Allied World Assurance Holdings, a Bermuda-based insurance group that is poised for a public offering, saw earnings rise 52 percent in the first quarter, as underwriting profitability and investment income grew.

Net income for the first three months of the year reached $98.1 million, compared to a profit of $64.4 million during the same period a year ago. Earnings a year ago were reduced by AWAC's recording $19 million in losses from Northern European windstorms.

AWAC's operating income in the quarter, which excludes some gains and losses, totalled $103.9 million. A year ago it was $66.9 million.

Chief executive Scott Carmilani, in an earnings statement, said the period had proved one of "strongest quarters" in AWAC history. The solid result could curry favour with potential investors, with the company having previously announced its intent to list on the New York Stock Exchange.

While AWAC's business levels declined 1.4 percent, underwriting profitability increased. Gross policy sales of $498 million during the first quarter compared to $505 million in the year-ago period. And after reinsurance protection purchased, net sales were $427.5 million versus $438.6 million during the first quarter of 2005.

AWAC's combined ratio, a measure of how much an insurer is making on its core business of underwriting policies, declined to 85.1 percent compared to 91.3 percent in the first quarter of 2005. The lower the percentage the higher the profitability. And investment income also helped buoy profits, rising 54 percent, from $40.3 million in the first quarter of 2005 to $62 million this year.

AWAC also kept a slightly better check on expenses. Acquisition costs and general and administrative expenses totalled $56.8 million, a marginal decline from the $57.4 million a year earlier, representing expense ratios of 18.4 percent and 17.7 percent, respectively.

Shareholders' equity rose to $1.47 billion, from $1.42 billion at the end of 2005.