ZUG, Switzerland--(BUSINESS WIRE)--Allied World Assurance Company Holdings, AG (NYSE:AWH) today reported net income of $1.7 million, or $0.02 per diluted share, for the fourth quarter of 2015 compared to net income of $130.5 million, or $1.33 per diluted share, for the fourth quarter of 2014. Net income for the year ended December 31, 2015 was $83.9 million, or $0.89 per diluted share, compared to net income of $490.3 million, or $4.92 per diluted share, for the year ended December 31, 2014.
The company reported operating income of $43.0 million, or $0.47 per diluted share, for the fourth quarter of 2015, compared to operating income of $148.5 million, or $1.51 per diluted share, for the fourth quarter of 2014. Operating income for the year ended December 31, 2015 was $212.0 million, or $2.25 per diluted share, compared to operating income of $415.1 million, or $4.17 per diluted share, for the year ended December 31, 2014.
President and Chief Executive Officer Scott Carmilani commented, "2015 was a challenging year, marked by a difficult underwriting environment and financial market volatility. With the close of the Asian acquisitions and targeted growth in our insurance segments, I believe our franchise is well positioned. We look forward to creating and capitalizing on profitable opportunities in 2016."
|
Fourth Quarter Summary (Unaudited) |
||||||||||||||||||||||||||||
| (Expressed in millions of U.S. dollars, except per share amounts) |
Three Months Ended |
Diluted per share |
Year Ended |
Diluted per share |
||||||||||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||||
| Net income | $ | 1.7 | $ | 130.5 | $ | 0.02 | $ | 1.33 | $ | 83.9 | $ | 490.3 | $ | 0.89 | $ | 4.92 | ||||||||||||
| Adjusted for after tax effect of: | ||||||||||||||||||||||||||||
| Net realized investment losses (gains) | 40.4 | 18.0 | 0.44 | 0.18 | 116.8 | (76.2 | ) | 1.24 | (0.76 | ) | ||||||||||||||||||
| Foreign exchange loss | 0.9 | 0.0 | 0.01 | 0.00 | 11.3 | 1.0 | 0.12 | 0.01 | ||||||||||||||||||||
| Operating income | $ | 43.0 | $ | 148.5 | $ | 0.47 | $ | 1.51 | $ | 212.0 | $ | 415.1 | $ | 2.25 | $ | 4.17 | ||||||||||||
Fourth Quarter Operating Results
-
Gross premiums written were $632.4 million, an 11.8% increase compared
to $565.7 million in the fourth quarter of 2014. This was driven by
growth in the Global Markets Insurance and North American Insurance
segments, offset by a decrease in the Reinsurance segment.
- While the fourth quarter is the smallest quarter for the Reinsurance segment, it decreased by 44.8% largely due to the non-renewal of several property and casualty treaties.
- The Global Markets Insurance segment grew by 75.4%, almost exclusively as a result of the inclusion of the acquired Asian operations.
- The North American Insurance segment grew by 5.9% driven by professional liability, programs, and specialty and other, offset by a continued decrease in healthcare of 23.8%.
- Net premiums earned were $622.8 million, an 8.6% increase compared to $573.5 million in the fourth quarter of 2014.
- The company did not experience any reportable catastrophe losses in the fourth quarter of 2015. This compares to $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.
- Underwriting income was $19.1 million, compared to underwriting income of $118.9 million in the fourth quarter of 2014.
- The combined ratio was 97.0%, compared to 79.3% in the fourth quarter of 2014.
- The loss and loss expense ratio was 66.3% in the fourth quarter of 2015, compared to 47.6% in the prior year quarter. During the fourth quarter of 2015, the company recorded net adverse reserve development on prior loss years of $12.5 million, an increase of 2.0 percentage points to the loss and loss expense ratio, compared to net favorable reserve development on prior loss years of $71.7 million a year ago, a reduction of 12.5 percentage points to the loss and loss expense ratio. This is inclusive of a $32.5 million reserve addition related to prior year development in North American healthcare, primarily related to the medical malpractice line of business. For the full year 2015, the company recorded net favorable reserve development on prior loss years of $81.6 million, a reduction of 3.3 percentage points to the loss and loss expense ratio, compared to net favorable reserve development on prior loss years of $212.6 million a year ago, a reduction of 9.7 percentage points to the loss and loss expense ratio.
