Allied World Reports $123 Million Q2 Net; Conference Call Today

Bermuda-based Allied World Assurance Company Holdings, Ltd. reported net income of $123.3 million, or $1.96 per diluted share, for the second quarter of 2007, compared to net income of $102.4 million, or $2.02 per diluted share, for the second quarter 2006. Net income for the six months ended June 30, 2007 was $237.2 million, or $3.81 per diluted share, compared to net income of $200.5 million, or $3.96 per diluted share, for the first six months of 2006.

The company reported operating income, which excludes capital gains/losses, of $125.3 million, or $1.99 per diluted share, for the second quarter 2007 compared to operating income of $112.1 million, or $2.21 per diluted share, for the second quarter 2006. Operating income for the six months ended June 30, 2007 was $245.7 million, or $3.95 per diluted share, compared to operating income of $216.0 million, or $4.26 per diluted share, for the first six months of 2006.

“The decrease in diluted earnings per share amounts reflects the increase in the number of common shares outstanding resulting primarily from the company’s initial public offering in July 2006,” the earnings bulletin explained.

President and CEO Scott Carmilani commented: “Allied World continues to produce impressive results and generate strong book value growth for our shareholders. This is our sixth consecutive quarter with operating income in excess of $100 million and annualized operating income and net income return on average equity in excess of 20 percent. Enhancing the strong underwriting performance achieved in each of our business segments, we continue to reap the benefits of historically strong operating cash flows and significant investment income momentum.”

After noting the current “challenging market conditions,” he added: “We expect continued strong performance going forward as we continue to leverage our global operating platforms and diversified product lines to retain attractive business and find new opportunities that meet our return targets. We continue to be supported by strong ratings, a conservative balance sheet and an expanding invested asset base.”

Other earnings highlights included the following:
— Gross premiums written were $530.5 million in the second quarter 2007, a 2.4 percent increase compared to $518.3 million in the second quarter 2006.
— For the six months ended June 30, 2007, gross premiums written totaled $969.0 million, a 4.7 percent decrease compared to $1.0164 billion in the first six months of 2006.
— Gross premiums written for both the three and six months ended June 30, 2007 were reduced by the non-renewal of business that did not meet our underwriting requirements (which included pricing and/or policy terms and conditions), increased competition and decreasing rates for new and renewal business.
— Net premiums written were $386.6 million in the second quarter 2007, a 4.4 percent increase compared to $370.3 million in the second quarter 2006.
— For the six months ended June 30, 2007, net premiums written totaled $744.4 million, a 6.7 percent decrease compared to $797.8 million in the first six months of 2006.
— Net premiums earned in the second quarter 2007 were $303.1 million, a 0.8 percent decrease compared to $305.5 million for the second quarter 2006.
— For the six months ended June 30, 2007, net premiums earned totaled $589.7 million, a 4.0 percent decrease from net premiums earned of $614.5 million in the first six months of 2006. These decreases also reflect the increased utilization of reinsurance in the casualty segment.
— The combined ratio was 80.0 percent in the second quarter 2007 compared to 78.2 percent in second quarter 2006. The loss and loss expense ratio was 58.1 percent in the second quarter 2007 compared to 58.9 percent in the second quarter 2006.

Allied World will host a conference call today, Wednesday, August 8, 2007, at 8:30 a.m. (Eastern Time) to discuss its second quarter financial results. The public may access a live web cast of the conference call at the “Investor Relations” section of the company’s web site at: www.awac.com. In addition, the conference call can be accessed by dialing (866) 314-5050 (U.S. and Canada callers) or (617) 213-8051 (international callers) and entering the passcode 47056208 approximately ten minutes prior to the call.

Following the conclusion of the presentation, a replay of the call will be available through Wednesday, August 22, 2007 by dialing (888) 286-8010 (U.S. and Canada callers) or (617) 801-6888 (international callers) and entering the passcode 82915625. In addition, the web cast will remain available online through Wednesday, August 22, 2007.

Source: Allied World