- Rates increased 7.5% across the U.S.
insurance platform
- Catastrophe losses of $29.8 million
during the quarter from Hurricane Odile in Mexico, Windstorm Ela in
Western Europe, and Property Claim Services ("PCS") 45 in the
Midwestern U.S.
- Combined ratio of 87.4% for the first
nine months of 2014
- Growth in diluted book value per share
of 8.5% year to date
- At the end of the fourth quarter, the
company will realign its two insurance business segments into North
American Insurance and Global Markets Insurance
- As previously announced, the company
reached definitive agreements to acquire the Hong Kong and
Singapore operations of Royal & Sun Alliance Insurance plc
("RSA"), as well as made a strategic minority investment through
Allied World Financial Services, Inc. ("AWFS") into Blue Vista
Capital Management LLC ("Blue Vista")
Allied World Assurance Company Holdings, AG (NYSE:AWH) today
reported net income of $30.9 million, or $0.31 per
diluted share, for the third quarter of 2014 compared to net income
of $122.8 million, or $1.18 per diluted share, for the
third quarter of 2013.
The company reported operating income of $60.6 million,
or $0.61 per diluted share, for the third quarter of
2014, compared to operating income of $101.8 million,
or $0.98 per diluted share, for the third quarter of
2013.
"We continue to see attractive opportunities for selective
organic growth," said President and Chief Executive
Officer Scott Carmilani. "The strategic changes to our
management team, and reorganization of our segments, will better
align us with our clients and position us well for continued
opportunities. Given the footprint of our business outside of
North America, and the announced RSA transaction, these regions
represent the next phase of our development."
Effective December 31, 2014, the company will realign its two
insurance business segments from the current U.S. Insurance (U.S.
and Canada) and International Insurance (all other regions). The
company will report across North American Insurance (all North
America business, including U.S., Canada, Bermuda) and Global
Markets Insurance (all business outside of North America). The
Reinsurance segment will remain unchanged. In conjunction with
these changes, several strategic positions will be realigned in
order to best serve clients and trading partners:
- Frank D’Orazio, currently President,
Bermuda and International Insurance, Allied World Assurance
Company, Ltd, will be appointed President, Underwriting and Global
Risk, and will be responsible for the company’s global underwriting
(management, controls and processes) as well as coordination of our
risk management tools across the organization.
- Louis Iglesias, as President, Allied
World North America, will continue to oversee production and
profitability for Canada and all U.S. branch offices, and will
assume responsibility for all insurance lines of business of the
Bermuda operation.
- Julian James, currently President,
Allied World Assurance Company (Europe) Limited, will be appointed
President, Global Markets. In this new role, he will continue to
oversee all insurance lines of business for Allied World Europe and
Syndicate 2232, as well as assume responsibility for Allied World’s
operations in Asia Pacific and any other initiatives outside of
North America.
All three executives will report directly to Scott Carmilani,
President and Chief Executive Officer.
Third Quarter
Summary (Unaudited)
(Expressed in millions of U.S. dollars,
except per share amounts)
Three Months Ended September 30,
Diluted per share 2014 2013
2014 2013 Net
income $ 30.9 $ 122.8 $ 0.31 $ 1.18 Add after tax effect of: Net
realized investment losses (gains) 29.4 (25.4 ) 0.30 (0.24 )
Foreign exchange loss 0.3 4.4
0.00 0.04 Operating income $ 60.6
$ 101.8 $ 0.61 $ 0.98
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.
Third Quarter Operating
Results
- Gross premiums written were $707.9
million, a 21.9% increase compared to $580.9 million in
the third quarter of 2013. This was driven by growth across all
three segments.
- The U.S. insurance segment grew by
25.3% led by 42.7% growth in general casualty and offset by a
continued decrease in healthcare of 10.2%.
- The international insurance segment
grew by 8.5% driven by more recently added lines of business,
including marine cargo, as well as growth across existing
lines.
- The reinsurance segment grew by 27.0%,
driven by a large, new professional liability treaty and a treaty
that had previously renewed in the second quarter, which, because
it included a significant fronting arrangement, had an outsized
impact on gross premiums written that did not carry through to net
premiums written.
- Net premiums written were $568.7
million, a 25.5% increase compared to $453.1 million in the
third quarter of 2013.
- Net premiums earned were $541.7
million, a 6.1% increase compared to $510.8 million in
the third quarter of 2013.
