American Safety Insurance Holdings has reported net earnings of $6 million, or $0.55 per diluted share for the first quarter of 2008, a decrease of 15%, from $7.1 million, or $0.65 per diluted share, for the same period in 2007.
According to the company, 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.
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.
Stephen Crim, president and CEO of American Safety Insurance Holdings, said: 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.