 Industry Leader
in Value Creation 4
th
Quarter 2011 Investor Presentation
Exhibit 99.1 |
 Forward-Looking Statements & Safe Harbor
2
This presentation contains certain statements, estimates and forecasts with respect to future
performance and events. These statements, estimates and forecasts are
"forward-looking statements". In some cases, forward-looking
statements can be identified by the use of forward-looking terminology such as "may,"
“might,” “will," “should,” "expect," “plan,”
"intend," "estimate," "anticipate," "believe,” “predict,”
“potential” or "continue" or the negatives thereof or variations thereon or
similar terminology. All statements other than statements of historical fact included in
this presentation are forward-looking statements and are based on various underlying
assumptions and expectations and are subject to known and unknown risks, uncertainties
and assumptions, may include projections of our future financial performance based on our
growth strategies and anticipated trends in our business. These statements are only
predictions based on our current expectations and projections about future events. There are
important factors that could cause our actual results, level of activity, performance or
achievements to differ materially from the results, level of activity, performance or
achievements expressed or implied in the forward-looking statements. As a
result, there can be no assurance that the forward-looking statements included in
this presentation will prove to be accurate or correct. In light of these risks,
uncertainties and assumptions, the future performance or events described in the
forward-looking statements in this presentation might not occur. Accordingly,
you should not rely upon forward-looking statements as a prediction of actual results
and we do not assume any responsibility for the accuracy or completeness of any of these
forward-looking statements that may be made from time to time. We are under no
obligation (and expressly disclaim any such obligation) to update or revise any forward-looking
statements, whether as a result of new information, future developments or otherwise. |
 Agenda
Executive Summary
Executive Summary
U.S. Insurance
U.S. Insurance
International Insurance
International Insurance
Reinsurance
Reinsurance
Financial Highlights
Financial Highlights
Peer Comparison
Peer Comparison
/Conclusion
/Conclusion
Appendix
Appendix
3 |
 Allied
World’s Franchise Industry leading results and value creation
Experienced executive management team
Diversified mix of business with global operations
Strong risk management culture
Excellent capitalization / active capital management
Highly
Rated
-
“A”
(Strong)
by
S&P,
“A”
(Excellent)
by
A.M.
Best
and
“A2”
(Good)
by
Moody’s
4
Well-diversified Property and Casualty Insurer and Reinsurer
with Significant Geographic Reach |
 Allied
World’s Key Business Strategies Leading specialty insurance company with broad range
of product offerings, global capabilities and significant U.S. focus
5
* Includes healthcare-related program business
2011 GPW: $ 1,940M
70% Insurance / 30% Reinsurance
74% Casualty / 26% Property
Diversified
insurance
and
reinsurance
products
offered across global platform with operations in the
U.S., Bermuda, Lloyd’s, Europe, Hong Kong and
Singapore
Insurance
and
casualty
emphasis
with
strong
reinsurance and property capabilities
Customer focus
Moving closer to clients in markets
Demonstrated expertise in markets in which we
underwrite
A “go to”
market for targeted lines and classes of
business such as healthcare and construction |
 Actively Shifted
Business in Response to Market Changes 6
2007 GPW: $1,506M
In response to the changing macro economic environment, Allied World
has transformed itself since its formation in 2001
2011 GPW: $1,940M
Allied World 2007
Allied World Today
Reduced dependence on Bermuda
large account excess business
U.S. segment has increased
significantly with focus on small
account primary and specialty business
Reinsurance segment now with strong
U.S. presence and growing
internationally |
 Growth in Small
Accounts = Increased Importance 7
% of Total
Premium
2%
13%
14%
16%
16%
Small accounts based on policy limits of less than $3M. |
 Active Capital
Management Improves Shareholder Value * Excludes $243.8 million syndicated loan
which was repaid on February 23, 2009 8
Diluted book value per
share has more than
doubled since 2006
Capital Management History
o
$210 million of common dividends paid
since going public in 2006
o
$563 million of shares repurchased from
AIG in December 2007
o
$500 million share repurchase program
•
$174 million remaining capacity at
December 2011
o
$505 million of shares and warrants
repurchased from founders in 2010
o
$300 million in ten-year senior notes
issued in November 2010
o
$53.6 million warrant repurchased from
founder in first quarter 2011
(In millions, except for per share amounts) |
 Consistently
Strong Operating Performance Strong
Operating
Income
–
Operating
return
on
equity
averaged
15.9%
over
last
five
years, 6% in 2011 despite impact from catastrophic events ($292 million)
Favorable
Reserve
Development
–
Every
year
since
our
inception,
$254
million
in
2011
Solid
Investment
Returns
-
$160
million,
2.0%,
total
net
investment
return
1
in
2011,
$469 million, 6.1%, in 2010
Operating
Cash
Flows
–
$1.7
billion
over
last
three
years,
$548
million
in
2011
Diluted
Book
Value
Growth
–
Diluted
book
value
per
share
has
increased
2
½
times
since the company went public in 2006 (after adjusting for dividends)
Maintained
Strong
Capital
Position
-
Total
capital
base
of
$3.95
billion
at
December
2011,
with
conservative
financial
leverage
2
of
20.2%
and
operating
leverage
3
of
1.83x
9
Management has demonstrated superior execution in a
challenging marketplace
1
Total net investment return includes net investment income, net realized gains, net
change in unrealized gains and net impairment charges recognized in earnings. The
percentage return is calculated by taking the total net investment return for the year divided by
the average aggregate invested assets for the year.
