8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): April 28, 2008

AMERICAN SAFETY INSURANCE HOLDINGS, LTD.

(Exact name of registrant as specified in its charter)

                                                                      Bermuda                                                                    (State or Other Jurisdiction                                                                    of Incorporation or Organization) 001-04795 (Commission File Number) Not applicable (I.R.S. Employer Identification No.)

The Boyle Building, 2nd Floor

31 Queen Street

Hamilton, Bermuda HM 11

(Address of principal executive offices, including zip code)

(441) 296-8560

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) 12 under the Securities Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) 12 under the Securities Act (17 CFR 240.13e-2(c))

Item 2.02. Results of Operations and Financial Condition.

On April 28, 2008, the Registrant issued a press release reporting its financial results for the quarter ended March 31, 2008.

A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is hereby incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits. The following exhibit is being furnished herewith:

Exhibit No.

Description

99.1

Press Release of American Safety Insurance Holdings, Ltd. issued April 28, 2008. The information set forth under Item 2.02 and in Exhibit 99.1 is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

AMERICAN SAFETY INSURANCE HOLDINGS, LTD.

Registrant

Date: April 28, 2008	By: /s/ Stephen R. Crim
	Stephen R. Crim
	President/CEO

EX-99

 

American Safety Insurance Holdings, Ltd.

Reports Net Earnings of $6.0 Million

HAMILTON, Bermuda, April 28, 2008 - American Safety Insurance Holdings, Ltd. (NYSE: ASI) today reported first quarter net earnings of $6.0 million, or $0.55 per diluted share, a decrease of 15%, from $7.1 million, or $0.65 per diluted share, for the same period in 2007.

Financial highlights for the quarter included:

• Gross premiums written decreased 2% to $54.4 million.

• Net premiums earned declined 1% to $38 million.

• Net investment income increased 1.4% to $7.3 million.

• Cash flow used in operations was $1.8 million compared to $18.9 million generated from operations for the same period of 2007.

• Combined ratio was 100.4% compared to 95.5%.

• Loss ratio was 57.9% compared to 62.4%.

• Expense ratio increased to 42.5% from 33.1%.

• Annualized return on average equity was 9.8% compared to 14.2% for the same period of 2007.

• Book value per share increased to $22.11 from $21.53 at December 31, 2007.

First Quarter Results

Net earnings for the quarter decreased to $6.0 million, or $0.55 per diluted share, compared to $7.1 million, or $0.65 per diluted share, for the 2007 quarter. The decline in net earnings is the result of changes in the mix of business as premium writings for the quarter included a greater portion from newer products added as a part of the Company’s diversification strategy. The newer products will generate lower profit margins than our more mature product lines until they attain critical mass.

Revenues for the quarter were essentially flat at $46.6 million, compared to $46.1 million for the 2007 quarter. Net premiums earned for the quarter totaled $38 million, an increase of $0.3 million. Investment income was relatively flat at $7.3 million. While invested assets increased to $605 million from $569 million, the average yield on the portfolio declined 40 basis points to 4.8% due to lower rates. Uses of cash in the quarter included higher paid losses, premium payments under the casualty reinsurance treaty, acquisition of our healthcare division and repurchase of our common stock.

The combined ratio for the quarter was 100.4%, composed of a loss ratio of 57.9% and an expense ratio of 42.5%, compared to a combined ratio of 95.5%, with a loss ratio of 62.4% and an expense ratio of 33.1%, for the 2007 quarter. The decrease in the loss ratio was due primarily to the impact of the casualty reinsurance treaty as more losses were ceded than under our previous treaties. The increased expense ratio was due primarily to the impact of the casualty reinsurance treaty and the increase in the proportion of premiums generated by assumed reinsurance, which carries higher acquisition expenses.

Pursuant to our announced stock repurchase program, the Company repurchased 119,600 shares during the quarter at an average price of $17.62 per share.

Commenting on the results, Stephen R. Crim, President and Chief Executive Officer of American Safety Insurance Holdings, Ltd., said, “The first quarter demonstrated continued momentum in the execution of our product diversification plan, with $16 million, or 29% of gross premiums written coming from newer products, compared to $5.5 million, or 10%, for the first quarter of 2007. Net earnings declined 15% over the first quarter of 2007 due to the impact of the soft market. The largest contributor to the earnings decline was a 49% decrease in net premiums earned in our construction business line, historically one of our more profitable lines. This premium decrease was largely offset by premium increases in newer products that carry a lower profit margin. We also reserve these newer lines at what we believe are conservative loss ratios until there is an established track record of underwriting results. The investment in these newer products is key to our future success as they create a broader platform for growth when market conditions improve. Based on the current growth opportunities we see in assumed reinsurance, we expect to exceed our previous projection for growth in gross premiums written in 2008. However, we expect the impact of the soft market, in combination with the change in the mix of business from our original expectations, to place downward pressure on underwriting profitability, and we expect to fall short of our previous projection of 10-11% for return on equity.”

