Mr. Crim (President & CEO): The company was formed in 1986 during the last hard insurance market by a group of environmental remediation contractors who were unable to buy insurance in the standard market, where insurance was either unavailable or unaffordable for any company involved in environmental remediation. These contractors, faced with potentially going out of business, pooled their funds and formed a Bermuda captive, which is now the parent holding company of the American Safety Insurance group of companies. Over time, the company either acquired or formed other domestic insurance companies to act as the policy issuing carriers, including American Safety Risk Retention Group, Inc., which is a Vermont licensed risk retention group that is authorized in all 50 states to write environmental insurance; American Safety Casualty Insurance Company, which is a licensed and admitted company that can write insurance on an admitted basis in 48 states; and American Safety Indemnity Company, which is an excess and surplus lines carrier that can write insurance in 41 states on a non-admitted basis. In 1988, the company completed an IPO and raised 31 million, which allowed the company to expand its writings to other specialty lines of insurance, including excess and surplus lines and specialty program business. All three business lines that we currently write are commercial casualty and specialty niche in nature.
TWST: How does your cycle relate to the standard property casualty cycle
that we are seeing at this time?
Mr. Scollo (Executive Vice President): Because of the unique lines of
business that we are in, we tend to focus in the more specialized areas
of insurance. In the E&S business line, we tend to gravitate toward the
hardest part of the hard market ' those areas that are most difficult to
place. Our E&S line tends to be more market-sensitive. When the market
is hard, we will write a lot of E&S premium; when the market gets soft,
those types of accounts will find a home back in the standard
marketplace and our writings will decline. The environmental line,
although it is a specialty line, tends to be less market sensitive.
There are fewer players in that line of business, so when the market
does fluctuate, it fluctuates within a much smaller band. And our third
line, which is specialty program business, it really depends on the type
of program being written.
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