Allied World Reports Q1 Net Income of $124.4M; Operating Income of $91.7M

April 23, 2015

Allied World Assurance Company Holdings, headquartered in Zug, Switzerland, reported net income of $124.4 million, or $1.27 per diluted share, for the first quarter of 2015 compared to net income of $177.0 million, or $1.74 per diluted share, for the first quarter of 2014.

The company reported operating income of $91.7 million, or $0.93 per diluted share, for the first quarter of 2015, compared to operating income of $129.9 million, or $1.28 per diluted share, for the first quarter of 2014.

“Allied World is off to a strong start in 2015. Our North American insurance segment continues to gain scale and see attractive rate increases,” commented President and Chief Executive Officer Scott Carmilani. “We are pleased to have completed our acquisitions of the RSA Hong Kong and Singapore operations and are looking forward to completing the combination of our platforms as we continue to grow our global markets insurance segment.”

Other highlights cited in the Allied World earnings report included:

  • Gross premiums written were $880.6 million, a 2.3 percent decrease compared to $901.4 million in the first quarter of 2014. This was driven by a decline in the reinsurance segment, partially offset by growth in both the North American insurance and global markets insurance segments.
  • The North American Insurance segment grew by 10.1 percent led by growth across casualty lines, including Defense Base Act, offset in part by a continued decrease in healthcare insurance.
  • The global markets insurance segment grew by 11.9 percent on a constant dollar basis and 3.8 percent on an as reported basis, driven by new lines of business, including onshore construction and marine liability, as well as growth across existing lines including general casualty and professional liability.
  • The reinsurance segment decreased by 11.6 percent driven largely by the non-renewal of business, including certain property and crop treaties.
  • Net premiums earned were $568.5 million, a 7.2 percent increase compared to $530.3 million in the first quarter of 2014 as the company retained more premium on a net basis.
  • Underwriting income was $67.5 million compared to $106.9 million in the first quarter of 2014.
  • The company did not experience any reportable catastrophe losses for the first quarter of 2015 or the comparable quarter last year, but did experience attritional property and aviation losses.
  • The combined ratio was 88.1 percent compared to 79.9 percent in the first quarter of 2014.
  • The loss and loss expense ratio was 57.2 percent in the first quarter of 2015 compared to 51.9 percent in the prior year quarter. During the first quarter of 2015, the company recorded net favorable reserve development on prior loss years of $63.6 million, a benefit of 11.2 percentage points to the loss and loss expense ratio, compared to $48.9 million a year ago, a benefit of 9.2 percentage points.
  • During the first quarter of 2015, the company repurchased 1,271,213 of its common shares through its open market share repurchase program at an average price of $40.08 per share and an aggregate cost of $50.9 million.

Source: Allied World Assurance Company Holdings AG

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