Allied World sees 21% rise in premiums

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Allied World Assurance Company Holdings last night reported first-quarter profit jumped to $218.2 million from $8.6 million in the same period last year on a substantial increase in premiums. The company also said from January through March it recorded no catastrophe losses related to 2012 events.

The re/insurer’s net income of $5.70 per diluted share compared to $0.21 per diluted share, for the first quarter of 2011.

Allied World’s operating income was $91.5 million, or $2.39 per diluted share, for the first quarter of 2012, compared to an operating loss of $41.3 million, or $1.02 per diluted share, for the first quarter of 2011.

President and CEO Scott Carmilani said: “Allied World had a strong first quarter with gross premiums exceeding $680 million for the first time, an increase of over 21 percent, or $120 million, from the same quarter last year.

“This is a direct result of the investments we have made in underwriting talent and operating platforms during the last few years. Premiums in our reinsurance segment alone were up $97 million for the quarter, driven by our global marine and speciality unit that was launched in late 2010.”

He continued: “The company is operating with significant positive momentum in all aspects of our business.

“The company generated $218 million of net income for the quarter, benefited significantly from gains across our investment portfolio during the quarter and from solid underwriting results. All in, these results demonstrate our ability to continue to build value for our shareholders.

“The company’s diluted book value per share increased by a very impressive 6.7 percent for the quarter, to $85.48 per share.”

Gross premiums written were $680.9 million in the first quarter of 2012, a 21.4 percent increase compared to $560.7 million in the first quarter of 2011.

The combined ratio was 85.2 percent in the first quarter of 2012 compared to 122.6 percent in the first quarter of 2011.

The loss and loss expense ratio was 56.0 percent in the first quarter of 2012 compared to 90.9 percent in the first quarter of 2011.

During the first quarter of 2012, the company recorded net favourable reserve development on prior loss years of $39.5 million.

The company said this favourable reserve development resulted in a benefit of 9.8 percentage points to the company’s loss and loss expense ratio for the quarter.

During the first quarter 2012, the company recorded no catastrophe losses related to 2012 events.

The first quarter 2011 loss and loss expense ratio was impacted by $132.2 million of net losses, or 39.5 percentage points, from global catastrophe events during the quarter.

The company’s expense ratio was 29.2 percent for the first quarter of 2012 compared to 31.7 percent for the first quarter of 2011.

The total return on the company’s investment portfolio for the three months ended March 31, 2012 was two percent compared to one percent for the three months ended March 31, 2011.

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