- The company's expense ratio of 30.7% was lower than the 31.7% in the prior year quarter, largely due to lower employee compensation expenses.
Investment Results
- The total financial statement return on the company's investment portfolio for the three months ended December 31, 2015 was 0.1% compared to 0.4% for the three months ended December 31, 2014. The decrease in total return was primarily due to a negative mark to market adjustment on fixed income investments as a result of higher interest rates and wider credit spreads.
- Net investment income was largely unchanged compared to that of 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, |
||||||||||||||||
| 2015 |
|
2014 |
2015 | 2014 | ||||||||||||||
| Net investment income | $ | 49.1 | $ | 49.1 | $ | 182.1 | $ | 176.8 | ||||||||||
| Net realized investment (losses) gains | (38.8 | ) | (15.4 | ) | (127.6 | ) | 89.0 | |||||||||||
| Total financial statement portfolio return | $ | 10.3 | $ | 33.7 | $ | 54.5 | $ | 265.8 | ||||||||||
| Average invested assets | $ | 9,008.1 | $ | 8,610.3 | $ | 8,866.2 | $ | 8,472.9 | ||||||||||
| Financial statement portfolio return | 0.1 | % | 0.4 | % | 0.6 | % | 3.1 | % | ||||||||||
| Note: Net investment income, realized gains and unrealized gains are disclosed on a pre-tax basis. | ||||||
Shareholders' Equity
- As of December 31, 2015, the company’s total shareholders' equity was $3,532.5 million compared to $3,778.3 million as of December 31, 2014.
- As of December 31, 2015, diluted book value per share was $37.78, a decrease of 1.3% compared to $38.27 as of December 31, 2014, and a decrease of 0.7% compared to $38.03 as of September 30, 2015.
- As of December 31, 2015, diluted tangible book value per share was $32.38, a decrease of 7.4% compared to $34.98 as of December 31, 2014, and a decrease of 1.4% compared to $32.84 as of September 30, 2015.
Capital Management
- During the fourth quarter of 2015, the company did not repurchase any common shares, although we repurchased over $245 million for the full year 2015. The company restarted its 10b5-1 repurchase program in the first quarter of 2016. As of December 31, 2015, $173 million of the company's repurchase authorization remained available.
- In May 2015, the company’s shareholders approved four quarterly dividends equal to $0.26 per share. Three of the four dividends have been paid, and the remaining dividend is anticipated to be paid in March 2016.
- In October, the company issued $500 million of 4.35% senior notes due in 2025 to refinance the existing $500 million of 7.50% senior notes due in August 2016.
Supplementary Information
Allied World will be providing both a Financial Supplement and an Investment Supplement as of December 31, 2015. 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 4, 2016 at 10:00 a.m. (Eastern Time) to discuss the results for the fourth quarter ended December 31, 2015. 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 1 (888) 771-4371 (U.S. callers) or 1 (847) 585-4405 (international callers) and entering the passcode 41589386 approximately ten minutes prior to the call. A replay of the call will be available through Friday, February 19, 2016 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.
"Annualized return on average shareholders' equity" ("ROAE") is calculated using average shareholders’ equity, excluding the average after tax other comprehensive income or loss, which may include unrealized gains (losses) on investments and currency translation adjustments. 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 amounts 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 ROAE explanation above.
"Tangible shareholders' equity and diluted book value per share" is calculated using total shareholders' equity excluding goodwill and intangible assets, because it represents a more liquid measure of the company's net assets than total shareholders' equity. The company also 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.
