Allied World Assurance 8-K Allied World Reports 3.6% Growth In Diluted Book Value Per Share

Exhibit 99.2

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

2nd Quarter Ended June 30, 2014

Investor Contact:        This report is for informational purposes only. It should be read in conjunction with documents filed by

Sarah Doran            Allied World Assurance Company Holdings, AG with the U.S. Securities and Exchange Commission.

Phone: (646)794-0590

Email: sarah.doran@awac.com

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 adequacy of our loss reserves; negative rating agency actions; greater frequency or severity of unpredictable catastrophic events; the impact of acts of terrorism and acts of war; 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 (the “SEC”). 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, AG
FINANCIAL SUPPLEMENT TABLE OF CONTENTS
		Page
	Basis of Presentation	4
I.	Financial Highlights
	- Consolidated Financial Highlights	5
II.	Consolidated Financial Statements
	- Consolidated Statements of Operations	6
	- Consolidated Balance Sheets	7
	- Consolidated Statement of Cash Flows	8
III.	Segment Results
	- Consolidated Segment Results - Current Quarter	9
	- Consolidated Segment Results - Prior Year Quarter	10
	- Consolidated Segment Results - Current Year to Date	11
	- Consolidated Segment Results - Prior Year to Date	12
	- Gross Premiums Written by Segment and Geographic Location	13
	- Gross Premiums Written by Line of Business	14
IV.	Incurred Losses, Loss Reserves and PMLs
	- Consolidated Incurred Loss Analysis by Segment	15
	- Loss Reserve Development by Loss Year - Current Quarter	16
	- Loss Reserve Development by Loss Year - Current Year to Date	17
	- Loss Reserve Development by Loss Year - Prior Year Quarter	18
	- Loss Reserve Development by Loss Year - Prior Year to Date	19
	- Reserves for Losses and Loss Expenses	20
	- Reinsurance Recoverable	21
	- Probable Maximum Losses	22
V.	Investment Portfolio
	- Consolidated Total Investment Portfolio	23
	- Investment Income, Book Yield and Portfolio Return	24
	- Additional Investment Detail	25
VI.	Capital Structure
	- Share Repurchase Detail	27
	- Capital Structure and Leverage Ratios	28
VII.	Non-GAAP Reconciliations
	- Operating Income Reconciliation and Basic and Diluted Earnings per Share	29
	- Return on Average Shareholders' Equity and Reconciliation of Average Shareholders' Equity	30
	- Reconciliation of Diluted Book Value per Share	31
	- Regulation G	32

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

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. On May 1, 2014, our shareholders approved a 3-for-1 stock split of the Company's common shares. All historical share and per share amounts reflect the effect of the stock split.

• Allied World Assurance Company Holdings, AG, along with others in the industry, use underwriting ratios as measures of performance. The loss and loss expense 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 and loss expense ratios, 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, the costs of losses and expenses, respectively. The combined ratio presents the total cost per $100 of earned 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-generally accepted accounting principles (“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 32 for further details.