2
Financial leverage calculated by dividing debt by total capital at 12/11. 3
Operating leverage calculated by taking sum of 2011 net premiums written and 12/11 net loss
reserves divided by 12/11 shareholders’ equity. |
 Superior Value
Creation Since 2006 IPO Compound annual growth in diluted book value per share
calculated by taking change in diluted book value per share from September 2006
through December 2011 adjusted for common dividends declared or paid. 10
Compound Annual
Growth in Diluted
Book Value per
Share through
December 2011 |
 Agenda
Executive Summary
Executive Summary
U.S. Insurance
U.S. Insurance
International Insurance
International Insurance
Reinsurance
Reinsurance
Financial Highlights
Financial Highlights
Peer Comparison/
Peer Comparison/
Conclusion
Conclusion
11
Appendix
Appendix |
 12
|
 We continue to
expand our brand in target markets and geographies Ten branch office locations throughout
country Increased access to attractive small account primary business including: o
Healthcare organizations
o
Specialty casualty
o
Not-for-profit D&O
Industry
verticals
–
focused
on
servicing
products
for
select
industry
classes
including:
o
Healthcare
o
Private / Non-Profit
o
Public entity / Construction
New specialty product capabilities
o
Defense Base Act approved underwriter
o
Environmental
o
Inland marine
Expanded distribution partners
o
Since 2007 4X increase in number of producers
13
Strong Competitive Position –
U.S. Insurance |
 Expanding U.S.
Direct Operating Platform Branch offices in strategic locations
throughout the U.S.
Dedicated U.S. management team with
significant industry experience
Significantly increased submission activity
throughout the country
•
Up over 50% in all regions since 2008
435 staff count, 62% of Allied World group
at December 2011
Significant IT infrastructure in place
Allied World’s expanded presence in U.S. has significantly
Allied World’s expanded presence in U.S. has significantly
enhanced the market profile of our domestic operations
enhanced the market profile of our domestic operations
San Francisco
San Francisco
Los Angeles
Los Angeles
Costa Mesa
Costa Mesa
Dallas
Dallas
Chicago
Chicago
Atlanta
Atlanta
Boston
Boston
Farmington
Farmington
New York
New York
14
Philadelphia
Philadelphia |
 Agenda
Executive Summary
Executive Summary
U.S. Insurance
U.S. Insurance
International Insurance
International Insurance
Reinsurance
Reinsurance
Financial Highlights
Financial Highlights
Peer Comparison/
Peer Comparison/
Conclusion
Conclusion
15
Appendix
Appendix |
 International
Insurance Segment - Overview
Bermuda (2011 GPW: $361M)
A leading direct writer of Fortune 1000 North American
domiciled property and casualty risks
Strong diversity of industries covered including
manufacturing, chemicals, transportation, real estate,
consumer products, medical and healthcare products and
construction
Recently began writing trade credit and political risk
products
Europe (2011 GPW: $153M)
Focus predominantly on mid-sized to large non-North
American domiciled accounts
Offers broad range of casualty & property insurance
products for multi-national corporations worldwide
Lloyd’s Syndicate expands insurance product capabilities
in Latin America and the Asia Pacific region
Recently launched SME and healthcare initiatives
Asia (2011 GPW: $16M)
Offers professional lines, healthcare and general casualty
business
Allied World International Insurance
Operating Segment Product Mix
Global Diversification and Expansion
Global Diversification and Expansion
Total 2011 GPW: $530M |
 Offices in
Bermuda, London, Dublin, Switzerland, Hong Kong and Singapore position the company to
meet developing opportunities Lloyd’s Syndicate 2232
o
Association with Lloyd’s enhances Allied World’s brand recognition
o
Increases access to Latin America and Asia-Pacific region
o
Offers treaty and individual risk products
Redomestication to Switzerland provides a more efficient structure and
greater flexibility to manage our business
New product capabilities:
o
Trade credit and political risk
o
European healthcare
o
Small-to-medium enterprises (SME Professional)
17
Strong Competitive Position –
International Insurance
We continue to expand our brand in target markets and geographies
