HAMILTON, Bermuda--American Safety Insurance Holdings, Ltd. (NYSE:ASI - News) today reported net earnings of $7.2 million for the three months ended September 30, 2010, or $0.68 per diluted share, as compared to $5.0 million, or $0.47 per diluted share for the same period of 2009.

• Total revenues increased 30% to $63.3 million
• Gross written premiums decreased 22% to $71.9 million
• Net operating cash flow increased 35% to $17.0 million
• The combined ratio improved to 98.3% from 100.2% for the 2009 quarter
• Annualized return on average equity was 10.3%, excluding realized and unrealized gains (losses) on investments
• Book value increased to $30.96 per outstanding share and $29.81 per diluted share

Third Quarter Results

Operating earnings for the quarter increased to $6.7 million from $4.9 million in 2009 due primarily to increased investment income. Investment income increased 13% reflecting positive cash flow and increased net written premiums. The 2009 quarter also included a $1.6 million receivable write-off. Operating earnings is a non-GAAP financial measure defined by the Company as net earnings adjusted for net realized gains/(losses), net of applicable taxes. Net realized gains on investments for the current quarter were approximately $560 thousand pre-tax compared to $60 thousand pre-tax for the 2009 quarter.

The combined ratio was 98.3%, composed of a loss ratio of 59.0% and an expense ratio of 39.3%. The loss ratio increased to 59.0% from 57.7% for the same quarter in 2009. The improvement in the expense ratio to 39.3% from 42.5% is attributable to increased net earned premiums in the 2010 quarter and the impact of the receivable write-off in 2009.

Year to Date Results

Gross written premiums increased 2% to $203.8 million compared to $200.2 million for the same period in 2009. Gross written premiums in the 2009 period include $40.9 million from the specialty program that was not renewed in 2010. Growth in gross written premiums during the 2010 period more than offset the impact of the non-renewal and resulted in a 35% increase in net written premiums to $163.3 million and a 14% increase in net earned premiums to $143.4 million.

The combined ratio was 99.8%, composed of a loss ratio of 60.0% and an expense ratio of 39.8%. The loss ratio increased to 60.0% from 58.9% for the 2009 period. The improvement in the expense ratio from 40.6% to 39.8% is attributable to the same factors noted in the third quarter results.

Invested assets increased 7% to $805.9 million at September 30, 2010 from $750.4 million at December 31, 2009 due to cash flow and net realized gains in the investment portfolio. The pre-tax book yield realized during the nine months on the investment portfolio was 4.1% compared to 4.3% for the same period in 2009.

Conference Call

A conference call to discuss 3rd quarter 2010 results is scheduled for Thursday, October 28, 2010 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 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, combined ratio, 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 and American Safety Risk Retention Group, Inc. and American Safety Assurance (Vermont), Inc. and Victore Insurance Company. 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.

American Safety Insurance Holdings, Ltd. and Subsidiaries Financial and Operating Highlights (Unaudited) (in thousands)
	Three Months Ended September 30,								Nine Months Ended September 30,
		2010				2009				2010				2009
INCOME STATEMENT DATA: Revenues:
Direct earned premiums	$	55,941			$	58,877			$	172,659			$	160,057
Assumed earned premiums		10,861				6,895				29,151				26,991
Ceded earned premiums		(13,582	)			(25,791	)			(58,382	)			(60,798	)
Net earned premiums		53,220				39,981				143,428				126,250
Net investment income		8,265				7,331				24,099				22,850
Net realized gains		560				61				2,080				298
Fee income		1,474				1,250				3,722				3,368
Other income (loss)		(260	)			(40	)			(230	)			44
Total revenues		63,259				48,583				173,099				152,810
Expenses:
Losses and loss adjustment expenses		31,378				23,074				86,030				74,322
Acquisition expenses		12,393				7,843				31,218				26,920
Other underwriting expenses		9,996				10,366				29,672				27,682
Interest expense		586				828				2,030				2,379
Corporate and other expenses		965				651				2,431				2,076
Total expenses		55,318				42,762				151,381				133,379
Earnings before income taxes		7,941				5,821				21,718				19,431
Income taxes		635				446				1,486				1,420
Net Earnings		7,306				5,375				20,232				18,011
Less: Net earnings attributable to the non-controlling interest		104				421				360				593
Net earnings attributable to ASIH, Ltd.	$	7,202			$	4,954			$	19,872			$	17,418
Net earnings per share:
Basic	$	0.70			$	0.48			$	1.93			$	1.69
Diluted	$	0.68			$	0.47			$	1.87			$	1.65
Weighted average number of shares outstanding:
Basic		10,271,184				10,303,121				10,282,976				10,297,303
Diluted		10,612,281				10,608,138				10,615,548				10,536,027
Loss Ratio		59.0	%			57.7	%			60.0	%			58.9	%
Expense Ratio		39.3	%			42.5	%			39.8	%			40.6	%
GAAP combined ratio		98.3	%			100.2	%			99.8	%			99.5	%
Operating Earnings:
Net earnings attributable to ASIH, Ltd.	$	7,202			$	4,954			$	19,872			$	17,418
Less: Realized investment gains (losses), net of taxes		487				39				1,660				(40	)
Operating earnings	$	6,715			$	4,915			$	18,212			$	17,458

		At
BALANCE SHEET DATA:			9/30/2010			12/31/2009
Total investments		$	805,941		$	750,425
Total assets			1,220,712			1,147,660
Unpaid losses and loss adjustment expenses			648,952			616,444
Total liabilities			898,314			872,148
Total shareholders’ equity			322,398			275,512
Book value per share-diluted		$	29.81		$	25.47