Page 4

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED FINANCIAL HIGHLIGHTS

			Three Months Ended										Six Months Ended
			June 30,							$	%		June 30,							$	%
			2014			2013				Difference	Difference		2014			2013				Difference	Difference
HIGHLIGHTS
	Gross premiums written		$	760,405		$	765,200		$	(4,795)	(0.6	)%	$	1,661,798		$	1,602,281		$	59,517	3.7	%
	Net premiums written			553,924			581,222			(27,298)	(4.7	)%		1,325,538			1,276,274			49,264	3.9	%
	Net premiums earned			537,247			507,271			29,976	5.9	%		1,067,532			970,499			97,033	10.0	%
	Underwriting income			51,925			86,941			(35,016)	(40.3	)%		158,862			155,626			3,236	2.1	%
	Operating income			76,071			103,525			(27,454)	(26.5	)%		205,930			187,693			18,237	9.7	%
	Net income			151,863			(1,862)			153,725	8,256	%		328,835			157,130			171,705	109.3	%
	Total shareholders' equity			3,682,762			3,373,229			309,533	9.2	%		3,682,762			3,373,229			309,533	9.2	%
	Cash flows provided by operating activities			145,842			120,073			25,769	21.5	%		448,938			133,642			315,296	235.9	%
PER SHARE AND SHARE DATA
	Basic earnings (loss) per share
		Net income (loss)	$	1.55		$	(0.02)		$	1.57	7,850	%	$	3.33		$	1.52		$	1.81	119.1	%
		Operating income	$	0.78		$	1.00		$	(0.22)	(22.0	)%	$	2.09		$	1.82		$	0.27	14.8	%
	Diluted earnings (loss) per share
		Net income (loss)	$	1.52		$	(0.02)		$	1.54	7,700	%	$	3.27		$	1.48		$	1.79	120.9	%
		Operating income	$	0.76		$	0.98		$	(0.22)	(22.4	)%	$	2.05		$	1.77		$	0.28	15.8	%
	Book value per share		$	37.99		$	32.90		$	5.09	15.5	%	$	37.99		$	32.90		$	5.09	15.5	%
	Diluted book value per share		$	36.98		$	32.06		$	4.92	15.3	%	$	36.98		$	32.06		$	4.92	15.3	%
FINANCIAL RATIOS
	Annualized return on average equity (ROAE), net income (loss)			16.6	%		(0.2	)%			16.8 pts			18.3	%		9.4	%			8.9 pts
	Annualized ROAE, operating income			8.3	%		12.2	%			(3.9) pts			11.4	%		11.2	%			0.2 pts
	Financial statement portfolio return			1.4	%		(0.9	)%			2.3 pts			2.6	%		0.4	%			2.2 pts
	GAAP Ratios
	Loss and loss expense ratio			58.6	%		54.2	%			(4.4) pts			55.3	%		54.6	%			(0.7) pts
	Acquisition cost ratio			13.8	%		12.7	%			(1.1) pts			13.3	%		12.5	%			(0.8) pts
	General and administrative expense ratio			17.9	%		15.9	%			(2.0) pts			16.5	%		16.8	%			0.3 pts
	Expense ratio			31.7	%		28.6	%			(3.1) pts			29.8	%		29.3	%			(0.5) pts
	Combined ratio			90.3	%		82.8	%			(7.5) pts			85.1	%		83.9	%			(1.2) pts

Page 5

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED STATEMENTS OF OPERATIONS

			Three Months Ended															Six Months Ended
			June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
			2014			2014			2013			2013			2013			2014			2013
Revenues
	Gross premiums written		$	760,405		$	901,393		$	555,490		$	580,893		$	765,200		$	1,661,798		$	1,602,281
	Net premiums written		$	553,924		$	771,614		$	391,130		$	453,077		$	581,222		$	1,325,538		$	1,276,274
	Net premiums earned		$	537,247		$	530,285		$	524,561		$	510,773		$	507,271		$	1,067,532		$	970,499
	Net investment income			36,793			47,619			47,270			39,271			37,635			84,412			71,023
	Net realized investment gains (losses)			85,217			54,205			67,599			27,487			(115,198	)		139,422			(35,561)
		Total revenues	$	659,257		$	632,109		$	639,430		$	577,531		$	429,708		$	1,291,366		$	1,005,961
Expenses
	Net losses and loss expenses		$	314,855		$	275,286		$	315,966		$	276,970		$	275,128		$	590,141		$	530,306
	Acquisition costs			74,279			67,722			66,257			65,114			64,617			142,001			121,302
	General and administrative expenses			96,188			80,340			100,467			88,553			80,585			176,528			163,265
	Amortization of intangible assets			634			633			633			633			634			1,267			1,267
	Interest expense			14,592			14,534			14,094			14,094			14,188			29,126			28,322
	Foreign exchange loss			651			49			658			4,353			490			700			3,008
		Total expenses	$	501,199		$	438,564		$	498,075		$	449,717		$	435,642		$	939,763		$	847,470
Income (loss) before income taxes			$	158,058		$	193,545		$	141,355		$	127,814		$	(5,934	)	$	351,603		$	158,491
	Income tax expense (benefit)			6,195			16,573			3,448			4,971			(4,072	)		22,768			1,361
Net income (loss)			$	151,863		$	176,972		$	137,907		$	122,843		$	(1,862)		$	328,835		$	157,130
GAAP Ratios
Loss and loss expense ratio				58.6	%		51.9	%		60.2	%		54.2	%		54.2	%		55.3	%		54.6	%
Acquisition cost ratio				13.8	%		12.8	%		12.6	%		12.7	%		12.7	%		13.3	%		12.5	%
General and administrative expense ratio				17.9	%		15.2	%		19.2	%		17.3	%		15.9	%		16.5	%		16.8	%
Expense ratio				31.7	%		28.0	%		31.8	%		30.0	%		28.6	%		29.8	%		29.3	%
Combined ratio				90.3	%		79.9	%		92.0	%		84.2	%		82.8	%		85.1	%		83.9	%
Per Share Data
Basic earnings per share
	Net income (loss)		$	1.55		$	1.78		$	1.37		$	1.20		$	(0.02	)	$	3.33		$	1.52
	Operating income		$	0.78		$	1.31		$	0.74		$	0.99		$	1.00		$	2.09		$	1.82
Diluted earnings per share
	Net income (loss)		$	1.52		$	1.74		$	1.34		$	1.18		$	(0.02	)	$	3.27		$	1.48
	Operating income		$	0.76		$	1.28		$	0.72		$	0.98		$	0.98		$	2.05		$	1.77

