Exhibit 99.2

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

4^th Quarter and Year Ended 2007

Investor Contact: Keith Lennox Phone: (212) 635-5319 Fax: (212) 635-553 email: keith.lennox@awac.com This report is for informational purposes only. It should be read in conjunction with documents filed by Allied World Assurance Company Holdings, Ltd with the U.S. Securities and Exchange Commission.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Any forward-looking statements made in this report reflect our current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties, which may cause actual results to differ materially from those set forth in these statements. For example, our forward-looking statements could be affected by pricing and policy term trends; increased competition; the impact of acts of terrorism and acts of war; greater frequency or severity of unpredictable catastrophic events; investigations of market practices and related settlement terms; negative rating agency actions; the adequacy of our loss reserves; the company or its subsidiaries becoming subject to significant income taxes in the United States or elsewhere; changes in regulations or tax laws; changes in the availability, cost or quality of reinsurance or retrocessional coverage; adverse general economic conditions; and judicial, legislative, political and other governmental developments, as well as management’s response to these factors, and other factors identified in our filings with the U.S. Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. We are under no obligation (and expressly disclaim any such obligation) to update or revise any forward-looking statement that may be made from time to time, whether as a result of new information, future developments or otherwise.

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

FINANCIAL SUPPLEMENT TABLE OF CONTENTS

		Page
	Basis of Presentation	4
I.	Financial Highlights
	- Consolidated Financial Highlights	5
II.	Consolidated Results
	- Consolidated Statements of Operations - Consecutive Quarters	6
	- Consolidated Statements of Operations - Full Year	7
	- Consolidated Premium Distribution Analysis - Current Quarter	8
	- Consolidated Premium Distribution Analysis - Full Year	9
III.	Segment Results
	- Consolidated Segment Results - Current Quarter	10
	- Consolidated Segment Results - Prior Year Quarter	11
	- Consolidated Segment Results - Full Year	12
	- Consolidated Segment Results - Prior Full Year	13
IV.	Balance Sheet Details
	- Consolidated Balance Sheets	14
	- Consolidated Investment Portfolio	15
	- Reserves for Losses and Loss Expenses	16
	- Capital Structure and Leverage Ratios	17
V.	Other
	- Operating Income Reconciliation and Basic and Diluted Earnings per Share - Consecutive Quarters	18
	- Operating Income Reconciliation and Basic and Diluted Earnings per Share - Full Year	19
	- Return on Average Shareholders’ Equity and Reconciliation of Average Shareholders’ Equity - Consecutive Quarters	20
	- Return on Average Shareholders’ Equity and Reconciliation of Average Shareholders’ Equity - Full Year	21
	- Diluted Book Value per Share	22
	- Annualized Investment Book Yield	23
	- Regulation G	25

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

BASIS OF PRESENTATION

DEFINITIONS AND PRESENTATION

- All financial information contained herein is unaudited.

- Unless otherwise noted, all data is in thousands of U.S. dollars, except for share, per share, percentage and ratio information.

- Allied World Assurance Company Holdings, Ltd, along with others in the industry, use underwriting ratios as measures of performance. The loss ratio is calculated by dividing net losses and loss expenses by net premiums earned. The acquisition cost ratio is calculated by dividing acquisition costs by net premiums earned. The general and administrative expense ratio is calculated by dividing general and administrative expenses by net premiums earned. The expense ratio is calculated by combining the acquisition cost ratio and the general and administrative expense ratio. The combined ratio is calculated by combining the loss ratio, the acquisition cost ratio and the general and administrative expense ratio. These ratios are relative measurements that describe for every $100 of net premiums earned or written, the cost of losses and expenses, respectively. The combined ratio presents the total cost per $100 of earned or written premium. A combined ratio below 100% demonstrates underwriting profit; a combined ratio above 100% demonstrates underwriting loss.

- In presenting the company’s results, management has included and discussed certain “non-GAAP” financial measures, as such term is defined in Regulation G promulgated by the SEC. Management believes that these non-GAAP measures, which may be defined differently by other companies, better explain the company’s results of operations in a manner that allows for a more complete understanding of the underlying trends in the company’s business. However, these measures should not be viewed as a substitute for those determined in accordance with generally accepted accounting principles (“GAAP”). The reconciliation of such non-GAAP financial measures to their respective most directly comparable GAAP financial measures in accordance with Regulation G is included in this financial supplement. See page 25 for further details.

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ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

