American Safety Insurance Holdings Ltd’s net earnings rose to $7.9 million during the first quarter of 2011 from $6.5 million in the same period in 2010.The Bermuda-based company’s net earned premiums increased 27 percent to $54.4 million, while net realised gains on investments were $11.1 million compared to $1 million a year prior.Property losses, including catastrophic events, were $5.8 million, contributing approximately 11 points to a combined ratio of 116.7 percent versus 102.3 percent in 2010.Net operating cash flow was $26.5 million compared to $10.6 million and book value was $28.57 per share versus $29 at December 31, 2010.Total revenues in the quarter increased to $73.8 million from $53 million in 2010 due to higher net earned premiums across all insurance divisions and net realised gains on investments, partially offset by a decrease in investment and fee income.The combined ratio consisted of a loss ratio of 77.7 percent and an expense ratio of 39 percent, compared to 59.1 percent and 43.2 percent, respectively, for the same quarter of 2010. The loss ratio was impacted by prior year reserve strengthening of $6.8 million, as well as $3.6 million in net catastrophe losses attributable to New Zealand and Japan in the assumed reinsurance division. The expense ratio decreased to 39 percent from 43.2 percent a year ago primarily as a result of economies of scale associated with an increase in net earned premiums.For the three months ended March 31, 2011, a net operating loss of $3.2 million compared to net operating earnings of $5.8 million for the same quarter 2010. The 2011 net operating loss was primarily the result of property and other losses.Meanwhile investment income decreased 5.9 percent to $7.4 million as a result of the sale of fixed income securities totaling $81.6 million and subsequent reinvestment in shorter duration, lower yielding securities.Since December 31, 2010, the company repurchased 37,566 shares at an average price of $19.89 per share. Remaining shares under the current authorisation stand at 306,734.Stephen Crim, president and CEO of American Safety, said: “Property catastrophe losses contributed to a difficult quarter, but those losses were in line with established risk tolerance levels. I am, however, pleased with the progress we made in our product diversification strategy, which was a primary driver of premium growth in the quarter.”