Allied World: 2013 “Off To A Strong Start”
Swiss-based Allied World Assurance Company Holdings, AG — which maintains a major Bermuda platform — reported net income of $159.0 million, or $4.49 per diluted share, for the first quarter of 2013, compared to net income of $218.2 million, or $5.70 per diluted share, for the first quarter of 2012.
Operating income was $84.2 million, or $2.38 per diluted share, for the first quarter of 2013, compared to operating income of $91.5 million, or $2.39 per diluted share, for the first quarter of 2012.
President and CEO Scott Carmilani commented: “Allied World is off to a strong start in 2013. We produced solid underwriting and investment results, and our diversified platform continues to deliver growth across each of our segments. In US insurance, our casualty business continues to grow gross premiums written amid a rising rate environment.
“We experienced growth across our international segment, driven by business lines including healthcare and general casualty. In our reinsurance business, we benefitted from our investment into new business lines, including crop and had a successful January 1 renewal season, constructing an attractive portfolio of business.
“Management’s focus on generating strong and consistent book value growth continues to be supported by solid underwriting, investment and reserving expertise and efficient management of capital. The company generated $159.0 million of quarterly net income and achieved an 85.1 percent combined ratio, growing diluted book value per share 4.2 percent to $96.50. We are encouraged by conditions across our business and are well positioned to take advantage of market opportunities.”
Allied World posted significant increases in underwriting results, detailed as follows: “Gross premiums written were $837.1 million in the first quarter of 2013, a 22.9 percent increase compared to $680.9 million in the first quarter of 2012. Net premiums written were $695.1 million in the first quarter of 2013, an 18.0 percent increase compared to $588.9 million in the first quarter of 2012. Net premiums earned in the first quarter of 2013 were $463.2 million, a 15.3 percent increase compared to $401.9 million in the first quarter of 2012.
“The combined ratio was 85.1 percent in the first quarter of 2013 compared to 85.2 percent in the first quarter of 2012. The loss and loss expense ratio was 55.1 percent in the first quarter of 2013 compared to 56.0 percent in the first quarter of 2012.”
The report also said: “During the first quarter of 2013, the company recorded net favorable reserve development on prior loss years of $44.1 million. This favorable reserve development resulted in a benefit of 9.5 percentage points to the company’s loss and loss expense ratio for the quarter.
“This compares to the first quarter of 2012, when the company recorded net favorable reserve development on prior loss years of $39.5 million, a benefit of 9.8 percentage points to the company’s loss and loss expense ratio for that quarter. Absent these adjustments, the loss and loss expense ratio for the first quarter of 2013 was 64.6 percent compared to 65.8 percent for the first quarter of 2012. The company did not record any catastrophe losses for the current accident year.
“The company’s expense ratio was 30.0 percent for the first quarter of 2013 compared to 29.2 percent for the first quarter of 2012. The expense ratio includes the impact of the increase in the company’s stock price reflected in equity-based incentive compensation.”
Investment results were down slightly as Allied World reported that the “total return on the company’s investment portfolio for the three months ended March 31, 2013 was 1.3 percent compared to 2.0 percent for the three months ended March 31, 2012.”
