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Member, Beacon International Group, Ltd.
Allied World Assurance Co. Holdings A.G. saw net income drop 29.7% to $124.4 million as expenses rose sharply and the company’s combined ratio worsened in the first quarter of 2015.
Revenues at the Zug, Switzerland-based insurer and reinsurer slipped 2.3% to $880.6 million, and net premiums written were almost flat, rising just 0.1% to $772.5 million.
Net investment income dropped 6.4% to $44.6 million, and the company’s combined ratio worsened to 88.1% from 79.9% in the year ago period.
Expenses hurt results, rising 20.3% overall to $527.7 million, with net losses and loss expenses rising 18.1% to $325.2 million.
First quarter losses at Allied World included three large property claims totaling $12.75 million plus $3.5 million on the March Germanwings airline crash in the French Alps, according to Marshall J. Grossack, executive vice president and chief actuary, speaking in the company’s earnings call.
Scott Carmilani, president, CEO and chairman of the board, said it was a “strong quarter in what continues to be a competitive environment,” on the earnings call.
The company’s rates for the first quarter were “flat across the board” according to Mr. Carmilani.
Property rates were down as much as 6%, he said, but casualty rates rose as much as 7%, and the company’s overall U.S. rates was up 5%, he added.
Results were also hurt by $9.9 million in foreign exchange losses, according to Thomas Bradley, executive vice president and chief financial officer, speaking on the call.
Allied World Assurance Co. Holdings A.G. recorded a dip in net income but experienced improved underwriting results in the fourth quarter as the company continued to expand its offerings globally and capitalize on increasing rates in the U.S. casualty insurance market.