Additionally, the company’s subsidiaries, Fairfax (US) Inc. (Delaware) and Zenith National Insurance Corp. (headquartered in Woodland Hills, CA), have also had their Long-Term ICRs upgraded to “a-” (Excellent) from “bbb+” (Good).

The pair are indirectly wholly owned downstream holding companies of Fairfax. The outlook of these ratings has been revised to stable from positive.

AM Best explained that Fairfax’s rating upgrades reflect its recently and prospectively improved earnings. In 2022, Fairfax deployed significant cash assets into higher-yielding fixed-income instruments, strengthening reliable streams of dividend and interest income.

The group’s underwriting performance drove record profits despite elevated catastrophe activity. These enhanced returns have allowed the group to grow its capital base and further expand its projected run-rate for operating earnings in future cycles.

On the same note, AM Best has upgraded the Financial Strength Rating (FSR) to A+ (Superior) from A (Excellent) and the Long-Term ICRs to “aa-” (Superior) from “a+” (Excellent) of the operating affiliates of Allied World Assurance Company Holdings, Ltd.’s, collectively referred to as Allied World.

The Long-Term ICRs have also been upgraded to “a-” (Excellent) from “bbb+” (Good) for Allied World Holdings and its downstream holding company, Allied World Assurance Company Holdings I, Ltd (Bermuda), with revised outlooks to stable from positive.

AM Best explains that the revised ratings reflect Allied World’s “strongest” balance sheet strength, strong operating performance, favourable business profile, and appropriate enterprise risk management.

Allied World’s ratings were revised by the revision of the operating performance assessment to strong from adequate. The firm has benefited from improved underwriting ratios, stronger streams of dividend and interest income in recent years.

AM Best commented, “Allied World’s solid recent and prospective underwriting results as reflective of sound cycle management strategies that have reduced volatility, while at the same time steadily increasing underwriting income.”

The foillowing subsidiaries of the group have had its FSR upgraded to A+ (Superior) from A (Excellent), and the Long-Term ICRs to “aa-” (Superior) from “a+” (Excellent), with the outlooks revised to stable from positive: Vantapro Specialty Insurance Company, Allied World Assurance Company, Ltd, Allied World Surplus Lines Insurance Company, Allied World Assurance Company (U.S.) Inc., Allied World National Assurance Company, Allied World Specialty Insurance Company, Allied World Insurance Company, and Allied World Assurance Company (Europe) Designated Activity Company.

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From what Reinsurance News understands, the move to a syndicated capacity arrangement will provide the MGA with the opportunity to significantly develop and boost its product suite as it enters its next phase of growth.

Following a mutual agreement reflecting differing strategic objectives, the MGA will transition from Allianz to the new capacity providers over the remainder of 2024, however the firm  will continue to partner with Allianz on other product lines.

It has also been confirmed that the syndicated binder agreement with Allied World and Sompo is active for all SME package new business submissions with immediate effect.

Aqueous Underwriting, which specialises in the professional indemnity and SME package (food, hospitality, leisure, and hotel) sectors, believes the new arrangement will enable the firm to build on its reputation for responding quickly to changing customer needs.

Furthermore, Aqueous is also reportedly launching a market-first extension to its pubs, restaurants and bars product to address the substantial increase in dine & dash losses, with the new coverage extension set to be available from January.

Tom Hill, Head of E-Trade, Aqueous Underwriting, commented: “We are delighted to be working with Allied World and Sompo on a syndicated placement basis, enabling us to pursue our strategic objective of significantly enhancing our existing product suite and developing new products, whilst not being reliant on any single market. Next year will be an exciting one for us all at Aqueous as we accelerate our growth in the SME market.”

Emma Lisi, Senior Vice President, Head of UK Commercial Division, Allied World, said: “Allied World is committed to the SME market in the UK and partnering with Aqueous is a natural fit. We look forward to leveraging our technical knowledge, and market relationships to deliver insurance solutions for brokers.”

Joe Brown, Head of UK Middle Market & SME, Commercial P&C Insurance, Sompo, UK, added: “We are delighted to be partnering with the team at Aqueous, a move which fits in with our ongoing strategy to develop further our UK commercial footprint and support the needs of our growing SME customer base outside the London market.”

