Bermuda-based Allied World Assurance Holdings Ltd. reported record net income of $103.0 million for the fourth quarter 2004, compared to $87.2 million for the fourth quarter last year. Net income for the twelve months ending Dec. 31, 2004, was $197.2 million, compared to $288.4 million for the same period last year.
President and Chief Executive Officer Scott Carmilani commented, “We are very pleased with our 2004 results and very proud to report record quarterly earnings of $103 million. While the catastrophe losses of the third quarter dampened our overall annual results, the underlying book of business continues to display the results of disciplined underwriting and risk selection. We were
able to again recognize positive reserve developments from prior years while maintaining our prudent reserve posture.
“During 2004, we expanded our operations in both the United States and Europe. As we look forward to 2005, our fourth year of operation, we will expand our marketing in the U.S. in order to enhance our visibility with regional brokers and large middle market accounts. We will continue our geographic diversification with focus on the U.K., Europe and Australia, and we will continue to manage our business to deliver superior value to our investors.”
Gross premiums written were $323.1 million in the fourth quarter 2004,
compared to $317.2 million in the same period in 2003. For the 12 months ended Dec. 31, 2004, gross written premiums increased 8.5% over the prior year, to $1,708.0 million.
Net premiums earned in the fourth quarter 2004 were $328.7 million and $325.1 million in the quarter ending Dec. 31, 2003. Net premiums earned in the 12 months ending Dec. 31, 2004, were $1,325.5 million, compared to $1,167.2 million in 2003.
Net loss and loss adjustment expenses incurred (including increases in reserves for incurred but not reported losses) were $196.3 million in the quarter ended Dec. 31, 2004, and $188.7 million in the same quarter last year, representing loss ratios of 59.7% and 58.1%, respectively. Net loss and loss adjustment expenses incurred were $1,013.4 million in the 12 months ended Dec. 31, 2004, and $762.1 million for 2003, representing loss ratios of 76.5% and 65.3%, respectively.
In the quarter ending Dec. 31, 2004, the company adjusted its gross
estimates of claims relating to the third quarter Florida hurricanes and two Japanese typhoons, increasing the estimates of ultimate gross losses by $22.0 million. In the fourth quarter 2004, the company also benefited from positive reserve development of $79.4 million from prior accident years. In the quarter ending Dec. 31, 2003, the company recognized $55.0 million of positive reserve development from the prior accident year.
Acquisition costs and general and administrative expenses totaled
$64.0 million in the quarter ended Dec. 31, 2004, and $72.8 million in the quarter ended Dec. 31, 2003, representing expense ratios of 19.5% and 22.4%, respectively.
For the 12 months ended Dec. 31, 2004, acquisition costs and general and administrative expenses totaled $257.2 million, compared to $229.1 million for 2003, representing expense ratios of 19.4% and 19.6%, respectively.
The company’s combined ratio for the quarter ended Dec. 31, 2004 was 79.2% and for the quarter ended Dec. 31, 2003, was 80.4%. For the 12 months ended Dec. 31, 2004 and 2003, the combined ratios were 95.9% and 84.9%, respectively.
Net income, which includes $1.4 million of net realized investment gains, was $103.0 million for the three months ended Dec. 31, 2004, compared to $87.2 million in the same period 2003, which included $2.3 million of net realized investment losses. Net income for the 12 months ended Dec. 31, 2004, was $197.2 million, which includes $10.8 million of net realized investment gains, and for the 12 months ended Dec. 31, 2003, net income was $288.4 million, which included $13.4 million of net realized gains.
At Dec. 31, 2004, shareholders’ equity was $2.14 billion, an increase
of 8.1% over the $1.98 billion reported at Dec. 31, 2003.
Topics Profit Loss
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