CONSOLIDATED FINANCIAL HIGHLIGHTS

		THREE MONTHS ENDED DECEMBER 31,						YEAR ENDED DECEMBER 31,						Previous Quarter Change		Previous Year to Date Change
		2007			2006			2007			2006
HIGHLIGHTS	Gross premiums written	$	260,301		$	280,111		$	1,505,509		$	1,659,025		(7.1)	%	(9.3)	%
	Net premiums written		189,382			210,739			1,153,110			1,306,596		(10.1)	%	(11.7)	%
	Net premiums earned		286,598			319,791			1,159,942			1,252,010		(10.4)	%	(7.4)	%
	Net investment income		75,214			66,009			297,932			244,360		13.9	%	21.9	%
	Net income		123,015			128,362			469,182			442,838		(4.2)	%	5.9	%
	Operating income		118,066			133,644			475,982			472,117		(11.7)	%	0.8	%
	Total investments and cash & cash equivalents		6,299,755			5,945,409			6,299,755			5,945,409		6.0	%	6.0	%
	Total assets		7,899,108			7,620,580			7,899,108			7,620,580		3.7	%	3.7	%
	Total shareholders’ equity		2,239,842			2,220,084			2,239,842			2,220,084		0.9	%	0.9	%
	Cash flows from operating activities		142,157			124,162			760,968			791,564		14.5	%	(3.9)	%
PER SHARE	Basic earnings per share
AND SHARE DATA	Net income	$	2.11		$	2.13		$	7.84		$	8.09		(0.9)	%	(3.1)	%
	Operating income	$	2.03		$	2.22		$	7.95		$	8.62		(8.6)	%	(7.8)	%
	Diluted earnings per share
	Net income	$	2.01		$	2.04		$	7.53		$	7.75		(1.5)	%	(2.8)	%
	Operating income	$	1.93		$	2.12		$	7.64		$	8.27		(9.0)	%	(7.6)	%
	Weighted average common shares outstanding
	Basic		58,247,755			60,284,459			59,846,987			54,746,613
	Diluted		61,133,206			62,963,243			62,331,165			57,115,172
	Book value	$	45.95		$	36.82		$	45.95		$	36.82		24.8	%	24.8	%
	Diluted book value	$	42.53		$	35.26		$	42.53		$	35.26		20.6	%	20.6	%
FINANCIAL RATIOS	Return on average equity (ROAE), net income		21.1	%		23.9	%		21.7	%		24.2	%	(2.8)	pts	(2.5)	pts
	ROAE, operating income		20.3	%		24.8	%		22.1	%		25.8	%	(4.5)	pts	(3.7)	pts
	Annualized investment book yield		4.8	%		4.4	%		4.9	%		4.5	%	0.4	pts	0.4	pts
	Loss and loss expense ratio		58.2	%		53.9	%		58.8	%		59.0	%	4.3	pts	(0.2)	pts
	Acquisition cost ratio		10.0	%		10.8	%		10.3	%		11.3	%	(0.8)	pts	(1.0)	pts
	General and administrative expense ratio		13.2	%		10.6	%		12.2	%		8.5	%	2.6	pts	3.7	pts
	Expense ratio		23.2	%		21.4	%		22.5	%		19.8	%	1.8	pts	2.7	pts
	Combined ratio		81.4	%		75.3	%		81.3	%		78.8	%	6.1	pts	2.5	pts

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ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

CONSOLIDATED STATEMENTS OF OPERATIONS - CONSECUTIVE QUARTERS

	THREE MONTHS ENDED DECEMBER 31, 2007			THREE MONTHS ENDED SEPTEMBER 30, 2007			THREE MONTHS ENDED JUNE 30, 2007			THREE MONTHS ENDED MARCH 31, 2007			THREE MONTHS ENDED DECEMBER 31, 2006
Revenues
Gross premiums written	$	260,301		$	276,253		$	530,549		$	438,406		$	280,111
Net premiums written	$	189,382		$	219,297		$	386,587		$	357,844		$	210,739
Net premiums earned	$	286,598		$	283,659		$	303,119		$	286,566		$	319,791
Net investment income		75,214			76,133			73,937			72,648			66,009
Net realized investment gain (loss)		4,544			(4,196	)		(1,481	)		(6,484	)		(4,190	)
Total revenues	$	366,356		$	355,596		$	375,575		$	352,730		$	381,610
Expenses
Net losses and loss expenses:
Current year	$	202,873		$	201,799		$	208,643		$	192,102		$	215,456
Prior years	$	(35,999	)	$	(28,553	)	$	(32,418	)		(26,107	)		(43,061	)
Total net losses and loss expenses		166,874			173,246			176,225			165,995			172,395
Acquisition costs		28,693			29,198			31,872			29,196			34,568
General and administrative expenses		37,956			36,050			34,432			33,203			33,856
Interest expense		9,511			9,481			9,482			9,374			9,510
Foreign exchange (gain) loss		(405	)		(976	)		532			32			1,092
Total expenses	$	242,629		$	246,999		$	252,543		$	237,800		$	251,421
Income before income taxes	$	123,727		$	108,597		$	123,032		$	114,930		$	130,189
Income tax expense (recovery)		712			(362	)		(255	)		1,009			1,827
Net income	$	123,015		$	108,959		$	123,287		$	113,921		$	128,362
GAAP Ratios
Loss and loss expense ratio		58.2	%		61.1	%		58.1	%		57.9	%		53.9	%
Acquisition cost ratio		10.0	%		10.3	%		10.5	%		10.2	%		10.8	%
General and administrative expense ratio		13.2	%		12.7	%		11.4	%		11.6	%		10.6	%
Expense ratio		23.2	%		23.0	%		21.9	%		21.8	%		21.4	%
Combined ratio		81.4	%		84.1	%		80.0	%		79.7	%		75.3	%
Per Share Data
Basic earnings per share
Net income	$	2.11		$	1.80		$	2.04		$	1.89		$	2.13
Operating income	$	2.03		$	1.86		$	2.07		$	2.00		$	2.22
Diluted earnings per share
Net income	$	2.01		$	1.72		$	1.96		$	1.83		$	2.04
Operating income	$	1.93		$	1.77		$	1.99		$	1.94		$	2.12

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ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