- The company experienced $29.8 million
of catastrophe losses for the third quarter of 2014 related to
Hurricane Odile ($18.5 million) in Mexico, which largely impacted
the international insurance segment, and Windstorm Ela ($8.0
million) in Western Europe, and PCS 45 in the Midwestern U.S. ($3.3
million), which both impacted the reinsurance segment. There were
no reportable catastrophe losses for the comparable quarter last
year. Including losses recorded in the second quarter of 2014, year
to date, the company has experienced $43.0 million of catastrophe
losses.
- Underwriting income was $45.0 million,
compared to underwriting income of $80.1 million in the third
quarter of 2013.
- The combined ratio was 91.7% compared
to 84.2% in the third quarter of 2013.
- The loss and loss expense ratio was
62.0% in the third quarter of 2014 compared to 54.2% in the prior
year quarter. During the third quarter of 2014, the company
recorded net favorable reserve development on prior loss years
of $46.9 million, a benefit of 8.7 percentage points to the
loss and loss expense ratio, compared to $61.5 million a year ago,
a benefit of 12.0 percentage points.
- The company's expense ratio was 29.7%
for the third quarter of 2014 compared to 30.0% for the third
quarter of 2013.
Investment Results
- The total financial statement return on
the company's investment portfolio for the three months ended
September 30, 2014 was 0.1% compared to 0.8% for the
three months ended September 30, 2013, and 2.7% for the
nine months ended September 30, 2014 compared to 1.2% for the
nine months ended September 30, 2013.
- For the quarter, the decrease in total
return was primarily due to both higher interest rates and wider
spreads.
- For the quarter, net investment income
was $43.4 million, a 10.5% increase compared to $39.3 million for
the third quarter of 2013. For the first nine months of 2014, net
investment income was $127.8 million, a 15.9% increase compared to
$110.3 million for the comparable period last year.
- As previously announced, through AWFS,
the company completed a strategic minority investment in Blue
Vista, a Chicago-based real estate private equity firm. AWFS is a
subsidiary of Allied World that invests in businesses intended to
complement and diversify Allied World's revenue streams. Results
for AWFS are included within other invested assets: other private
securities.
- See the table below for the components
of our investment returns:
(Expressed in millions of U.S. dollars,
except percentages)
Three Months Ended September
30,
2014 2013 Net investment income $ 43.4 $ 39.3
Net realized investment (losses) gains
(35.1
)
27.5 Total financial statement portfolio
return $ 8.3 $ 66.8 Average invested
assets $ 8,841.0 $ 8,522.7 Financial statement portfolio return
0.1%
0.8%
Note: net investment income, realized
gains and unrealized gains are disclosed on a pre-tax basis.
Shareholders' Equity
- As of September 30, 2014, the
company’s total shareholders' equity grew to $3,673.6 million,
compared to $3,519.8 million as of December 31,
2013.
- As of September 30, 2014,
diluted book value per share was $37.12, an increase of 0.4%
compared to $36.98 as of June 30, 2014, and an increase of 8.5%
compared to $34.20 as of December 31, 2013.
Capital Management
- During the third quarter of 2014, the
company repurchased 654,851 of its common shares through its share
repurchase program in the open market at an average price
of $38.17 per share and an aggregate cost of $25.0
million.
- In May 2014, the company’s shareholders
approved four quarterly dividends equal to $0.225 per share. The
first and second dividends were paid on July 2, 2014 and October 2,
2014, respectively.
Supplementary
Information
Allied World will be providing both a Financial Supplement and
an Investment Supplement as of September 30, 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,
October 23, 2014 at 9:00 a.m. (Eastern Time) to
discuss the results for the third quarter ended September 30,
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 7750105
approximately ten minutes prior to the call.
