Allied World Q2 Net up 43% to $102.4 Million; Conference Call Today

August 9, 2006

Allied World Assurance Company Holdings, Ltd. joined the many Bermuda-based insurers, who have turned in strong second quarter and first half results. The Company reported net income of $102.4 million, or $2.02 per diluted share, for the second quarter 2006 compared to net income of $71.5 million, or $1.41 per diluted share, for the second quarter 2005, a 43 percent rise.

Net income for the six months ended June 30, 2006 was $200.5 million, or $3.96 per diluted share, compared to $135.9 million, or $2.68 per diluted share, for the first half of 2005, up 47.5 percent.

Operating income rose to $112.1 million, or $2.21 per diluted share, for the second quarter 2006 compared to operating income of $78.6 million, or $1.55 per diluted share, for the second quarter 2005. Operating income for the six months ended June 30, 2006 was $216.0 million, or $4.26 per diluted share, compared to $145.5 million, or $2.87 per diluted share, for the first half of 2005.

President and CEO Scott Carmilani commented: “We have achieved several major milestones in recent weeks, including a successful initial public offering, a $500 million senior notes offering and record second quarter operating results — all of which give us additional financial strength, flexibility and a platform to build on in terms of creating value for our clients and shareholders.”

“Second quarter net income, annualized return on average equity and gross premiums written were among the highest levels in the company’s history. Each of our three operating segments is performing well, with our property segment benefiting from significantly improved property rates in catastrophe prone areas that began to take hold during the quarter. In addition, our investment income was a strong $54.9 million for the quarter and continues to gain momentum as our asset base grows in the current rising interest rate environment.”

“We are very pleased with the company’s financial performance for the quarter, and at the same time are satisfied that we have been able to implement our strategy to reduce our aggregate property exposures to catastrophes. This strategy, combined with the diversity of our portfolio of business and our strong ratings, positions us extremely well as we move forward as a public company.”

Allied World reported that “gross premiums written were $518.3 million in the second quarter 2006, a 17.4 percent increase compared to $441.7 million in the second quarter 2005. For the six months ended June 30, 2006, gross premiums written totaled $1.0164 billion, a 7.3 percent increase compared to $947.0 million in the first half of 2005.” The bulletin noted that “this increase was primarily the result of an increase in general property rates in catastrophe prone areas and an increase in market opportunities that developed following the 2005 hurricane season.”

The Company’s combined ratio was 78.2 percent in the second quarter 2006 compared to 86.3 percent in the second quarter 2005. The loss ratio was 58.9 percent in the second quarter 2006 compared to 67.5 percent in the second quarter 2005.” The bulletin also noted that “during the second quarter 2006, the company recorded net favorable reserve development on previous accident years of $29.0 million, a benefit of 9.5 percentage points to the company’s loss ratio for this quarter. The combined ratio for the six months ended June 30, 2006 was 81.6 percent compared to 88.8 percent for the first half of 2005. In addition to the net favorable development in the second quarter 2006, the results in the first half of 2006 benefited from lighter catastrophe losses than were experienced in the first half of 2005 when approximately $19 million of catastrophe losses were incurred primarily related to Northern European windstorms.”

The full report and additional information may be obtained on the Company’s Website at: www.awac.com.

Allied World will host a conference call today, Wednesday, August 9, at 8:30 a.m. (Eastern Time) to discuss its second quarter financial results. The public may access a live webcast of the conference call at the “Investor Relations” section of its Website. The conference call can also be accessed by dialing (866) 578-5801 (U.S. and Canada callers) or (617) 213-8058 (international callers) and entering the passcode 36188596 approximately ten minutes prior to the call.

Following the conclusion of the presentation, a replay of the call will be available through Friday, August 25, 2006 by dialing (888) 286-8010 (U.S. and Canada callers) or (617) 801-6888 (international callers) and entering the passcode 18530350. In addition, the webcast will remain available online through Friday, August 25, 2006 at: www.awac.com.

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