About Us:

American Safety Insurance Holdings, Ltd. (NYSE:ASI), a Bermuda holding company, offers innovative insurance 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. As a group, ASI’s insurance subsidiaries and affiliates are rated "A" (Excellent) VIII by A.M. Best.

Contacts:

American Safety Insurance Services, Inc.	American Safety Insurance Services, Inc.
Investor Relations	Media Relations
William Tepe	Julie McDonald
btepe@amsafety.com	jmcdonald@amsafety.com
(770) 916-1908	(770) 916-1908

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American Safety Insurance Holdings, Ltd. and Subsidiaries

Financial and Operating Highlights

	Three Months Ended March 31,
	(Unaudited) 2008		(Unaudited) 2007
PREMIUM SUMMARY (in Thousands)
Gross Premiums Written: Excess and Surplus Lines Segment
Environmental		$ 13,247		$ 13,138
Construction		8,864		15,993
Excess		2,461		1,969
Healthcare		1,742		-
Products Liability		1,365		811
Property		1,849		-
Surety		2,025		1,310
Total Excess & Surplus Lines Segment		31,553		33,221
Alternative Risk Transfer Segment
Specialty Programs		14,275		19,433
Assumed Reinsurance Segment		8,526		2,769
Total Gross Premiums Written		$ 54,354		$ 55,423
Net Premiums Written:
Excess and Surplus Lines Segment
Environmental		$ 8,927		$ 10,747
Construction		6,213		15,702
Excess		221		261
Healthcare		1,132		-
Products Liability		1,080		406
Property		1,297		-
Surety		1,697		1,270
Total Excess & Surplus Lines Segment		20,567		28,386
Alternative Risk Transfer Segment
Specialty Programs		9,413		7,687
Assumed Reinsurance Segment		8,526		2,769
Total Net Premiums Written		$ 38,506		$ 38,842
Net Premiums Earned:
Excess and Surplus Lines Segment:
Environmental		$ 8,606		$ 9,526
Construction		10,353		20,365
Excess		179		227
Healthcare		84		-
Products Liability		1,015		461
Property		726		-
Surety		1,626		915
Total Excess & Surplus Lines Segment		22,589		31,494
Alternative Risk Transfer Segment
Specialty Programs		7,766		5,351
Assumed Reinsurance Segment		7,694		1,513
Total Net Premiums Earned		$ 38,049		$ 38,358

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American Safety Insurance Holdings, Ltd. and Subsidiaries

Financial and Operating Highlights

(In thousands except per share data)

	Three Months Ended March 31,
	(Unaudited)		(Unaudited)
	2008		2007
INCOME STATEMENT DATA:
Revenues:
Direct and assumed premiums earned		$ 54,062		$ 56,635
Ceded premiums earned		(16,013)		(18,277)
Net premiums earned		38,049		38,358
Net investment income		7,327		7,224
Net realized gains		504		19
Fee income		727		516
Other income		15		17
Total revenues		46,622		46,134
Expenses:
Losses and loss adjustment expenses		22,030		23,952
Acquisition expenses		9,076		6,118
Payroll and related expenses		4,683		4,154
Real estate expenses		1		23
Interest expense		832		816
Other Expenses		3,693		3,405
Minority interest		38		15
Total expenses		40,453		38,583
Earnings before income taxes		6,169		7,551
Income taxes		148		459
Net earnings		$ 6,021		$ 7,092
Net earnings per share:
Basic		$ .56		$ .67
Diluted		$ .55		$ .65
Average number of shares outstanding:
Basic		10,696		10,556
Diluted		10,990		10,931
		As of
BALANCE SHEET DATA:		3/31/2008		12/31/2007
		(unaudited)		(audited)
Total investments		$604,813		$617,211
Total assets		932,390		934,009
Unpaid losses and loss adjustment expenses		512,267		504,779
Total liabilities		697,959		703,609
Total shareholders’ equity		234,431		230,400
Book value per share		$ 22.11		$ 21.53

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