Allied World Reports 79.3% Combined Ratio for the Fourth Quarter 2014

  • Return on equity of 13.4% and growth in diluted book value per share of 11.9% for the full year
  • Net favorable reserve development on prior loss years of $212.6 million versus $180.3 million in 2013
  • Full-year combined ratio of 85.2% compared with 86.2% in the prior year
  • Mid-teens growth in operating, underwriting and net income for the full year

ZUG, Switzerland--()--Allied World Assurance Company Holdings, AG (NYSE:AWH) today reported net income of $130.5 million, or $1.33 per diluted share, for the fourth quarter of 2014 compared to net income of $137.9 million, or $1.34 per diluted share, for the fourth quarter of 2013. Net income for the year ended December 31, 2014 was $490.3 million, or $4.92 per diluted share, compared to net income of $417.9 million, or $3.98 per diluted share, for the year ended December 31, 2013.

“Annualized net income return on average shareholders' equity”

The company reported operating income of $148.5 million, or $1.51 per diluted share, for the fourth quarter of 2014, compared to operating income of $74.5 million, or $0.72 per diluted share, for the fourth quarter of 2013. Operating income for the year ended December 31, 2014 was $415.1 million, or $4.17 per diluted share, compared to operating income of $364.0 million, or $3.47 per diluted share, for the year ended December 31, 2013.

President and Chief Executive Officer Scott Carmilani commented, "Allied World had an excellent fourth quarter and full year. Another great underwriting year has helped us to generate a five-year average combined ratio of 89.4%. The company made great progress in 2014 on executing our goals and initiatives, and is well positioned for 2015 and beyond. We look forward to the close of the RSA acquisitions and continued attractive opportunities across our platforms."

                             

Fourth Quarter 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
  2014     2013         2014       2013       2014       2013       2014       2013
                     
Net income $130.5 $137.9 $1.33 $1.34 $490.3 $417.9 $4.92 $3.98
Adjusted for after tax effect of:
Net realized investment losses (gains) 18.0 (64.1) 0.18 (0.62) (76.2) (61.9) (0.76) (0.59)
Foreign exchange loss   0.0     0.7         0.00       0.01       1.0       8.0       0.01       0.08
Operating income   $148.5     $74.5         $1.51       $0.72       $415.1       $364.0       $4.17       $3.47
 
    Note: On May 1, 2014, our shareholders approved a 3-for-1 stock split of the company's common shares. All historical share and per share amounts reflect the effect of the stock split.
 

As previously announced, the company realigned its two insurance business segments during the fourth quarter of 2014 from the previous U.S. Insurance (U.S. and Canada) and International Insurance (all other regions) segments to better manage the business. Our segments now report across North American Insurance, Global Markets Insurance, and Reinsurance.

Fourth Quarter Operating Results

  • Gross premiums written were $565.7 million, a 1.8% increase compared to $555.5 million in the fourth quarter of 2013. This was driven by growth in the Global Markets Insurance segment and North American Insurance segment, offset by a decrease in the Reinsurance segment.
  • The Reinsurance segment decreased by 34.7%, driven largely by the non-renewal of business that did not meet our pricing thresholds.
  • The Global Markets Insurance segment grew by 10.7% led by new lines of business, including marine and on-shore construction, as well as growth in existing lines.
  • The North American Insurance segment grew by 7.1% driven by most lines of business, and led by casualty, offset by a continued decrease in healthcare of 18.7%.
  • Net premiums earned were $573.5 million, a 9.3% increase compared to $524.6 million in the fourth quarter of 2013.
  • The company experienced $22.0 million of catastrophe losses in the fourth quarter of 2014 related to a hailstorm in Brisbane, Australia and Typhoon Rammasun, both of which impacted the Reinsurance segment. This compares to $13.5 million of catastrophe losses in the prior year quarter related to Typhoon Fitow.
  • Underwriting income was $118.9 million, compared to underwriting income of $41.9 million in the fourth quarter of 2013.
  • The combined ratio was 79.3% compared to 92.0% in the fourth quarter of 2013.
  • The loss and loss expense ratio was 47.6% in the fourth quarter of 2014 compared to 60.2% in the prior year quarter. During the fourth quarter of 2014, the company recorded net favorable reserve development on prior loss years of $71.7 million, a benefit of 12.5 percentage points to the loss and loss expense ratio, compared to $26.4 million a year ago, a benefit of 5.0 percentage points.
  • The company's expense ratio was largely flat for the fourth quarter of 2014 at 31.7% compared to 31.8% for the prior year quarter.