|
 Launched SME
Platform in the U.K. in February 2010 Continuing development of Asia Platform
Established Lloyd’s Syndicate 2232 effective mid-2010
Launched Trade Credit/Political Risk capability in October
2010 via MGA relationship with Latin American Underwriters
Expanding Healthcare Platform internationally (Asia &
Europe)
Business development personnel now in London, Scotland
and Singapore
MGA and program business initiated in targeted areas
International Insurance –
Recent Initiatives
18 |
 Executive
Summary Executive Summary
U.S. Insurance
U.S. Insurance
International Insurance
International Insurance
Reinsurance
Reinsurance
Financial Highlights
Financial Highlights
Peer Comparison/
Peer Comparison/
Conclusion
Conclusion
19
Appendix
Appendix
Agenda |
 Reinsurance
Operating Platforms and Major Product Lines 20
Bermuda
Bermuda
•
Property Catastrophe
•
Property Treaty
•
Specialty
•
Facultative
•
PA / WC Catastrophe
United States
United States
•
General Casualty
•
Professional Lines
•
Property
•
Global Marine and Crop
International
International
•
Property Catastrophe
•
Property Per Risk
•
Commercial Auto
•
General Liability
•
Employers’
Liability
•
Professional Lines |
 Reinsurance
Operating Segment Allied World Reinsurance Segment
Product Mix
21
Flexibility to take advantage of reinsurance opportunities in the global
Flexibility to take advantage of reinsurance opportunities in the global
marketplace
marketplace
Casualty Presence Established in U.S.
•
Underwriting teams closer to “decision makers”
which
provides greater access to information
•
Accessing clients and lines that do not typically access
the Bermuda marketplace, including U.S. regional
company multi-line business, super regional, middle-
market business and stand-alone casualty-clash business
•
Broaden product selection when market conditions
improve
Strategic Bermuda Platform
•
Property catastrophe, property per risk, workers’
compensation catastrophe, accident & health and
specialty casualty
Expanded Global Presence
•
Swiss and Singapore offices
•
Lloyd’s Syndicate established in June 2010
Total 2011 GPW: $571M |
 U.S. operation
has improved access to U.S. regional business and strengthened local relationships
o
In 2009, added property reinsurance that focuses on small and medium account
regional carriers
o
In late 2010, launched Global Marine and Specialty unit that offers marine and
aerospace coverages as well as crop and hail business
Swiss and Singapore offices and Lloyd’s Syndicate 2232 increases
global reach
o
Swiss office opened in 2008 offers property, general casualty and professional
liability products throughout Europe
o
Singapore office opened in 2009 as Allied World's hub for all classes of treaty
business in Asia Pacific, Middle East and Africa
o
Established Lloyd's Syndicate 2232 in June 2010, which significantly expanded
reinsurance products throughout Europe, Latin American and the Asia Pacific region
22
Strong Competitive Position –
Reinsurance
We continue to expand our brand in target markets and geographies
|
 Agenda
Executive Summary
Executive Summary
U.S. Insurance
U.S. Insurance
International Insurance
International Insurance
Reinsurance
Reinsurance
Financial Highlights
Financial Highlights
Peer Comparison/
Peer Comparison/
Conclusion
Conclusion
Appendix
Appendix
23 |
 Financial
Highlights Operating Results
Operating Results
2011
2011
2010
2010
2009
2009
2008
2008
2007
2007
Net Income
$275M
$665M
$607M
$184M
$469M
Operating Income
$184M
$398M
$538M
$455M
$476M
Annualized Net Income Return on Average Equity
8.9%
21.9%
22.6%
8.3%
21.7%
Annualized Operating Return on Average Equity
6.0%
13.1%
20.0%
20.6%
22.1%
Combined Ratio
95.9%
84.9%
76.1%
84.1%
81.3%
Cash flow from Operations
$548M
$451M
$668M
$657M
$761M
Operating Earnings Per Diluted Share
$4.63
$7.97
$10.34
$8.90
$7.64
Ending Diluted Book Value per Share
$80.11
$74.29
$59.56
$46.05
$42.53
Growth in Diluted Book Value Per Share
8%
25%
29%
8%
21%
Allied World has reported very strong results despite competitive landscape,
financial turbulence and catastrophe activity
24 |
 Annualized
Operating
ROE
22.1%
20.6%
20.0%
13.1%
6.0%
25
*
Peer
average
include
ACGL,
AGII,
AHL,
AXS,
ENH,
HCC,
MKL,
RLI,
THG,
NAVG
and
WRB.