CONSOLIDATED STATEMENTS OF OPERATIONS - YEAR TO DATE

	YEAR ENDED DECEMBER 31, 2007			YEAR ENDED DECEMBER 31, 2006
Revenues
Gross premiums written	$	1,505,509		$	1,659,025
Net premiums written		1,153,110			1,306,596
Net premiums earned	$	1,159,942		$	1,252,010
Net investment income		297,932			244,360
Net realized investment losses		(7,617	)		(28,678	)
Total revenues	$	1,450,257		$	1,467,692
Expenses
Net losses and loss expenses:
Current year	$	805,417		$	849,850
Prior years		(123,077	)		(110,717	)
Total net losses and loss expenses		682,340		$	739,133
Acquisition costs		118,959			141,488
General and administrative expenses		141,641			106,075
Interest expense		37,848			32,566
Foreign exchange (gain) loss		(817	)		601
Total expenses	$	979,971		$	1,019,863
Income before income taxes	$	470,286		$	447,829
Income tax expense		1,104			4,991
Net income	$	469,182		$	442,838
GAAP Ratios
Loss and loss expense ratio		58.8	%		59.0	%
Acquisition cost ratio		10.3	%		11.3	%
General and administrative expense ratio		12.2	%		8.5	%
Expense ratio		22.5	%		19.8	%
Combined ratio		81.3	%		78.8	%
Per Share Data
Basic earnings per share
Net income	$	7.84		$	8.09
Operating income	$	7.95		$	8.62
Diluted earnings per share
Net income	$	7.53		$	7.75
Operating income	$	7.64		$	8.27

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ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

CONSOLIDATED PREMIUM DISTRIBUTION ANALYSIS - CURRENT QUARTER

THREE MONTHS ENDED DECEMBER 31, 2007	THREE MONTHS ENDED DECEMBER 31, 2006
Gross Premiums Written = $260,301	Gross Premiums Written = $280,111

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ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

CONSOLIDATED PREMIUM DISTRIBUTION ANALYSIS - YEAR TO DATE

YEAR ENDED DECEMBER 31, 2007	YEAR ENDED DECEMBER 31, 2006
Gross Premiums Written = $1,505,509	Gross Premiums Written = $1,659,025

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ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

CONSOLIDATED SEGMENT RESULTS

FOR THE THREE MONTHS ENDED DECEMBER 31, 2007

	PROPERTY			CASUALTY			REINSURANCE			CONSOLIDATED TOTALS
Revenues
Gross premiums written	$	72,497		$	142,941		$	44,863		$	260,301
Net premiums written	$	38,941		$	105,620		$	44,821		$	189,382
Net premiums earned	$	43,403		$	112,422		$	130,773		$	286,598
Total revenues	$	43,403		$	112,422		$	130,773		$	286,598
Expenses
Net losses and loss expenses:
Current year	$	43,458		$	81,675		$	77,740		$	202,873
Prior years		(8,081	)		(28,504	)		586			(35,999	)
Total net losses and loss expenses	$	35,377		$	53,171		$	78,326			166,874
Acquisition costs	$	260		$	3,271		$	25,162			28,693
General and administrative expenses	$	9,844		$	18,439		$	9,673			37,956
Total expenses	$	45,481		$	74,881		$	113,161		$	233,523
Underwriting (loss) income	$	(2,078	)	$	37,541		$	17,612		$	53,075
Net investment income											75,214
Net realized investment gain											4,544
Interest expense											(9,511	)
Foreign exchange gain											405
Income before income taxes										$	123,727
GAAP Ratios
Loss and loss expense ratio		81.5	%		47.3	%		59.9	%		58.2	%
Acquisition cost ratio		0.6	%		2.9	%		19.2	%		10.0	%
General and administrative expense ratio		22.7	%		16.4	%		7.4	%		13.2	%
Expense ratio		23.3	%		19.3	%		26.6	%		23.2	%
Combined ratio		104.8	%		66.6	%		86.5	%		81.4	%

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ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

CONSOLIDATED SEGMENT RESULTS

FOR THE THREE MONTHS ENDED DECEMBER 31, 2006

	PROPERTY			CASUALTY			REINSURANCE			CONSOLIDATED TOTALS
Revenues
Gross premiums written	$	89,072		$	147,314		$	43,725		$	280,111
Net premiums written	$	40,846		$	126,169		$	43,724		$	210,739
Net premiums earned	$	49,151		$	133,805		$	136,835		$	319,791
Total revenues	$	49,151		$	133,805		$	136,835		$	319,791
Expenses
Net losses and loss expenses:
Current year	$	38,852		$	98,937		$	77,667		$	215,456
Prior years		(10,823	)		(26,171	)		(6,067	)		(43,061	)
Total net losses and loss expenses		28,029			72,766			71,600			172,395
Acquisition costs		384			6,821			27,363			34,568
General and administrative expenses		8,061			16,935			8,860			33,856
Total expenses	$	36,474		$	96,522		$	107,823		$	240,819
Underwriting income	$	12,677		$	37,283		$	29,012		$	78,972
Net investment income											66,009
Net realized investment losses											(4,190	)
Interest expense											(9,510	)
Foreign exchange loss											(1,092	)
Income before income taxes										$	130,189
GAAP Ratios
Loss and loss expense ratio		57.0	%		54.4	%		52.3	%		53.9	%
Acquisition cost ratio		0.8	%		5.1	%		20.0	%		10.8	%
General and administrative expense ratio		16.4	%		12.6	%		6.5	%		10.6	%
Expense ratio		17.2	%		17.7	%		26.5	%		21.4	%
Combined ratio		74.2	%		72.1	%		78.8	%		75.3	%

