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American Safety Insurance Holdings, Ltd. Reports Completion of Actuarial Reserve Evaluation

12 October 2004

Hamilton, Bermuda: 11 October 2004 - The review was commenced as a result of adverse loss development from a small segment of its excess and surplus business during the second quarter of 2004 and management's concern that existing reserves for this business line might not be adequate. As a result of the review, the Company will strengthen its reserves by approximately $3 million in the third quarter of 2004. This reserve strengthening is not a result of actual losses from the excess and surplus business, but rather is based on the Company's change in actuarial reserving methodology. Despite this reserve strengthening, the Company will report profitable insurance operations for the third quarter of 2004.

Commenting on this development, Stephen R. Crim, President and Chief Executive Officer of American Safety Insurance Holdings, Ltd., said, "We believe this reserve strengthening is prudent although it adversely effects our otherwise strong insurance results. The decision to change our actuarial reserving methodology and to strengthen reserves was made in consultation with the Company's independent actuarial consultant. As previously reported, the Company has taken steps in both our underwriting and claims areas to address the reserve development, and we believe the change in actuarial reserving assumptions and methodology for our excess and surplus business is appropriate. We continue to believe the insurance market conditions remain favorable for the market segments currently served by the Company, and we are pleased with the continued growth of our core insurance business lines."

A conference call to discuss third quarter 2004 results is scheduled for Thursday, November 4, 2004 at 11:00 a.m. (Eastern Time), which will be broadcast through the Investor Broadcast Network's Vcall website at www.vcall.com or the Company's website at www.americansafetyinsurance.com. A replay will be available on the Company's website.

American Safety Insurance Holdings, Ltd. is a specialty insurance holding company which, through its subsidiaries, provides innovative insurance solutions in the alternative insurance market for environmental remediation, contracting and other specialty risks. Additional information about the Company can be found at www.americansafetyinsurance.com.