Following the conclusion of the presentation, a replay of the
call will be available through Friday, November 7,
2014 by dialing (877) 344-7529 (U.S. callers) or (412)
317-0088 (international callers) and entering the passcode
10052466. In addition, the webcast will remain available online
through Friday, November 7,
2014 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 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 September 30, Nine Months Ended
September 30, 2014 2013 2014
2013 Revenues: Gross premiums written $
707,884 $ 580,893 $ 2,369,682 $ 2,183,174 Premiums ceded
(139,142 ) (127,816 ) (475,402 )
(453,823 ) Net premiums written 568,742 453,077 1,894,280
1,729,351 Change in unearned premiums (27,005 )
57,696 (285,011 ) (248,079 ) Net
premiums earned 541,737 510,773 1,609,269 1,481,272 Net
investment income 43,412 39,271 127,824 110,294 Net realized
investment (losses) gains (35,136 ) 27,487 104,286 (8,074 ) Other
income 1,032 — 1,032
—
Total revenues 551,045
577,531 1,842,411
1,583,492
Expenses: Net losses and loss
expenses 336,090 276,970 926,231 807,276 Acquisition costs 72,403
65,114 214,404 186,416 General and administrative expenses 88,294
88,553 264,822 251,818 Other expense 6,575 — 6,575 — Amortization
of intangible assets 633 633 1,900 1,900 Interest expense 14,325
14,094 43,451 42,416 Foreign exchange loss 278
4,353 978 7,361
Total expenses 518,598 449,717
1,458,361 1,297,187
Income before income taxes 32,447 127,814 384,050 286,305 Income
tax expense 1,532 4,971
24,300 6,332
NET INCOME $ 30,915
$ 122,843 $ 359,750 $ 279,973
PER SHARE DATA: Basic earnings per share $
0.32 $ 1.20 $ 3.67 $ 2.72 Diluted earnings per share $ 0.31 $ 1.18
$ 3.60 $ 2.66 Weighted average common shares outstanding
96,458,231 101,974,077 97,926,378 103,020,681 Weighted average
common shares and common share equivalents outstanding 98,444,238
104,184,579 99,965,296 105,393,276 Dividends paid per share
(1) $ 0.225 $ 0.167 $ 0.559 $ 0.292 (1) A dividend of
$0.225 was also paid on October 2, 2014 to shareholders of record
on September 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 September 30, December 31,
ASSETS: 2014 2013 Fixed maturity
investments trading, at fair value $ 6,128,237 $ 6,100,798 Equity
securities trading, at fair value 945,076 699,846 Other invested
assets 929,201 911,392 Total
investments 8,002,514 7,712,036 Cash and cash equivalents 1,010,228
681,329 Insurance balances receivable 926,183 664,731 Funds held
405,703 632,430 Prepaid reinsurance 376,651 340,992 Reinsurance
recoverable 1,349,009 1,234,504 Accrued investment income 30,554
32,236 Net deferred acquisition costs 171,827 126,661 Goodwill
278,085 268,376 Intangible assets 46,931 48,831 Balances receivable
on sale of investments 60,122 76,544 Net deferred tax assets 41,312
37,469 Other assets 110,449 89,691
Total assets $ 12,809,568 $ 11,945,830
LIABILITIES: Reserve for losses and loss expenses $
6,052,263 $ 5,766,529 Unearned premiums 1,716,927 1,396,256
Reinsurance balances payable 203,428 173,023 Balances due on
purchases of investments 166,026 104,740 Senior notes 798,725
798,499 Dividends payable 21,686 16,732 Accounts payable and
accrued liabilities 176,914 170,225
Total liabilities 9,135,969 8,426,004
SHAREHOLDERS' EQUITY: Common shares: 2014: par
value CHF 4.10 per share and 2013: par
value CHF 4.10 per share (2014:
100,775,256; 2013: 103,477,452
shares issued and 2014: 96,382,238;
2013:
100,253,646 shares outstanding)
407,990 418,988 Treasury shares, at cost (2014: 4,393,018; 2013:
3,223,806) (134,633 ) (79,992 ) Retained earnings 3,400,242
3,180,830
Total shareholders' equity
3,673,599 3,519,826
Total
liabilities and shareholders' equity $ 12,809,568 $
11,945,830
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG UNAUDITED
CONSOLIDATED SEGMENT DATA (Expressed in thousands of United
States dollars, except for ratio information)
U.S.