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ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

CONSOLIDATED SEGMENT RESULTS

FOR THE YEAR ENDED DECEMBER 31, 2007

	PROPERTY			CASUALTY			REINSURANCE			CONSOLIDATED TOTALS
Revenues
Gross premiums written	$	391,017		$	578,433		$	536,059		$	1,505,509
Net premiums written	$	176,420		$	440,802		$	535,888		$	1,153,110
Net premiums earned	$	180,458		$	475,523		$	503,961		$	1,159,942
Total revenues	$	180,458		$	475,523		$	503,961		$	1,159,942
Expenses
Net losses and loss expenses:
Current year	$	151,039		$	346,429		$	307,949		$	805,417
Prior years		(45,377	)		(70,614	)		(7,086	)		(123,077	)
Total net losses and loss expenses		105,662			275,815			300,863			682,340
Acquisition costs		(114	)		17,269			101,804			118,959
General and administrative expenses		34,185			68,333			39,123			141,641
Total expenses	$	139,733		$	361,417		$	441,790		$	942,940
Underwriting income	$	40,725		$	114,106		$	62,171		$	217,002
Net investment income											297,932
Net realized investment losses											(7,617	)
Interest expense											(37,848	)
Foreign exchange gain											817
Income before income taxes										$	470,286
GAAP Ratios
Loss and loss expense ratio		58.6	%		58.0	%		59.7	%		58.8	%
Acquisition cost ratio		(0.1	)%		3.6	%		20.2	%		10.3	%
General and administrative expense ratio		18.9	%		14.4	%		7.8	%		12.2	%
Expense ratio		18.8	%		18.0	%		28.0	%		22.5	%
Combined ratio		77.4	%		76.0	%		87.7	%		81.3	%

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ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

CONSOLIDATED SEGMENT RESULTS

FOR THE YEAR ENDED DECEMBER 31, 2006

	PROPERTY			CASUALTY			REINSURANCE			CONSOLIDATED TOTALS
Revenues
Gross premiums written	$	463,903		$	622,387		$	572,735		$	1,659,025
Net premiums written	$	193,655		$	540,980		$	571,961		$	1,306,596
Net premiums earned	$	190,784		$	534,294		$	526,932		$	1,252,010
Total revenues	$	190,784		$	534,294		$	526,932		$	1,252,010
Expenses
Net losses and loss expenses:
Current year	$	145,987		$	395,140		$	308,723		$	849,850
Prior years		(30,993	)		(63,381	)		(16,343	)		(110,717	)
Total net losses and loss expenses	$	114,994		$	331,759		$	292,380			739,133
Acquisition costs		(2,247	)		30,396			113,339			141,488
General and administrative expenses		26,294			52,809			26,972			106,075
Total expenses	$	139,041		$	414,964		$	432,691		$	986,696
Underwriting income	$	51,743		$	119,330		$	94,241		$	265,314
Net investment income											244,360
Net realized investment losses											(28,678	)
Interest expense											(32,566	)
Foreign exchange loss											(601	)
Income before income taxes										$	447,829
GAAP Ratios
Loss and loss expense ratio		60.3	%		62.1	%		55.5	%		59.0	%
Acquisition cost ratio		(1.2	)%		5.7	%		21.5	%		11.3	%
General and administrative expense ratio		13.8	%		9.9	%		5.1	%		8.5	%
Expense ratio		12.6	%		15.6	%		26.6	%		19.8	%
Combined ratio		72.9	%		77.7	%		82.1	%		78.8	%

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ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

CONSOLIDATED BALANCE SHEETS

	DECEMBER 31, 2007		DECEMBER 31, 2006
ASSETS
Fixed maturity investments available for sale, at fair value (amortized cost: 2007: $5,595,943; 2006: $5,188,379)	$	5,707,143	$	5,177,812
Other invested assets available for sale, at fair value (cost: 2007: $291,458; 2006: $245,657)		322,144		262,557
Total investments		6,029,287		5,440,369
Cash and cash equivalents		202,582		366,817
Restricted cash		67,886		138,223
Securities lending collateral		147,241		304,742
Insurance balances receivable		304,499		304,261
Prepaid reinsurance		163,836		159,719
Reinsurance recoverable		682,765		689,105
Accrued investment income		55,763		51,112
Deferred acquisition costs		108,295		100,326
Intangible assets		3,920		3,920
Balances receivable on sale of investments		84,998		16,545
Net deferred tax assets		4,881		5,094
Other assets		43,155		40,347
TOTAL ASSETS	$	7,899,108	$	7,620,580
LIABILITIES
Reserve for losses and loss expenses	$	3,919,772	$	3,636,997
Unearned premiums		811,083		813,797
Unearned ceding commissions		28,831		23,914
Reinsurance balances payable		67,175		82,212
Securities lending payable		147,241		304,742
Balances due on purchase of investments		141,462		—
Senior notes		498,682		498,577
Accounts payable and accrued liabilities		45,020		40,257
TOTAL LIABILITIES	$	5,659,266	$	5,400,496
SHAREHOLDERS’ EQUITY
Common shares, par value $0.03 per share:
48,741,927 issued and outstanding (2006 - 60,287,696)	$	1,462	$	1,809
Additional paid-in capital		1,281,832		1,822,607
Retained earnings		820,334		389,204
Accumulated other comprehensive income:
net unrealized gains on investments, net of tax		136,214		6,464
TOTAL SHAREHOLDERS’ EQUITY	$	2,239,842	$	2,220,084
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	7,899,108	$	7,620,580
Book value per share	$	45.95	$	36.82
Diluted book value per share		42.53		35.26

