HAMILTON, BERMUDA - CRM Holdings, Ltd. ("CRM" or "the Company"), a provider of a full range of products and services for the workers' compensation insurance industry, today announced results for the third quarter ended September 30, 2009.

In the third quarter of 2009, the Company incurred a net loss from continuing operations of $15.7 million, or $(0.93) per diluted share. In the same quarter of the prior year, the Company incurred a net loss from continuing operations of $2.9 million, or $(0.18) per diluted share. Unless otherwise stated, all further results discussed in this release refer to continuing operations for 2009 and results on a comparable basis for 2008.

The net loss includes a non-cash valuation allowance of $11.3 million, or ($0.72) per diluted share, with respect to the Company`s net deferred tax assets, representing an allowance of the full amount of that asset. This relates future tax deductions in the Company's domestic operations (including tax loss carry-forwards) and arises because the Company re-evaluated the realizability of the asset in light of the decline in the Company`s domestic taxable income. The tax loss carry-forward remains available to offset taxes over the next 20 years.

Total revenues in the third quarter of 2009 were $21.8 million, compared to $29.2 million in the same quarter of the prior year. The Company enjoyed higher rates on policy renewals and growth in the number of policies written in its major market of California. However, three principal items more than offset these gains, resulting in an overall decline in revenue. First, underwriting actions taken on business written by the company`s primary insurance subsidiary, Majestic Insurance Company ("Majestic"), reduced business in New York by $2.8 million. Second, the execution of quota share treaties between Majestic and
third party reinsurers resulted in Majestic ceding 47% of earned premiums effective July 1, 2009, as compared to Majestic ceding 40% under a quota share treaty that was in place in the third quarter of 2008. The increase in ceded premiums accounted for approximately $2.3 million of reduced net premiums earned by Majestic. Finally, prior year loss sensitive reinsurance treaties required the accrual of additional premiums payable ("reinstatement premiums") of $3.1 million. Read more