Segment Information

3 Months Ended

Mar. 31, 2012

Segment Information [Abstract]

Segment Information

Note 3 – Segment Information

We segregate our business into two segments: insurance operations and other. The insurance operations are further classified into three divisions: excess and surplus lines (E&S), alternative risk transfer (ART) and assumed reinsurance (Assumed Re). E&S consists of seven product lines: environmental, primary casualty, excess, property, surety, healthcare, and professional liability. ART consists of two product lines: specialty programs and fully funded. Assumed Re consists of property and casualty business assumed from unaffiliated specialty insurers and reinsurers. Other includes lines of business that we no longer underwrite (run-off) and other ancillary product lines. Prior year amounts have been reclassified to conform to the current year presentation.

Within E&S, our environmental insurance products provide general contractor pollution and/or professional liability coverage for contractors and consultants in the environmental remediation industry and property owners. Primary casualty provides general liability insurance for residential and commercial contractors as well as general liability and product liability for smaller manufacturers, distributors, non-habitational real estate and certain real property owner, landlord and tenant risks. Excess provides excess and umbrella liability coverages over our own and other carriers’ primary casualty polices. Our property product encompasses surplus lines commercial property business and commercial multi-peril (CMP) policies. American Safety specializes in a full range of contract and commercial bonds for small to medium size surety businesses, including bonds for environmental contractors, consultants and other professionals. Healthcare provides customized liability insurance solutions primarily for long-term care facilities. Professional Liability provides miscellaneous liability and professional liability coverage on both a primary and excess basis. Professional liability coverage is provided to lawyers, insurance agents, and other businesses, while miscellaneous liability coverage is provided to private and not for profit entities and, to a lesser extent, public companies.

In our ART division, specialty programs provide insurance to homogeneous niche groups through third-party program managers. Our specialty programs consist primarily of property and liability insurance coverages for certain classes of specialty risks including, but not limited to general and trade contractors, pest control operators, tanning salons, auto dealers, pizza delivery operators and federal employees. Fully funded policies provide our insureds the ability to fund their liability exposure via a self-insurance vehicle for which we generate fee income. We write fully funded general and professional liability for businesses operating primarily in the healthcare and construction industries.

Our Assumed Reinsurance division offers property and casualty reinsurance products in the form of treaty and facultative contracts targeting specialty insurers, risk retention groups and captives. We provide this coverage on an excess of loss and, to a lesser extent, a quota share basis. We reinsure casualty business, which includes medical malpractice, general liability, commercial auto, professional liability and workers’ compensation. The assumed reinsurance division also participates in one property catastrophe treaty that provides a maximum of $20 million of coverage over the treaty period. The treaty covers world-wide property catastrophe losses including hurricanes and earthquakes.

Our Other segment includes lines of business that we have placed in run-off, such as workers’ compensation, excess liability insurance for municipalities, other commercial lines, real estate and other ancillary product lines.

The reportable insurance divisions are measured based on underwriting profit (loss) and pre-tax operating income (loss).

The following table presents key financial data by segment for the three months ended March 31, 2012 and 2011, respectively (dollars in thousands):

	Three Months Ended March 31, 2012
	Insurance									Other
	E&S			ART			Reinsurance			Run-off			Total
Gross written premiums	$	38,611		$	21,178		$	13,976		$	—		$	73,765
Net written premiums		30,733			16,143			13,976			—			60,852
Net earned premiums		31,150			16,344			13,919			—			61,413
Fee & other income		—			663			—			17			680
Losses & loss adjustment expenses		18,917			9,987			8,349			28			37,281
Acquisition & other underwriting expenses		14,190			6,485			4,343			478			25,496
Underwriting profit (loss)		(1,957	)		535			1,227			(489	)		(684	)
Net investment income		4,625			1,429			1,621			136			7,811
Pre-tax operating income (loss)		2,668			1,964			2,848			(353	)		7,127
Net realized gains														53
Interest and corporate expenses														1,673
Earnings before income taxes														5,507
Income tax expense														1,106
Net earnings													$	4,401
Less: Net earnings attributable to the non - controlling interest														345
Net earnings attributable to ASIH, Ltd.													$	4,056
Loss ratio		60.7	%		61.1	%		60.0	%		*NM			60.7	%
Expense ratio		45.6	%		35.6	%		31.2	%		NM			40.4	%
Combined ratio**		106.3	%		96.7	%		91.2	%		NM			101.1	%

	Three Months Ended March 31, 2011
	Insurance									Other
	E&S			ART			Reinsurance			Run-off			Total
Gross written premiums	$	35,995		$	21,878		$	16,472		$	—		$	74,345
Net written premiums		29,602			14,906			15,502			—			60,010
Net earned premiums		27,994			14,355			12,019			—			54,368
Fee & other income		5			860			—			11			876
Losses & loss adjustment expenses		17,753			9,014			15,494			(1	)		42,260
Acquisition & other underwriting expenses		13,013			6,313			2,911			(283	)		21,954
Underwriting profit (loss)		(2,767	)		(112	)		(6,386	)		295			(8,970	)
Net investment income		4,815			1,121			1,349			152			7,437
Pre-tax operating income		2,048			1,009			(5,037	)		447			(1,533	)
Net realized gains														11,107
Interest and corporate expenses														1,212
Earnings before income taxes														8,362
Income tax benefit														(32	)
Net earnings													$	8,394
Less: Net earnings attributable to the non-controlling interest														493
Net earnings attributable to ASIH, Ltd.													$	7,901
Loss ratio		63.4	%		62.8	%		128.9	%		*NM			77.7	%
Expense ratio		46.5	%		38.0	%		24.2	%		NM			38.8	%
Combined ratio**		109.9	%		100.8	%		153.1	%		NM			116.5	%

* 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.

The Company conducts business in two geographic segments: the United States and Bermuda. Significant differences exist in the regulatory environment in each country.

The following table provides financial data about the geographic locations for the three months ended March 31, 2012 and 2011 (dollars in thousands):

	United States			Bermuda		Total
March 31, 2012
Income tax expense	$	1,106		$	—	$	1,106
Net earnings attributable to American Safety Insurance Holdings, Ltd.	$	1,539		$	2,517	$	4,056
Assets	$	687,542		$	611,431	$	1,298,973
Equity	$	108,689		$	233,730	$	342,419
	United States			Bermuda		Total
March 31, 2011
Income tax benefit	$	(32	)	$	—	$	(32	)
Net earnings attributable to American Safety Insurance Holdings, Ltd.	$	(120	)	$	8,021	$	7,901
Assets	$	658,064		$	580,832	$	1,238,896
Equity	$	102,154		$	212,557	$	314,712