Allied World Reports 36% Growth in Underwriting Income for the Second Quarter 2013

  Allied World Reports 36% Growth in Underwriting Income for the Second
  Quarter 2013

Diluted book value per share of $96.18, an increase of 3.9% from year end 2012

Business Wire

ZUG, Switzerland -- July 25, 2013

Allied World Assurance Company Holdings, AG (NYSE: AWH) today reported a net
loss of$1.9 million, or$0.05per diluted share, for the second quarter of
2013 compared to net income of$96.4 million, or$2.59per diluted share, for
the second quarter of 2012. The quarterly net loss was due to $115 million of
net realized investment losses driven by the mark to market adjustments on the
portfolio. Net income for the six months endedJune 30, 2013was$157.1
million, or$4.45per diluted share, compared to net income of$314.5 million,
or$8.41per diluted share, for the first six months of 2012.

The company reported operating income of$103.5 million, or$2.95per diluted
share, for the second quarter of 2013, compared to operating income of$87.3
million, or$2.35per diluted share, for the second quarter of 2012. Operating
income for the six months endedJune 30, 2013was$187.7 million, or $5.31per
diluted share, compared to operating income of$178.8 million, or $4.78per
diluted share, for the first six months of 2012.

President and Chief Executive OfficerScott Carmilanicommented, "Allied World
produced excellent underwriting results. We benefitted from growth across all
three segments, in part from newer product initiatives, and delivered a
combined ratio of 82.8% for the second quarter of 2013."

"Despite the challenging investment environment, we continue to be well
positioned to grow book value, and have done so at a rate of almost 4% during
the first half of 2013."

Underwriting Results

Gross premiums written were$765.2 millionin the second quarter of 2013, an
18.3% increase compared to$646.9 millionin the second quarter of 2012. For
the six months endedJune 30, 2013, gross premiums written totaled$1,602.3
million, a 20.7% increase compared to$1,327.8 millionin the first six months
of 2012. Net premiums written were$581.2 millionin the second quarter of
2013, a 17.5% increase compared to$494.7 millionin the second quarter of
2012. For the six months endedJune 30, 2013, net premiums written
totaled$1,276.3 million, a 17.8% increase compared to$1,083.7 millionin the
first six months of 2012.

Net premiums earned in the second quarter of 2013 were$507.3 million, an
18.0% increase compared to$429.7 millionin the second quarter of 2012. For
the six months endedJune 30, 2013, net premiums earned totaled$970.5
million, a 16.7% increase compared to$831.6 millionin the first six months
of 2012.

The combined ratio was 82.8% in the second quarter of 2013 compared to 85.1%
in the second quarter of 2012. The loss and loss expense ratio was 54.2% in
the second quarter of 2013 compared to 55.9% in the second quarter of 2012.
During the second quarter of 2013, the company recorded net favorable reserve
development on prior loss years of$48.4 million. This favorable reserve
development resulted in a benefit of 9.5 percentage points to the company's
loss and loss expense ratio for the quarter. This compares to the second
quarter of 2012, when the company recorded net favorable reserve development
on prior loss years of$41.9 million, a benefit of 9.8 percentage points to
the company's loss and loss expense ratio for that quarter. Absent these
adjustments, the loss and loss expense ratio for the second quarter of 2013
was 63.7% compared to 65.7% for the second quarter of 2012. The company
experienced no significant catastrophe losses for the current accident year or
quarter ended June 30, 2013.

For the six months endedJune 30, 2013, the combined ratio was 83.9% compared
to 85.2% for the first six months of 2012. The loss and loss expense ratio was
54.6% in the first half of 2013 compared to 56.0% in the first half of 2012.
For the six months endedJune 30, 2013, the company recorded net favorable
reserve development on prior loss years of$92.5 million, a benefit of 9.5
percentage points to the company's loss and loss expense ratio. For the six
months endedJune 30, 2012, the company recorded net favorable reserve
development on prior loss years of$81.4 million, a benefit of 9.8 percentage
points to the company's loss and loss expense ratio. Absent prior year reserve
adjustments, the loss and loss expense ratio for the six months endedJune 30,
2013was 64.1% compared to 65.8% for 2012.

The company's expense ratio was 28.6% for the second quarter of 2013 compared
to 29.2% for the second quarter of 2012. The expense ratio was 29.3% the first
six months ofJune 30, 2013compared to 29.2% for the first six months of
2012.

