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):  October 27, 2010

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):

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

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

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

[  ] 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 October 27, 2010, the Registrant issued a press release reporting its financial results for the quarter ended September 30, 2010.

A copy of the press release is attached as Exhibit 99.1 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 October 27, 2010 announcing financial results for the quarter ended September 30, 2010.

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:  October 27, 2010	By:	/s/ Stephen R. Crim
		Stephen R. Crim
		President/CEO

EX-99.1

American Safety Insurance Holdings, Ltd.

Reports Net Earnings of $7.2 Million

Book Value Per Diluted Share Increased to $29.81

HAMILTON, Bermuda, October 27, 2010 – American Safety Insurance Holdings, Ltd. (NYSE:ASI) 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.

Financial highlights for the quarter included:

·   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

The increase in total revenue in the quarter from $48.6 million in the 2009 quarter was due to higher net earned premiums resulting from growth in each of our three divisions, primarily in our newer products and the dealer open lot property program added in 2009.  The decrease in gross written premiums for the quarter was due to the non-renewal of a specialty program within the ART division that contributed $40.9 million of gross written premium in the 2009 quarter.  That program was 100% reinsured and therefore had no impact on earned premiums.

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

Net earnings for the nine months ended September 30, 2010 were $19.9 million, or $1.87 per diluted share, compared to $17.4 million, or $1.65 per diluted share for the same period in 2009.  Total revenues increased 13% to $173.1 million from $152.8 million for the 2009 period.  This increase was due primarily to higher net earned premiums resulting from growth in each of our three divisions, particularly in our newer products and the dealer open lot property program added in 2009.

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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.

Operating earnings for the nine months increased to $18.2 million from $17.5 million in 2009 due primarily  increased investment income.  Investment income increased 5% reflecting positive cash flow and increased net written premiums.  Net realized gains on investments for the current nine month period were approximately $2.1 million pre-tax, compared to net realized gains on investments of $0.3 million during 2009.

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.

Commenting on the results, Stephen R. Crim, President and Chief Executive Officer said, “I am pleased with the results for the third quarter with solid growth in book value per share and revenue, as well as strong cash flow from operations.  The higher revenue in the quarter was driven by increased premiums in newer products added in connection with our diversification strategy.  We will continue to evaluate opportunities for acquisitive growth, such as the professional liability underwriting team announced last week, to build our product platform and position the Company for more substantial growth when market conditions improve.”

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 a nd 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.

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About Us:

American Safety Insurance Holdings, Ltd. (NYSE:ASI), 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.

Contacts:

American Safety Insurance Holdings, Ltd.

Investor Relations

Stephen R. Crim

scrim@amsafety.bm

(441) 542-7933

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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

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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	%

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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	%

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