Allied World hit by $50m in cat losses
Allied World Assurance this evening posted a loss of nearly $41 million in the last quarter of 2016 and in the run-up to its acquisition by a Canadian investment and insurance company.
The net loss of $40.9 million, or 47 cents per diluted share, for the final three months of last year, compared to a profit of $1.7 million, or 2 cents per diluted share, posted for the same period in 2015.
Earnings for the quarter were hit by $49.9 million in net catastrophe losses, including $38.1 million related to Hurricane Matthew and $15.6 million related to a New Zealand earthquake.
Net income for the year end was $255.2 million, or $2.84 per diluted share, compared to net income of $83.9 million, or 89 cents per diluted share, for the previous year.
Swiss-based Allied World, which has a substantial presence in Bermuda, is scheduled to be taken over by Fairfax Financial Holdings in the second quarter of this year.
Scott Carmilani, president and CEO of Allied World, said: “Allied World has had a very good year in 2016 despite a challenging operating environment and an increase in natural catastrophes during the fourth quarter.
“For the full year, I am pleased that our 96.2 per cent combined ratio and solid contributions from the investment portfolio helped generate an 8.3 per cent return on tangible equity and grow our basic book value per share by 5 per cent.
“Looking ahead, we are very excited to become a part of the Fairfax family of companies and believe this combination will better position us to grow our specialty businesses globally in 2017 and beyond.”
The company also reported operating income of $42.4 million, or 48 cents per diluted share, for the quarter, similar to the $43 million and 47 cents per diluted share, recorded for the same period the year before.
Gross premiums written for the fourth quarter totalled $671.7 million, a 6.2 per cent increase on the $632.4 million recorded for same quarter the year before.
Allied World said the increase was driven by increases in the North American insurance and reinsurance segments, offset by a decrease in the global markets insurance segment.