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: https://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 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 |
Year Ended |
|||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||
| Revenues: | ||||||||||||||||||
| Gross premiums written | $ | 632,357 | $ | 565,743 | $ | 3,093,003 | $ | 2,935,425 | ||||||||||
| Premiums ceded | (167,539 | ) | (137,948 | ) | (644,996 | ) | (613,350 | ) | ||||||||||
| Net premiums written | 464,818 | 427,795 | 2,448,007 | 2,322,075 | ||||||||||||||
| Change in unearned premiums | 157,991 | 145,694 | 40,379 | (139,317 | ) | |||||||||||||
| Net premiums earned | 622,809 | 573,489 | 2,488,386 | 2,182,758 | ||||||||||||||
| Net investment income | 49,099 | 49,050 | 182,077 | 176,874 | ||||||||||||||
| Net realized investment (losses) gains | (38,849 | ) | (15,329 | ) | (127,632 | ) | 88,957 | |||||||||||
| Other income | 982 | 1,032 | 3,495 | 2,064 | ||||||||||||||
| Total revenues | 634,041 | 608,242 | 2,546,326 | 2,450,653 | ||||||||||||||
| Expenses: | ||||||||||||||||||
| Net losses and loss expenses | 412,756 | 272,959 | 1,586,334 | 1,199,190 | ||||||||||||||
| Acquisition costs | 95,938 | 80,718 | 375,356 | 295,122 | ||||||||||||||
| General and administrative expenses | 95,025 | 100,914 | 406,324 | 365,736 | ||||||||||||||
| Other expense | 1,907 | 2,003 | 6,210 | 8,578 | ||||||||||||||
| Amortization of intangible assets | 3,668 | 633 | 9,759 | 2,533 | ||||||||||||||
| Interest expense | 18,126 | 14,304 | 61,398 | 57,755 | ||||||||||||||
| Foreign exchange loss (gain) | 920 | (21 | ) | 11,289 | 957 | |||||||||||||
| Total expenses | 628,340 | 471,510 | 2,456,670 | 1,929,871 | ||||||||||||||
| Income before income taxes | 5,701 | 136,732 | 89,656 | 520,782 | ||||||||||||||
| Income tax expense | 3,994 | 6,223 | 5,765 | 30,523 | ||||||||||||||
| NET INCOME | $ | 1,707 | $ | 130,509 | $ | 83,891 | $ | 490,259 | ||||||||||
| PER SHARE DATA: | ||||||||||||||||||
| Basic earnings per share | $ | 0.02 | $ | 1.35 | $ | 0.91 | $ | 5.03 | ||||||||||
| Diluted earnings per share | $ | 0.02 | $ | 1.33 | $ | 0.89 | $ | 4.92 | ||||||||||
| Weighted average common shares outstanding | 90,934,107 | 96,386,796 | 92,530,208 | 97,538,319 | ||||||||||||||
|
Weighted average common shares and common share |
||||||||||||||||||
|
equivalents outstanding |
92,422,422 | 98,394,432 | 94,174,460 | 99,591,773 | ||||||||||||||
| Dividends paid per share | $ | 0.520 | $ | 0.225 | $ | 1.230 | $ | 0.784 | ||||||||||
| 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: | 2015 | 2014 | ||||||||
| Fixed maturity investments trading, at fair value | $ | 7,201,538 | $ | 6,069,010 | ||||||
| Equity securities trading, at fair value | 403,022 | 844,163 | ||||||||
| Other invested assets | 966,709 | 955,509 | ||||||||
| Total investments | 8,571,269 | 7,868,682 | ||||||||
| Cash and cash equivalents | 668,612 | 670,310 | ||||||||
| Insurance balances receivable | 745,888 | 664,815 | ||||||||
| Funds held | 640,819 | 724,021 | ||||||||
| Prepaid reinsurance | 392,265 | 360,732 | ||||||||
| Reinsurance recoverable | 1,479,959 | 1,340,256 | ||||||||
| Reinsurance recoverable on paid losses | 96,437 | 86,075 | ||||||||
| Accrued investment income | 38,304 | 28,456 | ||||||||
