Condensed Consolidated Guarantor Financial Statements (Tables)

9 Months Ended

Sep. 30, 2014

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Schedule of condensed consolidating balance sheet

Unaudited Condensed Consolidating Balance Sheet:

As of September 30, 2014	Allied World Switzerland (Parent Guarantor)		Allied World Bermuda (Subsidiary Issuer)		Other Allied World Subsidiaries		Consolidating Adjustments			Allied World Switzerland Consolidated
ASSETS:
Investments	$	—	$	—	$	8,002,514	$	—		$	8,002,514
Cash and cash equivalents	38,196		2,329		790,745		—			831,270
Insurance balances receivable	—		—		926,183		—			926,183
Funds held	—		—		405,703		—			405,703
Reinsurance recoverable	—		—		1,349,009		—			1,349,009
Net deferred acquisition costs	—		—		171,827		—			171,827
Goodwill and intangible assets	—		—		325,016		—			325,016
Balances receivable on sale of investments	—		—		60,122		—			60,122
Investments in subsidiaries	3,644,932		4,255,136		—		(7,900,068		)	—
Due from subsidiaries	18,497		407		15,508		(34,412		)	—
Other assets	2,009		3,576		732,339		—			737,924
Total assets	$	3,703,634	$	4,261,448	$	12,778,966	$	(7,934,480	)	$	12,809,568
LIABILITIES:
Reserve for losses and loss expenses	$	—	$	—	$	6,052,263	$	—		$	6,052,263
Unearned premiums	—		—		1,716,927		—			1,716,927
Reinsurance balances payable	—		—		203,428		—			203,428
Balances due on purchases of investments	—		—		166,026		—			166,026
Senior notes	—		798,725		—		—			798,725
Due to subsidiaries	6,826		8,682		18,904		(34,412		)	—
Other liabilities	23,209		12,513		162,878		—			198,600
Total liabilities	30,035		819,920		8,320,426		(34,412		)	9,135,969
Total shareholders’ equity	3,673,599		3,441,528		4,458,540		(7,900,068		)	3,673,599
Total liabilities and shareholders’ equity	$	3,703,634	$	4,261,448	$	12,778,966	$	(7,934,480	)	$	12,809,568

As of December 31, 2013	Allied World Switzerland (Parent Guarantor)		Allied World Bermuda (Subsidiary Issuer)		Other Allied World Subsidiaries		Consolidating Adjustments			Allied World Switzerland Consolidated
ASSETS:
Investments	$	—	$	—	$	7,712,036	$	—		$	7,712,036
Cash and cash equivalents	10,790		2,775		518,371		—			531,936
Insurance balances receivable	—		—		664,731		—			664,731
Funds held	—		—		632,430		—			632,430
Reinsurance recoverable	—		—		1,234,504		—			1,234,504
Net deferred acquisition costs	—		—		126,661		—			126,661
Goodwill and intangible assets	—		—		317,207		—			317,207
Balances receivable on sale of investments	—		—		76,544		—			76,544
Investments in subsidiaries	3,413,001		4,018,619		—		(7,431,620		)	—
Due from subsidiaries	111,172		122,846		123,479		(357,497		)	—
Other assets	1,757		4,671		643,353		—			649,781
Total assets	$	3,536,720	$	4,148,911	$	12,049,316	$	(7,789,117	)	$	11,945,830
LIABILITIES:
Reserve for losses and loss expenses	$	—	$	—	$	5,766,529	$	—		$	5,766,529
Unearned premiums	—		—		1,396,256		—			1,396,256
Reinsurance balances payable	—		—		173,023		—			173,023
Balances due on purchases of investments	—		—		104,740		—			104,740
Senior notes	—		798,499		—		—			798,499
Due to subsidiaries	12,945		110,534		234,018		(357,497		)	—
Other liabilities	3,949		17,797		165,211		—			186,957
Total liabilities	16,894		926,830		7,839,777		(357,497		)	8,426,004
Total shareholders’ equity	3,519,826		3,222,081		4,209,539		(7,431,620		)	3,519,826
Total liabilities and shareholders’ equity	$	3,536,720	$	4,148,911	$	12,049,316	$	(7,789,117	)	$	11,945,830

Schedule of condensed consolidating income statement

Unaudited Condensed Consolidating Statement of Operations and Comprehensive Income:

Three Months Ended September 30, 2014	Allied World Switzerland (Parent Guarantor)			Allied World Bermuda (Subsidiary Issuer)			Other Allied World Subsidiaries			Consolidating Adjustments			Allied World Switzerland Consolidated
Net premiums earned	$	—		$	—		$	541,737		$	—		$	541,737
Net investment income	2			—			43,410			—			43,412
Net realized investment gains (losses)	—			—			(35,136		)	—			(35,136		)
Other income	—			—			1,032			—			1,032
Net losses and loss expenses	—			—			(336,090		)	—			(336,090		)
Acquisition costs	—			—			(72,403		)	—			(72,403		)
General and administrative expenses	(8,285		)	(182		)	(79,827		)	—			(88,294		)
Other expense	—			—			(6,575		)	—			(6,575		)
Amortization of intangible assets	—			—			(633		)	—			(633		)
Interest expense	—			(13,855		)	(470		)	—			(14,325		)
Foreign exchange gain (loss)	16			47			(341		)	—			(278		)
Income tax (expense) benefit	—			—			(1,532		)	—			(1,532		)
Equity in earnings of consolidated subsidiaries	39,182			49,491			—			(88,673		)	—
NET INCOME (LOSS)	$	30,915		$	35,501		$	53,172		$	(88,673	)	$	30,915
Other comprehensive income	—			—			—			—			—
COMPREHENSIVE INCOME (LOSS)	$	30,915		$	35,501		$	53,172		$	(88,673	)	$	30,915

Three Months Ended September 30, 2013	Allied World Switzerland (Parent Guarantor)			Allied World Bermuda (Subsidiary Issuer)			Other Allied World Subsidiaries			Consolidating Adjustments			Allied World Switzerland Consolidated
Net premiums earned	$	—		$	—		$	510,773		$	—		$	510,773
Net investment income	3			—			39,268			—			39,271
Net realized investment gains (losses)	—			—			27,487			—			27,487
Other income	—			—			—			—			—
Net losses and loss expenses	—			—			(276,970		)	—			(276,970		)
Acquisition costs	—			—			(65,114		)	—			(65,114		)
General and administrative expenses	(7,323		)	(4,961		)	(76,269		)	—			(88,553		)
Other expense	—			—			—			—			—
Amortization of intangible assets	—			—			(633		)	—			(633		)
Interest expense	—			(13,838		)	(256		)	—			(14,094		)
Foreign exchange gain (loss)	(13		)	(212		)	(4,128		)	—			(4,353		)
Income tax (expense) benefit	—			—			(4,971		)	—			(4,971		)
Equity in earnings of consolidated subsidiaries	130,176			150,653			—			(280,829		)	—
NET INCOME (LOSS)	$	122,843		$	131,642		$	149,187		$	(280,829	)	$	122,843
Other comprehensive income	—			—			—			—			—
COMPREHENSIVE INCOME (LOSS)	$	122,843		$	131,642		$	149,187		$	(280,829	)	$	122,843

Nine Months Ended September 30, 2014	Allied World Switzerland (Parent Guarantor)			Allied World Bermuda (Subsidiary Issuer)			Other Allied World Subsidiaries			Consolidating Adjustments			Allied World Switzerland Consolidated
Net premiums earned	$	—		$	—		$	1,609,269		$	—		$	1,609,269
Net investment income	6			—			127,818			—			127,824
Net realized investment gains (losses)	—			—			104,286			—			104,286
Other income	—			—			1,032			—			1,032
Net losses and loss expenses	—			—			(926,231		)	—			(926,231		)
Acquisition costs	—			—			(214,404		)	—			(214,404		)
General and administrative expenses	(28,012		)	(919		)	(235,891		)	—			(264,822		)
Other expense	—			—			(6,575		)	—			(6,575		)
Amortization of intangible assets	—			—			(1,900		)	—			(1,900		)
Interest expense	—			(41,556		)	(1,895		)	—			(43,451		)
Foreign exchange gain (loss)	12			68			(1,058		)	—			(978		)
Income tax (expense) benefit	(86		)	—			(24,214		)	—			(24,300		)
Equity in earnings of consolidated subsidiaries	387,830			419,294			—			(807,124		)	—
NET INCOME (LOSS)	$	359,750		$	376,887		$	430,237		$	(807,124	)	$	359,750
Other comprehensive income	—			—			—			—			—
COMPREHENSIVE INCOME (LOSS)	$	359,750		$	376,887		$	430,237		$	(807,124	)	$	359,750

