Bermuda-based Allied World Assurance Holdings, Ltd net income for the first quarter of 2005 was $64.4 million, a 28 percent decline from $89.4 million for the first quarter last year. The first quarter 2005 includes catastrophe losses of $18.9 million arising primarily from windstorms in Northern Europe.

President and Chief Executive Officer Scott Carmilani said: ?Our first quarter gross premium of $505 million grew by a modest one percent over the first quarter last year. In markets characterised by increased competition and softer pricing, we are pleased with our stable growth and performance. Our first quarter production was fuelled by a strong renewal season for our reinsurance division, which grew 52 percent over the prior year, driven by customers seeking knowledgeable, financially secure partners for their sensitive, long- term reinsurance coverage. We have been able to maintain desirable terms and conditions, which enable us to meet our targeted profit margins.

?We have been able to deliver growth in shareholders? equity of 44 percent since the company?s founding. During the first quarter, we paid approximately $500 million to our shareholders in the form of a special one-time cash dividend. We are pleased to provide such returns to our shareholders, which reflect our growth, robust cash flows and superior financial strength.?

AWAC continues to strengthen the presence of its property and casualty operations in the US middle market through the expansion of its offices in New York and Boston.