Allied World Announces Fourth Quarter 2012 Loss Estimates from Superstorm
ZUG, Switzerland, Dec. 20, 2012
ZUG, Switzerland, Dec. 20, 2012 /PRNewswire/ -- Allied World Assurance Company
Holdings, AG (NYSE: AWH) announced today that it expects to record
approximately $165 million in catastrophe related losses in the fourth quarter
of 2012 related to Superstorm Sandy which struck the Atlantic coastline of the
United States in late October. This amount is pre-tax and net of reinsurance
recoverables and reinstatement premiums.
President and Chief Executive Officer Scott Carmilani commented, "As a diverse
property and casualty underwriter in the United States with large direct
commercial account exposures and a reinsurer of both commercial and personal
risks, this loss is within our expectation for an event of this magnitude.
While we caution that all estimates should be considered preliminary at this
point, we believe the $165 million that Allied World is reporting reflects a
realistic appreciation of the severity of Superstorm Sandy as well as a
thorough review of our insurance and reinsurance exposures in the region."
A breakout of Allied World's estimated gross and net losses from Superstorm
Sandy, by operating segment, is indicated below (in millions):
Segment Gross Loss Net Loss
U.S. Insurance(1) $26 $21
International Insurance 92 74
Total Insurance(2) 118 95
Reinsurance(3) 81 70
Total $199 $165
1.Includes property and inland marine lines.
2.The company co-participates in its property catastrophe reinsurance
coverage on its direct insurance business attaching at $175 million.
3.Includes property and marine lines. Net loss for Reinsurance segment
includes anticipated inward reinstatement premiums of $10 million.
Allied World's direct loss estimates are primarily derived from a detailed
analysis of exposures on each of the company's policies in the impacted areas.
For our reinsurance treaties in-force, while we place some reliance upon the
losses reported to us by our cedents, we use the high end of their estimates
as a starting point and may build in additional loss reserves in excess of the
high end of their range. This assumes an industry loss event approaching $25
billion. Actual ultimate losses may vary materially from current estimates due
to inherent uncertainties resulting from several factors, including the
application of hurricane deductibles, magnitude of business interruption
claims, classification of cause of loss, the preliminary nature of loss data
available, and potential inaccuracies and inadequacies in the data that has
been provided to us.
About Allied World Assurance Company Allied World Assurance Company Holdings,
AG, through its subsidiaries, is a global provider of innovative property,
casualty and specialty insurance and reinsurance solutions, offering 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
http://www.awac.com/ for further information on 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 pricing and
policy term trends; increased competition; the impact of acts of terrorism and
acts of war; greater frequency or severity of unpredictable catastrophic
events; negative rating agency actions; the adequacy of our loss reserves; 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
Contact: Media: Faye Cook, VP, Marketing & Communications, +1-441-278-5406,
email@example.com, or Investors: Keith J. Lennox, Investor Relations Officer,
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