American Safety Insurance Holdings, Ltd. Reports Earnings of $6.8 Million

Financial highlights for the quarter included:

-- Gross premiums written increased 26% to $72.6 million.

-- Net premiums written increased 29% to $57.2 million.

-- Net premiums earned increased 22% to $48.1 million.

-- Investment income decreased 2% to $7.3 million.

-- Combined ratio increased to 103.7% compared to 94.4% for the same period of 2007.

-- Loss ratio was 63.1% compared to 59.9% for the same period of 2007.

-- Expense ratio increased to 40.6% from 34.5% for the same period of 2007.

-- Annualized return on average equity declined to 11.2% from 14.1%.

-- Book value per share increased to $21.92 per outstanding share and $21.35 per diluted share compared to $21.53 and $20.81, respectively, as of December 31, 2007.

Second Quarter Results

The 7% decline in net earnings in the second quarter is the result of the impact of the soft insurance market on underwriting profit driven by declines in our construction line and other changes in the mix of our business. Premium writings for the quarter included a greater contribution from newer products added as a part of the Company's diversification strategy and which currently have lower margins than our more mature products.

Revenues for the quarter were $56.6 million, compared to $47.6 million for the 2007 quarter. Net premiums earned totaled $48.1 million, an increase of $8.7 million, primarily due to increased writings in assumed reinsurance and increased retention levels in the specialty program line. Investment income was $7.3 million, compared to $7.5 million for the 2007 quarter. Average invested assets increased to $601 million from $570 million at June 30, 2007 while the average yield on the portfolio declined 40 basis points to 4.9%.

The expense ratio increase for the quarter was primarily a result of higher acquisition expenses due to the change in the mix of business. The loss ratio increase includes $1.5 million of prior year development primarily relating to New York risks written in the middle market segment of our environmental product line. We have substantially reduced environmental premiums in New York over the past two years. Corporate and other expenses decreased $2.8 million primarily due to a reversal of an accrued expense in our non-insurance segment.

Year to Date Results

Net earnings for the six months ended June 30, 2008 were $12.8 million, or $1.18 per diluted share, compared to $14.4 million, or $1.31 per diluted share, for the same period of 2007. Total revenues increased $9.4 million primarily due to an increase in net earned premiums for the period. The increase in net premiums earned was primarily due to increased writings in assumed reinsurance and increased retention levels in the specialty program line. The combined ratio for the six months ended June 30, 2008 was 102.2% composed of a 60.8% loss ratio and a 41.4% expense ratio. The 2007 combined ratio was 95.0% composed of a loss ratio of 61.2% and an expense ratio of 33.8%.

Average invested assets increased 4.6% over June 30, 2007. The pre-tax investment yield decreased 40 basis points to 4.8% as compared to 5.2% for the same period of 2007. Book value for the six months increased 1.8% per outstanding share and 2.6% per diluted share despite a $9.8 million increase in unrealized losses for the period.

Commenting on the results, Stephen R. Crim, President and Chief Executive Officer said, "Gross and net premiums written increased by 12% and 15% respectively for the first six months of 2008, driven by premium growth from lines of business added since 2006 in connection with our product diversification strategy. These newer products generated $45.5 million of gross premiums written through June, compared to $17.8 million for the same period in 2007. The largest contributor to growth was assumed reinsurance, which produced $28.6 million. I am pleased with the progress in broadening our product platform, which has allowed us to achieve growth in a competitive insurance market while maintaining underwriting discipline. This platform positions the Company for meaningful growth and improved profitability when market conditions improve."

Conference Call

A conference call to discuss second quarter 2008 results is scheduled for Monday, July 28, 2008 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. These forward-looking statements reflect the Company's current views with respect to future events and financial performance, including insurance market conditions, 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 and 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.

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.