Investment Results

  • The total financial statement return on the company's investment portfolio for the three months ended December 31, 2014 was 0.4% compared to 1.4% for the three months ended December 31, 2013. The decrease in total return was primarily due to net realized investment losses driven by a flatter treasury curve and accompanied interest rate movements, as compared to net realized investment gains generated across the portfolio during the fourth quarter of 2013.
  • For the quarter, net investment income grew 3.8% compared to the prior year quarter.
  • See the table below for the components of our investment returns:
           

(Expressed in millions of U.S. dollars,
except percentages)

Three Months Ended December 31,

Year Ended December 31,

2014     2013     2014     2013
Net investment income   $49.1       $47.3 $176.9     $157.6
Net realized investment (losses) gains   (15.3)         67.6       89.0         59.5  
Total financial statement portfolio return   $33.7         $114.9       $265.8         $217.1  
 
Average invested assets $8,610.3 $8,488.3 $8,472.9 $8,411.7
Financial statement portfolio return   0.4 %       1.4 %     3.1 %       2.6 %
 
    Note: Net investment income, realized gains and unrealized gains are disclosed on a pre-tax basis.
 

Shareholders' Equity

  • As of December 31, 2014, the company’s total shareholders' equity grew to $3,778.3 million compared to $3,519.8 million as of December 31, 2013.
  • As of December 31, 2014, diluted book value per share was $38.27, an increase of 11.9% compared to $34.20 as of December 31, 2013, and an increase of 3.1% compared to $37.12 as of September 30, 2014.

Capital Management

  • During the fourth quarter of 2014, the company repurchased 290,242 of its common shares through its share repurchase program in the open market at an average price of $37.36 per share and an aggregate cost of $10.8 million. The company restarted its repurchase program late in the fourth quarter.
  • In May 2014, the company’s shareholders approved four quarterly dividends equal to $0.225 per share. Three of the four dividends have been paid, and the remaining dividend is anticipated to be paid on April 2, 2015.

Supplementary Information

Allied World will be providing both a Financial Supplement and an Investment Supplement as of December 31, 2014. This information will be available in the "Investor Relations" section of the company's website at www.awac.com.

Conference Call

Allied World will host a conference call on Thursday, February 5, 2015 at 8:30 a.m. (Eastern Time) to discuss the results for the fourth quarter ended December 31, 2014. The public may access a live webcast of the conference call at the "Investor Relations" section of the company's website at www.awac.com. In addition, the conference call can be accessed by dialing (888) 317-6003 (U.S. callers) or (412) 317-6061 (international callers) and entering the passcode 2916755 approximately ten minutes prior to the call.

A replay of the call will be available through Friday, February 20, 2015 by dialing (877) 344-7529 (U.S. callers) or (412) 317-0088 (international callers) and entering the passcode 10058325. In addition, the webcast will remain available online through Friday, February 20, 2015 at www.awac.com.

Non-GAAP Financial Measures

In presenting the company's results, management has included and discussed in this press release certain non-generally accepted accounting principles ("non-GAAP") financial measures within the meaning of Regulation G as promulgated by the U.S. Securities and Exchange Commission. Management believes that these non-GAAP measures, which may be defined differently by other companies, better explain the company's results of operations in a manner that allows for a more complete understanding of the underlying trends in the company's business. However, these measures should not be viewed as a substitute for those determined in accordance with generally accepted accounting principles ("U.S. GAAP").

"Operating income" is an internal performance measure used in the management of the company's operations and represents after-tax operational results excluding, as applicable, net realized investment gains or losses, net foreign exchange gain or loss, and other non-recurring items. The company excludes net realized investment gains or losses, net foreign exchange gain or loss, and other non-recurring items from the calculation of operating income because these amounts are heavily influenced by and fluctuate in part according to the availability of market opportunities and other factors. In addition to presenting net income determined in accordance with U.S. GAAP, the company believes that showing operating income enables investors, analysts, rating agencies and other users of the company's financial information to more easily analyze our results of operations and underlying business performance. Operating income should not be viewed as a substitute for U.S. GAAP net income.

The company has included "diluted book value per share" because it takes into account the effect of dilutive securities; therefore, the company believes it is an important measure of calculating shareholder returns.