Page 6

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED BALANCE SHEETS

		As of		As of
		June 30, 2014		December 31, 2013
ASSETS
Fixed maturity investments trading, at fair value		$	6,157,084	$	6,100,798
Equity securities trading, at fair value			938,117		699,846
Other invested assets			932,639		911,392
	Total investments		8,027,840		7,712,036
Cash and cash equivalents			635,138		531,936
Restricted cash			127,755		149,393
Insurance balances receivable			976,441		664,731
Funds held			414,445		632,430
Prepaid reinsurance			390,414		340,992
Reinsurance recoverable			1,301,742		1,234,504
Accrued investment income			30,968		32,236
Net deferred acquisition costs			163,259		126,661
Goodwill			277,761		268,376
Intangible assets			47,564		48,831
Balances receivable on sale of investments			164,713		76,544
Net deferred tax assets			35,867		37,469
Other assets			75,740		89,691
TOTAL ASSETS		$	12,669,647	$	11,945,830
LIABILITIES
Reserve for losses and loss expenses		$	5,935,678	$	5,766,529
Unearned premiums			1,703,684		1,396,256
Reinsurance balances payable			224,182		173,023
Balances due on purchases of investments			180,378		104,740
Senior notes			798,648		798,499
Dividends payable			21,870		16,732
Accounts payable and accrued liabilities			122,445		170,225
TOTAL LIABILITIES		$	8,986,885	$	8,426,004
SHAREHOLDERS' EQUITY
Common shares: 2014: par value CHF 4.10 per share and 2013: par value CHF 4.10 per share (2014: 99,515,760; 2013: 103,477,452 shares issued and 2014: 96,929,091; 2013: 100,253,646 shares outstanding)			402,907	$	418,988
Treasury shares, at cost (2014: 2,586,669; 2013: 3,223,806)			(65,258)		(79,992)
Retained earnings			3,345,113		3,180,830
TOTAL SHAREHOLDERS' EQUITY		$	3,682,762	$	3,519,826
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	12,669,647	$	11,945,830
Book value per share		$	37.99	$	35.11
Diluted book value per share		$	36.98	$	34.20

