Allied World Assurance Company Holdings has reported a drop in profits in the first quarter of this year with a net income of $159.0 million, but the company still managed to beat analysts’ expectations.The first quarter results represented a 27 percent decrease from the first quarter of 2012 when the company reported a net income of $218.2 million.The Switzerland-based re/insurer with substantial operations in Bermuda did however, beat Wall Street expectations — posting an operating income of $84.2 million, or $2.38 per share. The eight analysts polled by Yahoo Finance had predicted the company would earn $2.07 a share.Operating income in the same quarter of 2012 was $91.5 million, or $2.39 per share.Underwriting income surged year over year, increasing 16.1 percent compared to the first quarter of 2012.Gross premiums written were $837.1 million in Q1 of 2013, a 22.9 percent increase compared to the $680.9 million in Q1 of 2012.Underwriting operations were slightly more profitable with a combined ratio of 85.1 percent in the quarter, compared to 85.2 percent in the first three months of 2012.The loss and loss expense ratio was 55.1 percent down year over year from 56.0 percent in 2012. The company did not record any catastrophe losses for the current year.President and chief executive officer Scott Carmilani said 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,” Mr Carmilani said.“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 benefited 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’s total shareholders’ equity was $3.43 billion, compared to $3.33 billion as of the end of last year.During the first quarter, the company repurchased 432,117 of its common shares at an average price of $83.88 per share for an aggregate cost of $36.2 million.The company announced last month that its board of directors has proposed an increase in its quarterly dividend from $0.375 to $0.50 per share.This proposed increase in the quarterly dividend is subject to approval by the company’s shareholders at the Allied World 2013 Annual Shareholder Meeting to be held on May 2, 2013.