American Safety Insurance Holdings, Ltd. and Subsidiaries Segment Data (Unaudited) (Dollars in thousands)
	Three Months Ended September 30, 2010
	Insurance												Other
	E&S				ART				Reinsurance				Run-off				Total
Gross Written Premiums	$	34,121			$	24,847			$	12,971			$	(6	)		$	71,933
Net Written Premiums		27,423				17,063				12,258				(6	)			56,738
Net Earned Premiums		26,347				15,114				11,765				(6	)			53,220
Underwriting Profit (Loss)		(1,161	)			736				181				(303	)			(547	)
Fee Income		266				1,150				57				1				1,474
Other Income (Loss)		(223	)			-				-				(37	)			(260	)
Investment Income		5,286				1,366				1,488				125				8,265
Pre-tax Operating Income		4,168				3,252				1,726				(214	)			8,932
Realized Gains																		560
Interest and Holding Company Expenses																		1,551
Earnings Before Income Taxes																		7,941
Income Taxes																		635
Net Earnings																		7,306
Less: Net Earnings Attributable to the Non-controlling Interest																		104
Net Earnings Attributable to ASIH, Ltd.																	$	7,202
Loss Ratio		57.3	%			53.1	%			70.2	%			NM				59.0	%
Expense Ratio		46.1	%			34.4	%			27.7	%			NM				39.3	%
Combined Ratio		103.4	%			87.5	%			97.9	%			NM				98.3	%
	Three Months Ended September 30, 2009
	Insurance												Other
	E&S				ART				Reinsurance				Run-off				Total
Gross Written Premiums	$	26,910			$	58,593			$	7,100			$	-			$	92,603
Net Written Premiums		19,667				11,351				7,044				-				38,062
Net Earned Premiums		22,025				11,261				6,695				-				39,981
Underwriting Profit (Loss)		(677	)			167				(236	)			(556	)			(1,302	)
Fee Income		265				939				80				(34	)			1,250
Other Income (Loss)														(40	)			(40	)
Investment Income		5,100				1,104				905				222				7,331
Pre-tax Operating Income		4,688				2,210				749				(408	)			7,239
Realized Gains																		61
Interest and Holding Company Expenses																		1,479
Earnings Before Income Taxes																		5,821
Income Taxes																		446
Net Earnings																		5,375
Less: Net Earnings Attributable to the Non-controlling Interest																		421
Net Earnings Attributable to ASIH, Ltd.																	$	4,954
Loss Ratio		56.4	%			54.0	%			68.9	%			NM				57.7	%
Expense Ratio		45.5	%			36.3	%			33.4	%			NM				42.5	%
Combined Ratio		101.9	%			90.3	%			102.3	%			NM				100.2	%

American Safety Insurance Holdings, Ltd. and Subsidiaries Segment Data (Unaudited) (Dollars in thousands)
	Nine Months Ended September 30, 2010
	Insurance												Other
	E&S				ART				Reinsurance				Run-off				Total
Gross Written Premiums	$	100,227			$	66,966			$	36,641			$	(6	)		$	203,828
Net Written Premiums		81,251				48,501				33,539				(6	)			163,285
Net Earned Premiums		72,741				39,178				31,515				(6	)			143,428
Underwriting Profit (Loss)		(5,078	)			1,482				1,086				(982	)			(3,492	)
Fee Income		615				2,854				228				25				3,722
Other Income (Loss)		(223	)			-				-				(7	)			(230	)
Investment Income		16,120				3,634				3,753				592				24,099
Pre-tax Operating Income		11,434				7,970				5,067				(372	)			24,099
Realized Gains																		2,080
Interest and Holding Company Expenses																		4,461
Earnings Before Income Taxes																		21,718
Income Taxes																		1,486
Net Earnings																		20,232
Less: Net Earnings Attributable to the Non-controlling Interest																		360
Net Earnings Attributable to ASIH, Ltd.																	$	19,872
Loss Ratio		57.7	%			58.5	%			67.1	%			NM				60.0	%
Expense Ratio		48.4	%			30.4	%			28.8	%			NM				39.8	%
Combined Ratio		106.1	%			88.9	%			95.9	%			NM				99.8	%
	Nine Months Ended September 30, 2009
	Insurance												Other
	E&S				ART				Reinsurance				Run-off				Total
Gross Written Premiums	$	85,420			$	89,477			$	25,327			$	-			$	200,224
Net Written Premiums		63,927				30,995				25,776				-				120,698
Net Earned Premiums		68,451				31,758				26,041				-				126,250
Underwriting Profit (Loss)		(2,670	)			2,661				(595	)			(2,070	)			(2,674	)
Fee Income		673				2,420				309				(34	)			3,368
Other Income		-				-				-				44				44
Investment Income		16,253				3,120				2,750				727				22,850
Pre-tax Operating Income		14,256				8,201				2,464				(1,333	)			23,588
Realized Gains																		298
Interest and Holding Company Expenses																		4,455
Earnings Before Income Taxes																		19,431
Income Taxes																		1,420
Net Earnings																		18,011
Less: Net Earnings Attributable to the Non-controlling Interest																		593
Net Earnings Attributable to ASIH, Ltd.																	$	17,418
Loss Ratio		57.9	%			52.9	%			68.8	%			NM				58.9	%
Expense Ratio		45.0	%			31.1	%			32.3	%			NM				40.6	%
Combined Ratio		102.9	%			84.0	%			101.1	%			NM				99.5	%