Insurer blames tough underwriting conditions as combined operating ratio soars 

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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.”