| Net deferred acquisition costs | 165,206 | 151,546 | ||||||||
| Goodwill | 388,127 | 278,258 | ||||||||
| Intangible assets | 116,623 | 46,298 | ||||||||
| Balances receivable on sale of investments | 36,889 | 47,149 | ||||||||
| Net deferred tax assets | 24,401 | 33,615 | ||||||||
| Other assets | 147,149 | 118,641 | ||||||||
| Total assets | $ | 13,511,948 | $ | 12,418,854 | ||||||
| LIABILITIES: | ||||||||||
| Reserve for losses and loss expenses | $ | 6,456,156 | $ | 5,881,165 | ||||||
| Unearned premiums | 1,683,274 | 1,555,313 | ||||||||
| Reinsurance balances payable | 214,369 | 180,060 | ||||||||
| Balances due on purchases of investments | 125,126 | 5,428 | ||||||||
| Senior notes | 1,292,907 | 796,093 | ||||||||
| Other long-term debt | 23,033 | 19,213 | ||||||||
| Dividends payable | — | 21,669 | ||||||||
| Accounts payable and accrued liabilities | 184,541 | 181,622 | ||||||||
| Total liabilities | 9,979,406 | 8,640,563 | ||||||||
| SHAREHOLDERS' EQUITY: | ||||||||||
|
Common shares: 2015 and 2014: par value CHF 4.10 per share (2015: 95,523,230; 2014: |
||||||||||
|
100,775,256 shares issued and 2015: 90,959,635; 2014: 96,195,482 shares outstanding) |
386,702 | 408,020 | ||||||||
| Treasury shares, at cost (2015: 4,563,595; 2014: 4,579,774) | (155,072 | ) | (143,075 | ) | ||||||
| Accumulated other comprehensive loss | (9,297 | ) | — | |||||||
| Retained earnings | 3,310,209 | 3,513,346 | ||||||||
| Total shareholders' equity | 3,532,542 | 3,778,291 | ||||||||
| Total liabilities and shareholders' equity | $ | 13,511,948 | $ | 12,418,854 | ||||||
| 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, 2015 | Insurance | Insurance | Reinsurance | Total | ||||||||||||||
| Gross premiums written | $ | 456,649 | $ | 148,127 | $ | 27,581 | $ | 632,357 | ||||||||||
| Net premiums written | 338,238 | 107,875 | 18,705 | 464,818 | ||||||||||||||
| Net premiums earned | 327,124 | 103,800 | 191,885 | 622,809 | ||||||||||||||
| Net losses and loss expenses | (254,719 | ) | (83,112 | ) | (74,925 | ) | (412,756 | ) | ||||||||||
| Acquisition costs | (38,693 | ) | (16,846 | ) | (40,399 | ) | (95,938 | ) | ||||||||||
| General and administrative expenses | (48,973 | ) | (30,264 | ) | (15,788 | ) | (95,025 | ) | ||||||||||
| Underwriting (loss) income | (15,261 | ) | (26,422 | ) | 60,773 | 19,090 | ||||||||||||
| Other insurance-related revenues | 982 |
— |
— | 982 | ||||||||||||||
| Other insurance-related expenses | (587 | ) | (282 | ) | (1,038 |
) |
(1,907 | ) | ||||||||||
| Segment (loss) income | (14,866 | ) | (26,704 | ) | 59,735 | 18,165 | ||||||||||||
| Net investment income | 49,099 | |||||||||||||||||
| Net realized investment losses | (38,849 | ) | ||||||||||||||||
| Amortization and impairment of intangible assets | (3,668 | ) | ||||||||||||||||
| Interest expense | (18,126 | ) | ||||||||||||||||
| Foreign exchange loss | (920 | ) | ||||||||||||||||
| Income before income taxes | $ | 5,701 | ||||||||||||||||
| GAAP Ratios: | ||||||||||||||||||
| Loss and loss expense ratio |
77.9 |
% |
80.1 |
% |
39.0 |
% |
66.3 |
% |
||||||||||
| Acquisition cost ratio |
11.8 |
% |
16.2 |
% |
21.1 |
% |
15.4 |
% |
||||||||||
| General and administrative expense ratio |
15.0 |
% |
29.2 |
% |
8.2 |
% |
15.3 |
% |
