Allied World Assurance Company Holdings, AG has reported a net income of US$68.6 million for the third quarter of 2016, compared to a net loss of US$51.6 million for the same quarter in 2015.
The Zug, Switzerland-based company – a global provider of property, casualty and specialty insurance and reinsurance solutions – released its financial results on Monday. The combined ratio was 96.2% for the most recent quarter ending Sept. 30, compared to 95.8% in the third quarter of 2015, Allied World said in a press release.
“I am pleased we were able to generate a 96.2% combined ratio and strong investment returns which resulted in net income of US$68.6 million, in spite of some large loss events that took place in the quarter,” commented Allied World president and chief executive officer Scott Carmilani.
Gross premiums written (GPW) were US$730.2 million, a 3.2% decrease compared to US$754.1 million in the third quarter of 2015. For the nine months ending Sept. 30, GPW were US$2.394 billion compared to US$2.461 billion in 9M 2015. Net premiums written (NPW) were US$528.3 in the most recent quarter, compared to US$607 million in Q3 2015, while NPW were US$1.81 billion in 9M 2016 from US$1.983 billion in 9M 2015.
By segment, North American Insurance grew 1.3% to US$466.5 million in Q3 2016, led by increases in programs and other specialty lines, the release said. Partially offsetting this were reductions in healthcare and property lines, Allied World reported. The Global Markets Insurance segment decreased 4.5% to US$126.7 million, driven by reductions in several lines of business across Europe and Asia. The Reinsurance segment decreased 14.9% to $137.0 million, driven by continued strategic non-renewal of several property and casualty treaties.
The company did not experience any new reportable catastrophe losses this quarter, compared to US$35.5 million in the prior-year period. There was an increase of $4.9 million in catastrophe losses due to the Texas hailstorms which occurred in the second quarter of 2016.
Other Q3 highlights were:
The loss and loss expense ratio was 64.4% in the third quarter of 2016 compared to 64.1% in the prior-year quarter;
Underwriting income was US$21.5 million compared to underwriting income of US$27.9 million in Q3 2015;
Total acquisition costs were US$82.033 million for the quarter (US$31.517 million for North American Insurance, US$16.449 million for Global Markets Insurance and US$34.067 for Reinsurance); and
During the third quarter of 2016, the company recorded net favourable reserve development on prior loss years of US$29.7 million, a benefit of 5.1 percentage points to the loss and loss expense ratio, compared to US$8.6 million a year ago, a benefit of 1.3 percentage points.