American Safety Insurance Holdings, Ltd. Reports Fourth Quarter and Year End Earnings

HAMILTON, Bermuda: March 16, 2005 - American Safety Insurance Holdings, Ltd. (NYSE: ASI) today reported net earnings of $3.8 million or $0.52 per diluted share for the fourth quarter ended December 31, 2004, as compared to a loss of $582,000 or $0.09 per diluted share for the fourth quarter of 2003.  Net earnings for the twelve months ended December 31, 2004 were $14.8 million or $2.01 per diluted share, as compared to $7.4 million or $1.42 per diluted share for the same period in 2003.

Net earnings (loss) are detailed as follows (in thousands):

The increase in net earnings from insurance operations for the fourth quarter of 2004 was due to improved underwriting results in the Company's core business lines.  The insurance results for the quarter include $1.9 million of reserve strengthening for prior accident years. There was no reserve development for the quarter relating to the Company's excess and surplus business.  The increase in net earnings for the quarter from real estate operations was due to the closing of units with higher profit margins at Harbour Village.  The $1.1 million net loss from other items resulted from an adverse court ruling in the Principal Management, Inc. rescission litigation, which the Company intends to appeal.  Total revenues for the quarter decreased 5% to $53 million compared to the same quarter of 2003 as a result of decreased closings of units at Harbour Village.  This decrease was offset, in part, by a 3% increase in net earned premiums in the Company's core business lines, and a 51% increase in investment income as a result of increases in invested assets. Net cash flow generated from operations increased to $23 million for the quarter from $20 million in the same quarter of 2003.

Net earnings from insurance operations for the twelve months ended December 31, 2004 include reserve strengthening of $14.4 million for prior accident years.  The increase in net earnings from real estate operations was due to closings of units at Harbour Village with higher profit margins.  Earnings from other items include a $2.6 million payment received by the Company in settlement of an impaired note receivable that was written off in the fourth quarter of 2003.  Total revenues for the year ended December 31, 2004 increased 22% to $215 million compared to 2003 as a result of increased net premiums earned, real estate and investment income.  Net premiums earned for the year ended December 31, 2004 increased 25% to $136 million from 2003 due to increases in the Company's core business lines.  Investment income increased 69% to $9.8 million compared to 2003 as a result of increased invested assets.  Net cash flow from operations increased to $90 million for the year ended December 31, 2004 from $80 million in 2003.

The Company's book value per share increased 16% to $16.04 at December 31, 2004 from $13.80 at December 31, 2003, due primarily to the Company's net earnings during the year.

Commenting on the results, Stephen R. Crim, President and Chief Executive Officer of American Safety Insurance Holdings, Ltd., said: "I am encouraged by the improved results in our insurance operations during the fourth quarter and pleased with the contribution to earnings from real estate for the year.  During the fourth quarter, we regained momentum in our insurance earnings, which improved by 37% over the same quarter in 2003.  Looking ahead, I believe that insurance market conditions in our core lines of business remain favorable for modest premium growth and strong earnings based on a targeted combined ratio of 95% for 2005."

A conference call to discuss fourth quarter and year end 2004 results is scheduled for Thursday, March 17, 2005 at 9:00 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, Inc. 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 risks inherent in real estate development and new construction, and litigation.  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:

Cameron Associates

Kevin McGrath

 (212) 245-4577