||||||||||
| Expense ratio |
26.8 |
% |
45.4 |
% |
29.3 |
% |
30.7 |
% |
||||||||||
| Combined ratio |
104.7 |
% |
125.5 |
% |
68.3 |
% |
97.0 |
% |
||||||||||
| 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 |
% |
||||||||||
| 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, 2015 | Insurance | Insurance | Reinsurance | Total | ||||||||||||||
| Gross premiums written | $ | 1,815,285 | $ | 476,349 | $ | 801,368 | $ | 3,093,002 | ||||||||||
| Net premiums written | 1,358,104 | 324,105 | 765,798 | 2,448,007 | ||||||||||||||
| Net premiums earned | 1,301,356 | 366,793 | 820,237 | 2,488,386 | ||||||||||||||
| Net losses and loss expenses | (910,193 | ) | (240,312 | ) | (435,829 | ) | (1,586,334 | ) | ||||||||||
| Acquisition costs | (139,512 | ) | (70,921 | ) | (164,923 | ) | (375,356 | ) | ||||||||||
| General and administrative expenses | (224,708 | ) | (108,353 | ) | (73,263 | ) | (406,324 | ) | ||||||||||
| Underwriting income (loss) | 26,943 | (52,793 | ) | 146,222 | 120,372 | |||||||||||||
| Other insurance-related revenues | 3,495 | — |
— |
3,495 | ||||||||||||||
| Other insurance-related expenses | (2,664 | ) | (2,508 | ) |
(1,038 |
) |
(6,210 | ) | ||||||||||
| Segment income (loss) | 27,774 | (55,301 | ) | 145,184 | 117,657 | |||||||||||||
| Net investment income | 182,077 | |||||||||||||||||
| Net realized investment losses | (127,632 | ) | ||||||||||||||||
| Amortization and impairment of intangible assets | (9,759 | ) | ||||||||||||||||
| Interest expense | (61,398 | ) | ||||||||||||||||
| Foreign exchange loss | (11,289 | ) | ||||||||||||||||
| Income before income taxes | $ | 89,656 | ||||||||||||||||
| GAAP Ratios: | ||||||||||||||||||
| Loss and loss expense ratio |
69.9 |
% |
65.5 |
% |
53.1 |
% |
63.7 |
% |
||||||||||
| Acquisition cost ratio |
10.7 |
% |
19.3 |
% |
20.1 |
% |
15.1 |
% |
||||||||||
| General and administrative expense ratio |
17.3 |
% |
29.5 |
% |
8.9 |
% |
16.3 |
% |
||||||||||
| Expense ratio |
28.0 |
% |
48.8 |
% |
29.0 |
% |
31.4 |
% |
||||||||||
| Combined ratio |
97.9 |
% |
114.3 |
% |
82.1 |
% |
95.1 |
% |
||||||||||
| 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 |
% |
||||||||||
| 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 |
Year Ended
December 31, |
||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||||
| Net income | $ | 1,707 | $ | 130,509 | $ | 83,891 | $ | 490,259 | |||||||||
| Add after tax effect of: | |||||||||||||||||
| Net realized investment losses (gains) | 40,385 | 18,038 | 116,787 | (76,154 | ) | ||||||||||||
| Foreign exchange loss (gain) | 920 | (21 | ) | 11,289 | 957 | ||||||||||||
| Operating income | $ | 43,012 | $ | 148,526 | $ | 211,967 | $ | 415,062 | |||||||||
| Weighted average common shares outstanding: | |||||||||||||||||
| Basic | 90,934,107 | 96,386,796 | 92,530,208 | 97,538,319 | |||||||||||||
| Diluted | 92,422,422 | 98,394,432 | 94,174,460 | 99,591,773 | |||||||||||||
| Basic per share data: | |||||||||||||||||
| Net income | $ | 0.02 | $ | 1.35 | $ | 0.91 | $ | 5.03 | |||||||||
| Add after tax effect of: | |||||||||||||||||
| Net realized investment losses (gains) | 0.44 | 0.19 | 1.26 | (0.78 | ) | ||||||||||||
| Foreign exchange loss | 0.01 | 0.00 | 0.12 | 0.01 | |||||||||||||
