Bermuda-based Allied World Assurance Holdings Ltd. filed for an initial public offering of up to $400 million in common stock on Friday and will finally follow the other Class of 2001 Bermuda start-ups onto the New York Stock Exchange under the symbol ?AWH?.

The regulatory filing did not state the number of shares and estimated price range for the IPO, however the specialty insurer and reinsurer said that it plans to use the proceeds to increase capital of its subsidiaries, repay a portion of a bank loan that matures March 30, 2012, and for general corporate purposes.

Goldman Sachs & Co. was listed as the underwriter for the offering.

AWAC, was one of a wave of insurance companies to form in the wake of the September 11, 2001 terrorist attacks in the US in response to a global reduction in insurance industry capital and a disruption in available insurance and reinsurance coverage. Its backers included American International Group, Inc., The Chubb Corporation, certain affiliates of The Goldman Sachs Group, Inc. and Securities Allied Holdings, Ltd., an affiliate of Swiss Reinsurance Company.

As of December 31, 2005, AWAC had $6.61 billion of total assets, $1.42 billion of shareholders? equity and $1.92 billion of total capitalisation.

?We offer our clients and producers significant capacity in both the direct property and casualty insurance markets. We believe that our focus on direct insurance and our experienced team of skilled underwriters allow us to have greater control over the risks that we assume and the volatility of our losses incurred and, as a result, ultimately our profitability,? AWAC said in its regulatory filing.

AWAC reported a net loss of $159.8 million for the year ended December 31, 2005 compared to earnings of $197.2 million a year earlier. It estimates $456 million in property losses relating to Hurricanes Katrina, Rita and Wilma plus a general liability loss of $25 million relating to Hurricane Katrina.

?Our property losses from the 2005 hurricane season of $456 million were among the lowest as a percentage of June 30, 2005 book value (approximately 26 percent) among all major publicly traded insurance and reinsurance companies that commenced operations in Bermuda in 2001 or shortly thereafter. We believe this performance was largely attributable to our strong exposure management program and disciplined underwriting philosophy,? AWAC said in its regulatory filing.

Losses incurred by the insurance industry have led to a substantial increase in property rates for various catastrophe-exposed insurance risks and a tightening of terms and conditions in certain instances, the company said in its regulatory filing. It added that it expects to be a ?major beneficiary? of these price increases in the worldwide property market, given its track record, strong capital base and ratings.

On January 9, 2006, A.M. Best downgraded AWAC?s insurance subsidiaries to ?A? from ?A+? and placed the ratings under review with negative implications pending the successful completion of its capital-raising plan.

?While we expect to benefit from the price increases in the property market, we have established a balanced business model that does not depend exclusively on our property segment. Our casualty segment contributes 60.5 percent of our total direct insurance gross premiums written, and we have the flexibility to increase or decrease our presence in the reinsurance business based on market conditions,? the company said.

Subsidiaries of principal shareholder AIG continue to provide certain limited administrative services to AWAC, including information technology services to subsidiaries in Bermuda, the United States and Europe, and certain financial reporting and claims management services to our subsidiaries in the United States.

?To replace these services, we would be required to devote significant time and resources to finding another third party to provide them and these services may be provided to us by a different service provider on terms that are not as favourable to us as the terms in our current agreements,? the company said.

AWAC has also entered into an agreement with AIG subsidiary, American International Company Limited, to lease some 56,114 square feet of newly constructed office space for a 15 year term.

AWAC?s 230 full-time employees of whom 152 worked in Bermuda, 37 in the United States and 41 in Europe, also stand to gain with the company finally going public. AWAC said in its regulatory filing that it had granted 2,281,500 warrants to its employees between January 1, 2003 and March 1, 2006, which will convert into stock options as part of this offering. A further 605,500 restricted stock units were also issued to employees.

On March 3, Bart Friedman, partner of New York law firm Cahill Gordon & Reindel, Scott Hunter, a financial services consultant and former managing partner of Arthur Andersen, and Mark R. Patterson, chairman of MatlinPatterson Asset Management joined AWAC?s board of directors. Upon termination of the company?s shareholders agreement immediately prior to the closing of the IPO, James F. Duffy, former chairman and chief executive officer of The St. Paul Reinsurance Group and insurance industry consultant Samuel J. Weinhoff will also join the board of directors.