"Annualized net income return on average shareholders' equity" ("ROAE") is calculated using average shareholders' equity, excluding the average after tax unrealized gains (or losses) on investments. Unrealized gains (losses) on investments are primarily the result of interest rate and credit spread movements and the resultant impact on fixed income securities. Such gains (losses) are not related to management actions or operational performance, nor are they likely to be realized. Therefore, the company believes that excluding these unrealized gains (losses) provides a more consistent and useful measurement of operating performance, which supplements U.S. GAAP information. In calculating ROAE, the net income (loss) available to shareholders for the period is multiplied by the number of such periods in a calendar year in order to arrive at annualized net income (loss) available to shareholders. The company presents ROAE as a measure that is commonly recognized as a standard of performance by investors, analysts, rating agencies and other users of its financial information.

"Annualized operating return on average shareholders' equity" is calculated using operating income (as defined above and annualized in the manner described for net income (loss) available to shareholders under ROAE above) and average shareholders' equity, excluding the average after tax unrealized gains (losses) on investments. Unrealized gains (losses) are excluded from equity for the reasons outlined in the annualized net income return on average shareholders' equity explanation above.

Reconciliations of these financial measures to their most directly comparable U.S. GAAP measures are included in the attached tables.

About Allied World

Allied World Assurance Company Holdings, AG, through its subsidiaries and brand known as Allied World, is a global provider of innovative property, casualty and specialty insurance and reinsurance solutions. Allied World offers superior client service through a global network of offices and branches. All of Allied World's rated insurance and reinsurance subsidiaries are rated A by A.M. Best Company, A by Standard & Poor's, and A2 by Moody's, and our Lloyd's Syndicate 2232 is rated A+ by Standard & Poor's and AA- by Fitch.

Please visit the following for further information on Allied World: Web: www.awac.com | Facebook: www.facebook.com/alliedworld | LinkedIn: http://www.linkedin.com/company/Allied-World.

Cautionary Statement Regarding Forward-Looking Statements

Any forward-looking statements made in this press release reflect our current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties, which may cause actual results to differ materially from those set forth in these statements. For example, our forward-looking statements could be affected by the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive agreements with RSA; the inability to receive the required regulatory approvals to complete the acquisitions; risks that the proposed acquisitions disrupt each company’s current plans and operations; the ability to retain key personnel; the ability to recognize the benefits of the acquisitions; the amount of costs, fees, expenses and charges related to the acquisitions; pricing and policy term trends; increased competition; the adequacy of our loss reserves; negative rating agency actions; greater frequency or severity of unpredictable catastrophic events; the impact of acts of terrorism and acts of war; the company or its subsidiaries becoming subject to significant income taxes in the United States or elsewhere; changes in regulations or tax laws; changes in the availability, cost or quality of reinsurance or retrocessional coverage; adverse general economic conditions; and judicial, legislative, political and other governmental developments, as well as management’s response to these factors, and other factors identified in our filings with the U.S. Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We are under no obligation (and expressly disclaim any such obligation) to update or revise any forward-looking statement that may be made from time to time, whether as a result of new information, future developments or otherwise.

 
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in thousands of United States dollars, except share and per share amounts)
                         
Three Months Ended
December 31,
Year Ended
December 31,
2014       2013 2014       2013
 
Revenues:
Gross premiums written $ 565,743 $ 555,490 $ 2,935,425 $ 2,738,664
Premiums ceded   (137,948)         (164,360)   (613,350)         (618,183)
 
Net premiums written 427,795 391,130 2,322,075 2,120,481
Change in unearned premiums   145,694         133,431     (139,317)         (114,648)
Net premiums earned 573,489 524,561 2,182,758 2,005,833
 
Net investment income 49,050 47,270 176,874 157,564
Net realized investment (losses) gains (15,329) 67,599 88,957 59,525
Other income   1,032             2,064        
Total revenues   608,242         639,430     2,450,653         2,222,922
Expenses:
Net losses and loss expenses 272,959 315,966 1,199,190 1,123,242
Acquisition costs 80,718 66,257 295,122 252,673
General and administrative expenses 100,914 100,467 365,736 352,285
Other expense 2,003 8,578
Amortization of intangible assets 633 633 2,533 2,533
Interest expense 14,304 14,094 57,755 56,510
Foreign exchange (gain) loss   (21)         658     957         8,019
Total expenses   471,510         498,075     1,929,871         1,795,262
Income before income taxes 136,732 141,355 520,782 427,660
Income tax expense   6,223         3,448     30,523         9,780
NET INCOME $ 130,509       $ 137,907   $ 490,259       $ 417,880
 
