CONDENSED CONSOLIDATED GUARANTOR FINANCIAL STATEMENTS

The following tables present unaudited condensed consolidating financial information as of September 30, 2015 and December 31, 2014 and for the three and nine months ended September 30, 2015 and 2014 for Allied World Switzerland (the “Parent Guarantor”) and Allied World Bermuda (the “Subsidiary Issuer”). The Subsidiary Issuer is a direct, 100%-owned subsidiary of the Parent Guarantor. Investments in subsidiaries are accounted for by the Parent Guarantor under the equity method for purposes of the supplemental consolidating presentation. Earnings of subsidiaries are reflected in the Parent Guarantor’s investment accounts and earnings. The Parent Guarantor fully and unconditionally guarantees the senior notes issued by the Subsidiary Issuer.

Unaudited Condensed Consolidating Balance Sheet:



September 30, 2015	Allied World Switzerland (Parent Guarantor)		Allied World Bermuda (Subsidiary Issuer)		Other Allied World Subsidiaries		Consolidating Adjustments			Allied World Switzerland Consolidated
ASSETS:
Investments	$	—	$	—	$	8,179,810	$	—		$	8,179,810
Cash and cash equivalents	30,561		1,462		571,787		—			603,810
Insurance balances receivable	—		—		905,401		—			905,401
Funds held	—		—		443,670		—			443,670
Reinsurance recoverable	—		—		1,449,832		—			1,449,832
Reinsurance recoverable on paid losses	—		—		117,110		—			117,110
Net deferred acquisition costs	—		—		201,313		—			201,313
Goodwill and intangible assets	—		—		485,393		—			485,393
Balances receivable on sale of investments	—		—		29,461		—			29,461
Investments in subsidiaries	3,337,480		3,882,163		—		(7,219,643		)	—
Due from subsidiaries	216,992		45,005		14,100		(276,097		)	—
Other assets	2,402		2,298		777,079		—			781,779
Total assets	$	3,587,435	$	3,930,928	$	13,174,956	$	(7,495,740	)	$	13,197,579
LIABILITIES:
Reserve for losses and loss expenses	$	—	$	—	$	6,436,579	$	—		$	6,436,579
Unearned premiums	—		—		1,835,527		—			1,835,527
Reinsurance balances payable	—		—		260,225		—			260,225
Balances due on purchases of investments	—		—		108,337		—			108,337
Senior notes	—		799,043		—		—			799,043
Other long-term debt	—		—		23,328		—			23,328
Due to subsidiaries	6,559		7,541		261,997		(276,097		)	—
Other liabilities	25,471		12,477		141,187		—			179,135
Total liabilities	32,030		819,061		9,067,180		(276,097		)	9,642,174
Total shareholders’ equity	3,555,405		3,111,867		4,107,776		(7,219,643		)	3,555,405
Total liabilities and shareholders’ equity	$	3,587,435	$	3,930,928	$	13,174,956	$	(7,495,740	)	$	13,197,579



December 31, 2014	Allied World Switzerland (Parent Guarantor)		Allied World Bermuda (Subsidiary Issuer)		Other Allied World Subsidiaries		Consolidating Adjustments			Allied World Switzerland Consolidated
ASSETS:
Investments	$	—	$	—	$	7,868,682	$	—		$	7,868,682
Cash and cash equivalents	32,579		1,734		555,026		—			589,339
Insurance balances receivable	—		—		664,815		—			664,815
Funds held	—		—		724,021		—			724,021
Reinsurance recoverable	—		—		1,340,256		—			1,340,256
Reinsurance recoverable on paid losses	—		—		86,075		—			86,075
Net deferred acquisition costs	—		—		151,546		—			151,546
Goodwill and intangible assets	—		—		324,556		—			324,556
Balances receivable on sale of investments	—		—		47,149		—			47,149
Investments in subsidiaries	3,629,301		4,218,028		—		(7,847,329		)	—
Due from subsidiaries	147,072		19,190		14,396		(180,658		)	—
Other assets	1,470		3,192		620,462		—			625,124
Total assets	$	3,810,422	$	4,242,144	$	12,396,984	$	(8,027,987	)	$	12,421,563
LIABILITIES:
Reserve for losses and loss expenses	$	—	$	—	$	5,881,165	$	—		$	5,881,165
Unearned premiums	—		—		1,555,313		—			1,555,313
Reinsurance balances payable	—		—		180,060		—			180,060
Balances due on purchases of investments	—		—		5,428		—			5,428
Senior notes	—		798,802		—		—			798,802
Other long-term debt	—		—		19,213		—			19,213
Due to subsidiaries	7,599		6,797		166,262		(180,658		)	—
Other liabilities	24,532		19,618		159,141		—			203,291
Total liabilities	32,131		825,217		7,966,582		(180,658		)	8,643,272
Total shareholders’ equity	3,778,291		3,416,927		4,430,402		(7,847,329		)	3,778,291
Total liabilities and shareholders’ equity	$	3,810,422	$	4,242,144	$	12,396,984	$	(8,027,987	)	$	12,421,563

Unaudited Condensed Consolidating Statement of Operations and Comprehensive Income:



