Interview with Thomas A. Bradley, EVP and CFO of Allied World Assurance Company Holdings, AG (AWH)
67 WALL STREET, New York - June 10, 2013 - The Wall Street Transcript has just published its Insurance Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Low Profitability and Low Interest Rates - Commercial Line Brokers and Underwriters - Consolidation Trends - Emerging Market Expansion - Analysis Of Personal, Commercial & Reinsurance Subsectors
Companies include: Allied World Assurance Company (AWH) and many more.
In the following excerpt from the Insurance Report, the EVP and CFO of Allied World Assurance Company Holdings, AG (AWH) discusses company strategy and the outlook for this vital industry:
TWST: You recently reported your first-quarter results. Can you begin by sharing some highlights from the quarter?
Mr. Bradley: We were happy to end the quarter at 4.2% growth in book value per share, which is one of our primary drivers and measures. We think it's the clearest metric to shareholder value, particularly given that we report our investment returns on a total return basis. So that's a good way to include what we can do on the investment side in addition to what we do on the operating side to create shareholder value.
TWST: Which of your business lines are driving growth right now and how are you positioning the company to take advantage of potential opportunities?
Mr. Bradley: The growth drivers for the first quarter were both the U.S. business segment and the reinsurance business segment, growing at over 20% for the quarter year over year. Reinsurance is a little different from our direct business segments, a little more opportunistic. That's a low fixed cost business, and we allow it to grow and shrink based on the available opportunities, and this was a quarter where we felt there were good growth opportunities given the markets and the lines that we work for the segment.
The U.S. insurance segment, which is direct insurance, has seen five or six quarters in a row where we've been able to have 20%-plus growth, driven by just a series of new businesses, new lines of businesses and new programs that we've been able to launch over the past two or three years. The ones launched three years ago are zipping along and others launched more recently are starting to bear fruit. So we think they're additive over the years to contribute to that growth.
TWST: How are your premium rates trending across your various business lines and what are the implications of those rate trends for the company?
Mr. Bradley: Our U.S. business segment is actually our leader in rate increases for the year - we averaged almost 6% in the first quarter, with property rates up a little over 10% and casualty rates up a little over 5%. In the international segment, which is mostly our Bermuda-based business, the rates were generally flat, although property rates rose a little more than 4% in the first quarter. So again, the U.S. business, in addition to having real growth, is having...
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