PER SHARE DATA:
Basic earnings per share $ 1.35 $ 1.37 $ 5.03 $ 4.08
Diluted earnings per share $ 1.33 $ 1.34 $ 4.92 $ 3.98
 
Weighted average common shares outstanding 96,386,796 100,814,955 97,538,319 102,464,715
Weighted average common shares and common share equivalents outstanding 98,394,432 103,129,812 99,591,773 104,865,834
 
Dividends paid per share (1) $ 0.225 $ 0.167 $ 0.784 $ 0.458
 
(1) A dividend of $0.225 was also paid on January 2, 2015 to shareholders of record on December 23, 2014.
 
           
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of United States dollars, except share and per share amounts)
 
As of As of
December 31, December 31,
ASSETS: 2014 2013
Fixed maturity investments trading, at fair value $ 6,069,010 $ 6,100,798
Equity securities trading, at fair value 844,163 699,846
Other invested assets   955,509   911,392
 
Total investments 7,868,682 7,712,036
Cash and cash equivalents 670,310 681,329
Insurance balances receivable 664,815 588,632
Funds held 724,021 632,430
Prepaid reinsurance 360,732 340,992
Reinsurance recoverable 1,340,256 1,234,504
Reinsurance recoverable on paid losses 86,075 76,099
Accrued investment income 28,456 32,236
Net deferred acquisition costs 151,546 126,661
Goodwill 278,258 268,376
Intangible assets 46,298 48,831
Balances receivable on sale of investments 47,149 76,544
Net deferred tax assets 33,615 37,469
Other assets   121,350   89,691
 
Total assets $ 12,421,563 $ 11,945,830
 
LIABILITIES:
Reserve for losses and loss expenses $ 5,881,165 $ 5,766,529
Unearned premiums 1,555,313 1,396,256
Reinsurance balances payable 180,060 173,023
Balances due on purchases of investments 5,428 104,740
Senior notes 798,802 798,499
Other long-term debt 19,213
Dividends payable 21,669 16,732
Accounts payable and accrued liabilities   181,622   170,225
Total liabilities   8,643,272   8,426,004
 
SHAREHOLDERS' EQUITY:

Common shares: 2014 and 2013: par value CHF 4.10 per share (2014: 100,775,256;

2013: 103,477,452 shares issued and 2014: 96,195,482; 2013: 100,253,646 shares

outstanding)

408,020 418,988
Treasury shares, at cost (2014: 4,579,774; 2013: 3,223,806) (143,075) (79,992)
Retained earnings   3,513,346   3,180,830
Total shareholders' equity   3,778,291   3,519,826
 
Total liabilities and shareholders' equity $ 12,421,563 $ 11,945,830
 
                   
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED CONSOLIDATED SEGMENT DATA
(Expressed in thousands of United States dollars, except for ratio information)
 
North American Global Markets
Three Months Ended December 31, 2014 Insurance Insurance Reinsurance Total
 
Gross premiums written $ 431,244 $ 84,457 $ 50,042 $ 565,743
Net premiums written 325,559 61,424 40,812 427,795
Net premiums earned 302,710 47,983 222,796 573,489
Net losses and loss expenses (163,252) (25,852) (83,855) (272,959)
Acquisition costs (29,383) (5,606) (45,729) (80,718)
General and administrative expenses   (60,599)     (19,246)     (21,069)     (100,914)  
Underwriting income (loss) 49,476 (2,721) 72,143 118,898
Other insurance-related revenues 1,032 1,032
Other insurance-related expenses   (584)     (1,419)         (2,003)  
Segment income (loss) 49,924 (4,140) 72,143 117,927
Net investment income 49,050
Net realized investment losses (15,329)
Amortization of intangible assets (633)
Interest expense (14,304)
Foreign exchange gain   21  
Income before income taxes $ 136,732  
 
GAAP Ratios:
Loss and loss expense ratio 53.9 % 53.9 % 37.6 % 47.6 %
Acquisition cost ratio 9.7 % 11.7 % 20.5 % 14.1 %
General and administrative expense ratio   20.0 %   40.1 %   9.5 %   17.6 %
Expense ratio   29.7 %   51.8 %   30.0 %   31.7 %
Combined ratio   83.6 %   105.7 %   67.6 %   79.3 %
 