International Three Months Ended September 30, 2014
Insurance Insurance Reinsurance Total
Gross premiums written $ 386,681 $ 144,236 $ 176,967 $
707,884 Net premiums written 321,713 87,820 159,209 568,742 Net
premiums earned 224,764 94,013 222,960 541,737 Net losses and loss
expenses
(153,010
)
(55,814
)
(127,266
)
(336,090
)
Acquisition costs
(31,131
)
(1,209
)
(40,063
)
(72,403
)
General and administrative expenses
(41,730
)
(27,993
)
(18,571
)
(88,294
)
Underwriting (loss) income
(1,107
)
8,997 37,060 44,950 Other insurance-related revenues 1,032 — —
1,032 Other insurance-related expenses
(1,270
)
(5,305
)
—
(6,575
)
Segment (loss) income
(1,345
)
3,692 37,060 39,407 Net investment income 43,412 Net realized
investment losses
(35,136
)
Amortization of intangible assets
(633
)
Interest expense
(14,325
)
Foreign exchange loss
(278
)
Income before income taxes $ 32,447
GAAP
Ratios: Loss and loss expense ratio 68.1 % 59.4 % 57.1 % 62.0 %
Acquisition cost ratio 13.9 % 1.3 % 18.0 % 13.4 % General and
administrative expense ratio 18.6 % 29.8 % 8.3
% 16.3 % Expense ratio 32.5 % 31.1 %
26.3 % 29.7 % Combined ratio 100.6 % 90.5 %
83.4 % 91.7 %
U.S. International
Three Months Ended September 30, 2013 Insurance
Insurance Reinsurance Total Gross
premiums written $ 308,709 $ 132,881 $ 139,303 $ 580,893 Net
premiums written 238,792 75,632 138,653 453,077 Net premiums earned
207,602 87,554 215,617 510,773 Net losses and loss expenses
(141,222
)
(31,094
)
(104,654
)
(276,970
)
Acquisition costs
(28,426
)
282
(36,970
)
(65,114
)
General and administrative expenses
(41,616
)
(26,450
)
(20,487
)
(88,553
)
Underwriting (loss) income
(3,662
)
30,292 53,506 80,136 Other insurance-related revenues —
—
—
—
Other insurance-related expenses — —
— — Segment (loss) income
(3,662
)
30,292 53,506 80,136 Net investment income 39,271 Net realized
investment gains 27,487 Amortization of intangible assets
(633
)
Interest expense
(14,094
)
Foreign exchange loss
(4,353
)
Income before income taxes $ 127,814
GAAP
Ratios: Loss and loss expense ratio 68.0 % 35.5 % 48.5 % 54.2 %
Acquisition cost ratio 13.7 % (0.3 )% 17.1 % 12.7 % General and
administrative expense ratio 20.0 % 30.2 % 9.5
% 17.3 % Expense ratio 33.7 % 29.9 %
26.6 % 30.0 % Combined ratio 101.7 % 65.4 %
75.1 % 84.2 %
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED CONSOLIDATED SEGMENT DATA (Expressed in thousands
of United States dollars, except for ratio information)
U.S. International Nine Months Ended September 30,
2014 Insurance Insurance Reinsurance
Total Gross premiums written $ 998,051 $ 483,079 $
888,552 $ 2,369,682 Net premiums written 746,403 285,450 862,427
1,894,280 Net premiums earned 651,480 271,557 686,232 1,609,269 Net
losses and loss expenses
(440,491
)
(115,299
)
(370,441
)
(926,231
)
Acquisition costs
(88,311
)
(835
)
(125,258
)
(214,404
)
General and administrative expenses
(125,760
)
(82,164
)
(56,898
)
(264,822
)
Underwriting (loss) income
(3,082
)
73,259 133,635 203,812 Other insurance-related revenues 1,032 — —
1,032 Other insurance-related expenses
(1,270
)
(5,305
)
—
(6,575
)
Segment (loss) income
(3,320
)
67,954 133,635 198,269 Net investment income 127,824 Net realized
investment gains 104,286 Amortization of intangible assets
(1,900
)
Interest expense
(43,451
)
Foreign exchange loss
(978
)
Income before income taxes $ 384,050
GAAP
Ratios: Loss and loss expense ratio 67.6 % 42.5 % 54.0 % 57.6 %
Acquisition cost ratio 13.6 % 0.3 % 18.3 % 13.3 % General and
administrative expense ratio 19.3 % 30.3 % 8.3
% 16.5 % Expense ratio 32.9 % 30.6 %
26.6 % 29.8 % Combined ratio 100.5 % 73.1 %
80.6 % 87.4 %
U.S. International
Nine Months Ended September 30, 2013 Insurance
Insurance Reinsurance Total Gross
premiums written $ 872,024 $ 453,990 $ 857,160 $ 2,183,174 Net
premiums written 652,464 259,771 817,116 1,729,351 Net premiums
earned 593,477 258,809 628,986 1,481,272 Net losses and loss
expenses
(398,910
)
(90,997
)
(317,369
)
(807,276
)
Acquisition costs
(78,824
)
1,489
(109,081
)
(186,416
)