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ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

CONSOLIDATED INVESTMENT PORTFOLIO

	DECEMBER 31, 2007 FAIR MARKET VALUE					SEPTEMBER 30, 2007 FAIR MARKET VALUE					JUNE 30, 2007 FAIR MARKET VALUE					MARCH 31, 2007 FAIR MARKET VALUE					DECEMBER 31, 2006 FAIR MARKET VALUE
MARKET VALUE
Fixed maturities available for sale	$	5,707,143		94.7	%	$	6,022,625		95.1	%	$	5,689,348		96.2	%	$	5,407,813		95.3	%	$	5,177,812		95.2	%
Other invested assets available for sale		322,144		5.3	%		310,715		4.9	%		227,173		3.8	%		263,993		4.7	%		262,557		4.8	%
Total	$	6,029,287		100.0	%	$	6,333,340		100.0	%	$	5,916,521		100.0	%	$	5,671,806		100.0	%	$	5,440,369		100.0	%
ASSET ALLOCATION BY MARKET VALUE
U.S. government and agencies	$	2,053,224		32.6	%	$	2,409,398		35.9	%	$	2,062,352		33.1	%	$	1,939,024		31.5	%	$	1,700,052		28.6	%
Non-U.S. government securities		118,843		1.9	%		112,680		1.7	%		105,397		1.7	%		100,064		1.6	%		97,320		1.6	%
Corporate securities		1,252,617		19.9	%		1,250,990		18.6	%		1,191,679		19.1	%		1,242,895		20.2	%		1,318,136		22.2	%
Mortgage-backed securities		2,117,539		33.6	%		2,098,494		31.3	%		2,123,124		34.0	%		1,897,086		30.8	%		1,823,907		30.7	%
Asset-backed securities		164,920		2.6	%		151,063		2.3	%		206,796		3.3	%		228,744		3.7	%		238,397		3.9	%
Fixed income sub-total		5,707,143		90.6	%		6,022,625		89.8	%		5,689,348		91.2	%		5,407,813		87.8	%		5,177,812		87.0	%
Global high-yield bond fund		79,549		1.3	%		80,765		1.2	%		34,142		0.5	%		33,968		0.6	%		33,031		0.6	%
Hedge funds		241,435		3.8	%		229,950		3.4	%		193,031		3.1	%		230,025		3.7	%		229,526		3.9	%
Other invested assets		1,160		0.0	%		—		0.0	%		—		0.0	%		—		0.0	%		—		0.0	%
Cash & cash equivalents		270,468		4.3	%		376,765		5.6	%		322,467		5.2	%		489,097		7.9	%		505,040		8.5	%
Total	$	6,299,755		100.0	%	$	6,710,105		100.0	%	$	6,238,988		100.0	%	$	6,160,903		100.0	%	$	5,945,409		100.0	%
CREDIT QUALITY BY MARKET VALUE
U.S. government and agencies	$	2,053,224		36.0	%	$	2,409,398		40.0	%	$	2,062,351		36.3	%	$	1,939,024		35.9	%	$	1,700,052		32.8	%
AAA/Aaa		2,655,246		46.5	%		2,580,781		42.8	%		2,605,371		45.8	%		2,416,429		44.7	%		2,426,331		46.9	%
AA/Aa		411,796		7.2	%		450,219		7.5	%		370,794		6.5	%		377,225		7.0	%		306,242		5.9	%
A/A		519,336		9.1	%		533,924		8.9	%		609,453		10.7	%		629,368		11.6	%		699,267		13.5	%
BBB/Baa		67,541		1.2	%		48,303		0.8	%		41,379		0.7	%		45,767		0.8	%		45,920		0.9	%
Total	$	5,707,143		100.0	%	$	6,022,625		100.0	%	$	5,689,348		100.0	%	$	5,407,813		100.0	%	$	5,177,812		100.0	%
STATISTICS
Annualized book yield, year to date		4.9	%				4.7	%				4.7	%				4.7	%				4.5	%
Duration		3.1 years					3.2 years					3.0 years					2.9 years					2.8 years
Average credit quality (S&P)		AA					AA					AA					AA					AA

Page 15

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

RESERVES FOR LOSSES AND LOSS EXPENSES

	AT DECEMBER 31, 2007
	PROPERTY			CASUALTY			REINSURANCE			CONSOLIDATED TOTAL
Case reserves (net of reinsurance recoverable)	$	234,023		$	227,888		$	212,315		$	674,226
IBNR (net of reinsurance recoverable)		126,593			1,650,354			785,834			2,562,781
Total	$	360,616		$	1,878,242		$	998,149		$	3,237,007
IBNR/Total reserves (net of reinsurance recoverable)		35.1	%		87.9	%		78.7	%		79.2	%
	AT DECEMBER 31, 2006
	PROPERTY			CASUALTY			REINSURANCE			CONSOLIDATED TOTAL
Case reserves (net of reinsurance recoverable)	$	284,284		$	149,619		$	197,366		$	631,269
IBNR (net of reinsurance recoverable)		139,703			1,541,549			635,371			2,316,623
Total	$	423,987		$	1,691,168		$	832,737		$	2,947,892
IBNR/Total reserves (net of reinsurance recoverable)		32.9	%		91.2	%		76.3	%		78.6	%