Page 7

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED STATEMENTS OF CASH FLOWS

			Three Months Ended											Six Months Ended
			June 30,		March 31,		December 31,			September 30,		June 30,		June 30,		June 30,
			2014		2014		2013			2013		2013		2014		2013
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net income (loss)			$	151,863	$	176,972	$	137,907		$	122,843	$	(1,862)	$	328,835	$	157,130
Adjustments to reconcile net income (loss) to cash
	provided by operating activities:
		Net realized (losses) gains on sales of investments		(50,025)		(49,756)		(32,980)			(13,183)		(24,388)		(99,781)		(62,921)
		Mark to market adjustments		(45,157)		(13,956)		(31,989)			(15,562)		141,810		(59,113)		95,698
		Stock compensation expense		3,391		4,240		4,687			2,716		2,571		7,631		6,566
		Undistributed income of equity method investments		16,036		(2,292)		(7,610)			(1,997)		(2,316)		13,744		(2,316)
Changes in:
	Reserve for losses and loss expenses, net of
		reinsurance recoverables		57,663		44,248		(22,722)			37,407		7,623		101,911		12,901
	Unearned premiums, net of prepaid reinsurance			16,677		241,329		(133,430)			(57,697)		73,952		258,006		305,776
	Insurance balances receivable			(135,986)		(174,899)		75,381			74,508		(147,121)		(310,885)		(304,088)
	Funds held			33,356		184,629		(257,299)			12,468		(17,019)		217,985		(51,231)
	Reinsurance balances payable			64,141		(12,982)		(20,620)			(12,241)		87,423		51,159		69,620
	Net deferred acquisition costs			3,845		(40,443)		19,290			7,861		(11,661)		(36,598)		(45,802)
	Net deferred tax assets			1,413		521		4,363			(1,282)		(12,813)		1,934		(14,970)
	Accounts payable and accrued liabilities			30,348		(83,745)		41,457			27,061		25,179		(53,397)		(45,601)
	Other items, net			(1,723)		29,230		(176)			21,628		(1,305)		27,507		12,880
		Net cash provided by (used in) operating activities		145,842		303,096		(223,741)			204,530		120,073		448,938		133,642
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Net (purchases) sales of investments				(6,632)		(191,042)		(236,042)			188,616		68,966		(197,674)		(29,499)
Purchases of fixed assets				(3,265)		(2,336)		(1,139)			(808)		(985)		(5,601)		(3,363)
Change in restricted cash				16,815		4,823		108,124			(63,471)		(127,346)		21,638		(10,561)
Net cash paid for acquisitions				(2,565)		—		—			—		—		(2,565)		—
		Net cash (used in) provided by investing activities		4,353		(188,555)		(129,057)			124,337		(59,365)		(184,202)		(43,423)
CASH FLOWS USED IN FINANCING ACTIVITIES:
Dividends paid — par value reduction				—		—		—			—		—		—		(12,981)
Dividends paid				(16,475)		(16,732)		(16,942	)		(17,117)		—		(33,207)		—
Proceeds from the exercise of stock options				3,283		3,030		3,672			3,172		2,821		6,313		5,293
Share repurchases				(69,151)		(68,659)		(52,843)			(37,592)		(46,326)		(137,810)		(82,571)
		Net cash used in financing activities		(82,343)		(82,361)		(66,113)			(51,537)		(43,505)		(164,704)		(90,259)
Effect of exchange rate changes on foreign currency cash				1,484		1,686		(2,200)			1,614		(5,681)		3,170		(7,736)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS				69,336		33,866		(421,111)			278,944		11,522		103,202		(7,776)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD				565,802		531,936		953,047			674,103		662,581		531,936		681,879
CASH AND CASH EQUIVALENTS, END OF PERIOD			$	635,138	$	565,802	$	531,936		$	953,047	$	674,103	$	635,138	$	674,103

Page 8

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED SEGMENT RESULTS – CURRENT QUARTER

			Three Months Ended June 30, 2014
			U.S.			International						Consolidated
			Insurance			Insurance			Reinsurance			Totals
Revenues
	Gross premiums written		$	341,426		$	204,478		$	214,501		$	760,405
	Net premiums written		$	221,950		$	122,171		$	209,803		$	553,924
	Net premiums earned		$	214,593		$	89,205		$	233,449		$	537,247
		Total revenues	$	214,593		$	89,205		$	233,449		$	537,247
Expenses
	Net losses and loss expenses		$	145,485		$	35,920		$	133,450		$	314,855
	Acquisition costs			29,677			575			44,027			74,279
	General and administrative expenses			46,593			29,411			20,184			96,188
		Total expenses	$	221,755		$	65,906		$	197,661		$	485,322
Underwriting (loss) income			$	(7,162)		$	23,299		$	35,788		$	51,925
	Net investment income												36,793
	Net realized investment gains												85,217
	Amortization of intangible assets												(634)
	Interest expense												(14,592)
	Foreign exchange loss												(651)
Income before income taxes												$	158,058
GAAP Ratios
Loss and loss expense ratio				67.8	%		40.3	%		57.2	%		58.6	%
Acquisition cost ratio				13.8	%		0.6	%		18.9	%		13.8	%
General and administrative expense ratio				21.7	%		33.0	%		8.6	%		17.9	%
Expense ratio				35.5	%		33.6	%		27.5	%		31.7	%
Combined ratio				103.3	%		73.9	%		84.7	%		90.3	%

