Allied World Assurance Company Holdings, AG reported net income of $151.9 million, or $1.52 per diluted share, for the second quarter of 2014 compared to a net loss of $1.9 million, or $0.02 per diluted share, for the second quarter of 2013.
Operating income for the period was $76.1 million, or $0.76 per diluted share, compared to operating income of $103.5 million, or $0.98 per diluted share, for the second quarter of 2013.
President and CEO Scott Carmilani commented: “Allied World delivered another solid result for the first half of 2014. As evidenced by an 85 percent combined ratio, our disciplined underwriting philosophy, combined with improved investment performance, drove the year to date 8.1 percent growth in diluted book value per share.
Other operating highlights in the earnings report included the following:
— Gross premiums written were $760.4 million, a 0.6 percent decrease compared to $765.2 million in the second quarter of 2013. — The growth in the U.S. and international insurance segments was offset by a decrease in the reinsurance segment.
— The U.S. insurance segment grew by 11.1 percent led by growth in general casualty, inland marine and representations and warranties insurance, offset by a continued decrease in healthcare insurance.
— The international insurance segment grew by 6.2 percent driven by more recently added lines of insurance business in Europe including aviation and marine cargo as well as growth across existing lines.
— Offsetting the growth in the two insurance segments was a 19.1 percent decrease in the reinsurance segment driven by lower premiums across most lines of business.
— Net premiums written were $553.9 million, a 4.7 percent decrease compared to $581.2 million in the second quarter of 2013.
— Net premiums earned were $537.2 million, a 5.9 percent increase compared to $507.3 million in the second quarter of 2013.
— Underwriting income was $51.9 million, compared to underwriting income of $86.9 million in the second quarter of 2013.
— The combined ratio was 90.3 percent compared to 82.8 percent in the second quarter of 2013.
— The loss and loss expense ratio was 58.6 percent in the second quarter of 2014 compared to 54.2 percent in the prior year quarter. — During the second quarter of 2014, the company recorded net favorable reserve development on prior loss years of $45.1 million, a benefit of 8.4 percentage points to the loss and loss expense ratio, compared to $48.4 million a year ago, a benefit of 9.5 percentage points.
— The company did not experience any reportable catastrophe losses for the second quarter of 2014 or the comparable quarter last year.
— The company’s expense ratio was 31.7 percent for the second quarter of 2014 compared to 28.6 percent for the second quarter of 2013. The increase was driven by various profit commissions as well as the impact of new hires and higher stock price on compensation expense.
— During the quarter, the company purchased new global property catastrophe protection which helped lower our probable maximum losses from a single catastrophic event across all major zones and perils.
Source: Allied World Assurance