Three Months Ended September 30, 2015	Allied World Switzerland (Parent Guarantor)			Allied World Bermuda (Subsidiary Issuer)			Other Allied World Subsidiaries			Consolidating Adjustments		Allied World Switzerland Consolidated
Net premiums earned	$	—		$	—		$	650,653		$	—	$	650,653
Net investment income	—			—			45,667			—		45,667
Net realized investment gains (losses)	—			—			(113,626		)	—		(113,626		)
Other income	—			—			735			—		735
Net losses and loss expenses	—			—			(416,881		)	—		(416,881		)
Acquisition costs	—			—			(100,101		)	—		(100,101		)
General and administrative expenses	(7,438		)	590			(98,950		)	—		(105,798		)
Other expense	—			—			(1,245		)	—		(1,245		)
Amortization of intangible assets	—			—			(2,639		)	—		(2,639		)
Interest expense	—			(13,876		)	(593		)	—		(14,469		)
Foreign exchange gain (loss)	2			—			791			—		793
Income tax (expense) benefit	(472		)	—			5,753			—		5,281
Equity in earnings of consolidated subsidiaries	(43,722		)	(37,021		)	—			80,743		—
NET INCOME (LOSS)	$	(51,630	)	$	(50,307	)	$	(30,436	)	$	80,743	$	(51,630	)
Other comprehensive income (loss)	(993		)	—			(993		)	993		(993		)
COMPREHENSIVE INCOME (LOSS)	$	(52,623	)	$	(50,307	)	$	(31,429	)	$	81,736	$	(52,623	)



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 (loss)	—			—			—			—			—
COMPREHENSIVE INCOME (LOSS)	$	30,915		$	35,501		$	53,172		$	(88,673	)	$	30,915



Nine Months Ended September 30, 2015	Allied World Switzerland (Parent Guarantor)			Allied World Bermuda (Subsidiary Issuer)			Other Allied World Subsidiaries			Consolidating Adjustments			Allied World Switzerland Consolidated
Net premiums earned	$	—		$	—		$	1,865,577		$	—		$	1,865,577
Net investment income	5			—			132,973			—			132,978
Net realized investment gains (losses)	—			—			(88,783		)	—			(88,783		)
Other income	—			—			2,513			—			2,513
Net losses and loss expenses	—			—			(1,173,578		)	—			(1,173,578		)
Acquisition costs	—			—			(279,418		)	—			(279,418		)
General and administrative expenses	(27,053		)	405			(284,651		)	—			(311,299		)
Other expense	—			—			(4,303		)	—			(4,303		)
Amortization of intangible assets	—			—			(6,091		)	—			(6,091		)
Interest expense	—			(41,613		)	(1,659		)	—			(43,272		)
Foreign exchange gain (loss)	9			13			(10,391		)	—			(10,369		)
Income tax (expense) benefit	(553		)	—			(1,218		)	—			(1,771		)
Equity in earnings of consolidated subsidiaries	109,776			138,603			—			(248,379		)	—
NET INCOME (LOSS)	$	82,184		$	97,408		$	150,971		$	(248,379	)	$	82,184
Other comprehensive income (loss)	(4,265		)	—			(4,265		)	4,265			(4,265		)
COMPREHENSIVE INCOME (LOSS)	$	77,919		$	97,408		$	146,706		$	(244,114	)	$	77,919



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

Unaudited Condensed Consolidating Statement of Cash Flows:



Nine Months Ended September 30, 2015	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	$	302,025		$	333,128		$	661,020		$	(712,850	)	$	583,323
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchases trading securities	—			—			(3,962,283		)	—			(3,962,283		)
Purchases of other invested assets	—			—			(110,851		)	—			(110,851		)
Sales of trading securities	—			—			3,888,416			—			3,888,416
Sales of other invested assets	—			—			160,253			—			160,253
Net cash paid for acquisitions	—			—			(141,503		)	—			(141,503		)
Other	—			—			(102,690		)	—			(102,690		)
Net cash provided by (used in) investing activities	—			—			(268,658		)	—			(268,658		)
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Dividends paid	(66,784		)	—			—			—			(66,784		)
Intercompany dividends paid	—			(333,400		)	(379,450		)	712,850			—
Proceeds from the exercise of stock options	9,184			—			—			—			9,184
Share repurchases	(246,443		)	—			—			—			(246,443		)
Proceeds from other long-term debt	—			—			4,003			—			4,003
Repayments of other long-term debt	—			—			(154		)	—			(154		)
Net cash provided by (used in) financing activities	(304,043		)	(333,400		)	(375,601		)	712,850			(300,194		)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(2,018		)	(272		)	16,761			—			14,471
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	32,579			1,734			555,026			—			589,339
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	30,561		$	1,462		$	571,787		$	—		$	603,810



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 of 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
Net cash paid for acquisitions	—			—			(2,565		)	—			(2,565		)
Other	—			—			(44,055		)	—			(44,055		)
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

Notes to Parent Company Condensed Financial Information

a) Dividends

Allied World Switzerland received cash dividends from its subsidiaries of $333,400 and $264,000 for the nine months ended September 30, 2015 and 2014, respectively. Such dividends are included in “cash flows provided by (used in) operating activities” in the unaudited condensed consolidating cash flows.