Bloomberg News

Allied World Falls After Missing Estimates on Sales Drop

July 24, 2014

Allied World Assurance Co. (AWH:US), the seller of aviation and environmental insurance, fell the most since February as second-quarter profit missed analysts’ estimates amid a decline in sales.

Allied plunged 4.3 percent to $37.04 at 11:06 a.m. in New York. The stock has dropped 1.5 percent this year, compared with the 7.5 percent increase of the Russell 1000 Index.

Operating income (AWH:US) was 76 cents a share, missing by 8 cents the average estimate of 9 analysts surveyed by Bloomberg. Net policy sales fell 4.7 percent to $553.9 million as a decline at the reinsurance unit overwhelmed gains from the U.S. and international insurance segments, the Zug, Switzerland-based company said in a statement late yesterday.

“In reinsurance they’ve been shrinking their exposure to catastrophes,” Matt Carletti, an analyst with JMP Securities LLC said in a phone interview. “That segment drove the miss.”

Reinsurers have been forced to lower prices or settle for lower sales amid competition from catastrophe bond investors willing to shoulder weather-related risks. Everest Re Group Ltd. (RE:US) also reported results late yesterday that missed analysts’ estimates, and the Bermuda-based company dropped 2.2 percent.

Allied World’s second-quarter net income was $151.9 million, compared with a loss of $1.9 million a year earlier that was driven by investment results.

To contact the reporter on this story: Kelly Gilblom in New York at kgilblom@bloomberg.net

To contact the editors responsible for this story: Dan Kraut at dkraut2@bloomberg.net Dan Reichl


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Companies Mentioned

  • AWH
    (Allied World Assurance Co Holdings AG)
    • $37.74 USD
    • -0.03
    • -0.08%
  • RE
    (Everest Re Group Ltd)
    • $169.51 USD
    • 1.99
    • 1.17%
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