Page 16

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

CAPITAL STRUCTURE AND LEVERAGE RATIOS

	DECEMBER 31, 2007			SEPTEMBER 30, 2007			JUNE 30, 2007			MARCH 31, 2007			DECEMBER 31, 2006
Senior notes	$	498,682		$	498,655		$	498,629		$	498,602		$	498,577
Shareholders’ equity		2,239,842			2,612,775			2,418,186			2,355,978			2,220,084
Total capitalization	$	2,738,524		$	3,111,430		$	2,916,815		$	2,854,580		$	2,718,661
Leverage ratios
Debt to total capitalization		18.2	%		16.0	%		17.1	%		17.5	%		18.3	%
Closing shareholders’ equity	$	2,239,842		$	2,612,775		$	2,418,186		$	2,355,978		$	2,220,084
Deduct/add: accumulated other comprehensive (income)/loss		(136,214	)		(62,917	)		25,663			(31,481	)		(6,464	)
Adjusted shareholders’ equity	$	2,103,628		$	2,549,858		$	2,443,849		$	2,324,497		$	2,213,620
Net premiums written (trailing 12 months)	$	1,153,110		$	1,174,467		$	1,253,186		$	1,236,937		$	1,306,596
Net premiums written (trailing 12 months) to adjusted shareholders’ equity		0.55			0.46			0.51			0.53			0.59
Total investments and cash & cash equivalents	$	6,299,755		$	6,710,105		$	6,238,988		$	6,160,903		$	5,945,409
Total investments and cash & cash equivalents to adjusted shareholders’ equity		2.99			2.63			2.55			2.65			2.69
Reserve for losses and loss expenses		3,919,772			3,831,962			3,743,680			3,663,224			3,636,997
Deduct: reinsurance recoverable		(682,765	)		(674,398	)		(679,198	)		(668,050	)		(689,105	)
Net reserve for losses and loss expenses		3,237,007			3,157,564			3,064,482			2,995,174			2,947,892
Net reserve for losses and loss expenses to adjusted shareholders’ equity		1.54			1.24			1.25			1.29			1.33

Page 17

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

OPERATING INCOME RECONCILIATION AND

BASIC AND DILUTED EARNINGS PER SHARE INFORMATION

	THREE MONTHS ENDED DECEMBER 31, 2007			THREE MONTHS ENDED SEPTEMBER 30, 2007			THREE MONTHS ENDED JUNE 30, 2007		THREE MONTHS ENDED MARCH 31, 2007		THREE MONTHS ENDED DECEMBER 31, 2006
Net income	$	123,015		$	108,959		$	123,287	$	113,921	$	128,362
Add:
Net realized investment (gain) losses		(4,544	)		4,196			1,481		6,484		4,190
Foreign exchange (gain) loss		(405	)		(976	)		532		32		1,092
Operating income	$	118,066		$	112,179		$	125,300	$	120,437	$	133,644
Weighted average common shares outstanding
Basic		58,247,755			60,413,019			60,397,591		60,333,209		60,284,459
Diluted		61,133,206			63,250,024			62,874,235		62,207,941		62,963,243
Basic per share data
Net income	$	2.11		$	1.80		$	2.04	$	1.89	$	2.13
Add:
Net realized investment (gain) losses		(0.07	)		0.08			0.02		0.11		0.07
Foreign exchange (gain) loss		(0.01	)		(0.02	)		0.01		—		0.02
Operating income	$	2.03		$	1.86		$	2.07	$	2.00	$	2.22
Diluted per share data
Net income	$	2.01		$	1.72		$	1.96	$	1.83	$	2.04
Add:
Net realized investment (gain) losses		(0.07	)		0.07			0.02		0.11		0.06
Foreign exchange (gain) loss		(0.01	)		(0.02	)		0.01		—		0.02
Operating income	$	1.93		$	1.77		$	1.99	$	1.94	$	2.12

Page 18

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

OPERATING INCOME RECONCILIATION AND

BASIC AND DILUTED EARNINGS PER SHARE INFORMATION

	YEAR ENDED DECEMBER 31, 2007			YEAR ENDED DECEMBER 31, 2006
Net income	$	469,182		$	442,838
Add:
Net realized investment losses		7,617			28,678
Foreign exchange (gain) loss		(817	)		601
Operating income	$	475,982		$	472,117
Weighted average common shares outstanding
Basic		59,846,987			54,746,613
Diluted		62,331,165			57,115,172
Basic per share data
Net income	$	7.84		$	8.09
Add:
Net realized investment losses		0.12			0.52
Foreign exchange (gain) loss		(0.01	)		0.01
Operating income	$	7.95		$	8.62
Diluted per share data
Net income	$	7.53		$	7.75
Add:
Net realized investment losses		0.12			0.51
Foreign exchange (gain) loss		(0.01	)		0.01
Operating income	$	7.64		$	8.27

