Allied World’s net income for Q2 at $151.9 million, up from loss in same quarter of 2013

Allied World Assurance Company Holdings, AG reports that its net income for the three months ended June 30, 2014 was US$151.9 million compared to a net loss of US$1.9 million for the same quarter in 2013.

The global provider of property, casualty and specialty insurance and reinsurance solutions notes that operating income was US$76.1 million in 2014 Q2, down from US$103.5 million in 2013 Q2.

Gross written premium growth across both insurance segments (United States and International) in the second quarter of 2014 was offset by a decrease in the reinsurance segment, notes the Allied World statement.

More specifically, the U.S. insurance segment grew by 11.1% – led by growth in general casualty, inland marine and representations and warranties insurance, offset by a continued decrease in healthcare insurance – while the international insurance segment grew by 6.2% – driven by more recently added lines of insurance business in Europe, including aviation and marine cargo as well as growth across existing lines.

With regard to the reinsurance segment, Allied World saw a 19.1% decrease, driven by lower premiums across most lines of business.

Comparing 2014 Q2 and 2013 Q2 results, Allied World announced the following:

• gross premiums written were US$760.4 million in 2014 Q2, down 0.6% from US$765.2 million in 2013 Q2;
• net premiums written were US$553.9 million, down 4.7% from US$581.2 million;
• underwriting income was US$51.9 million, down from US$86.9 million; and
• net realized investment increased to about US$85.2 million from a loss of about US$115.2 million.

During the second quarter of 2014, Allied World purchased “new global property catastrophe protection, which helped lower our probable maximum losses from a single catastrophic events across all major zones and perils.”

With regard to GAAP (generally accepted accounting principles) ratios, all ratios – loss and loss ratio, acquisition cost ratio, general and administrative expense ratio, expense ratio and combined ratio – improved from 2013 Q2 to 2014 Q2. The combined ratio was 90.3% in the second quarter of 2013 compared to 84.7% in the second quarter of 2014.

“As evidenced by an 85% combined ratio, our disciplined underwriting philosophy, combined with improved investment performance, drove the year to date 8.1% growth in diluted book value per share,” Scott Carmilani, president and CEO of Allied World, notes in the company statement.

For the six months ended June 30, 2014, Allied World had a net income of about US$328.8 million compared to about US$157.1 million for the first half of 2013. Operating income also improved to about US$205.9 million for the first half of 2014 from about US$187.7 million for the first half of 2013.