Allied World reports 88.1% combined ratio for Q1 2015

Allied World Assurance Company Holdings, AG, a global provider of innovative property, casualty and specialty insurance and reinsurance solutions, has reported an 88.1% combined ratio for the first quarter of 2015, compared to 79.9% in the first quarter of 2014.

The Switzerland-based company reported in a press release Wednesday a net income of US$124.4 million, or $1.27 per diluted share, for the first quarter of 2015, compared to net income of US$177.0 million, or $1.74 per diluted share, for the first quarter of 2014. The company also reported operating income of US$91.7 million, or $0.93 per diluted share, for Q1 2015, compared to operating income of US$129.9 million, or $1.28 per diluted share, for Q1 2014.

“Allied World is off to a strong start in 2015,” said Allied World president and CEO Scott Carmilani. “Our North American Insurance segment continues to gain scale and see attractive rate increases.” The company reported growth in gross premiums written of 10.1% in North American Insurance compared to the prior year quarter and a growth in gross premiums written of 11.9% on a constant dollar basis in Global Markets insurance compared to the prior year quarter.

The North American Insurance segment grew by 10.1%, led by growth across casualty lines, including Defense Base Act, offset in part by a continued decrease in healthcare insurance, the press release noted. The Global Markets Insurance segment grew by 11.9% on a constant dollar basis and 3.8% on an as reported basis, driven by new lines of business, including onshore construction and marine liability, as well as growth across existing lines including general casualty and professional liability. [click image below to enlarge]

Gross premiums written were US$880.6 million, a 2.3% decrease compared to US$901.4 million in the first quarter of 2014. “This was driven by a decline in the reinsurance segment, partially offset by growth in both the North American Insurance and Global Markets Insurance segments,” the release said, adding that the Reinsurance segment decreased by 11.6%, driven largely by the non-renewal of business, including certain property and crop treaties. Net premiums earned were US$568.5 million, a 7.2% increase compared to US$530.3 million in the first quarter of 2014 as the company retained more premium on a net basis.

Underwriting income was $67.5 million, compared to $106.9 million in the first quarter of 2014. The loss and loss expense ratio was 57.2% in Q1 2015, compared to 51.9% in the prior year quarter. During the first quarter of 2015, the company recorded net favourable reserve development on prior loss years of US$63.6 million, a benefit of 11.2 percentage points to the loss and loss expense ratio, compared to US$48.9 million a year ago, a benefit of 9.2 percentage points.