NU Online News Service, Feb. 16, 11:22 a.m. EST
Allied World Assurance Co. Holdings says it nearly doubled fourth-quarter net income but the Switzerland-based company’s net income for the year was more than halved.
Catastrophe losses—Allied World says 2011 was the costliest catastrophe year in history—were offset by favorable loss reserves and fees related to the merger break-up it has with Transatlantic Holdings.
New York-based Transatlantic paid Allied World a $35 million termination fee in addition to $13.3 million in merger-related expenses 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 2011 fourth-quarter net income of $183.1 million compared to $92.8 million 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 net catastrophe losses were $292.2 million.
Fourth quarter results were impacted by $59.1 million in net catastrophe losses from the flooding inThailandas well as other catastrophes throughout the year. Results in the quarter were also affected by $21.4 million of net losses related to events during 2010. However, fourth-quarter results were bolstered by net favorable reserve development on prior losses of $92.4 million.
Scott Carmilani, president and chief executive officer, says each of the company’s three segments saw premiums growth in 2011 as the continues “focusing [its] efforts on targeted lines and select geographies throughout the world.”
Gross production was up 10 percent for 2011, driven by new business initiatives.