Allied World profits plummet; reorganises primary operations
The profits of Swiss-based re/insurer Allied World nosedived in profits for the third quarter of 2014 as the company also revealed a repositioning its primary operations including some management changes.
The insurer’s net profit fell to $30.9 million in the third quarter of 2014, compared with $122.8 million in the third quarter of 2013.
It experienced $29.8 million of catastrophe losses for the third quarter of 2014 related to Hurricane Odile ($18.5 million) in Mexico, which largely impacted the international insurance segment, and Windstorm Ela ($8 million) in Western Europe, and PCS 45 in the Midwestern US ($3.3 million), which both impacted the reinsurance segment.
The insurer’s gross written premiums improved to $707.9 million, a 21.9 percent increase compared with $580.9 million it underwrote in the third quarter of 2013. This was driven by growth across all three segments.
The US insurance segment grew by 25.3 percent led by 42.7 percent growth in general casualty and offset by a continued decrease in healthcare of 10.2 percent. The reinsurance segment grew by 27 percent, driven by a large, new professional liability treaty and a treaty that had previously renewed in the second quarter.
The international insurance segment grew by 8.5 percent driven by more recently added lines of business, including marine cargo, as well as growth across existing lines.
Its combined ratio deteriorated to 91.7 percent in the third quarter of 2014, compared to 84.2 percent in the third quarter of 2013.
The company will realign its two insurance business segments from the current US insurance (US and Canada) and international insurance (all other regions) to North American insurance (all North America business, including US, Canada, Bermuda) and global markets insurance (all business outside of North America). The reinsurance segment will remain unchanged.
As part of the realignment, there has been a reshuffle. Frank D’Orazio, currently president, Bermuda and international insurance, will be appointed president, underwriting and global risk.
Louis Iglesias, as president, Allied World North America, will continue to oversee production and profitability for Canada and all US branch offices, and will assume responsibility for all insurance lines of business of the Bermuda operation.
Julian James, currently president, Allied World Assurance Company (Europe), will be appointed president, global markets. In this new role, he will continue to oversee all insurance lines of business for Allied World Europe and Syndicate 2232, as well as assume responsibility for Allied World’s operations in Asia Pacific and any other initiatives outside of North America.
"We continue to see attractive opportunities for selective organic growth," said president and chief executive officer Scott Carmilani. "The strategic changes to our management team, and reorganisation of our segments, will better align us with our clients and position us well for continued opportunities. Given the footprint of our business outside of North America, and the announced RSA transaction, these regions represent the next phase of our development