North American Global Markets
Three Months Ended December 31, 2013 Insurance Insurance Reinsurance Total
 
Gross premiums written $ 402,574 $ 76,322 $ 76,594 $ 555,490
Net premiums written 270,969 44,239 75,922 391,130
Net premiums earned 262,398 34,303 227,860 524,561
Net losses and loss expenses (197,587) (14,168) (104,211) (315,966)
Acquisition costs (24,540) (3,045) (38,672) (66,257)
General and administrative expenses   (57,441)     (19,877)     (23,149)     (100,467)  
Underwriting (loss) income (17,170) (2,787) 61,828 41,871
Other insurance-related revenues
Other insurance-related expenses                
Segment (loss) income (17,170) (2,787) 61,828 41,871
Net investment income 47,270
Net realized investment gains 67,599
Amortization of intangible assets (633)
Interest expense (14,094)
Foreign exchange loss   (658)  
Income before income taxes $ 141,355  
 
GAAP Ratios:
Loss and loss expense ratio 75.3 % 41.3 % 45.7 % 60.2 %
Acquisition cost ratio 9.4 % 8.9 % 17.0 % 12.6 %
General and administrative expense ratio   21.9 %   57.9 %   10.2 %   19.2 %
Expense ratio   31.3 %   66.8 %   27.2 %   31.8 %
Combined ratio   106.6 %   108.1 %   72.9 %   92.0 %
 
 
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED CONSOLIDATED SEGMENT DATA
(Expressed in thousands of United States dollars, except for ratio information)
                   
North American Global Markets
Year Ended December 31, 2014 Insurance Insurance Reinsurance Total
 
Gross premiums written $ 1,716,288 $ 280,543 $ 938,594 $ 2,935,425
Net premiums written 1,230,839 187,997 903,239 2,322,075
Net premiums earned 1,111,164 162,566 909,028 2,182,758
Net losses and loss expenses (683,836) (61,057) (454,297) (1,199,190)
Acquisition costs (105,914) (18,222) (170,986) (295,122)
General and administrative expenses   (219,665)     (68,106)     (77,965)     (365,736)  
Underwriting income 101,749 15,181 205,780 322,710
Other insurance-related revenues 2,064 2,064
Other insurance-related expenses   (1,854)     (6,724)         (8,578)  
Segment income 101,959 8,457 205,780 316,196
Net investment income 176,874
Net realized investment gains 88,957
Amortization of intangible assets (2,533)
Interest expense (57,755)
Foreign exchange loss   (957)  
Income before income taxes $ 520,782  
 
GAAP Ratios:
Loss and loss expense ratio 61.5 % 37.6 % 50.0 % 54.9 %
Acquisition cost ratio 9.5 % 11.2 % 18.8 % 13.5 %
General and administrative expense ratio   19.8 %   41.9 %   8.6 %   16.8 %
Expense ratio   29.3 %   53.1 %   27.4 %   30.3 %
Combined ratio   90.8 %   90.7 %   77.4 %   85.2 %
 
North American Global Markets
Year Ended December 31, 2013 Insurance Insurance Reinsurance Total
 
Gross premiums written $ 1,572,355 $ 232,555 $ 933,754 $ 2,738,664
Net premiums written 1,082,441 145,002 893,038 2,120,481
Net premiums earned 1,022,979 126,008 856,846 2,005,833
Net losses and loss expenses (651,267) (50,395) (421,580) (1,123,242)
Acquisition costs (94,869) (10,051) (147,753) (252,673)
General and administrative expenses   (209,042)     (63,164)     (80,079)     (352,285)  
Underwriting income 67,801 2,398 207,434 277,633
Other insurance-related revenues
Other insurance-related expenses                
Segment income 67,801 2,398 207,434 277,633
Net investment income 157,564
Net realized investment gains 59,525
Amortization of intangible assets (2,533)
Interest expense (56,510)
Foreign exchange loss   (8,019)  
Income before income taxes $ 427,660  
 
GAAP Ratios:
Loss and loss expense ratio 63.7 % 40.0 % 49.2 % 56.0 %
Acquisition cost ratio 9.3 % 8.0 % 17.2 % 12.6 %
General and administrative expense ratio   20.4 %   50.1 %   9.3 %   17.6 %
Expense ratio   29.7 %   58.1 %   26.5 %   30.2 %
Combined ratio   93.4 %   98.1 %   75.7 %   86.2 %
 