Investment Results

The total return on the company's investment portfolio for the three months
endedJune 30, 2013was a loss of 90 basis points compared to a gain of 60
basis points for the three months endedJune 30, 2012. This was largely driven
by losses in the U.S. bond market, which, as measured by the Barclays
Aggregate Bond Index, posted its third largest loss since 1981. For the six
months ended June 30, 2013, the total return on the company’s investment
portfolio was 40 basis points compared to 260 basis points for the six months
ended June 30, 2012. See the table below for the components of our investment
returns:

(Expressed
in millions   Quarter Ended                   Six Months Ended
of U.S.
Dollars)
                June 30, 2013  June 30, 2012     June 30, 2013  June 30,
                                                                  2012
                                                                  
Net
investment      $  37.6         $  42.5           $  71.0         $  89.7
income
Net
realized
investment         (115.2  )       8.6               (35.5    )      142.2
(losses)
gains
Change in
unrealized        -          (1.4     )       -          (15.4   )
gains
Net
investment
income,
realized        $  (77.6   )   $  49.7          $  35.5       $  216.5   
gains and
unrealized
gains
                                                                  
Average
invested        $  8,459.5      $  8,276.1        $  8,446.1      $  8,203.8
assets
                                                                  
Financial
statement          (0.9    %)      0.6      %        0.4      %      2.6     %
portfolio
return
                                                                  
Note: investment income, net realized gains / losses and change in unrealized
gains / losses are disclosed on a pre-tax basis.


Shareholders' Equity

As ofJune 30, 2013, the company’s total shareholders' equity was$3,373.2
million, compared to$3,326.3 millionas ofDecember 31, 2012.

As ofJune 30, 2013, diluted book value per share was$96.18, an increase of
3.9% compared to$92.59as ofDecember 31, 2012.

Capital Management

During the second quarter of 2013, the company repurchased 508,328 of its
common shares through its share repurchase program in the open market at an
average price of$91.13per share and at an aggregate cost of$46.3 million.
This compares to the open market repurchase of 432,117 common shares at an
average price of $83.88 per share and at an aggregate cost of $36.2 million
during the first quarter of 2013.

In May 2013 the company’s shareholders approved a quarterly dividend equal to
$0.50 per share. The first installment of that dividend was paid on July 3,
2013 to shareholders of record on June 25, 2013. The three remaining
installments are anticipated to be paid in October 2013, January 2014 and
April 2014.

Supplementary Information

Allied World will be providing a Financial Supplement relating to second
quarter 2013 and an Investment Supplement as of June 30, 2013. This
information will be available in the "Investor Relations" section of the
company's website at www.awac.com.

Conference Call

Allied World will host a conference call onFriday, July 26, 2013at9:00 a.m.
(Eastern Time)to discuss the results for the second quarter endedJune 30,
2013. The public may access a live webcast of the conference call at the
"Investor Relations" section of the company's website at www.awac.com. In
addition, the conference call can be accessed by dialing (888) 317-6003 (U.S.
andCanadacallers) or (412) 317-6061 (international callers) and entering the
passcode 5166966 approximately ten minutes prior to the call.

Following the conclusion of the presentation, a replay of the call will be
available throughFriday, August 9, 2013by dialing (877) 344-7529 (U.S.
andCanadacallers) or (412) 317-0088 (international callers) and entering the
passcode 10030260. In addition, the webcast will remain available online
throughFriday, August 9, 2013atwww.awac.com.

Non-GAAP Financial Measures

In presenting the company's results, management has included and discussed in
this press release certain non-generally accepted accounting principles
("non-GAAP") financial measures within the meaning of Regulation G as
promulgated by the U.S. Securities and Exchange Commission. Management
believes that these non-GAAP measures, which may be defined differently by
other companies, better explain the company's results of operations in a
manner that allows for a more complete understanding of the underlying trends
in the company's business. However, these measures should not be viewed as a
substitute for those determined in accordance with generally accepted
accounting principles ("U.S. GAAP").

"Operating income" is an internal performance measure used in the management
of the company's operations and represents after-tax operational results
excluding, as applicable, net realized investment gains or losses, net
impairment charges recognized in earnings, net foreign exchange gain or loss,
and other non-recurring items. The company excludes net realized investment
gains or losses, net impairment charges recognized in earnings, net foreign
exchange gain or loss, and other non-recurring items from the calculation of
operating income because these amounts are heavily influenced by and fluctuate
in part according to the availability of market opportunities and other
factors. In addition to presenting net income determined in accordance with
U.S. GAAP, the company believes that showing operating income enables
investors, analysts, rating agencies and other users of the company's
financial information to more easily analyze our results of operations and
underlying business performance. Operating income should not be viewed as a
substitute for U.S. GAAP net income.

