Back to top

Analyst Blog

Last week, Allied World Bermuda, the Bermuda unit of Allied World Assurance Company Holdings, AG (AWH - Snapshot Report), launched an excess casualty coverage package called Constellation. The package consists of five excess casualty coverage products combined in one.

The five coverage enhancements offered by Constellation are Uni-Wrap, Affirmative Punitive Damages, Defense-Assistance & Cooperation Provision, Payment of Loss Provision and Business Continuity Protection.

Uni-Wrap tackles the loopholes of the conventional policies and provides coverage for punitive damages in the follow-form occurrence market. Affirmative Punitive damages provide coverage above retention. Defense Assistance & Cooperation Provision provides drop-down, duty-to-defend after the primary duty-to-defend is exhausted. Payment of Loss Provision recognizes amounts paid by the insured for covered loss. Business Continuity Protection provides policy extension when communication between an insured and its broker or Allied World gets disrupted by a natural catastrophe.

A combination of the five enhancements captures almost all the issues that an ideal coverage policy should consider. These coverage services will be integrated into Allied World Bermuda’s follow-form occurrence policies. Thus it is expected to enhance the overall follow-form business of Allied World, and add to the existing $25 million coverage policy.

Allied World, the global provider of innovative property, casualty and specialty insurance and reinsurance solutions, designed Constellation to address the loopholes of the long-established excess casualty products. Management stated that, requests from the company’s clients and brokers led to the effort. The launch of Constellation, is aimed at providing its customers and trading partners with developed products which will help them to cope with the risks encountered. In turn this will help Allied World to maintain client confidence and thus client retention.

We expect the launch of Constellation to push up the earnings of the company in response to improved levels of sales owing to acquisition of new customers and retention of existing customers. The Zacks Consensus Estimate for full year 2013 is pegged at $7.02 representing a year-over-year improvement of 37.8%.

The initiator of Constellation, Allied World Bermuda is a leading name in the general casualty coverage market in Bermuda. By means of its follow-form occurrence coverage and capable underwriters, the unit has consistently provided protection to its clients. Through Constellation, the company intends to improve services offered and provide a thorough and superior protection to prospective consumers.

In order to expand its operations Allied World U.S. in a joint venture with Alteris Insurance Services, Inc. entered into an agreement to provide coverage to wineries in the United States specifically in California, New York, Oregon, Texas and Washington, last December.

Endurance Specialty Holdings Ltd. (ENH - Snapshot Report) which closely competes with Allied World, launched a unit named Endurance Global Weather last November, by acquiring the assets of Galileo Weather Risk Management and appointing its entire workforce. The new facility provides customized weather risk management products which enable clients to cope with the adverse effects of unpredictable weather changes on their businesses.

Allied World currently carries a Zacks Rank #3 (Hold). Endurance shares the same Zacks Rank.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SIGNET JEWE… SIG 116.37 +7.72%
CHYRONHEGO… CHYR 2.72 +5.84%
US SILICA H… SLCA 70.72 +4.00%
MALLINCKROD… MNK 80.11 +2.32%
RF MICRO DE… RFMD 11.76 +2.31%