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG  
UNAUDITED OPERATING INCOME RECONCILIATION
(Expressed in thousands of United States dollars, except share and per share amounts)
                       
 

Three Months Ended
December 31,

Year Ended
2014       2013 2014       2013
 
Net income $ 130,509 $ 137,907 $ 490,259 $ 417,880
Add after tax effect of:
Net realized investment losses (gains) 18,038 (64,027) (76,154) (61,867)
Foreign exchange (gain) loss   (21)         658   957         8,019
Operating income $ 148,526       $ 74,538 $ 415,062       $ 364,032
 
Weighted average common shares outstanding:
Basic 96,386,796 100,814,955 97,538,319 102,464,715
Diluted 98,394,432 103,129,812 99,591,773 104,865,834
 
Basic per share data:
Net income $ 1.35 $ 1.37 $ 5.03 $ 4.08
Add after tax effect of:
Net realized investment losses (gains) 0.19 (0.64) (0.78) (0.60)
Foreign exchange (gain) loss   0.00         0.01   0.01         0.08
Operating income $ 1.54       $ 0.74 $ 4.26       $ 3.56
 
Diluted per share data:
Net income $ 1.33 $ 1.34 $ 4.92 $ 3.98
Add after tax effect of:
Net realized investment losses (gains) 0.18 (0.62) (0.76) (0.59)
Foreign exchange (gain) loss   0.00         0.01   0.01         0.08
Operating income $ 1.51       $ 0.72 $ 4.17       $ 3.47
 
 
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED DILUTED BOOK VALUE PER SHARE RECONCILIATION
(Expressed in thousands of United States dollars, except share and per share amounts)
         
As of As of
December 31, December 31,
2014 2013
Price per share at period end $ 37.92 $ 37.60
 
Total shareholders' equity $ 3,778,291 $ 3,519,826
 
Basic common shares outstanding 96,195,482 100,253,646
 
Add: unvested restricted share units 502,506 143,697
 
Add: performance based equity awards 616,641 804,519
 
Add: employee share purchase plan 42,176 55,596
 
Add: dilutive options outstanding 2,426,674 2,928,312
Weighted average exercise price per share $ 16.41 $ 16.07
Deduct: options bought back via treasury method   (1,050,151)   (1,251,687)
 
Common shares and common share
equivalents outstanding 98,733,328 102,934,083
 
Basic book value per common share $ 39.28 $ 35.11
Diluted book value per common share $ 38.27 $ 34.20
 
 
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED ANNUALIZED RETURN ON SHAREHOLDERS' EQUITY RECONCILIATION
(Expressed in thousands of United States dollars, except for percentage information)
                         
Three Months Ended December 31, Year Ended
2014       2013 2014         2013
 
Opening shareholders' equity $ 3,676,599 $ 3,443,928 $ 3,519,826 $ 3,326,335
Deduct: accumulated other comprehensive income                                
Adjusted opening shareholders' equity 3,676,599 3,443,928 3,519,826 3,326,335
 
Closing shareholders' equity $ 3,778,291 $ 3,519,826 $ 3,778,291 $ 3,519,826
Deduct: accumulated other comprehensive income                                
Adjusted closing shareholders' equity 3,778,291 3,519,826 3,778,291 3,519,826
 
Average shareholders' equity $   3,727,445         $ 3,481,877   $   3,649,059         $ 3,423,081
 
Net income available to shareholders $ 130,509 $ 137,907 $ 490,259 $ 417,880
Annualized net income available to shareholders 522,036 551,628 490,259 417,880
 
Annualized return on average shareholders' equity -
net income available to shareholders     14.0 %         15.8 %     13.4 %         12.2 %
 
Operating income available to shareholders $ 148,526 $ 74,538 $ 415,062 $ 364,032
Annualized operating income available to shareholders 594,104 298,152 415,062 364,032
 
Annualized return on average shareholders' equity -
operating income available to shareholders     15.9 %         8.6 %     11.4 %         10.6 %
 
 

Contacts

Allied World Assurance Company Holdings, AG
Media:
Faye Cook, +1-441-278-5406
Senior Vice President, Marketing & Communications
Faye.Cook@awac.com
or
Investors:
Sarah Doran, +1-646-794-0590
Senior Vice President, Investor Relations and Treasurer
Sarah.Doran@awac.com
www.awac.com

Allied World Assurance Company Holdings, AG