Bermuda-based American Safety Insurance Holdings last night reported a 42 percent increase in fourth-quarter net earnings to $6.4 million, or $0.59 per share.

An earnings statement from the company said attributed the increase primarily to increased investment income, realised gains on investments and a $1.1 million reduction in payroll and related expenses.

Full-year profits for 2006 increased 40 percent to $20.5 million, or $2.26 per share, as compared to $14.7 million for 2005.

Revenues for the quarter totalled $45.9 million, an increase of 9 percent over 2005.

Gross premiums written rose 15 percent for the quarter and 2.4 percent for the year. And combined ratio was 99.7 percent for the quarter compared to 100.6 percent for the same period of 2005.

Stephen R. Crim, president and chief executive officer of American Safety Insurance Holdings, said: ?While the insurance market continues to show signs of softening and we are experiencing a modest decline in rates overall, I remain confident in our ability to achieve our growth targets in 2007 of 8 percent gross premium written growth and 16 percent net premium written growth, and to improve the combined ratio toward our 95-percent target.?