American Safety Insurance Holdings Ltd. (ASI, Financial) filed Quarterly Report for the period ended 2010-03-31.
American Safety Insurance Holdings Ltd. has a market cap of $158.4 million; its shares were traded at around $15.34 with a P/E ratio of 6.58 and P/S ratio of 0.77. ASI is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Net earned premiums decreased 3.8% to $43.0 million for the three months ended March 31, 2010, compared to $44.7 million for the same period of 2009. E&S premiums earned totaled $22.2 million, a slight decrease from the same period in 2009 due to less earned premium in our construction product of approximately $1.8 million, which was partially offset by increased earned premium in our property and surety products. The construction product has been impacted by economic conditions and competition reducing pricing over the last three years. Our diversification strategy initiated in 2006 with new product offerings resulted in the increased earned premium in the property and surety products. ART premiums earned totaled $11.2 million, a 4.7% increase over the 2009 period, primarily due to a new dealer open lot program and the expansion of a restaurant program. Assumed Reinsurance totaled $9.7 million, an 11.9% decrease from 2009 due primarily to the shift to excess of loss treaties versus quota share treaties. Excess of loss treaties generally produce less premium than do quota share treaties but carry lower acquisition expenses.
Fee income earned increased to $1.1 million for the three months ended March 31, 2010 as compared to $0.9 million for the same period of 2009. The increase is primarily attributable to the fee income associated with the fully funded line of business in our ART division.
Net investment income increased to $7.9 million for the three months ended March 31, 2010 compared to $7.8 million for the same period of 2009 due primarily to increased invested assets partially offset by assets earning lower yields. Average invested assets increased to $754.4 million at March 31, 2010 as compared to $680.5 for the same period of 2009, due primarily to cash flow. The average pre-tax and after-tax investment yields were 4.2% and 3.6%, compared to 4.6% and 3.9% for the three months ended March 31, 2010 and 2009, respectively.
Losses and loss adjustment expenses totaled $25.4 million, or 59.1% of net earned premiums, for the three months ended March 31, 2010 compared to $27.1 million, or 60.6%, for the same period of 2009. The decrease in the loss ratio was due primarily to a lower loss ratio in the Assumed Reinsurance division and business mix shifts in the Alternative Risk division to shorter tailed business. Shorter tailed business generally carries a lower loss ratio than does certain of the longer tailed casualty business. Partially offsetting these factors was a $0.4 million increase to our 2010 property loss ratio to reflect a large claim reported during the quarter. There was no prior year development in the 2010 quarter.
Income tax expense for the three months ended March 31, 2010 was a benefit of $0.1 million compared to an expense of $0.2 million for the same period of 2009. The decrease is due to the reduction of our valuation allowance established for realized losses in 2008. Since 2008 we have realized gains from sales of investments allowing us to reduce that allowance. During the quarter we reduced the allowance by $0.3 million.
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American Safety Insurance Holdings Ltd. has a market cap of $158.4 million; its shares were traded at around $15.34 with a P/E ratio of 6.58 and P/S ratio of 0.77. ASI is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Net earnings increased $1.0 million to $6.5 million, or $0.61 per diluted share, for the three months ended March 31, 2010, compared to $5.5 million, or $0.53 per diluted share, for the same period of 2009. The increase in net earnings was primarily due to pre-tax realized gains from investments of $1.0 million compared to a loss of $0.4 million in 2009. See discussion below for more information regarding the various components of net earnings.Net earned premiums decreased 3.8% to $43.0 million for the three months ended March 31, 2010, compared to $44.7 million for the same period of 2009. E&S premiums earned totaled $22.2 million, a slight decrease from the same period in 2009 due to less earned premium in our construction product of approximately $1.8 million, which was partially offset by increased earned premium in our property and surety products. The construction product has been impacted by economic conditions and competition reducing pricing over the last three years. Our diversification strategy initiated in 2006 with new product offerings resulted in the increased earned premium in the property and surety products. ART premiums earned totaled $11.2 million, a 4.7% increase over the 2009 period, primarily due to a new dealer open lot program and the expansion of a restaurant program. Assumed Reinsurance totaled $9.7 million, an 11.9% decrease from 2009 due primarily to the shift to excess of loss treaties versus quota share treaties. Excess of loss treaties generally produce less premium than do quota share treaties but carry lower acquisition expenses.
Fee income earned increased to $1.1 million for the three months ended March 31, 2010 as compared to $0.9 million for the same period of 2009. The increase is primarily attributable to the fee income associated with the fully funded line of business in our ART division.
Net investment income increased to $7.9 million for the three months ended March 31, 2010 compared to $7.8 million for the same period of 2009 due primarily to increased invested assets partially offset by assets earning lower yields. Average invested assets increased to $754.4 million at March 31, 2010 as compared to $680.5 for the same period of 2009, due primarily to cash flow. The average pre-tax and after-tax investment yields were 4.2% and 3.6%, compared to 4.6% and 3.9% for the three months ended March 31, 2010 and 2009, respectively.
Losses and loss adjustment expenses totaled $25.4 million, or 59.1% of net earned premiums, for the three months ended March 31, 2010 compared to $27.1 million, or 60.6%, for the same period of 2009. The decrease in the loss ratio was due primarily to a lower loss ratio in the Assumed Reinsurance division and business mix shifts in the Alternative Risk division to shorter tailed business. Shorter tailed business generally carries a lower loss ratio than does certain of the longer tailed casualty business. Partially offsetting these factors was a $0.4 million increase to our 2010 property loss ratio to reflect a large claim reported during the quarter. There was no prior year development in the 2010 quarter.
Income tax expense for the three months ended March 31, 2010 was a benefit of $0.1 million compared to an expense of $0.2 million for the same period of 2009. The decrease is due to the reduction of our valuation allowance established for realized losses in 2008. Since 2008 we have realized gains from sales of investments allowing us to reduce that allowance. During the quarter we reduced the allowance by $0.3 million.
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