The company has included "diluted book value per share" because it takes into
account the effect of dilutive securities; therefore, the company believes it
is an important measure of calculating shareholder returns.

"Annualized net income return on average shareholders' equity" ("ROAE") is
calculated using average shareholders' equity, excluding the average after tax
unrealized gains (or losses) on investments. Unrealized gains (losses) on
investments are primarily the result of interest rate and credit spread
movements and the resultant impact on fixed income securities. Such gains
(losses) are not related to management actions or operational performance, nor
are they likely to be realized. Therefore, the company believes that excluding
these unrealized gains (losses) provides a more consistent and useful
measurement of operating performance, which supplements U.S. GAAP information.
In calculating ROAE, the net income (loss) available to shareholders for the
period is multiplied by the number of such periods in a calendar year in order
to arrive at annualized net income (loss) available to shareholders. The
company presents ROAE as a measure that is commonly recognized as a standard
of performance by investors, analysts, rating agencies and other users of its
financial information.

"Annualized operating return on average shareholders' equity" is calculated
using operating income (as defined above and annualized in the manner
described for net income (loss) available to shareholders under ROAE above)
and average shareholders' equity, excluding the average after tax unrealized
gains (losses) on investments. Unrealized gains (losses) are excluded from
equity for the reasons outlined in the annualized net income return on average
shareholders' equity explanation above.

Reconciliations of these financial measures to their most directly comparable
U.S. GAAP measures are included in the attached tables.

About Allied World Assurance Company

Allied World Assurance Company Holdings, AG, through its subsidiaries and
brand known as Allied World, is a global provider of innovative property,
casualty and specialty insurance and reinsurance solutions. Allied World
offers 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 the following for further information on Allied World: Web:
www.awac.com | Facebook: www.facebook.com/alliedworld | LinkedIn:
http://www.linkedin.com/company/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 or otherwise.

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Expressed in thousands of United States dollars, except share and per share
amounts)
                                                               
                     Quarter Ended June 30,            Six Months Ended June 30,
                     2013           2012             2013           2012
                                                                          
Revenues:
  Gross premiums     $ 765,200        $ 646,870        $ 1,602,281      $ 1,327,799
  written
  Premiums ceded      (183,978)     (152,160)       (326,007)     (244,136)
                                                                          
  Net premiums         581,222          494,710          1,276,274        1,083,663
  written
  Change in
  unearned            (73,951)      (64,963)        (305,775)     (252,026)
  premiums
  Net premiums         507,271          429,747          970,499          831,637
  earned
                                                                          
  Net investment       37,635           42,451           71,023           89,660
  income
  Net realized
  investment          (115,198)     8,663           (35,561)      142,244
  (losses) gains
  Total revenues      429,708       480,861         1,005,961     1,063,541
Expenses:
  Net losses and       275,128          240,380          530,306          465,582
  loss expenses
  Acquisition          64,617           51,588           121,302          98,726
  costs
  General and
  administrative       80,585           73,979           163,265          144,345
  expenses
  Amortization
  of intangible        634              634              1,267            1,267
  assets
  Interest             14,188           14,001           28,322           27,757
  expense
  Foreign
  exchange loss       490           (1,019)         3,008         (1,100)
  (gain)
  Total expenses      435,642       379,563         847,470       736,577
Loss (income)
before income          (5,934)          101,298          158,491          326,964
taxes
  Income tax
  (benefit)           (4,072)       4,947           1,361         12,457
  expense
                                                                          
NET (LOSS)           $ (1,862)      $ 96,351         $ 157,130      $ 314,507
INCOME
                                                                          
PER SHARE DATA:
                                                                          
  Basic (loss)
  earnings per       $ (0.05)         $ 2.66           $ 4.55           $ 8.56
  share
                                                                          
  Diluted (loss)
  earnings per       $ (0.05)         $ 2.59           $ 4.45           $ 8.41
  share
                                                                          
  Weighted
  average common       34,422,553       36,288,596       34,517,552       36,746,881
  shares
  outstanding
                                                                          
  Weighted
  average common
  shares and           34,422,553       37,189,722       35,316,595       37,395,559
  common share
  equivalents
  outstanding
                                                                          
  Dividends paid     $ —          *   $ 0.375          $ 0.375          $ 0.750
  per share
                                                                          
* Dividend of $0.50 per share was paid on July 3, 2013 to shareholders of record on
June 25, 2013.


ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of United States dollars, except share and per share
amounts)
                                                             
                                               As of              As of
                                               June 30,     December 31,
ASSETS:                                        2013               2012
                                                                  
Fixed maturity investments trading, at         $  6,285,778       $ 6,626,454
fair value
Equity securities trading, at fair value          640,925           523,949
Other invested assets                            849,100          783,534
                                                                    
Total investments                                 7,775,803         7,933,937
Cash and cash equivalents                         868,149           865,364
Insurance balances receivable                     814,620           510,532
Funds held                                        387,599           336,368
Prepaid reinsurance                               339,936           277,406
Reinsurance recoverable                           1,179,525         1,141,110
Accrued investment income                         24,112            29,135
Net deferred acquisition costs                    153,812           108,010
Goodwill                                          268,376           268,376
Intangible assets                                 50,098            51,365
Balances receivable on sale of investments        277,025           418,879
Net deferred tax assets                           40,550            25,580
Other assets                                     85,272           63,884
                                                                    
Total assets                                   $  12,264,877      $ 12,029,946
                                                                    
LIABILITIES:
                                                                    
Reserve for losses and loss expenses           $  5,696,865       $ 5,645,549
Unearned premiums                                 1,586,327         1,218,021
Reinsurance balances payable                      205,884           136,264
Balances due on purchases of investments          487,063           759,934
Senior notes                                      798,355           798,215
Dividends payable                                 17,127            —
Accounts payable and accrued liabilities         100,027          145,628
Total liabilities                                8,891,648        8,703,611
                                                                    
SHAREHOLDERS' EQUITY:
                                                                    
Common shares, 2013: par value CHF 12.30
per share and 2012: par value CHF 12.64
per
share (2013: 35,429,423; 2012: 36,369,868
shares issued and 2013: 34,175,831; 2012:
34,797,781 shares outstanding)                    430,397           454,980
Treasury shares, at cost (2013: 1,253,592;        (91,661)          (113,818)
2012: 1,572,087)
Retained earnings                                3,034,493        2,985,173
Total shareholders' equity                       3,373,229        3,326,335
                                                                    
Total liabilities and shareholders' equity     $  12,264,877      $ 12,029,946
                                                                    

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED CONSOLIDATED SEGMENT DATA
(Expressed in thousands of United States dollars, except for ratio
information)
                                                             
                     U.S.            International
Quarter Ended        Insurance   Insurance       Reinsurance   Total
June 30, 2013
                                                                     
Gross premiums       $  307,297      $   192,593     $ 265,310     $ 765,200
written
Net premiums            221,419          106,394       253,409       581,222
written
Net premiums            197,436          87,041        222,794       507,271
earned
Net losses and          (124,364)        (30,968)      (119,796)     (275,128)
loss expenses
Acquisition             (27,270)         358           (37,705)      (64,617)
costs
General and
administrative         (38,302)        (24,135)     (18,148)     (80,585)
expenses
Underwriting            7,500            32,296        47,145        86,941
income
Net investment                                                       37,635
income
Net realized
investment                                                           (115,198)
losses
Amortization of
intangible                                                           (634)
assets
Interest expense                                                     (14,188)
Foreign exchange                                                    (490)
loss
Loss before                                                        $ (5,934)
income taxes
                                                                     
GAAP Ratios:
Loss and loss           63.0%            35.6%         53.8%         54.2%
expense ratio
Acquisition cost        13.8%            (0.4%)        16.9%         12.7%
ratio
General and
administrative         19.4%           27.7%        8.1%         15.9%
expense ratio
Combined ratio         96.2%           62.9%        78.8%        82.8%
                                                                     
                     U.S.            International
Quarter Ended        Insurance       Insurance       Reinsurance   Total
June 30, 2012
                                                                     
Gross premiums       $  265,974      $   183,593     $ 197,303     $ 646,870
written
Net premiums            196,661          111,342       186,707       494,710
written
Net premiums            162,785          82,605        184,357       429,747
earned
Net losses and          (103,074)        (22,233)      (115,073)     (240,380)
loss expenses
Acquisition             (21,250)         582           (30,920)      (51,588)
costs
General and
administrative         (34,730)        (21,648)     (17,601)     (73,979)
expenses
Underwriting            3,731            39,306        20,763        63,800
income
Net investment                                                       42,451
income
Net realized                                                         8,663
investment gains
Amortization of
intangible                                                           (634)
assets
Interest expense                                                     (14,001)
Foreign exchange                                                    1,019
gain
Income before                                                      $ 101,298
income taxes
                                                                     
GAAP Ratios:
Loss and loss           63.3%            26.9%         62.4%         55.9%
expense ratio
Acquisition cost        13.1%            (0.7%)        16.8%         12.0%
ratio
General and
administrative         21.3%           26.2%        9.5%         17.2%
expense ratio
Combined ratio         97.7%           52.4%        88.7%        85.1%
                                                                     

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED CONSOLIDATED SEGMENT DATA
(Expressed in thousands of United States dollars, except for ratio
information)
                                                             
                       U.S.          International
Six Months Ended       Insurance   Insurance       Reinsurance   Total
June 30, 2013
                                                                     
Gross premiums         $ 563,315     $   321,109     $ 717,857     $ 1,602,281
written
Net premiums             413,672         184,139       678,463       1,276,274
written
Net premiums             385,875         171,255       413,369       970,499
earned
Net losses and           (257,688)       (59,903)      (212,715)     (530,306)
loss expenses
Acquisition costs        (50,398)        1,207         (72,111)      (121,302)
General and
administrative          (77,898)       (48,924)     (36,443)     (163,265)
expenses
Underwriting             (109)           63,635        92,100        155,626
(loss) income
Net investment                                                       71,023
income
Net realized                                                         (35,561)
investment losses
Amortization of                                                      (1,267)
intangible assets
Interest expense                                                     (28,322)
Foreign exchange                                                    (3,008)
loss
Income before                                                      $ 158,491
income taxes
                                                                     
GAAP Ratios:
Loss and loss            66.8%           35.0%         51.5%         54.6%
expense ratio
Acquisition cost         13.1%           (0.7%)        17.4%         12.5%
ratio
General and
administrative          20.2%          28.6%        8.8%         16.8%
expense ratio
Combined ratio          100.1%         62.9%        77.7%        83.9%
                                                                     
                       U.S.          International
Six Months Ended       Insurance     Insurance       Reinsurance   Total
June 30, 2012
                                                                     
Gross premiums         $ 470,185     $   297,183     $ 560,431     $ 1,327,799
written
Net premiums             350,507         183,951       549,205       1,083,663
written
Net premiums             316,143         162,476       353,018       831,637
earned
Net losses and           (200,778)       (60,333)      (204,471)     (465,582)
loss expenses
Acquisition costs        (41,222)        1,110         (58,614)      (98,726)
General and
administrative          (65,774)       (44,049)     (34,522)     (144,345)
expenses
Underwriting             8,369           59,204        55,411        122,984
income
Net investment                                                       89,660
income
Net realized                                                         142,244
investment gains
Amortization of                                                      (1,267)
intangible assets
Interest expense                                                     (27,757)
Foreign exchange                                                    1,100
gain
Income before                                                      $ 326,964
income taxes
                                                                     
GAAP Ratios:
Loss and loss            63.5%           37.1%         57.9%         56.0%
expense ratio
Acquisition cost         13.0%           (0.7%)        16.6%         11.9%
ratio
General and
administrative          20.8%          27.1%        9.8%         17.3%
expense ratio
Combined ratio          97.3%          63.5%        84.3%        85.2%
                                                                     

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED OPERATING INCOME RECONCILIATION
(Expressed in thousands of United States dollars, except share and per share
amounts)
                                                           
                                                                      
                 Quarter Ended June 30,            Six Months Ended June 30,
                 2013           2012             2013           2012
                                                                      
Net (loss)       $ (1,862)        $ 96,351         $ 157,130        $ 314,507
income
Add after
tax effect
of:
  Net
  realized
  investment       104,897          (8,014)          27,555           (134,584)
  losses
  (gains)
  Foreign
  exchange        490           (1,019)         3,008         (1,100)
  loss
  (gain)
Operating        $ 103,525      $ 87,318         $ 187,693      $ 178,823
income
                                                                      
Weighted
average
common
shares
outstanding:
Basic              34,422,553       36,288,596       34,517,552       36,746,881
Diluted            35,136,296 *     37,189,722       35,316,595       37,395,559
                                                                      
Basic per
share data:
Net (loss)       $ (0.05)         $ 2.66           $ 4.55           $ 8.56
income
Add after
tax effect
of:
  Net
  realized
  investment       3.05             (0.22)           0.80             (3.66)
  losses
  (gains)
  Foreign
  exchange        0.01          (0.03)          0.09          (0.03)
  loss
  (gain)
Operating        $ 3.01         $ 2.41           $ 5.44         $ 4.87
income
                                                                      
