Allied World Assurance Company has turned in a first-quarter profit of $113.9 million, a rise of $15.8m on the same three months a year ago.

While its gross written premiums for property, casualty and reinsurance have decreased by a total of $60m, losses incurred have also dropped while investment income has improved from $62m to $72.6m.

President and chief executive officer Scott Carmilani said: "We are very pleased with Allied World's performance for the quarter. We have grown net income by 16 percent over the prior year and achieved an annualised operating return on equity of 21.2 percent. Gross premiums for the quarter were down 12 percent primarily due to our having recorded upward premium adjustments in our reinsurance segment in the first quarter of 2006.

"Without these adjustments, gross premiums declined by about 5 percent quarter over quarter. Our emphasis continues to be on sustaining underwriting profitability, especially in the face of softening market conditions.

"Notwithstanding current market conditions, we continue to leverage our diverse and seasoned books of business, strong financial strength ratings and growing asset base and expect to continue to generate strong results."

The profit equates to $1.83 per diluted share compared to $1.94 for the opening quarter of 2006 and reflects the increase in shares outstanding following the company's initial public offering in July 2006.

Allied World's operating income was $120.4m compared to $103.9m year-on-year.