Allied World Touches 52-Week High on Favorable Developments - Analyst Blog

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On Jun 30, 2014, shares of Allied World Assurance Company Holdings, AG ( AWH ) reached a new 52-week high of $38.13, after a series of positive tidings for the company.

The stock gained 29.9% in the one-year period. Moreover, Allied World's one-year return of 24.66% was higher than the S&P 500's return of 22.03% and that of the other industry players like Arch Capital Group Ltd. ( ACGL ), XL Group plc ( XL ) and Platinum Underwriters Holdings Ltd. ( PTP ) that recorded returns of 11.73%, 7.95% and 13.3% respectively.

Over the last couple of months, Allied World has made significant investments toward upgrading its services and expanding its global reach. These should drive bullish sentiment on the stock.

The company opened its branch offices in Toronto, Ontario in Apr 2014 and Sydney in May 2014. While the first move strengthens the North American presence of Allied World, the second forms part of expansion of the distribution network in the Asia Pacific region.

Moreover, to enhance its services, Allied World has launched a number of products over the last few months. The U.S. subsidiary, namely Allied World U.S. has introduced a Specified Response Vendor Solution (SRVS) policy named Privacy//403 SRVS in Apr 2014. This solution provides coverage for the liabilities and expenses associated with the loss of information in case of a data breach.

In the same month, the company launched ForceField, a suite of management liability products in the Canadian market. Again, May 2014 saw the launch of an Onshore Construction insurance line of business for Allied World Europe.    

To address liability exposures, the company's Bermuda division launched Thirty2°/Sixty4° the same month. Last week, Allied World, in association with WKFC Underwriting Managers, introduced a special event liability program.

The company's strong financial position also enabled the board of directors to increase its annual dividend by 35% to $2.70 per share from $2.00 per share and authorize a new $500 million share repurchase program. Moreover, Allied World initiated a 3:1 stock split that made the shares affordable to investors.

Earlier, the company reported first-quarter 2014 earnings that surpassed the Zacks Consensus Estimate by 85.51%. Notably, this Zacks Rank #3 (Hold) property and casualty insurer delivered positive earnings surprises in three of the last four quarters with an average beat of 45.63%.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: AWH , XL , ACGL , PTP

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