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According to Fairfax, this figure primarily reflects increased adjusted operating income of $1,136.8 million and net gains on investments.

Moreover, book value per basic share at September 30, 2024 was $1,033.18 compared to $939.65 at December 31, 2023 (an increase of 11.7% adjusted for the $15 per common share dividend paid in the first quarter of 2024).

At the same time, net earnings in Q3’24 sat at $1,119.5 million, compared to $1,187.0 million from the same period last year.

All in all, gross premiums written (GPW) for the third quarter of 2024 sat at $8,302.2 million, a solid increase from $7,272.2 million in Q3’23.

Fairfax’s insurance and reinsurance companies posted an undiscounted combined ratio of 93.9%, improving from 95.0% in 2023, as well as an underwriting profit of $389.7 million, an improved figure compared to $291.6 million, which was reported in the prior year.

Net premiums written by the property and casualty insurance and reinsurance operations increased by 10.0% to $6,420.4 million from $5,837.9 million, while GPW increased by 13.9%.

Fairfax noted that this increase primarily reflects the consolidation of Gulf Insurance on December 26, 2023 which contributed $420.5 million to net premiums written and $778.4 million to gross premiums written in 2024, and continued growth across most operating companies, partially offset by a decrease at Odyssey Group.

In addition, Fairfax also recorded a total net expense of $731.8 million from discounting insurance and reinsurance contracts, which was comprised of net finance expense from insurance contracts and reinsurance contract assets held of $1,112.6 million.

Meanwhile, Fairfax subsidiary Odyssey Group, the reinsurance and specialty insurance provider, posted $1,546.2 million in gross premiums written (GPW), a 4.7% decrease in comparison to $1,621.9 million from Q3’23.

Brit, specialty insurer and reinsurer focused on underwriting complex risks and also part of Fairfax, also recorded GPW of $888.8 million in this year’s third quarter, a figure 3.8% down from last year’s $923.5 million.

Allied World, also a provider of re/insurance solutions and a Fairfax subsidiary, posted a 3.0% rise in GPW in the third quarter, climbing from $1,623.2 million to $1,671.8 million.

Prem Watsa, Chairman and Chief Executive Officer, commented: “In the third quarter of 2024 our property and casualty insurance and reinsurance operations produced adjusted operating income of $1,136.8 million up from $967.2 million in the third quarter of 2023 (or operating income of $1,516.3 million (2023 – $1,424.4 million) including the benefit of discounting, net of a risk adjustment on claims), primarily reflecting continued strong core underwriting performance and increased interest and dividends.

“Our underwriting performance in the third quarter of 2024 was outstanding, with our property and casualty insurance and reinsurance companies reporting a consolidated combined ratio of 93.9% and consolidated underwriting profit of $389.7 million, on an undiscounted basis, despite higher current period catastrophe losses of $434.5 million. Gross and net premiums written grew by 13.9% and 10.0%, reflecting the acquisition of Gulf Insurance, which added $778.4 million in gross premiums written and $420.5 million in net premiums written. Excluding Gulf Insurance, gross and net premiums written grew by 3.2% and 2.8%.”

Adding: “Net gains on investments of $1,287.3 million in the quarter was principally comprised of mark to market gains on bonds of $828.6 million and mark to market gains on common stocks of $322.9 million.

“We remain focused on being soundly financed and ended the quarter with approximately $2.0 billion of cash and marketable securities and an additional $2.1 billion, at fair value, of investments in associates and consolidated non-insurance companies owned by the holding company.”

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This increase, according to Fairfax, primarily reflects increased adjusted operating income of $1,119.4 million and net gains on investments.

Additionally, book value per basic share at June 30, 2024 was reported to be $979.63 compared to $939.65 at December 31, 2023 (an increase of 6.0% adjusted for the $15 per common share dividend paid in the first quarter of 2024).

In Q2 2024 the net earnings were $1,055.8 million, compared to $829.1 million in Q2 2023.

Fairfax’s insurance and reinsurance companies reported a consolidated combined ratio of 93.9% and consolidated underwriting profit of $370.4 million, an improved figure when compared with the $337.5 million reported in Q2 2023.

