Bermuda-based insurer American Safety Insurance Holdings, Ltd. yesterday reported a net loss of $8.2 million for the 2008 fourth quarter

The loss, which broke down to 80 cents per share, compared to net earnings of $6.8 million, or $0.61 per diluted share, for the same period of 2007.

The fourth quarter results include $6.0 million of realised losses due to other-than-temporary-impairment of investments, $3.9 million of net prior year adverse reserve development and $1.6 million of reinsurance reinstatement premiums primarily related to the environmental line in New York.

There was also a $2.5 million increase in the allowance for reinsurance recoverables. These items, totalling $14 million, increased the combined ratio by 17 percentage points.

The combined ratio - the percentage of premium dollars spent on claims and expenses - was 115.4 percent for the quarter and 106.0 percent for the year, compared to 105.0 percent and 97.4 percent, respectively, in 2007. Gross premiums written increased eight percent for the quarter and 19 percent for the year.

Chief executive officer Stephen Crim said: "2008 was a difficult year for both the insurance industry and American Safety Insurance.

"I am disappointed in our fourth-quarter performance but, despite the losses we experienced, our balance sheet remains strong, book value remains at $21 per share and we generated over $100 million of positive cash flow from operations last year, significantly increasing our investment portfolio.

"Short term, we will continue to focus on improving underwriting profitability and operational efficiency. We believe our expanded product base will support future growth when market conditions improve."