General and administrative expenses
(119,514
)
(75,374
)
(56,930
)
(251,818
)
Underwriting (loss) income
(3,771
)
93,927 145,606 235,762 Other insurance-related revenues —
—
— — Other insurance-related expenses — —
— — Segment (loss) income
(3,771
)
93,927 145,606 235,762 Net investment income 110,294 Net realized
investment losses
(8,074
)
Amortization of intangible assets
(1,900
)
Interest expense
(42,416
)
Foreign exchange loss
(7,361
)
Income before income taxes $ 286,305
GAAP
Ratios: Loss and loss expense ratio 67.2 % 35.2 % 50.5 % 54.5 %
Acquisition cost ratio 13.3 % (0.6 )% 17.3 % 12.6 % General and
administrative expense ratio 20.1 % 29.1 % 9.1
% 17.0 % Expense ratio 33.4 % 28.5 %
26.4 % 29.6 % Combined ratio 100.6 % 63.7 %
76.9 % 84.1 %
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 September
30,
Nine Months Ended September
30,
2014 2013 2014 2013
Net income $ 30,915 $ 122,843 $ 359,750 $ 279,973 Add after
tax effect of: Net realized investment losses (gains) 29,413
(25,395 ) (94,192 ) 2,160 Foreign exchange loss 278
4,353 978 7,361 Operating
income $ 60,606 $ 101,801 $ 266,536 $
289,494
Weighted average common shares outstanding:
Basic 96,458,231 101,974,077 97,926,378 103,020,681 Diluted
98,444,238 104,184,579 99,965,296 105,393,276
Basic per
share data: Net income $ 0.32 $ 1.20
$
3.67 $ 2.72 Add after tax effect of: Net realized investment losses
(gains) 0.30 (0.25 ) (0.96 ) 0.02 Foreign exchange loss 0.00
0.04 0.01 0.07
Operating income $ 0.62 $ 0.99 $ 2.72 $
2.81
Diluted per share data: Net income $ 0.31 $ 1.18
$ 3.60 $ 2.66 Add after tax effect of: Net realized investment
losses (gains) 0.30 (0.24 ) (0.94 ) 0.02 Foreign exchange loss
0.00 0.04 0.01
0.07 Operating income $ 0.61 $ 0.98 $ 2.67
$ 2.75
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 September 30, December
31, 2014 2013 Price per share at period end $
36.84 $ 37.60 Total shareholders' equity $ 3,673,599 $
3,519,826 Basic common shares outstanding 96,382,238
100,253,646 Add: unvested restricted share units 512,112
143,697 Add: performance based equity awards 619,428 804,519
Add: employee share purchase plan 28,381 55,596 Add:
dilutive options outstanding 2,532,918 2,928,312 Weighted average
exercise price per share $ 16.30 $ 16.07 Deduct: options bought
back via treasury method (1,120,699 ) (1,251,687 )
Common shares and common share equivalents outstanding
98,954,378 102,934,083 Basic book value per common share $
38.11 $ 35.11 Diluted book value per common share $ 37.12 $ 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 September 30, Nine Months Ended
September 30, 2014 2013 2014
2013 Opening shareholders' equity $ 3,682,762 $
3,373,229 $ 3,616,678 $ 3,326,335 Deduct: accumulated other
comprehensive income
—
— — —
Adjusted opening shareholders' equity 3,682,762 3,373,229
3,616,678 3,326,335 Closing shareholders' equity $ 3,673,599
$ 3,443,928 $ 3,673,599 $ 3,443,928 Deduct: accumulated other
comprehensive income
—
— — —
Adjusted closing shareholders' equity 3,673,599 3,443,928
3,673,599 3,443,928 Average shareholders' equity $ 3,678,181
$ 3,408,579 $ 3,645,139 $
3,385,132 Net income available to shareholders $
30,915 $ 122,843 $ 359,750 $ 279,973 Annualized net income
available to shareholders 123,660 491,372 479,667 373,297
Annualized return on average shareholders' equity - net income
available to shareholders 3.4
%
14.4 % 13.2 % 11.0 %
Operating income available to shareholders $ 60,606 $ 101,801 $
266,536 $ 289,494 Annualized operating income available to
shareholders 242,424 407,204 355,381 385,992 Annualized
return on average shareholders' equity - operating income available
to shareholders 6.6 % 11.9 % 9.7 %
11.4 %
Media:Noelle Campbell, +1-646-794-0544Assistant Vice President,
Director of Public RelationsNoelle.Campbell@awacservices.comorFaye Cook,
+1-441-278-5406Senior Vice President, Marketing &
CommunicationsFaye.Cook@awac.comorInvestors:Sarah Doran,
+1-646-794-0590Senior Vice President, Investor Relations and
TreasurerSarah.Doran@awac.comorWebsite: www.awac.com