Allied World Assurance Company Holdings
) reported fourth quarter operating loss of $1.58 per share,
narrower than the Zacks Consensus Estimate loss of $1.91. In the
fourth quarter of 2011, the company reported operating earnings
of $2.40 per share.
Including net realized investment gains of 43 cents and foreign
exchange loss of 2 cents, Allied World reported a net loss of
$1.17 per share in the fourth quarter, compared to a net income
of $4.63 per share in the year-ago period.
Quarterly Operational Update
Total revenues declined 1.9% year over year to $529 million in
the fourth quarter. The decline came on back of waning net
investment income (down 15.7% year over year) and net realized
investment gains (down 54.5% year over year). It surpassed the
Zacks Consensus Estimate of $493 million.
Net written premiums in the quarter increased 18.2% year over
year to $362.6 million.
Total expenses of $570.4 million in the quarter showed an
increase of 65.7% year over year due to increased net loss and
loss expenses (up 94.3% year over year), acquisition costs (up
20.1% y ear over year), general and administrative expenses (up
19.7% year over year) and foreign exchange loss ($0.9 million,
compared to a profit of $0.5 million in the fourth quarter of
In the fourth quarter, underwriting loss for Allied World was
$78.8 million compared to an underwriting profit of $65.1 million
in the year-ago period.
The combined ratio deteriorated 3300 basis points year over year
The U.S. Insurance reported underwriting loss of $35.1 million
compared to an underwriting profit of $7.7 million in the
prior-year period. Net premiums written in the segment were
$192.1 million, up 13.6% year over year. Combined ratio
deteriorated 2430 basis points to 119.3%.
The International Insurance reported underwriting loss of $24.5
million, compared to an underwriting profit of $39.4 million in
the year-ago period. Net premiums written in the segment were
$91.2 million, up 14.3% year over year. Combined ratio
deteriorated 7650 basis points to 127.6%.
The Reinsurance segment reported underwriting loss of $19.2
million compared to an underwriting profit of $18 million in the
year-ago period. Net premiums written in the quarter increased
36.9% year over year to $79.3 million. Combined ratio
deteriorated 2050 basis points to 109.4%.
Full Year Highlights
Operating earnings of $5.47 per share improved 18.1% year over
Including net realized investment gains of $8.07 and foreign
exchange losses of 2 cents, Allied World reported net income of
$13.30 per share in 2012, up 92.2% year over year.
Total revenue for full year 2012 increased 25.9% year over year
to $2.2 billion.
Underwriting profit in 2012 was $96.6 million, up 64% year over
Combined ratio improved 140 basis points to 94.5% in 2012.
Share Repurchase Update
In the fourth quarter, Allied World spent $56.9 million to buy
back 713,874 shares at an average price of $79.70. In 2012, it
spent $263.9 million to repurchase 3.7 million shares at an
average price of $72.20 per share.
Allied World exited 2012 with cash and cash equivalents of $865.4
million, up 20.8% year over year.
Cash from operating activities stood at $629.4 million in 2012,
up 14.8% year over year.
As of Dec 31, 2012, total assets of the company were $12 billion,
up 8.2% year over year.
Shareholders' equity increased 5.6% year over year to $3.3
billion at 2012 end. The debt to capital ratio of the company
improved 80 basis points year over year to 19.4% in 2012.
In the reported quarter, the company partnered with four
, a leading loss adjusting and claim management company. Another,
Aeolus Capital Management
, a Bermuda-based asset management company that manages capital
for investors interested in property catastrophe reinsurance and
retrocession market, while
, a private equity firm focused on distressed investments across
a range of industries. A fourth partner,
Crescent Capital Group
, a privately held asset management firm that specializes in
public and private below investment grade assets spanning the
entire credit capital.
Performance of few other Property and Casualty
Cincinnati Financial Corp.
) reported fourth quarter 2012 operating earnings of $1.11 per
share, substantially beating the Zacks Consensus Estimate of 50
cents. Earnings were also up substantially 32% year over year.
The earnings beat came on the back of increased property casualty
American Financial Group Inc.
) fourth quarter adjusted earnings of 67 cents breezed past the
Zacks Consensus Estimate by 3.1%. However, results were down
36.2% year over year from $1.05 earned in the year-ago quarter.
AMER FINL GROUP (AFG): Free Stock Analysis
ALLIED WORLD AS (AWH): Free Stock Analysis
CINCINNATI FINL (CINF): Free Stock Analysis
XL GROUP PLC (XL): Free Stock Analysis Report
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XL Group Plc
) fourth-quarter 2012 operating income of 13 cents per share
outpaced the Zacks Consensus Estimate of a loss of 35 cents.
Earnings rebounded from a loss of 25 cents incurred in the
Allied World currently carries a Zacks Rank #3 (Hold).