Bermuda-based Allied World Assurance Company Holdings reported a net loss of $46.4 million, or $0.95 per diluted share, for the third quarter of 2008 compared to net income of $109.0 million, or $1.72 per diluted share, for the third quarter of 2007.
Net income for the nine months ended September 30, 2008 was $163.8 million, or $3.22 per diluted share, compared to net income of $346.2 million, or $5.51 per diluted share, for the first nine months of 2007.
The steep drop in earnings was primarily attributable to investment losses taken in the third quarter of $151.8 million. Allied World’s operating income for the period was $102.8 million, or $2.03 per diluted share, for the third quarter of 2008 compared to operating income of $112.2 million, or $1.77 per diluted share, for the third quarter of 2007. Operating income for the nine months ended September 30, 2008 was $313.9 million, or $6.17 per diluted share, compared to operating income of $357.9 million, or $5.70 per diluted share, for the first nine months of 2007.
The company’s annualized return on average shareholders’ equity for three and nine months ended September 30, 2008 was a loss of 8.0 percent and a gain of 9.9 percent, respectively. The company’s annualized operating return on average shareholders’ equity for the three and nine months ended September 30, 2008 was 17.8 percent and 19.0 percent, respectively.
President and CEO Scott Carmilani commented, “Allied World has fared well through the current turmoil in the financial markets due to our strong risk controls and conservative business approach. Despite the quarter’s storm activity and the severe disruption in the world’s financial markets, we have delivered an annualized operating ROE of 19 percent year to date and have preserved our shareholders’ equity at levels comparable with year end 2007. We believe our financial strength, capacity and selective risk management approach position us well to serve the needs of both our current and prospective clients.”
He also said Allied is “very pleased” to have just completed the acquisition of Darwin Professional Underwriters. The deal was first announced last June. “Darwin offers healthcare professional liability, errors and omissions and other specialty professional liability coverages,” the bulletin noted. Allied said it expects “to record approximately $250 million in goodwill and $65 million in other intangible assets in the fourth quarter 2008. Subsequent to this acquisition.”
The complete report and details on accessing the earnings conference call held Friday, November 7, may be obtained on the Company’s web site at: www.awac.com. A replay of the call will be available through Friday, November 21, 2008 by dialing (888) 286-8010 (U.S. and Canada callers) or (617) 801-6888 (international callers) and entering the passcode 94417370.
Source: Allied World
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