Allied World experiences sharp increase in Q2 profits despite GWP decrease
Allied World Assurance Company (Allied World), which has offices in Bermuda, encountered a jump in its net income in the second quarter of 2016, despite the decrease in business in several areas, mainly reinsurance, due to a drop in its property portfolio.
The company has made a net profit of $153.4 million in the first half of 2016 compared with $9.5 million within the same period last year. Its combined ratio has also improved to 92.5 percent compared with 99.2 percent in the second quarter of 2015.
Scott Carmilani, president and chief executive officer (CEO) of Allied World said the performance improvement was due to improvements on both its underwriting an investment portfolios.
However, the company reported a decrease in its total gross written premiums (GWP) of 3.1 percent, which has 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, mainly due to declines in its property/casualty book.
Its global markets insurance segment has decreased by 7.1 percent to $125.4 million caused by reductions across lines within its European business, the company said, though these were partly offset by an increase in its Asia-Pacific business.
Finally, Allied World’s reinsurance segment has decreased by 4 percent to $166.5 million, also driven by declines in property, the company said.
Its greatly 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 has experienced $20.9 million in cat losses during this period, compared with $25 million in the same period of 2015.
“I am very pleased with our results this quarter, which were attributable to strong performances across both the underwriting and investment portfolios," said Carmilani.
“In particular, with a combined ratio of 92.3 percent, our North American Insurance business is showing the strength and results of our focused build out.”