American Safety Insurance Holdings Ltd. enjoyed a successful second quarter with a 57 percent increase in net earnings, in the face of a soft market impacting on premium growth.

Earnings rose from $4.6 million or $0.62 per diluted share this time last year to $7.3m or $0.66 per share.

Gross premiums written decreased six percent to $57.9m, but on the flipside net premiums written increased seven percent to $44.5m and net premiums written as a percentage of gross premiums written increased to 76.9 percent from 67.6 percent in 2006.

Meanwhile net premiums earned increased 12 percent to $39.4m and investment income increased 58 percent to $7.5m and annualised return on average equity declined to 14.1percent from 15.8 percent for the same period of 2006 due to the impact of the 2006 equity offering.

Stephen Crim, president and CEO said: "The soft market adversely impacted premium growth in the quarter as we continued to exercise underwriting discipline. Our western states construction line was impacted the most, declining by approximately 50 percent during the quarter.

"Given the greater than anticipated decline in the insurance markets, we are revising our growth projection for 2007 to be flat in gross premiums written and modest growth in net premiums written. Our new products and our eastern states construction business produced $18 million of premium, representing 31 percent of gross premiums written for the quarter."