American Safety Insurance Holdings, Ltd. Reports Third Quarter Earnings

Net earnings are detailed as follows (in thousands):

Quarter EndedSeptember 30, Nine months EndedSeptember 30,

2004 2003 2004 2003

Insurance Operations $ 992 $1,768 $1,410 $4,993

Real Estate Operations 2,288 1,173 5,807 998

Other (22) 21 3,787 2,005

Net Earnings $3,258 $2,962 $11,004 $7,996

The decrease in earnings from insurance operations for the third quarter of 2004 reflects approximately $3.0 million of reserve strengthening for prior accident years as a result of an actuarial reserve evaluation for the Company's excess and surplus lines business, as previously announced. The increase in earnings from real estate operations for the third quarter of 2004 was due to higher profits from closings of condominium units at Harbour Village.

The decrease in earnings from insurance operations for the nine months ended September 30, 2004 reflects a total of $12.3 million of reserve strengthening for prior accident years. Of this amount, $7.7 million consists of reserve increases for the Company's excess and surplus business, and the remaining $4.6 million represents reserve increases for discontinued lines. The increase in earnings from real estate operations for the nine months ended September 30, 2004 was due to higher profits from closings of condominium units at Harbour Village.

Total revenues for the third quarter of 2004 increased 27% to $57 million as compared to the same quarter of 2003 as a result of increased net premiums earned, investment income and real estate income. Net premiums earned for the third quarter of 2004 increased 26% to $35 million from the same period in 2003 due to increases in the Company's core business lines. Net cash flow generated from operations was $22 million for the third quarter of 2004.

Total revenues for the nine months ended September 30, 2004 increased 34% to $162 million as compared to the same period in 2003 as a result of increased net premiums earned, investment income and real estate income. Net premiums earned for the nine months ended September 30, 2004 increased 35% to $101 million from the same period in 2003 due to increases in the Company's core business lines. Net cash flow from operations increased to $66 million for the nine months ended September 30, 2004.

The Company's book value per share increased 12% to $15.52 at September 30, 2004 from $13.80 at December 31, 2003. This increase in book value per share is due primarily to the Company's net earnings during the nine months ended September 30, 2004 and the repurchase of 217,000 shares under its previously announced stock repurchase programs.

Commenting on the results, Stephen R. Crim, President and Chief Executive Officer of American Safety Insurance Holdings, Ltd., said: "While the reserve strengthening adversely affected the results for the quarter, we are pleased with the continued growth and profitability of our insurance operations. We achieved strong growth in revenue, cash flow, net premiums earned and investment income for the nine months, and successfully increased the Company's book value by 12% over the year ended December 31, 2003. While we have begun to experience a leveling in our premium rates, we believe that the market conditions for the insurance business segments that the Company serves continue to present profitable opportunities."

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.

This press release contains forward-looking statements. These forward-looking statements reflect the Company's current views with respect to future events and financial performance, including insurance market conditions, future insurance claims and losses, and profitability of the Harbour Village real estate development project. Forward-looking statements involve risks and uncertainties which may cause actual results to differ materially, and are subject to change based on various factors, including competitive conditions in the insurance industry, levels of new and renewal insurance business, developments in loss trends, adequacy and changes in loss reserves and actuarial assumptions, timing or collectibility of reinsurance recoverables, market acceptance of new coverages and enhancements, changes in reinsurance costs and availability, potential adverse decisions in court and arbitration proceedings (including the outcome of the Principal Management acquisition rescission litigation), and changes in levels of general business activity and economic conditions. With respect to the development of the Harbour Village project, such forward looking statements involve risks and uncertainties which may cause actual results to differ materially, and are subject to change based on various real estate development industry factors, including competitive housing conditions in the local market area, risks inherent in real estate development and new construction, increases in construction costs, weather, litigation, changes in interest rates and the availability of mortgage financing for prospective purchasers of condominium units, and changes in local and national levels of general business activity and economic conditions. For additional factors, which could influence the results of the Company's operating and financial performance, see the Company's filings with the Securities and Exchange Commission.

Contacts:

American Safety Insurance Services, Inc. Cameron Associates

Fred J. Pinckney Kevin McGrath

Investor Relations/General Counsel (212) 245-4577

(770) 916-1908