Allied World Assurance Co. Holdings' CEO Scott Carmilani says the company is off to a strong start for 2013 despite first-quarter net income dropping 27 percent.
The Zug, Switzerland-based insurer and reinsurer reports first-quarter net income dropped $59 million to $159 million even though gross premiums increased 23 percent to $837 million. Revenues were off 1 percent to $576 million, hurt by net investment gains dropping 40 percent to $79 million.
The company also reports total expenses were up 15 percent to $412 million.
The company says it suffered no catastrophe losses in the first quarter, which contributed to a combined ratio of 85.1–basically flat compared to the same time in 2012.
During a conference call with financial analysts, Carmilani says the company benefited from strong rates of retention, new business opportunities and the improved rate environment. He says rate for the carrier's overall insurance portfolio was up 3.5 percent as property led the way up more than 6 percent and casualty was up 3 percent.
Chief Financial Officer Thomas Bradley says an increase in compensation expense due to depreciation of its stock price and higher acquisition costs in the reinsurance segment for new retrocession coverage plus higher profit commissions on certain accounts contributed to the increase in expenses.
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