Bermuda-based Allied World Assurance Holdings, Ltd. last night reported its profits had soared by 60 percent to nearly $90 million after the company grew its book of business.

AWAC, which was set up at the end of 2001 in response to a shortage of capacity after the September 11 terrorist attacks, reported net income for the first quarter of 2004 was $89.4 million, compared to $55.8 million for the first quarter last year.

?We are very pleased with AWAC?s continued growth and profitability,? said Scott Carmilani, president and chief executive officer.

?In our first two years, we have built an exceptional team and an outstanding reputation for service and responsiveness.?

He added that in markets characterised by a high degree of competition, AWAC excelled because it had developed a flexible insurance platform that responded quickly to changes in market conditions.

Mr. Carmilani, who took over from former chief executive officer Michael Morrison earlier this year, added: ?Our hard-earned reputation for quality service and superior financial strength position us very well in the current environment.?

AWAC, one of Bermuda?s leading property and casualty insurers, said gross premiums written were $499.8 million in the first quarter 2004, a 27 percent increase over the same period in 2003.

Net premiums written in the first quarter 2004 were $430.3 million compared to $374.9 million in the same period last year, said the company which offers property and casualty insurance and reinsurance on a world-wide basis.

Net premiums earned in the current quarter were $337.8 million, and $237.8 million in the quarter ended March 31, 2003.

Net investment income in the quarter ended March 31, 2004 was $33.6 million, and $27.4 million in the quarter ended March 31, 2003.

Net loss and loss adjustment expenses incurred (including increases in reserves for incurred but not reported losses) were $224.5 million in the quarter ended March 31, 2004 and $163.6 million in the same quarter last year, representing loss ratios of 66.4 percent and 68.8 percent, respectively.

Acquisition costs and general and administrative expenses totalled $69.3 million in the quarter ended March 31, 2004, and $48.7 million in the quarter ended March 31, 2003, representing expense ratios of 20.5 percent for both quarterly periods.

The company?s combined ratio for the quarter ended March 31, 2004 was 86.9 percent, and for the quarter ended March 31, 2003 was 89.3 percent.

Net income, which includes $10.6 million of net realised investment gains, was $89.4 million for the three months ended March 31, 2004, compared to $55.8 million in the same period 2003, which included $4.1 million of net realised investment gains.

At March 31, 2004, shareholders? equity was $2.09 billion, compared to $1.98 billion reported at December 31, 2003.

The principal operating companies of Allied World Assurance Holdings have earned an A+ (Superior) rating from A.M. Best Company