Allied World Assurance Holdings Reports Q2 Net Income of $73.8M

Bermuda-based Allied World Assurance Holdings, Ltd reported net income of $73.8 million for the second quarter 2003, compared to $26.2 million for the second quarter last year. Net income for the six months ended June 30, 2003 was $129.6 million, compared to $44.0 million for the first half of 2002.

President and CEO Michael Morrison noted, “Allied World has experienced substantial growth in 2003, more than doubling our production over the first half of last year. We have achieved continued growth by applying our available capacity in all areas in which we specialize, where the need for quality coverage continues unabated. Our strong financial position and experienced underwriters, together with dedicated support staff producing quality service, enables us to reap the benefit of the more realistic rates, terms and conditions of the current market.”

Gross premiums written were $445.7 million in the second quarter 2003, compared to $278.5 million in the second quarter 2002. For the six months ended June 30, 2003, gross premiums written totaled $839.1 million, compared to $405.2 million in the same period last year.

Net premiums written in the second quarter 2003 were $390.3 million compared to $271.2 million in the second quarter last year. For the six months ended June 30, 2003, net premiums written were $765.3 million, compared to $397.9 million in the comparable period last year.

Net premiums earned in the quarter were $281.7 million, and $75.9 million in the quarter ended June 30, 2002; net premiums earned in the six months ended June 30, 2003 were $519.5 million, compared to $99.6 million in 2002.

Net investment income in the quarter ended June 30, 2003 was $23.9 million, and $19.5 million in the second quarter 2002. For the six months ended June 30, 2003, net investment income was $51.3 million, compared to $37.4 million in 2002.

Net loss and loss adjustment expenses incurred (including increases in reserves for incurred but not reported losses) were $191.4 million in the quarter ended June 30, 2003, and $49.4 million in the same quarter last year, representing loss ratios of 68.0 percent and 65.1 percent, respectively. Net loss and loss adjustment expenses incurred were $355.0 million in the period ended June 30, 2003, and $64.4 million in the same period 2002, representing loss ratios of 68.3 percent and 64.7 percent, respectively.

Acquisition costs and general and administrative expenses totaled $47.9 million in the quarter ended June 30, 2003, and $15.7 million in the quarter ended June 30, 2002, representing expense ratios of 17.0 percent and 20.7 percent, respectively. For the six months ended June 30, 2003, acquisition costs and general and administrative expenses totaled $96.6 million, compared to $22.9 million for the same period in 2002, representing expense ratios of 18.6 percent and 23.0 percent, respectively.

The company’s combined ratio for the quarter ended June 30, 2003, was 85.0 percent, and for the quarter ended June 30, 2002, was 85.8 percent. For the six months ended June 30, 2003 and 2002, the combined ratios were 86.9 percent and 87.7 percent, respectively.

Net income, which includes $7.8 million of net realized investment gains, was $73.8 million for the three months ended June 30, 2003, and compared to $26.2 million in the same period 2002, which included $4.3 million of net realized investment losses. Net income for the six months ended June 30, 2003, was $129.6 million, which includes $11.9 million of net realized investment gains, and for the six months ended June 30, 2002, net income was $44.0 million, which included $6.0 million of net realized losses.