Net premiums written (NPW) by the property and casualty insurance and reinsurance operations increased 11.5% to $6,841.6 million from $6,134.4 million, while gross premiums written (GPW) increased by 10.8%.

According to Fairfax, this increase mainly reflects the consolidation of Gulf Insurance on December 26, 2023 that contributed $523.8 million to NPW and $815.9 million to GWP in 2024, and continued growth across most operating companies, partially offset by decreases at Odyssey Group.

Underwriting profit in Q2 2024 also saw growth, increasing to $370.4 million compared to $337.5 million in the same period the year prior.

Undiscounted combined ratio was 93.9% in 2024, consistent with the 93.9% in 2023, primarily reflecting increased net favourable prior year reserve development of $131.8 million that was offset by an increased underwriting expense ratio due to investments in personnel and technology to support continued growth in business volumes, the firm noted.

Fairfax subsidiary Odyssey Group, a reinsurance and specialty insurance provider, posted GWP of $1,707.5 million in Q2 2024, down 9.5% when compared to the $1,887.3 million reported in Q2 2023.

Brit, specialty insurer and reinsurer focused on underwriting complex risks and also part of Fairfax, reported GWP of $1,041.8 million in this years second quarter, a figure 6.5% down from the $3,945.9 million seen in the same period last year.

Allied World, also a provider of re/insurance solutions and a Fairfax subsidiary, saw a 7.2 % increase in its GPW, to $2,021.1 million in Q2 2024 from $1,872.2 million in Q2 2023.

Prem Watsa, Chairman and Chief Executive Officer, stated: “In the second quarter of 2024 our property and casualty insurance and reinsurance operations produced adjusted operating income of $1,119.4 million up from $913.5 million in the second quarter of 2023 (or operating income of $1,553.1 million (2023 – $1,526.4 million) including the benefit of discounting, net of a risk adjustment on claims), primarily reflecting increased interest and dividends and share of profit of associates.

“Our underwriting performance in the second quarter of 2024 continued to produce favourable results with our insurance and reinsurance companies reporting a consolidated combined ratio of 93.9% and consolidated underwriting profit of $370.4 million, on an undiscounted basis.Gross and net premiums written grew by 10.8% and 11.5%, reflecting the acquisition of Gulf Insurance, which added $815.9 million in gross premiums written and $523.8 million in net premiums written. Excluding Gulf Insurance, gross premiums written grew by 0.6% and net premiums written grew by 3.0%.

“Net gains on investments of $241.6 million in the quarter was principally comprised of mark to market gains on common stocks of $377.4 million, partially offset by mark to market losses on bonds of $190.8 million.

Watsa concluded: “We remain focused on being soundly financed and ended the quarter with approximately $2.5 billion of cash and marketable securities (prior to Allied World’s subsequent redemption of its $500.0 million of senior notes) and an additional $2.0 billion, at fair value, of investments in associates and consolidated non-insurance companies owned by the holding company,”

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Brad J. Sickinger, President of Pinpoint US, said: “We are thrilled to join AM Specialty Insurance Group. This partnership marks a milestone in our journey, aligning our innovative approaches with a company that has a strong reputation in specialty insurance markets. Together, we will drive greater innovation and value for our clients.”

Sickinger will continue to lead Pinpoint, bringing his industry experience from previous roles at Allianz AGCS, Willis HRH, Marsh, and AIG.

Shevawn Barder, CEO of AM Holding Company, added: “This acquisition represents a significant step forward for us in enhancing our specialised insurance offerings. Pinpoint’s expertise complements our strategic vision, allowing us to broaden our reach and deepen our capabilities in key niche markets.”

Expanding beyond the US, AM Specialty has also launched Pinpoint UK in London. Darren Powell, with over 30 years of experience from RSA and Allied World, will take on the role of Chief Underwriting Officer starting in September 2024.

Darren Powell, Chief Underwriting Officer of Pinpoint UK, noted: “The impressive technology, wealth of data and strong entrepreneurial leadership of AM Specialty, combines powerfully with Pinpoint customer solutions. I am very excited to be leading the expansion into the UK at this important stage in the development of the business.”

Additionally, Shaun Packman, who has over 40 years of experience in Marine and Aviation business lines, will oversee the operations of the London-based entity.

The acquisition of Pinpoint brings several strategic advantages to both organisations. AM Specialty Insurance Group can now offer a more extensive range of products, expanding its market reach and serving a broader client base.

Pinpoint will benefit from AM Specialty’s robust infrastructure and resources, gaining the tools and capital necessary to scale their solutions effectively.

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At the same time, Best has also upgraded the Long-Term ICRs to “bbb+” (Good) from “bbb” (Good) and the Long-Term IRs of Zenith National Insurance Corp., and Fairfax (US) Inc. (Delaware), both of which are indirectly, wholly owned downstream holding companies of Fairfax.

The outlook of these Credit Ratings has been revised to stable from positive.

Best states that the Long-Term ICR upgrade for Fairfax reflects the company’s ability to limit investment volatility through year-end 2022, and the prospective earnings outlook from deploying substantial cash into higher yielding debt instruments.

The upgrade also considers that Fairfax’s financial leverage has improved materially compared with historically higher levels and has been consistently maintained at levels largely in line with comparably rated peers in recent years.

Best stated that it expects that Fairfax will continue to maintain financial leverage at or near current levels going forward, with the group’s capital position expected to continue to improve over time, as it benefits from higher levels of dividend and interest incomes.

Moreover, Best has also upgraded the Long-Term ICR to “a+” (Excellent) from “a” (Excellent) and affirmed the Financial Strength Rating (FSR) of A (Excellent) of Allied World Assurance Company Holdings, Ltd.’s operating affiliates.

Elsewhere, Best has also upgraded the Long-Term ICRs to “bbb+” (Good) from “bbb” (Good) of Allied World Holdings and its downstream holding company – Allied World Assurance Company Holdings I, Ltd.

Best also confirmed that it has upgraded the Long-Term IR to “bbb+” (Good) from “bbb” (Good) on the $500 million, 4.35% senior unsecured notes of Allied World Assurance Company Holdings I, Ltd, due 2025, which are unconditionally and irrevocably guaranteed by Allied World Holdings. The outlook of these ratings is stable.

Best noted that the ratings of Allied World reflect its balance sheet strength, which Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

In addition, the upgrading of Allied World group’s Long-Term ICRs follow Best’s recognition of implicit support provided by Fairfax to Allied World, which represents roughly one quarter of Fairfax’s overall GWPs and has been a key contributor to Fairfax’s earnings during the last five years.

Furthermore, Best notes that Allied World’s operating performance has been on a steadily positive trajectory for the last five years, reflecting broad rate improvement across many of the company’s key business lines, as well as changes in underwriting strategy.

The company has also reduced its catastrophe exposure, which ultimately has reduced volatility.

Best added that it expects that Allied World’s risk-adjusted capitalization as measured by the Best’s Capital Adequacy Ratio (BCAR) will continue to be supportive of the overall balance sheet assessment, supported by capital growth from operating earnings and supplemented by an eventual recovery of equity and fixed income markets prices over time.

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However, gross written premiums for the company in Q3 2022 reached $6,922.9m, up from $5,970.0m in Q3 2021. The firm said that this was an increase of 18.6%.

Prem Watsa, chairman and chief executive officer at the firm, said: “Our core underwriting performance in the third quarter of 2022 continued to be very strong, with growth in gross premiums written of 16.3% and net premiums written of 18.6%, primarily reflecting new business and continued incremental rate increases.

“Despite significant catastrophe losses of $803.3m or 15.0 combined ratio points in the quarter, our consolidated combined ratio was 100.3% for the quarter and 96.0% for the first nine months. Our operating income for the first nine months was a record $1.6bn reflecting increased interest and dividends, increased share of profit of associates, and strong underwriting income.”

The company said it had seen net losses on investments in the period totalling $519.1m. These were, it said, principally comprised of mark to market losses on bonds of $242.4m due to continued rising interest rates, losses on common stocks of $154.8m reflecting the 5% drop in the S&P 500 in the quarter and unrealized foreign exchange losses of $141.9m.

