This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Allied World Reports 10.8% Growth In Diluted Book Value Per Share For The Full-Year 2013

Allied World Assurance Company Holdings, AG (NYSE:AWH) today reported net income of $137.9 million, or $4.01 per diluted share, for the fourth quarter of 2013 compared to a net loss of $41.1 million, or $1.17 per diluted share, for the fourth quarter of 2012. Net income for the year ended December 31, 2013 was $417.9 million, or $11.95 per diluted share, compared to net income of $493.0 million, or $13.30 per diluted share, for the year ended December 31, 2012.

The company reported operating income of $74.5 million, or $2.17 per diluted share, for the fourth quarter of 2013, compared to an operating loss of $55.4 million, or $1.58 per diluted share, for the fourth quarter of 2012. Operating income for the year ended December 31, 2013 was $364.0 million, or $10.41 per diluted share, compared to operating income of $202.7 million, or $5.47 per diluted share, for the year ended December 31, 2012.

President and Chief Executive Officer Scott Carmilani commented, "Allied World had a very strong year in 2013. Consistent underwriting performance, highlighted by an 86% combined ratio, and a solid contribution from the investment portfolio, drove an 11% growth in diluted book value per share. Our platform is strongly positioned to gain additional scale over the coming year and our investment portfolio is well-aligned with the current investment environment. We are excited by the opportunities we see across the businesses."

 

Fourth Quarter and Full-Year Summary (Unaudited)

                           

(Expressed in millions of U.S. Dollars, except per share amounts)

 

Three Months Ended

December 31,

Diluted per share

Year Ended

December 31,

Diluted per share

2013   2012         2013   2012         2013   2012         2013   2012
       
Net income (loss) $137.9 $(41.1) $4.01 $(1.17) $417.9 $493.0 $11.95 $13.30

Adjusted for after tax effect of:

Net realized investment (gains)

(64.1) (15.2) (1.86) (0.43) (61.9) (291.1) (1.77) (7.85)
Foreign exchange loss 0.7   0.9         0.02   0.02         8.0   0.8         0.23   0.02
Operating income (loss) $74.5   $(55.4)         $2.17   $(1.58)         $364.0   $202.7         $10.41   $5.47
 

Fourth Quarter Operating Results

Gross premiums written were $555.5 million, an 11.8% increase compared to $497.1 million in the fourth quarter of 2012. This was driven by growth in the international insurance segment and the U.S insurance segment, offset by a slight decrease in the reinsurance segment. The international segment's gross premiums written grew by 19.9% attributable to growth across all lines, led by double-digit growth in trade credit, general casualty and the new aviation business; the U.S. insurance segment's gross premiums written grew by 11.7% helped by growth across existing lines including general casualty and programs, and contributions from newer lines including construction and surety.

  • Net premiums written were $391.1 million, a 7.9% increase compared to $362.6 million in the fourth quarter of 2012.
  • Net premiums earned were $524.6 million, a 10.1% increase compared to $476.2 million in the fourth quarter of 2012.
  • Underwriting income was $41.9 million, compared to an underwriting loss of $78.8 million in the fourth quarter of 2012 due to higher premiums earned as well as lower catastrophe losses.
  • The combined ratio was 92.0% compared to 116.5% in the fourth quarter of 2012 primarily due to the impact of Superstorm Sandy in the prior year quarter.
  • The loss and loss expense ratio was 60.2% in the fourth quarter of 2013 compared to 87.1% in the prior year quarter. During the fourth quarter of 2013, the company recorded net favorable reserve development on prior loss years of $26.4 million, a benefit of 5.0 percentage points to the loss and loss expense ratio, compared to $32.8 million a year ago, a benefit of 6.9 percentage points.
  • Excluding prior year reserve adjustments, the loss and loss expense ratio for the fourth quarter of 2013 was 65.3% compared to 94.0% for the fourth quarter of 2012.
  • The company experienced $13.5 million of catastrophe losses for the fourth quarter of 2013 related to Typhoon Fitow. This compares to $174.6 million of catastrophe losses in the prior year quarter primarily related to Superstorm Sandy.
  • The company's expense ratio was 31.8% for the fourth quarter of 2013 compared to 29.4% for the fourth quarter of 2012. The increase was largely driven by increased salary-related costs and higher stock-based compensation expense.

Investment Results

  • The total financial statement return on the company's investment portfolio for the three months ended December 31, 2013 was 1.4% compared to 0.6% for the three months ended December 31, 2012.
  • Net investment income grew 23.2% in the quarter compared to the prior year quarter.
  • The increase in net realized investment gains was primarily due to positive performance from the other invested assets and equities portfolio.
  • See the table below for the components of our investment returns:
             
(Expressed in millions of U.S. Dollars)

Three Months Ended December 31,

Year Ended December 31,

2013   2012           2013   2012
Net investment income $47.3   $38.4 $157.6   $167.1

Net realized investment gains (includes mark-to-market)

67.6

14.4 59.5

306.4

Change in unrealized (gains)

-   (2.2)           -   (17.5)
Total financial statement portfolio return $114.9   $50.6           $217.1   $456.0
 
Average invested assets $8,488.3 $8,518.1 $8,411.7 $8,272.6
Financial statement portfolio return 1.4%   0.6%           2.6%   5.5%

Note: net investment income, realized gains and unrealized gains are disclosed on a pre-tax basis.

1 of 5

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,083.80 -2.83 -0.02%
S&P 500 1,987.98 +0.97 0.05%
NASDAQ 4,472.1080 -1.5890 -0.04%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs