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Allied World (AWH) Q1 Earnings and Revenues Miss Estimates
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Allied World Assurance Company Holdings, AG (AWH - Free Report) reported first-quarter 2017 operating net income of 53 cents per share that missed the Zacks Consensus Estimate. Earnings also decreased from the year-ago earnings by 18.5%.
Including net realized investment gains of 46 cents per share, foreign exchange loss of 2 cents per share, other expenses of 5 cents per share and income tax expenses of 2 cents per share , the company reported net income of 90 cents per share, up 11% from year-ago quarter.
Operational Performance
Gross premiums written were $860.9 million, down 0.3% year over year. Weak results at Reinsurance segment led to the deterioration.
Net premiums written decreased 4% year over year to $676 million in the reported quarter.
Net investment income dipped 1.7% year over year to $52.3 million owing to shift in allocations within fixed maturity assets.
Total operating revenue decreased 5.5% year over year to $599 million. Revenues missed the Zacks Consensus Estimate of $672 million.
Total expenses declined 2.8% to $561.3 million.
Underwriting income plummeted 80% to $4.71 million in the quarter. Combined ratio deteriorated 320 basis points (bps) to 99.2%.
Allied World Assurance Company Holdings, AG Price, Consensus and EPS Surprise
Gross premiums written at the North American Insurance segment increased 4.6% year over year to $396.7 million on growth across programs, excess casualty and environmental businesses. However, decline in professional lines, healthcare and property businesses partially limited the upside. Underwriting loss of $7.6 million compared unfavorably with income of $14 million in the year-ago quarter. Combined ratio deteriorated 640 bps year over year to 102.6%.
Gross premiums written at the Global Markets Insurance segment inched up 0.2% to $115.8 million owing to growth across European businesses, partially limited by a reduction in the Asia-Pacific region. Underwriting loss of $6.9 million was narrower than year-ago loss of $20.5 million. Combined ratio improved 1440 bps year over year.
Gross premiums written at the Reinsurance segment decreased 5.5% to $348.3 million due to reduction in property catastrophe risk as well as the non-renewal of certain other property and casualty treaties. Underwriting income declined 36% year over year to $18.7 million. Combined ratio deteriorated 530 bps year over year.
Financial Update
Allied World exited 2016 with cash and cash equivalents of $1.3 billion, up from $0.8 million from year-end 2016.
Total assets were $13.4 billion, up 1.5% from Dec 31, 2016.
Shareholder’s equity was $3.7 billion, down 5.7% from year-end 2016.
Allied World’s book value per share increased 2.8% to $40.59 per share as of Mar 31, 2017.
Return on the company's investment portfolio increased to 1% from 0.8% in the yea- ago quarter.
Among the other players from the insurance industry that have reported their first-quarter earnings so far, Chubb Limited (CB - Free Report) beat the Zacks Consensus Estimate but RLI Corp. (RLI - Free Report) and The Progressive Corporation (PGR - Free Report) missed expectations.
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Allied World (AWH) Q1 Earnings and Revenues Miss Estimates
Allied World Assurance Company Holdings, AG (AWH - Free Report) reported first-quarter 2017 operating net income of 53 cents per share that missed the Zacks Consensus Estimate. Earnings also decreased from the year-ago earnings by 18.5%.
Including net realized investment gains of 46 cents per share, foreign exchange loss of 2 cents per share, other expenses of 5 cents per share and income tax expenses of 2 cents per share , the company reported net income of 90 cents per share, up 11% from year-ago quarter.
Operational Performance
Gross premiums written were $860.9 million, down 0.3% year over year. Weak results at Reinsurance segment led to the deterioration.
Net premiums written decreased 4% year over year to $676 million in the reported quarter.
Net investment income dipped 1.7% year over year to $52.3 million owing to shift in allocations within fixed maturity assets.
Total operating revenue decreased 5.5% year over year to $599 million. Revenues missed the Zacks Consensus Estimate of $672 million.
Total expenses declined 2.8% to $561.3 million.
Underwriting income plummeted 80% to $4.71 million in the quarter. Combined ratio deteriorated 320 basis points (bps) to 99.2%.
Allied World Assurance Company Holdings, AG Price, Consensus and EPS Surprise
Allied World Assurance Company Holdings, AG Price, Consensus and EPS Surprise | Allied World Assurance Company Holdings, AG Quote
Segment Update
Gross premiums written at the North American Insurance segment increased 4.6% year over year to $396.7 million on growth across programs, excess casualty and environmental businesses. However, decline in professional lines, healthcare and property businesses partially limited the upside. Underwriting loss of $7.6 million compared unfavorably with income of $14 million in the year-ago quarter. Combined ratio deteriorated 640 bps year over year to 102.6%.
Gross premiums written at the Global Markets Insurance segment inched up 0.2% to $115.8 million owing to growth across European businesses, partially limited by a reduction in the Asia-Pacific region. Underwriting loss of $6.9 million was narrower than year-ago loss of $20.5 million. Combined ratio improved 1440 bps year over year.
Gross premiums written at the Reinsurance segment decreased 5.5% to $348.3 million due to reduction in property catastrophe risk as well as the non-renewal of certain other property and casualty treaties. Underwriting income declined 36% year over year to $18.7 million. Combined ratio deteriorated 530 bps year over year.
Financial Update
Allied World exited 2016 with cash and cash equivalents of $1.3 billion, up from $0.8 million from year-end 2016.
Total assets were $13.4 billion, up 1.5% from Dec 31, 2016.
Shareholder’s equity was $3.7 billion, down 5.7% from year-end 2016.
Allied World’s book value per share increased 2.8% to $40.59 per share as of Mar 31, 2017.
Return on the company's investment portfolio increased to 1% from 0.8% in the yea- ago quarter.
Zacks Rank
Allied World presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other P&C Insurers
Among the other players from the insurance industry that have reported their first-quarter earnings so far, Chubb Limited (CB - Free Report) beat the Zacks Consensus Estimate but RLI Corp. (RLI - Free Report) and The Progressive Corporation (PGR - Free Report) missed expectations.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 "Strong Buys" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 "Strong Sells." Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>