Schedule II Condensed Statements Of Financial Condition (Parent Company)

12 Months Ended

Dec. 31, 2011

Condensed Financial Information Of Parent Company [Abstract]

Condensed Financial Information Of Parent Company

Schedule II

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONDENSED BALANCE SHEETS — PARENT COMPANY

as of December 31, 2011 and 2010

(Expressed in thousands of United States dollars, except share and per share amounts)

	2011			2010
ASSETS:
Cash and cash equivalents	$	112,672		$	138,488
Investments in subsidiaries		3,064,066			2,944,975
Balances due from subsidiaries		(4,853	)		(7,143	)
Other assets		1,504			—
Total assets	$	3,173,389		$	3,076,320
LIABILITIES:
Accounts payable and accrued liabilities	$	24,367		$	500
Total liabilities	$	24,367		$	500
SHAREHOLDERS' EQUITY:
Common shares, 2011: par value CHF 14.03 per share and 2010: par value CHF 15.00 per share, (2011: 40,003,642; 2010: 40,003,642 shares issued and 2011: 37,742,131; 2010: 38,089,226 shares outstanding)		557,153			600,055
Additional paid-in capital		78,225			170,239
Treasury shares, at cost (2011: 2,261,511; 2010: 1,914,416)		(136,590	)		(112,811	)
Retained earnings		2,635,750			2,361,202
Accumulated other comprehensive income		14,484			57,135
Total shareholders' equity	$	3,149,022		$	3,075,820
Total liabilities and shareholders' equity	$	3,173,389		$	3,076,320

See accompanying notes to the consolidated financial statements.

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME — PARENT COMPANY

for the Years Ended December 31, 2011, 2010 and 2009

(Expressed in thousands of United States dollars)

	2011			2010			2009(1)
REVENUES:
Net investment income	$	64		$	16		$	297
Other income		101,744			—			—
		101,808			16			297
EXPENSES:
General and administrative expenses		13,354			2,175			6,477
Interest expense		—			—			39,019
Foreign exchange gain		(9	)		(7	)		—
Income tax expense		7,940			—			—
		21,285			2,168			45,496
Income (loss) before equity in earnings of consolidated subsidiaries		80,523			(2,152	)		(45,199	)
Equity in earnings of consolidated subsidiaries		194,025			667,157			652,086
NET INCOME	$	274,548		$	665,005		$	606,887
Other comprehensive (loss) income
Unrealized gains on investments arising during the year net of applicable deferred income tax expense		5,243			162,653			243,188
Portion of other-than-temporary impairment losses recognized in other comprehensive income, net of deferred income tax		—			—			(18,659	)
Reclassification adjustment for net realized investment gains included in net income, net of applicable income tax		(47,894	)		(213,478	)		(43,464	)
Other comprehensive (loss) income		(42,651	)		(50,825	)		181,065
COMPREHENSIVE INCOME	$	231,897		$	614,180		$	787,952

(1) Represents balances of Allied World Assurance Company Holdings, Ltd prior to the redomestication in 2010.

See accompanying notes to the consolidated financial statements.

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONDENSED STATEMENTS OF CASH FLOWS — PARENT COMPANY

for the Years Ended December 31, 2011, 2010 and 2009

(Expressed in thousands of United States dollars)

	2011			2010			2009(1)
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net income	$	274,548		$	665,005		$	606,887
Adjustments to reconcile net income to cash provided by operating activities:
Equity in earnings of consolidated subsidiaries		(194,025	)		(667,157	)		(652,086	)
Dividends received from subsidiaries		—			—			75,000
Stock compensation expenses		1,297			44			468
Amortization of discount on senior notes		—			—			495
Balance due from subsidiaries		—			—			2,798
Other assets		(1,504	)		—			(129	)
Accounts payable and accrued liabilities		7,276			7,643			166
Interest payable		—			—			(687	)
Balances due to subsidiaries		—			—			(5,727	)
Net cash provided by operating activities		87,592			5,535			27,185
CASH FLOWS USED IN INVESTING ACTIVITIES:
Other		(4,496	)		—			—
Net cash used in investing activities		(4,496	)		—			—
CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES:
Dividends paid		—			—			(36,689	)
Partial par value reduction		(28,600	)		—			—
Proceeds from the exercise of stock options		6,837			—			7,442
Stock repurchased		(86,700	)		(27,047	)		—
Repayment of syndicated loan		—			—			(243,750	)
Capital contribution		—			160,000			—
Stock compensation funding due from subsidiaries		—			—			2,677
Other		(449	)		—			—
Net cash (used in) provided by financing activities		(108,912	)		132,953			(270,320	)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(25,816	)		138,488			(243,135	)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		138,488			—			296,984
CASH AND CASH EQUIVALENTS, END OF YEAR	$	112,672		$	138,488		$	53,849

(1) Represents balances of Allied World Assurance Company Holdings, Ltd prior to the redomestication in 2010.