Page 19

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

RETURN ON AVERAGE SHAREHOLDERS' EQUITY AND

RECONCILIATION OF AVERAGE SHAREHOLDERS' EQUITY

	THREE MONTHS ENDED DECEMBER 31, 2007			THREE MONTHS ENDED SEPTEMBER 30, 2007			THREE MONTHS ENDED JUNE 30, 2007			THREE MONTHS ENDED MARCH 31, 2007			THREE MONTHS ENDED DECEMBER 31, 2006
Opening shareholders' equity	$	2,612,775		$	2,418,186		$	2,355,978		$	2,220,084		$	2,094,872
Deduct/add: accumulated other comprehensive (income)/loss		(62,917	)		25,663			(31,481	)		(6,464	)		(3,447	)
Adjusted opening shareholders' equity	$	2,549,858		$	2,443,849		$	2,324,497		$	2,213,620		$	2,091,425
Closing shareholders' equity	$	2,239,842		$	2,612,775		$	2,418,186		$	2,355,978		$	2,220,084
Deduct/add: accumulated other comprehensive (income)/loss		(136,214	)		(62,917	)		25,663			(31,481	)		(6,464	)
Adjusted closing shareholders' equity	$	2,103,628		$	2,549,858		$	2,443,849		$	2,324,497		$	2,213,620
Average shareholders' equity	$	2,326,743		$	2,496,854		$	2,384,173		$	2,269,059		$	2,152,523
Net income available to shareholders	$	123,015		$	108,959		$	123,287		$	113,921		$	128,362
Annualized net income available to shareholders		492,060			435,836			493,148			455,684			513,448
Annualized return on average shareholders' equity—net income available to shareholders		21.1	%		17.5	%		20.7	%		20.1	%		23.9	%
Operating income available to shareholders	$	118,066		$	112,179		$	125,300		$	120,437		$	133,644
Annualized operating income available to shareholders		472,264			448,716			501,200			481,748			534,576
Annualized return on average shareholders' equity—operating income available to shareholders		20.3	%		18.0	%		21.0	%		21.2	%		24.8	%

Page 20

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

RETURN ON AVERAGE SHAREHOLDERS' EQUITY AND

RECONCILIATION OF AVERAGE SHAREHOLDERS' EQUITY

	YEAR ENDED DECEMBER 31, 2007			YEAR ENDED DECEMBER 31, 2006
Opening shareholders' equity	$	2,220,084		$	1,420,266
Deduct/add: accumulated other comprehensive (income)/loss		(6,464	)		25,508
Adjusted opening shareholders' equity	$	2,213,620		$	1,445,774
Closing shareholders' equity	$	2,239,842		$	2,220,084
Deduct: accumulated other comprehensive income		(136,214	)		(6,464	)
Adjusted closing shareholders' equity	$	2,103,628		$	2,213,620
Average shareholders' equity	$	2,158,624		$	1,829,697
Net income available to shareholders	$	469,182		$	442,838
Annualized return on average shareholders' equity—net income available to shareholders		21.7	%		24.2	%
Operating income available to shareholders	$	475,982		$	472,117
Annualized return on average shareholders' equity—operating income available to shareholders		22.1	%		25.8	%

Page 21

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

DILUTED BOOK VALUE PER SHARE

	DECEMBER 31, 2007			DECEMBER 31, 2006
Price per share at period end	$	50.17		$	43.63
Total shareholders' equity	$	2,239,842		$	2,220,084
Basic common shares outstanding		48,741,927			60,287,696
Add: unvested restricted share units		820,890			704,372
Add: performance based equity awards		886,251			342,501
Add: dilutive options/warrants outstanding		6,723,875			6,695,990
Weighted average exercise price per share	$	33.62		$	33.02
Deduct: options bought back via treasury method		(4,506,182	)		(5,067,534	)
Common shares and common share equivalents outstanding		52,666,761			62,963,025
Basic book value per common share	$	45.95		$	36.82
Diluted book value per common share	$	42.53		$	35.26

Page 22

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

ANNUALIZED INVESTMENT BOOK YIELD

	THREE MONTHS ENDED DECEMBER 31, 2007			THREE MONTHS ENDED DECEMBER 31, 2006			YEAR ENDED DECEMBER 31, 2007			YEAR ENDED DECEMBER 31, 2006
Net investment income	$	75,214		$	66,009		$	297,932		$	244,360
Deduct: annual and non-recurring items		—			723			N/A			N/A
Net investment income, recurring	$	75,214		$	65,286		$	297,932		$	244,360
Annualized net investment income, recurring	$	300,856		$	261,144		$	297,932		$	244,360
Add: annual and non-recurring items		—			723			N/A			N/A
Normalized net investment income	$	300,856		$	261,867		$	297,932		$	244,360
Fixed maturity investments available for sale, amortized cost	$	5,984,929		$	5,289,411		$	5,188,379		$	4,442,040
Other invested assets, available for sale, cost		280,696			246,854			245,657			270,138
Cash and cash equivalents		329,862			270,848			366,817			172,379
Restricted cash		46,903			50,871			138,223			41,788
Balances receivable on sale of investments		7,951			70,174			16,545			3,633
Balances due on purchase of investments		(123,482	)		(66,874	)		—			—
Opening aggregate invested assets	$	6,526,859		$	5,861,284		$	5,955,621		$	4,929,978
Fixed maturity investments available for sale, amortized cost	$	5,595,943		$	5,188,379		$	5,595,943		$	5,188,379
Other invested assets, available for sale, cost		291,458			245,657			291,458			245,657
Cash and cash equivalents		202,582			366,817			202,582			366,817
Restricted cash		67,886			138,223			67,886			138,223
Balances receivable on sale of investments		84,998			16,545			84,998			16,545
Balances due on purchase of investments		(141,462	)		—			(141,462	)		—
Closing aggregate invested assets	$	6,101,405		$	5,955,621		$	6,101,405		$	5,955,621
Average aggregate invested assets	$	6,314,132		$	5,908,453		$	6,028,513		$	5,442,800
Annualized investment book yield		4.8	%		4.4	%		4.9	%		4.5	%