Source: SNL Financial
Operating Income and Combined Ratio
Strong Operating Performance |
 AY
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
CY Total
CY Original Loss Ratio
70.1%
65.3%
75.9%
103.1%
59.6%
58.4%
55.6%
45.9%
52.1%
65.8%
Prior Year Development
0.0%
-4.9%
-5.8%
-3.6%
-8.2%
-10.2%
-24.2%
-18.8%
-23.1%
-17.4%
AY Original Loss Ratio
70.1%
70.1%
81.7%
106.7%
67.7%
68.6%
79.8%
64.7%
75.1%
83.2%
2002
2003
(57)
(57)
2004
(27)
(53)
(79)
2005
(8)
(46)
6
(49)
2006
(16)
(43)
(45)
(8)
(113)
2007
6
(34)
(77)
(6)
(26)
(137)
2008
(9)
(88)
(100)
(74)
(8)
(34)
(313)
2009
(17)
(57)
(118)
(103)
12
2
32
(248)
2010
4
(11)
(57)
(147)
(54)
(25)
(23)
(1)
(313)
2011
(0)
(1)
(22)
(90)
(42)
(69)
(22)
(28)
20
(254)
Subsequent Development
(123)
(333)
(414)
(427)
(119)
(125)
(12)
(29)
20
(1,562)
Loss Ratio Points
-28.4%
-28.4%
-30.2%
-31.5%
-8.6%
-9.3%
-0.9%
-2.2%
1.5%
AY Developed
41.6%
41.7%
51.5%
75.2%
59.1%
59.2%
78.9%
62.5%
76.6%
83.2%
Cat Losses
16.4%
28.0%
9.6%
6.3%
20.1%
AY Developed EX Cat Losses
41.6%
41.7%
35.1%
47.2%
59.1%
59.2%
69.2%
62.5%
70.3%
63.2%
Case Incurred through 2011 Q4
39.3%
34.0%
45.1%
59.6%
39.2%
38.6%
46.7%
23.4%
39.2%
29.3%
Remaining IBNR / EP Ratio @ 2011 Q4
2.3%
7.8%
6.4%
15.7%
19.9%
20.7%
32.2%
39.1%
37.4%
54.0%
Strong Underwriting Results
Underwriting performance has been strong since our inception
26
Historical
Loss
Ratios
Through
December
31,
2011
($MM)
1
2
(1) Pro-forma including Darwin development since inception (2) Case
incurred ratios by year are not directly comparable to our financial statements as reinsurance case incurred losses shown above are on a treaty year basis
|
 •
Net reserves about 4.5% above mid-point of range at
December 31, 2011
•
$1.6 billion net favorable reserve development since
inception (including Darwin development)
•
72% of reserves are IBNR
Net Loss & LAE Reserve Mix at December 31, 2011
Case
U.S. Insurance,
7%
IBNR
International
Insurance
30%
Case
International
Insurance,
10%
IBNR
Reinsurance
20%
Case
Reinsurance,
11%
IBNR
U.S. Insurance
22%
December 31, 2011 Total: $4.2B
Net Prior Year Reserve Releases* ($MM)
Range of Net Reserves at December 31, 2011 ($MM)
Prudent Reserving Philosophy
27
* Pro-forma including Darwin development since inception |
 Investment
Track Record: Where We’ve Been 28
We have actively managed the
portfolio exposures, including:
Exposure to rates
Exposure to spread assets
Exposure to non-fixed
income assets
Always within stated risk
appetite |
  •
U.S. Treasury yields declined
modestly during 4Q11 and spreads
tightened, creating positive core
fixed income returns
•
Relative value and significant
market volatility remains in favor of
a diversified portfolio
Portfolio Summary -
December 31, 2011
Investment Portfolio: Where we are Today
29
Name
Market Value ($)
% Portfolio
JPMorgan Chase & Co
67,776,188
0.8%
Bank of America Corp
55,093,335
0.7%
Wells Fargo & Co
52,784,154
0.7%
Sparebank 1 Boligkreditt AS
51,696,377
0.6%
Citigroup Inc
49,700,624
0.6%
Top 5 Corporate Exposures
Total: $8.1 B
Portfolio Yield: 2.5%
Duration: 1.9 years
2011 Total Portfolio Return: 2.0%
Average Credit Quality is AA- |
 Agenda
Executive Summary
Executive Summary
U.S. Insurance
U.S. Insurance
International Insurance
International Insurance
Reinsurance
Reinsurance
Financial Highlights
Financial Highlights
Peer Comparison/
Peer Comparison/
Conclusion
Conclusion
30
Appendix
Appendix |
 31
Expense Ratio Declining as we Build Scale
