Switzerland-based Allied World Assurance Co (AWAC) has reported net income of $124.4m for Q1 2015, down from $177.0m in the same period last year, on gross written premiums (GWP) of $880.6m, down from $901.4m up Q1 2914.
Net premiums earned were up, to $568.5m from $530.3m, mainly because AWAC ceded fewer premiums this quarter ($108m) than it did in Q1 2014 ($129.8m), and because the change in unearned premiums fell to minus $204.0m, from minus $241.3m.
Diluted earnings per share fell to $1.27, from $1.74.
President and CEO Scott Carmilani said that Allied World was "off to a strong start in 2015", with the North American segment continuing to gain scale and see attractive rate increases.
The decline in GWP at the headline level was mainly a result of a decline in the reinsurance segment ($439m from $497m), partially offset by growth in North American Insurance ($380m from $345m) and Global Markets Insurance ($60m from $58m) segments.
The reinsurance decline was driven mainly by the non-renewal of business, including certain property and crop treaties.
Net favourable reserve development for Q1 was $63.6m, reducing the loss and loss expense ratio by 11.2 percentage points. In Q1 last year the corresponding figure was $48.9m, a benefit of 9.2 percentage points.
The expense ratio rose by 2.1 points to 30.9%, "largely driven by the impact of a higher stock price on compensation expense".
The company booked $9.9m in foreign exchange losses, mainly because of hedges placed on the acquisition price of the RSA Insurance acquisitions (measured in sterling) in Hong Kong and Singapore, and the strengthening of the US dollar.
Net investment income declined to $44.6m, from $47.6m.