Diluted per
share data:
Net (loss)       $ (0.05)     *   $ 2.59           $ 4.45           $ 8.41
income
Add after
tax effect
of:
  Net
  realized
  investment       2.99             (0.22)           0.78             (3.60)
  losses
  (gains)
  Foreign
  exchange        0.01          (0.02)          0.08          (0.03)
  loss
  (gain)
Operating        $ 2.95         $ 2.35           $ 5.31         $ 4.78
income
                                                                      

* Diluted weighted average common shares outstanding were only used in the
calculation of diluted operating income per share. There were no common share
equivalents included in calculating diluted earnings per share as there was a
net loss and any additional shares would be anti-dilutive.

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED DILUTED BOOK VALUE PER SHARE RECONCILIATION
(Expressed in thousands of United States dollars, except share and per share
amounts)
                                                         
                            As of              As of            As of
                            June 30,     December 31,     June 30,
                            2013               2012             2012
Price per share at          $  91.51           $ 78.80          $  79.47
period end
                                                                   
Total shareholders'         $  3,373,229       $ 3,326,335      $  3,283,901
equity
                                                                   
Basic common shares            34,175,831        34,797,781        35,942,964
outstanding
                                                                   
Add: unvested                  83,730            135,123           185,809
restricted share units
                                                                   
Add: performance based         270,853           485,973           510,530
equity awards
                                                                   
Add: employee share            10,622            10,750            —
purchase plan
                                                                   
Add: dilutive
options/warrants               1,111,266         1,224,607         1,365,245
outstanding
Weighted average
exercise price per          $  47.65           $ 47.02          $  46.04
share
Deduct: options bought
back via treasury             (578,610)        (730,652)        (790,888)
method
                                                                   
Common shares and
common share
equivalents outstanding        35,073,692        35,923,582        37,213,660
                                                                   
Basic book value per        $  98.70           $ 95.59          $  91.36
common share
Diluted book value per      $  96.18           $ 92.59          $  88.24
common share
                                                                   

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED ANNUALIZED RETURN ON SHAREHOLDERS' EQUITY RECONCILIATION
(Expressed in thousands of United States dollars, except for percentage
information)
                                                          
                   Quarter Ended June 30,          Six Months Ended June 30,
                   2013          2012            2013          2012
                                                                     
Opening
shareholders'      $ 3,431,963     $ 3,245,821     $ 3,326,335     $ 3,149,022
equity
Deduct:
accumulated
other               —            (2,325)        —            (14,484)
comprehensive
income
Adjusted
opening              3,431,963       3,243,496       3,326,335       3,134,538
shareholders'
equity
                                                                     
Closing
shareholders'      $ 3,373,229     $ 3,283,901     $ 3,373,229     $ 3,283,901
equity
Deduct:
accumulated
other               —            (1,414)        —            (1,414)
comprehensive
income
Adjusted
closing              3,373,229       3,282,487       3,373,229       3,282,487
shareholders'
equity
                                                                     
Average
shareholders'      $ 3,402,596   $ 3,262,992     $ 3,349,782   $ 3,208,513
equity
                                                                     
Net (loss)
income             $ (1,862)       $ 96,351        $ 157,130       $ 314,507
available to
shareholders
Annualized net
(loss) income        (7,448)         385,404         314,260         629,014
available to
shareholders
                                                                     
Annualized
return on
average
shareholders'
equity -
net (loss)
income              (0.2%)       11.8%          9.4%         19.6%
available to
shareholders
                                                                     
Operating
income             $ 103,525       $ 87,318        $ 187,693       $ 178,823
available to
shareholders
Annualized
operating
income               414,100         349,272         375,386         357,646
available to
shareholders
                                                                     
Annualized
return on
average
shareholders'
equity -
operating
income              12.2%        10.7%          11.2%        11.1%
available to
shareholders
                                                                     

Contact:

Allied World Assurance Company Holdings, AG
Media:
Noelle Campbell, +1-646-794-0544
Manager, Corporate Communications
Noelle.campbell@awacservices.com
or
Faye Cook, +1-441-278-5406
SVP, Marketing & Communications
faye.cook@awac.com
or
Investors:
Sarah Doran, +1-646-794-0590
SVP, Investor Relations and Treasurer
sarah.doran@awac.com
or
Website: www.awac.com