Nine Months Ended September 30, 2013	Allied World Switzerland (Parent Guarantor)			Allied World Bermuda (Subsidiary Issuer)			Other Allied World Subsidiaries			Consolidating Adjustments			Allied World Switzerland Consolidated
Net premiums earned	$	—		$	—		$	1,481,272		$	—		$	1,481,272
Net investment income	11			4			110,279			—			110,294
Net realized investment gains (losses)	—			—			(8,074		)	—			(8,074		)
Other income	—			—			—			—			—
Net losses and loss expenses	—			—			(807,276		)	—			(807,276		)
Acquisition costs	—			—			(186,416		)	—			(186,416		)
General and administrative expenses	(26,875		)	(5,873		)	(219,070		)	—			(251,818		)
Other expense	—			—			—			—			—
Amortization of intangible assets	—			—			(1,900		)	—			(1,900		)
Interest expense	—			(41,503		)	(913		)	—			(42,416		)
Foreign exchange gain (loss)	261			(935		)	(6,687		)	—			(7,361		)
Income tax (expense) benefit	—			—			(6,332		)	—			(6,332		)
Equity in earnings of consolidated subsidiaries	306,576			353,280			—			(659,856		)	—
NET INCOME (LOSS)	$	279,973		$	304,973		$	354,883		$	(659,856	)	$	279,973
Other comprehensive income	—			—			—			—			—
COMPREHENSIVE INCOME (LOSS)	$	279,973		$	304,973		$	354,883		$	(659,856	)	$	279,973

Schedule of condensed consolidating statement of cash flows

Unaudited Condensed Consolidating Statement of Cash Flows:

Nine Months Ended September 30, 2014	Allied World Switzerland (Parent Guarantor)			Allied World Bermuda (Subsidiary Issuer)			Other Allied World Subsidiaries			Consolidating Adjustments			Allied World Switzerland Consolidated
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	241,037		$	263,554		$	737,516		$	(575,000	)	$	667,107
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchases trading securities	—			—			(5,608,594		)	—			(5,608,594		)
Purchases of other invested assets	—			—			(242,227		)	—			(242,227		)
Sales of trading securities	—			—			5,500,176			—			5,500,176
Sales of other invested assets	—			—			243,123			—			243,123
Other	—			—			(46,620		)	—			(46,620		)
Net cash provided by (used in) investing activities	—			—			(154,142		)	—			(154,142		)
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Dividends paid	(55,064		)	—			—			—			(55,064		)
Intercompany dividends paid	—			(264,000		)	(311,000		)	575,000			—
Proceeds from the exercise of stock options	7,640			—			—			—			7,640
Share repurchases	(166,207		)	—			—			—			(166,207		)
Net cash provided by (used in) financing activities	(213,631		)	(264,000		)	(311,000		)	575,000			(213,631		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	27,406			(446		)	272,374			—			299,334
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	10,790			2,775			518,371			—			531,936
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	38,196		$	2,329		$	790,745		$	—		$	831,270

Nine Months Ended September 30, 2013	Allied World Switzerland (Parent Guarantor)			Allied World Bermuda (Subsidiary Issuer)			Other Allied World Subsidiaries			Consolidating Adjustments			Allied World Switzerland Consolidated
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:	$	177,859		$	226,564		$	431,127		$	(503,500	)	$	332,050
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchases of trading securities	—			—			(4,955,817		)	—			(4,955,817		)
Purchases of other invested assets	—			—			(211,501		)	—			(211,501		)
Sales of trading securities	—			—			5,137,280			—			5,137,280
Sales of other invested assets	—			—			189,155			—			189,155
Other	—			—			(78,203		)	—			(78,203		)
Net cash provided by (used in) investing activities	—			—			80,914			—			80,914
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Dividends paid - partial par value reduction	(12,981		)	—			—			—			(12,981		)
Dividends paid	(17,117		)	—			—			—			(17,117		)
Intercompany dividends paid	—			(229,500		)	(274,000		)	503,500			—
Proceeds from the exercise of stock options	8,465			—			—			—			8,465
Share repurchases	(120,163		)	—			—			—			(120,163		)
Net cash provided by (used in) financing activities	(141,796		)	(229,500		)	(274,000		)	503,500			(141,796		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	36,063			(2,936		)	238,041			—			271,168
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	19,997			11,324			650,558			—			681,879
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	56,060		$	8,388		$	888,599		$	—		$	953,047