Bermuda-based Allied World Assurance Company Holdings reported net income of $79.2 million, or $1.56 per diluted share, for the second quarter of 2008, compared to net income of $123.3 million, or $1.96 per diluted share, for the second quarter of 2007. Net income for the six months ended June 30, 2008 was $210.2 million, or $4.12 per diluted share, compared to net income of $237.2 million, or $3.81 per diluted share, for the first six months of 2007.
The Company also reported operating income, which excludes capital gains/losses, of $83.2 million, or $1.64 per diluted share, for the second quarter of 2008 compared to operating income of $125.3 million, or $1.99 per diluted share, for the second quarter of 2007. Operating income for the six months ended June 30, 2008 was $211.2 million, or $4.14 per diluted share, compared to operating income of $245.7 million, or $3.95 per diluted share, for the first six months of 2007.
The company’s annualized net income return on average shareholders’ equity for three and six months ended June 30, 2008 was 13.8 percent and 18.9 percent, respectively. The company’s annualized operating return on average shareholders’ equity for the three and six months ended June 30, 2008 was 14.5 percent and 19.0 percent, respectively.
Gross premiums written were $446.8 million in the second quarter of 2008, a 15.8 percent decrease compared to $530.5 million in the second quarter of 2007. For the six months ended June 30, 2008, gross premiums written totaled $843.7 million, a 12.9 percent decrease compared to $969.0 million in the first six months of 2007. “This decrease in gross premiums written was the result of the non-renewal of business that did not meet our underwriting requirements (which included pricing and/or policy and contract terms and conditions), increased competition and decreasing rates for new and renewal business in each of our operating segments,” the bulletin noted.
President and CEO Scott Carmilani commented: “Allied World has reported solid operating results despite the continued downturn in pricing in the insurance marketplace and the negative impact of worldwide catastrophes during the quarter. Our operating cash flows continue to be very strong, and we are reporting a 19 percent annualized operating return on equity for the first half of the year.
“Although our revenue declined in this competitive environment, we continue to seek out strategic opportunities to better position ourselves assuming that the current state of the insurance marketplace will remain in place for the foreseeable future. To that end, we are very excited about our recently announced agreement to acquire Darwin Professional Underwriters. This transaction will significantly accelerate our expansion efforts for our U.S. specialty insurance operations by providing us with a well-regarded and complementary small account platform where we believe rates are less sensitive to swings in the market.”
The full report and details on accessing the investors’ conference call may be obtained on the Group’s web site at: http://www.awac.com.
Source: Allied World
Topics Profit Loss
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