safety Insurance Holdings, Ltd. Investor Relations Stephen R. Crim, 441-296-8560 scrim@amsafety.bm or American Safety Administrative Services, Inc. Media Relations Julie McDonald, 770-916-1908 jmcdonald@amsafety.com
source: http://biz.yahoo.com/bw/090428/20090428006566.html?.v=1