Allied World Assurance Holdings, Ltd. [AWAC] has reported a net loss of $203.5 million for the third quarter of 2005, compared to a net loss of $64.7 million for the same period last year. The figure reflects a $290 million loss resulting from hurricanes Katrina and Rita, net of reinsurance, after taxes and reinstatement premiums. The company’s net loss for the nine months ending September 30, 2005 was $67.6 million, compared to net income of $94.1 million for the same period in 2004.
President and CEO Scott Carmilani commented: “The catastrophe storms of the third quarter 2005 caused the most significant property and business interruption losses in history. Hurricanes Katrina and Rita combined produced industry losses in excess of US$40 billion. Our net losses will be approximately US$290 million, very much in line with our original estimates for Katrina and Rita. Although we sustained significant losses, our exposure management program sufficiently protected our capital position.”
“Our gross written premiums were down this quarter by 20 percent and on a year-to-date basis, down by 8 percent, as our property-related aggregate exposures continued to reduce during the quarter and throughout the year,” he continued.
On an upbeat note, however, he added: “We now find ourselves well positioned to take advantage of the expected hardening property market and selected specialty casualty business. We will further expand our distribution platform later this year with the opening of two new regional offices in the U.S. to better market and distribute our products and services.”
AWAC released figures showing a drop in gross premiums written to $322 million in the third quarter 2005, compared to $402.5 million in the third quarter 2004. For the nine months ending September 30, 2005, gross premiums written totaled $1.269 billion, an 8.4 percent decrease from gross premiums written of $1.3849 billion in the same period last year.
Just how badly AWAC was hit is reflected in its combined ratio. For the quarter ended September 30, 2005 it was 181.3 percent, compared to 132.5 percent in the third quarter of 2004, which included three of the four hurricanes that struck Florida last year. For the nine months ended September 30, 2005 and 2004, the combined ratios were 118.7 percent and 101.4 percent, respectively. The bulletin noted that “excluding the effect of the catastrophes, the combined ratios for the third quarter and year to date were 88.0 percent and 87.4 percent, respectively.” Unfortunately their exclusion isn’t permitted.
The full report can be obtained on the company’s Website at: http://www.awac.com under the “Company News” section.
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