| Operating income | $ | 0.47 | $ | 1.54 | $ | 2.29 | $ | 4.26 | |||||||||
| Diluted per share data: | |||||||||||||||||
| Net income | $ | 0.02 | $ | 1.33 | $ | 0.89 | $ | 4.92 | |||||||||
| Add after tax effect of: | |||||||||||||||||
| Net realized investment losses (gains) | 0.44 | 0.18 | 1.24 | (0.76 | ) | ||||||||||||
| Foreign exchange loss | 0.01 | 0.00 | 0.12 | 0.01 | |||||||||||||
| Operating income | $ | 0.47 | $ | 1.51 | $ | 2.25 | $ | 4.17 | |||||||||
| 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, | |||||||||
| 2015 | 2014 | |||||||||
| Price per share at period end | $ | 37.19 | $ | 37.92 | ||||||
| Total shareholders' equity | $ | 3,532,542 | $ | 3,778,291 | ||||||
| Total tangible shareholders' equity | $ | 3,027,792 | $ | 3,453,735 | ||||||
| Basic common shares outstanding | 90,959,635 | 96,195,482 | ||||||||
| Add: unvested restricted share units | 819,309 | 502,506 | ||||||||
| Add: performance based equity awards | 591,683 | 616,641 | ||||||||
| Add: employee share purchase plan | 53,514 | 42,176 | ||||||||
| Add: dilutive options outstanding | 1,968,607 | 2,426,674 | ||||||||
| Weighted average exercise price per share | $ | 16.87 | $ | 16.41 | ||||||
| Deduct: options bought back via treasury method | (892,993 | ) | (1,050,151 | ) | ||||||
| Common shares and common share | ||||||||||
| equivalents outstanding | 93,499,755 | 98,733,328 | ||||||||
| Basic book value per common share | $ | 38.84 | $ | 39.28 | ||||||
| Diluted book value per common share | $ | 37.78 | $ | 38.27 | ||||||
| Basic tangible book value per common share | $ | 33.29 | $ | 35.90 | ||||||
| Diluted tangible book value per common share | $ | 32.38 | $ | 34.98 | ||||||
| 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 December 31, | |||||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||||
| Opening shareholders' equity | $ | 3,555,405 | $ | 3,676,599 | $ | 3,778,291 | $ | 3,519,826 | ||||||||||
| Add: accumulated other comprehensive loss | 4,265 | — |
— |
— | ||||||||||||||
| Adjusted opening shareholders' equity | 3,559,670 | 3,676,599 | 3,778,291 | 3,519,826 | ||||||||||||||
| Closing shareholders' equity | $ | 3,532,542 | $ | 3,778,291 | $ | 3,532,542 | $ | 3,778,291 | ||||||||||
| Add: accumulated other comprehensive loss | 9,297 | — | 9,297 | — | ||||||||||||||
| Adjusted closing shareholders' equity | 3,541,839 | 3,778,291 | 3,541,839 | 3,778,291 | ||||||||||||||
| Average shareholders' equity | $ | 3,550,755 | $ | 3,727,445 | $ | 3,660,065 | $ | 3,649,059 | ||||||||||
| Net income available to shareholders | $ | 1,707 | $ | 130,509 | $ | 83,891 | $ | 490,259 | ||||||||||
| Annualized net income available to shareholders | 6,828 | 522,036 | 83,891 | 490,259 | ||||||||||||||
| Annualized return on average shareholders' equity - | ||||||||||||||||||
| net income available to shareholders | 0.2 | % | 14.0 | % | 2.3 | % | 13.4 | % | ||||||||||
| Operating income available to shareholders | $ | 43,012 | $ | 148,526 | $ | 211,967 | $ | 415,062 | ||||||||||
| Annualized operating income available to shareholders | 172,048 | 594,104 | 211,967 | 415,062 | ||||||||||||||
| Annualized return on average shareholders' equity - | ||||||||||||||||||
| operating income available to shareholders | 4.8 | % | 15.9 | % | 5.8 | % | 11.4 | % | ||||||||||