Watsa added: “With the short duration of 1.6 years on our $37bn fixed income portfolio, our fixed income portfolio only dropped 3.1% in the first nine months, while interest and dividend income increased significantly due to rising interest rates, from a run rate of approximately $530m annually at the end of 2021 to a current run rate of approximately $1.2bn annually. We continue to focus on being soundly financed and ended the quarter with approximately $0.9bn in cash and investments in the holding company, which does not include any proceeds from the sale of our pet insurance business which closed on October 31, 2022.”

In terms of its insurance and reinsurance subsidiaries, Brit saw a rise in gross written premiums for the quarter of more than 16% to $961 million, as the firm’s net premiums written spiked 20.4% to $847.7 million. Brit’s combined ratio for the quarter improved slightly, year-on-year, to 1117.4%.

Odyssey Group has recorded Q3 2022 gross written premium of $1.6 billion, reflecting growth of over 27%, as net premiums written within this business jumped by 32% to $1.5 billion. The firm’s combined ratio ended the quarter at 107.8%, compared with 109.5% a year earlier.

In today’s results announcement, Fairfax has also revealed that it increased its ownership interest in Allied World to 82.9% from 70.9% for total consideration of $733.5 million, inclusive of the fair value of a call option exercised and an accrued dividend paid, and recorded a loss in retained earnings of $228.1 million.

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As the Chief Operating Officer, he will have oversight of the day-to-day administrative and operational functions across the company.

Following the appointment, Dupont will also continue to oversee the company’s legal, compliance, claims, human resources, internal audit and procurement functions on a global basis.

Allied World also confirmed that he will remain a member of the Executive Board.

Dupont has been at Allied World for 17 years, having joined the firm in 2003 as Executive Vice President, General Counsel.

Since 2017, he has served as Chief Executive Officer (CEO) for Global Legal & Strategy, based in New York.

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Alongside Kenahan, Ascot has also announced that Jason Pugi, Kimberley Pursell, and Michael Watkins have joined as Senior Vice Presidents.

The entire team has joined Ascot from insurer and reinsurer Allied World, and will underwrite excess casualty insurance for large corporations across a broad range of industry classes.

Kenahan brings more than 25 years of industry experience to the role, 16 of which have been spent in Bermuda. Most recently, he served as Senior Vice President and Bermuda Branch Manager at Allied World.

Pugi, Pursell, and Watkins most recently served as Vice Presidents of General Casualty at Allied World.

Ian Thompson, Head of Casualty & Specialty, Ascot Re, commented: “Pat and the team have a strong reputation in the market for their casualty insurance expertise. Their underwriting acumen is consistent with Ascot’s underwriting philosophy and the brand that we continue to build on the island.

“The addition of this team means Ascot is now in a position where we operate in almost all casualty and specialty classes of business in the Bermudian market.”

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At the same time, Lou Iglesias has been appointed to take over from Carmilani as Chief Executive Officer (CEO) of Allied World, Fairfax revealed.

In his new role, Carmilani will work closely with Andy Barnard, President of Fairfax Insurance Group, and Paul Rivett, President of Fairfax Financial.

As CEO of Allied World, Carmilani spent the past 20 years building the company up from a small Bermuda operation into a large worldwide re/insurance operation, with its eventual acquisition by Fairfax in 2017.

Now, Carmilani will build on his network of contacts and broker and customer relationships to foster new growth and collaboration initiatives at Fairfax.

Iglesias, meanwhile, is expected to transition smoothly into his new position, having previously served as President of Allied World, working under Carmilani for over seven years. He will now report to Andy Barnard.

“We are privileged to have an executive of Scott Carmilani’s calibre focused on building Fairfax’s global organic growth initiatives,” said Prem Watsa, Chairman and CEO of Fairfax.

“While always mindful of retaining our decentralized structure, we and the entire organization will benefit from Scott’s guidance, energy and collaborative spirit,” he continued.

“Meanwhile, at Allied World, Lou Iglesias, chosen by Scott as his successor, is a strong leader with the ability to continue to profitably grow the Allied business.”

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