Bermuda-based Allied World Assurance Holdings, Ltd. (AWAC) expects premium rates to remain strong as it reported a surge in net income of $55.8 million for the first quarter.

AWAC said its net more than tripled than the $17.8 million in the year-ago period.

AWAC, located on Victoria Street, was among a wave of new insurers incorporated in Bermuda following the September 2001 terrorist attacks.

"Allied World has had a very successful first quarter in its second full year of operation. Our market acceptance, strong financial position, experienced underwriters and disciplined underwriting approach have created a solid foundation for the company's ongoing success,'' president and chief executive officer Michael Morrison said.

"Our strong premium growth and increasing profitability evidence the momentum that we have achieved. The demand for high quality capacity remains strong and we continue to see increasing opportunities to obtain business at more favourable terms, conditions and rates than in the past."

Gross premiums written were $393.4 million in the quarter, compared to $126.6 million in the year-ago period. Net premiums written were $374.9 million compared to $126.6 million. Net premiums earned in the quarter were $237.8 million and $23.7 million in the year-ago quarter. Net investment income was $27.4 million in the quarter and $18 million in the year-ago quarter.

Net loss and loss adjustment expenses incurred - including increases in reserves for incurred but not reported losses - were $163.6 million and $15 million in the year-ago quarter, representing loss ratios of 68.8 percent and 63.3 percent, respectively.

Acquisition costs and general and administrative expenses totalled $48.7 million in the quarter and $7.2 million in the year ago quarter, representing expense ratios of 20.5 percent and 30.2 percent, respectively.

The company's combined ratio was 89.3 percent compared to 93.5 percent in the year-ago quarter.

Net income, which includes $4.1 million of net realised investment gains, was $55.8 million for the three months ended March 31, 2003 and $17.8 million, which includes $1.7 million of net realised investment losses.

Shareholders' equity was $1,744.8 million, an increase of 3.7 percent over the $1,682.4 million reported in the year-ago quarter and 14.9 percent over the $1,518.7 million reported at March 31, 2002.