Allied World profit hit by investment losses
Profits plunged to $9.5 million at Allied World Assurance Company in the second quarter, down from $151.9 million during the same period in 2014.
The company was hit by a mark-to-market loss of $60.1 million on investments, together with a double-digit decrease in the reinsurance segment, catastrophe losses of $25 million from storms in Australia and a further $20 million of non-catastrophe weather and fire-related losses.
During the past three months Allied World directly repurchased more than four million shares, totalling $164.4 million, from Exor SA, a subsidiary of Italian investment company Exor, which is bidding to buy Bermuda-based reinsurance firm PartnerRe.
“While we are excited to report our first quarter inclusive of the results of the recently acquired Asian operations, unfortunately this quarter’s results were impacted by catastrophe and current year events,” said Scott Carmilani, Allied World president and chief executive officer.
“We continue to take steps to grow attractive insurance businesses, and look to manage our growth while mitigating exposure to less attractive risks.”
Gross premiums written were $826 million, up 8.6 per cent year-on-year, however there was a 19.1 per cent decrease in the reinsurance segment, driven by the non-renewal of several casualty and property treaties.
Net income per diluted share was $0.10, compared with $1.25 during the same period in 2014. Operating income was $25.8 million, or $0.27 per diluted share, compared with $76.1 million, or $0.76 per diluted share a year ago.
Allied World directly bought $146.4 million of its shares from Exor SA at $40.55, which was a 3 per cent discount on the most recent closing price at the time of the repurchase.
As of June 30 the company had $173 million remaining on its outstanding share repurchase authorisation.
Allied World’s combined ratio was 99.2 per cent compared with 90.3 per cent in the second quarter of 2014.