Page 23

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

ANNUALIZED INVESTMENT BOOK YIELD

	NINE MONTHS ENDED SEPTEMBER 30, 2007			SIX MONTHS ENDED JUNE 30, 2007			THREE MONTHS ENDED MARCH 31, 2007
Net investment income	$	222,718		$	146,585		$	72,648
Deduct: annual and non-recurring items		2,062			2,062			2,062
Net investment income, recurring	$	220,656		$	144,523		$	70,586
Annualized net investment income, recurring	$	294,208		$	289,046		$	282,344
Add: annual and non-recurring items		2,062			2,062			2,062
Normalized net investment income	$	296,270		$	291,108		$	284,406
Fixed maturity investments available for sale, amortized cost	$	5,188,379		$	5,188,379		$	5,188,379
Other invested assets, available for sale, cost		245,657			245,657			245,657
Cash and cash equivalents		366,817			366,817			366,817
Restricted cash		138,223			138,223			138,223
Balances receivable on sale of investments		16,545			16,545			16,545
Balances due on purchase of investments		—			—			—
Opening aggregate invested assets	$	5,955,621		$	5,955,621		$	5,955,621
Fixed maturity investments available for sale, amortized cost	$	5,984,929		$	5,737,857		$	5,392,983
Other invested assets, available for sale, cost		280,696			202,016			246,500
Cash and cash equivalents		329,862			270,571			288,284
Restricted cash		46,903			51,896			200,813
Balances receivable on sale of investments		7,951			53,089			25,239
Balances due on purchase of investments		(123,482	)		(21	)		(46,517	)
Closing aggregate invested assets	$	6,526,859		$	6,315,408		$	6,107,302
Average aggregate invested assets	$	6,241,240		$	6,135,515		$	6,031,462
Annualized investment book yield		4.7	%		4.7	%		4.7	%

Page 24

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, LTD

REGULATION G

In presenting the company's results, management has included and discussed certain non-GAAP financial measures. Management believes that these non-GAAP measures, which may be defined differently by other companies, better explain the company's results of operations in a manner that allows for a more complete understanding of the underlying trends in the company's business. However, these measures should not be viewed as a substitute for those determined in accordance with GAAP.

OPERATING INCOME

Operating income is an internal performance measure used by the company in the management of its operations and represents after-tax operational results excluding, as applicable, net realized investment gains or losses and foreign exchange gains or losses. The company excludes net realized investment gains or losses and net foreign exchange gains or losses from its calculation of operating income because the amount of these gains or losses is heavily influenced by, and fluctuates in part according to, the availability of market opportunities. The company believes these amounts are largely independent of its business and underwriting process and including them distorts the analysis of trends in its operations. In addition to presenting net income determined in accordance with GAAP, the company believes that showing operating income enables investors, analysts, rating agencies and other users of its financial information to more easily analyze the company's results of operations in a manner similar to how management analyzes the company's underlying business performance. Operating income should not be viewed as a substitute for GAAP net income. See pages 18 and 19 for reconciliations of operating income to net income.

ANNUALIZED RETURN ON AVERAGE EQUITY ("ROAE")

Annualized return on average equity is calculated using average equity, excluding the average after tax unrealized gains or losses on investments. Unrealized gains (losses) on investments are primarily the result of interest rate movements and the resultant impact on fixed income securities. Such gains (losses) are not related to management actions or operational performance, nor are they likely to be realized. Therefore, the company believes that excluding these unrealized gains (losses) provides a more consistent and useful measurement of operating performance, which supplements GAAP information. In calculating ROAE, the net income (loss) available to shareholders for the period is multiplied by the number of such periods in a calendar year in order to arrive at annualized net income (loss) available to shareholders. The company presents ROAE as a measure that is commonly recognized as a standard of performance by investors, analysts, rating agencies and other users of its financial information. See pages 20 and 21 for reconciliations of average equity.

ANNUALIZED OPERATING RETURN ON AVERAGE EQUITY

Annualized operating return on average equity is calculated using operating income (as defined above and annualized in the manner described for net income (loss) available to shareholders under ROAE above), and average equity, excluding the average after tax unrealized gains (losses) on investments. Unrealized gains (losses) are excluded from equity for the reasons outlined in the annualized return on average equity explanation above. See pages 18 and 19 for reconciliations of net income to operating income and pages 20 and 21 for reconciliations of average equity.

DILUTED BOOK VALUE PER SHARE

The company has included diluted book value per share because it takes into account the effect of dilutive securities; therefore, the company believes it is a better measure of calculating shareholder returns than book value per share. See page 22 for a reconciliation of diluted book value per share to basic book value per share.

ANNUALIZED INVESTMENT BOOK YIELD

Annualized investment book yield is calculated by dividing normalized net investment income by average aggregate invested assets at book value. In calculating annualized investment book yield, normalized net investment income for the period is multiplied by the number of such periods in a calendar year in order to arrive at annualized net investment income. Normalized net investment income is adjusted for known annual or non-recurring items. The company utilizes and presents the investment yield in order to better disclose the performance of the company's investments and to show the components of the company's ROAE. See pages 23 and 24 for reconciliations of annualized investment book yield.

Page 25