Insurer blames tough underwriting conditions as combined operating ratio soars
Allied World’s share price fell 13.31% yesterday as profits plunged.
The global insurer’s profits crashed to $83.9m last year compared with $490.3m in 2014.
One problem was its underwhelming return on investments, which last year shrank to just $54.5m compared with $265.8 in 2014.
In the fourth quarter alone, the firm took a hit on its fixed income book because of wider credit spreads and rising interest rates.
Chief executive Scott Carmilani largely blamed difficult underwriting conditions. Combined operating ratio was 95.1% compared with 85.2% in 2014.
He said: “2015 was a challenging year, marked by a difficult underwriting environment and financial market volatility.
“With the close of the Asian acquisitions and targeted growth in our insurance segments, I believe our franchise is well positioned. We look forward to creating and capitalising on profitable opportunities in 2016.”