Note: GAAP expense ratio
Peer average includes ACGL, AGII, AHL, AXS, ENH, HCC, MKL, RLI, THG, NAVG and WRB.
Source: SNL Financial
Allied World expanded global
operations, including: the acquisition
of Darwin, establishment of a U.S.
reinsurance company and the opening
of Lloyd's Syndicate 2232 |
 Peer
Comparisons – Operating Income ROE
Source: SNL Financial
32
Five Year Average Operating ROE
2007 -
2011
Peer Average = 11.1% |
 Peer
Comparisons - Combined Ratio
Source: SNL Financial
33
Five Year Average Combined Ratio
2007 -
2011
Peer Average = 92.3% |
 Superior Book
Value Growth Versus Peers Growth in book value per share calculated by taking change in
diluted book value per share from December 2006 through December 2011 adjusted for
dividends paid or declared. 34
Peer Average = 80%
Five Year Growth in Diluted Book Value per Share
2007 -
2011 |
 35
Catastrophe Losses at Low End of Competitors
Catastrophe Losses as a % of Prior Year
Shareholders’
Equity
Catastrophe
losses in line with
our risk appetite
* Hurricanes Ike and Gustav
Percentages represent pre tax catastrophe losses divided by prior year-end shareholders
equity. Source: SNL Financial and company filings |
 Conclusion
Allied World Expects to Generate a Mid-teen ROE Over the Cycle,
Allied World Expects to Generate a Mid-teen ROE Over the Cycle,
Assuming Normalized Catastrophe Activity
Assuming Normalized Catastrophe Activity
Strong underwriting franchise diversified by product and geography
Experienced executive management team in place
Excellent capitalization, strong balance sheet and financial flexibility
Enhanced by recent capital management initiatives
Significant infrastructure investments made since 2008
Strengthened U.S. specialty franchise and global capabilities
Well positioned to capitalize on market opportunities
Current valuation inconsistent with history of strong returns
36 |
 Agenda
Executive Summary
Executive Summary
U.S. Insurance
U.S. Insurance
International Insurance
International Insurance
Reinsurance
Reinsurance
Financial Highlights
Financial Highlights
Peer Comparison/
Peer Comparison/
Conclusion
Conclusion
Appendix
Appendix
37 |
 Non-GAAP
Financial Measures 38
In presenting the company's results, management has included and discussed in this
presentation 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 by the company in the
management of its 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,
impairment of intangible assets 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 its 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. The company excludes impairment of intangible assets
as these are non-recurring charges. In addition to presenting net income determined in accordance with GAAP, the company believes
that showing operating income enables investors, analysts, rating agencies and other users of
its financial information to more easily analyze the company’s results of
operations and the company’s underlying business performance. Operating income should not be viewed as a substitute for 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 return on average shareholders' equity" ("ROAE") is calculated
using average 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 risk premium 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 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 return on average shareholders' equity
explanation above.
