NU Online News Service, Feb. 16, 11:22 a.m.EST

Allied World Assurance Co. Holdings says it nearly doubledfourth-quarter net income but the Switzerland-based company's netincome for the year was more than halved.

Catastrophe losses—Allied World says 2011 was the costliestcatastrophe year in history—were offset by favorable loss reservesand fees related to the merger break-up it has with TransatlanticHoldings.

New York-based Transatlantic paid Allied World a $35 milliontermination fee in addition to $13.3 million in merger-relatedexpenses to Allied World.

Transatlantic then entered into an agreement to be bought by Alleghany Corp. for about $3.4 billion.

Specialty insurer and reinsurer Allied World posted 2011fourth-quarter net income of $183.1 million compared to $92.8million during the same period in 2010.

Profit for the year fell nearly 60 percent to $274.5 million,compared to $665 million the previous year. Allied World says netcatastrophe losses were $292.2 million.

Fourth quarter results were impacted by $59.1 million in netcatastrophe losses from the flooding inThailandas well as othercatastrophes throughout the year. Results in the quarter were alsoaffected by $21.4 million of net losses related to events during2010. However, fourth-quarter results were bolstered by netfavorable reserve development on prior losses of $92.4 million.

Scott Carmilani, president and chief executive officer, sayseach of the company's three segments saw premiums growth in 2011 asthe continues “focusing [its] efforts on targeted lines and selectgeographies throughout the world.”

Gross production was up 10 percent for 2011, driven by newbusiness initiatives.