21 July 2016 Insurance

Q2 profits leap at Allied World despite decrease in GWP

Allied World Assurance Company (Allied World) enjoyed a big boost in its net profits in the second quarter of 2016 though the business did shrink in several areas including reinsurance largely because of declines in its property portfolio.

The company made a net profit of $153.4 million in the quarter compared with $9.5 million in the same period a year earlier. Its combined ratio also improved to 92.5 percent compared with 99.2 percent in the second quarter of 2015.

The company’s CEO said the better performance was due to improvements on both its underwriting and investment portfolios.

However, Allied World reported a decrease in its overall gross written premiums (GWP) of 3.1 percent, which dropped to $800.3 million compared with $826 million in the second quarter of 2015.

Specifically, the company’s North American insurance segment decreased by 1.8 percent to $508.4 million, largely due to declines in its property/casualty book.

Its global markets insurance segment decreased by 7.1 percent to $125.4 million caused by reductions across lines within its European business, the company said, though these were partially offset by an increase in its Asia Pacific business.

Finally, Allied World’s reinsurance segment decreased by 4 percent to $166.5 million, also driven by declines in property, the company said.

Its vastly improved results were in spite of several severe catastrophes in the period, which included the hailstorms in Texas and Fort McMurray wildfires in Canada. The company experienced $20.9 million in cat losses for this period, compared with $25 million in the same period of 2015.

Scott Carmilani, president and chief executive officer, said: “I am very pleased with our results this quarter, which were attributable to strong performances across both the underwriting and investment portfolios.

“In particular, with a combined ratio of 92.3%, our North American Insurance business is showing the strength and results of our focused build out.”

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