See slides 39 - 41 for a reconciliation of non-GAAP measures used in this presentation
to their most directly comparable GAAP measures. |
 Non-GAAP
Financial
Measures
-
Reconciliations
39
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED ANNUALIZED RETURN ON SHAREHOLDERS' EQUITY RECONCILIATION
(Expressed in thousands of United States dollars, except for percentage information)
2011
2010
2011
2010
Opening shareholders' equity
3,003,074
$
3,341,314
$
3,075,820
$
3,213,295
$
Deduct: accumulated other comprehensive income
(17,796)
(111,760)
(57,135)
(149,849)
Adjusted opening shareholders' equity
2,985,278
3,229,554
3,018,685
3,063,446
Closing shareholders' equity
3,149,022
$
3,075,820
$
3,149,022
$
3,075,820
$
Deduct: accumulated other comprehensive income
(14,484)
(57,135)
(14,484)
(57,135)
Adjusted closing shareholders' equity
3,134,538
3,018,685
3,134,538
3,018,685
Average shareholders' equity
3,059,908
$
3,124,120
$
3,076,612
$
3,041,066
$
Net income available to shareholders
183,100
$
92,786
$
274,548
$
665,005
$
Annualized net income available to shareholders
732,400
371,144
274,548
665,005
Annualized return on average shareholders' equity - net income available
to shareholders
23.9%
11.9%
8.9%
21.9%
Operating income available to shareholders
94,681
$
97,288
$
183,686
$
397,831
$
Annualized operating income available to shareholders
378,724
389,152
183,686
397,831
Annualized return on average shareholders' equity - operating income
available to shareholders
12.4%
12.5%
6.0%
13.1%
Quarter Ended December 31,
Year Ended December 31, |
  Non-GAAP
Financial Measures - Reconciliations
40
ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG
UNAUDITED OPERATING INCOME RECONCILIATION
(Expressed in thousands of United States dollars, except share and per share amounts)
2011
2010
2011
2010
Net income
183,100
$
92,786
$
274,548
$
665,005
$
Add after tax affect of:
Net realized investment (gains) losses
(26,332)
4,306
(213)
(267,727)
Net impairment charges recognized in earnings
-
-
-
109
Other Income - termination fee
(61,538)
-
(93,808)
-
Foreign exchange (gain) / loss
(549)
196
3,159
444
Operating income
94,681
$
97,288
$
183,686
$
397,831
$
Weighted average common shares outstanding:
Basic
38,138,558
40,291,620
38,093,351
46,491,279
Diluted
39,524,273
43,501,068
39,667,905
49,913,317
Basic per share data:
Net income
4.80
$
2.30
$
7.21
$
14.30
$
Add after tax affect of:
Net realized investment (gains) losses
(0.69)
0.11
(0.01)
(5.75)
Net impairment charges recognized in earnings
-
-
-
-
Other Income - termination fee
(1.62)
-
(2.46)
-
Foreign exchange (gain) / loss
(0.01)
-
0.08
0.01
Operating income
2.48
$
2.41
$
4.82
$
8.56
$
Diluted per share data
Net income
4.63
$
2.13
$
6.92
$
13.32
$
Add after tax affect of:
Net realized investment (gains) losses
(0.67)
0.10
(0.01)
(5.36)
Net impairment charges recognized in earnings
-
-
-
-
Other Income - termination fee
(1.56)
-
(2.36)
-
Foreign exchange (gain) / loss
-
0.01
0.08
0.01
Operating income
2.40
$
2.24
$
4.63
$
7.97
$
Quarter Ended December 31,
Year Ended December 31, |
  Non-GAAP
Financial Measures - Reconciliations
41
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
December 31,
December 31,
2011
2010
Price per share at period end
62.93
$
59.44
$
Total shareholders' equity
3,149,022
$
3,075,820
$
Basic common shares outstanding
37,742,131
38,089,226
Add: unvested restricted share units
249,251
571,178
Add: Performance based equity awards
889,939
1,440,017
Add: employee share purchase plan
11,053
10,576
Add: dilutive options/warrants outstanding
1,525,853
3,272,739
Weighted average exercise price per share
45.72
$
35.98
$
Deduct: options bought back via treasury method
(1,108,615)
(1,980,884)
Common shares and common share
equivalents outstanding
39,309,612
41,402,852
Basic book value per common share
83.44
$
80.75
$
Diluted book value per common share
80.11
$
74.29
$
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