American Safety Insurance Holdings, Ltd. and Subsidiaries Financial and Operating Highlights (Unaudited) (in thousands except per share data and percentages) Three Months Ended Six Months Ended June 30, June 30, --------------------------------------------------- 2008 2007 2008 2007 ------------ ------------ ------------ ------------ INCOME STATEMENT DATA: Revenues: Direct premiums earned $ 47,903 $ 55,280 $ 94,271 $ 110,402 Assumed premiums earned 14,419 1,653 22,113 3,165 Ceded premiums earned (14,180) (17,522) (30,193) (35,799) ------------ ------------ ------------ ------------ Net premiums earned 48,142 39,411 86,191 77,768 Net investment income 7,316 7,482 14,643 14,706 Net realized gains (losses) 291 (27) 795 (8) Fee income 791 748 1,518 1,264 Other income 16 15 30 32 ------------ ------------ ------------ ------------ Total revenues 56,556 47,629 103,177 93,762 Expenses: Losses and loss adjustment expenses 30,380 23,622 52,410 47,574 Acquisition expenses 11,962 7,728 21,038 13,846 Payroll and related expenses 5,605 4,522 10,246 8,676 Other underwriting expenses 2,770 2,083 5,932 4,997 Interest Expense 824 822 1,655 1,638 Corporate and other expenses (1,883) 922 (1,309) 1,435 Minority interest 14 9 152 124 ------------ ------------ ------------ ------------ Total expenses 49,672 39,708 90,124 78,290 ------------ ------------ ------------ ------------ Earnings before income taxes 6,884 7,921 13,053 15,472 Income taxes 95 649 243 1,108 ------------ ------------ ------------ ------------ Net earnings $ 6,789 $ 7,272 $ 12,810 $ 14,364 ============ ============ ============ ============ Net earnings per share: Basic $ 0.64 $ 0.69 $ 1.21 $ 1.36 ============ ============ ============ ============ Diluted $ 0.63 $ 0.66 $ 1.18 $ 1.31 ============ ============ ============ ============ Weighted average number of shares outstanding: Basic 10,543,397 10,605,708 10,619,552 10,580,917 ============ ============ ============ ============ Diluted 10,803,446 10,974,296 10,896,841 10,952,738 ============ ============ ============ ============ GAAP combined ratio 103.7% 94.4% 102.2% 95.0% ============ ============ ============ ============ BALANCE SHEET June 30, December DATA: 2008 31, 2007 (in millions except per share data) Total investments $ 597 $ 617 Total assets 959 934 Unpaid losses and loss adjustment expenses 538 505 Total liabilities 729 704 Total shareholders' equity 230 230 Book value per share $ 21.92 $ 21.53

American Safety Insurance Holdings, Ltd. and Subsidiaries Financial and Operating Highlights (Unaudited) (in thousands ) Three Months Ended Six Months Ended June 30, June 30, ------------------ ---------------- 2008 2007 2008 2007 ---------------------------------------------------------------------- PREMIUM SUMMARY (in Thousands) Gross Premiums Written: Excess and Surplus Lines Segment Environmental $ 13,085 $11,844 $ 26,332 $ 24,982 Construction 11,206 16,930 20,070 32,923 Excess 1,869 1,227 4,330 3,196 Healthcare 3,362 - 5,103 - Products Liability 1,748 2,047 3,113 2,859 Property 2,441 233 4,290 233 Surety 2,594 1,476 4,619 2,786 ----------- ------- -------- -------- Total Excess and Surplus Lines Segment 36,305 33,757 67,857 66,979 Alternative Risk Transfer Segment Specialty Programs 16,224 15,353 30,498 34,785 ----------- ------- -------- -------- Total Alternative Risk Transfer Segment 16,224 15,353 30,498 34,785 Assumed Reinsurance Segment 20,102 8,742 28,628 11,511 ----------- ------- -------- -------- Total Gross Premiums Written $ 72,631 $57,852 $126,983 $113,275 =========== ======= ======== ======== Net Premiums Written: Excess and Surplus Lines Segment Environmental $ 9,694 $ 9,363 $ 18,620 $ 20,111 Construction 8,689 16,811 14,902 32,513 Excess 410 156 632 417 Healthcare 2,185 - 3,317 - Products Liability 1,411 1,024 2,491 1,429 Property 1,715 157 3,012 157 Surety 1,980 1,467 3,677 2,736 ----------- ------- -------- -------- Total Excess and Surplus Lines Segment 26,084 28,978 46,651 57,363 Alternative Risk Transfer Segment Specialty Programs 11,055 6,747 20,469 14,435 ----------- ------- -------- -------- Total Alternative Risk Transfer Segment 11,055 6,747 20,469 14,435 Assumed Reinsurance Segment 20,102 8,742 28,628 11,511 ----------- ------- -------- -------- Total Net Premiums Written $ 57,241 $44,467 $ 95,748 $ 83,309 =========== ======= ======== ======== Net Premiums Earned: Excess and Surplus Lines Segment Environmental $ 9,223 $10,024 $ 17,829 $ 19,550 Construction 10,335 18,895 20,688 39,259 Excess 183 184 363 411 Products Liability 1,168 482 2,183 943 Property 1,029 7 1,755 7 Surety 1,726 1,156 3,352 2,071 Healthcare 637 - 721 - ----------- ------- -------- -------- Total Excess and Surplus Lines Segment 24,301 30,748 46,891 62,241 Alternative Risk Transfer Segment Specialty Programs 9,422 7,009 17,188 12,361 ----------- ------- -------- -------- Total Alternative Risk Transfer Segment 9,422 7,009 17,188 12,361 Assumed Reinsurance Segment 14,419 1,653 22,112 3,166 ----------- ------- -------- -------- Total Net Premiums Earned $ 48,142 $39,410 $ 86,191 $ 77,768 =========== ======= ======== ========

SOURCE: American Safety Insurance Holdings, Ltd.

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