Allied World Posts $177 Million Q1 Net Income; Underwriting, Investment Gains

April 24, 2014

Allied World Assurance Company Holdings, AG reported net income of $177.0 million, or $5.23 per diluted share, for the first quarter of 2014 compared to net income of $159.0 million, or $4.49 per diluted share, for the first quarter of 2013.

Operating income was $129.9 million, or $3.84 per diluted share, for the first quarter, compared to $84.2 million, or $2.38 per diluted share, for the first quarter of 2013.

The report also noted that gross premiums written were $901.4 million, a 7.7 percent increase compared to $837.1 million in the first quarter of 2013, “driven by growth across all three segments. The U.S. insurance segment grew by 5.4 percent led by growth in the excess casualty line of business and programs; the international insurance segment grew by 4.6 percent driven by new lines of business including aviation and marine cargo as well as growth across existing lines; and the reinsurance segment grew by 9.8 percent driven in part by our participation in Aeolus Re Ltd. and selected growth in our crop line of business.

Net premiums written were $771.6 million, an 11.0 percent increase compared to $695.1 million in the first quarter of 2013.”

Additional earnings highlights for the period were listed as follows:

- Net premiums earned were $530.3 million, a 14.5 percent increase compared to $463.2 million in the first quarter of 2013.

- Underwriting income was $106.9 million, compared to underwriting income of $68.7 million in the first quarter of 2013.

- The combined ratio was 79.9 percent compared to 85.1 percent in the first quarter of 2013.

- The loss and loss expense ratio was 51.9 percent in the first quarter of 2014 compared to 55.1 percent in the prior year quarter.

- During the first quarter of 2014, the company recorded net favorable reserve development on prior loss years of $48.9 million, a benefit of 9.2 percentage points to the loss and loss expense ratio, compared to $44.1 million a year ago, a benefit of 9.5 percentage points.

- The company did not experience any reportable catastrophe losses for the first quarter of 2014 or the comparable quarter last year.

- The company’s expense ratio was 28.0 percent for the first quarter of 2014 compared to 30.0 percent for the first quarter of 2013.

Investment results included:

- The total financial statement return on the company’s investment portfolio for the three months ended March 31, 2014 was 1.2 percent compared to 1.3 percent for the three months ended March 31, 2013.

- Net investment income grew 42.6 percent in the quarter compared to the prior year quarter, driven by an increase across most asset classes, including other private securities in the Allied World Financial Services investment portfolio.

President and CEO Scott Carmilani commented: “Allied World is off to a great start in 2014. Premium growth in selected products and record underwriting income drove our combined ratio below 80 percent. Our focus on solid underwriting and investment expertise generated 4.4 percent growth in diluted book value per share. We remain well positioned to take advantage of opportunities across the market.”

The report also noted that Allied World has received approval to launch a new managing agency at Lloyd’s

Source: Allied World Assurance Company Holdings

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