Page 9

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED SEGMENT RESULTS – PRIOR QUARTER

			Three Months Ended June 30, 2013
			U.S.			International						Consolidated
			Insurance			Insurance			Reinsurance			Totals
Revenues
	Gross premiums written		$	307,297		$	192,593		$	265,310		$	765,200
	Net premiums written		$	221,419		$	106,394		$	253,409		$	581,222
	Net premiums earned		$	197,436		$	87,041		$	222,794		$	507,271
		Total revenues	$	197,436		$	87,041		$	222,794		$	507,271
Expenses
	Net losses and loss expenses		$	124,364		$	30,968		$	119,796		$	275,128
	Acquisition costs			27,270			(358)			37,705			64,617
	General and administrative expenses			38,302			24,135			18,148			80,585
		Total expenses	$	189,936		$	54,745		$	175,649		$	420,330
Underwriting income			$	7,500		$	32,296		$	47,145		$	86,941
	Net investment income												37,635
	Net realized investment losses												(115,198)
	Amortization of intangible assets												(634)
	Interest expense												(14,188)
	Foreign exchange loss												(490)
Loss before income taxes												$	(5,934)
GAAP Ratios
Loss and loss expense ratio				63.0	%		35.6	%		53.8	%		54.2	%
Acquisition cost ratio				13.8	%		(0.4	)%		16.9	%		12.7	%
General and administrative expense ratio				19.4	%		27.7	%		8.1	%		15.9	%
Expense ratio				33.2	%		27.3	%		25.0	%		28.6	%
Combined ratio				96.2	%		62.9	%		78.8	%		82.8	%

Page 10

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED SEGMENT RESULTS – CURRENT YEAR TO DATE

			Six Months Ended June 30, 2014
			U.S.			International						Consolidated
			Insurance			Insurance			Reinsurance			Totals
Revenues
	Gross premiums written		$	611,371		$	338,842		$	711,585		$	1,661,798
	Net premiums written		$	424,690		$	197,630		$	703,218		$	1,325,538
	Net premiums earned		$	426,716		$	177,544		$	463,272		$	1,067,532
		Total revenues	$	426,716		$	177,544		$	463,272		$	1,067,532
Expenses
	Net losses and loss expenses		$	287,480		$	59,486		$	243,175		$	590,141
	Acquisition costs			57,180			(374)			85,195			142,001
	General and administrative expenses			84,030			54,171			38,327			176,528
		Total expenses	$	428,690		$	113,283		$	366,697		$	908,670
Underwriting (loss) income			$	(1,974)		$	64,261		$	96,575		$	158,862
	Net investment income												84,412
	Net realized investment gains												139,422
	Amortization of intangible assets												(1,267)
	Interest expense												(29,126)
	Foreign exchange loss												(700)
Income before income taxes												$	351,603
GAAP Ratios
Loss and loss expense ratio				67.4	%		33.5	%		52.5	%		55.3	%
Acquisition cost ratio				13.4	%		(0.2	)%		18.4	%		13.3	%
General and administrative expense ratio				19.7	%		30.5	%		8.3	%		16.5	%
Expense ratio				33.1	%		30.3	%		26.7	%		29.8	%
Combined ratio				100.5	%		63.8	%		79.2	%		85.1	%

Page 11

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED SEGMENT RESULTS – PRIOR YEAR TO DATE

			Six Months Ended June 30, 2013
			U.S.			International						Consolidated
			Insurance			Insurance			Reinsurance			Totals
Revenues
	Gross premiums written		$	563,315		$	321,109		$	717,857		$	1,602,281
	Net premiums written		$	413,672		$	184,139		$	678,463		$	1,276,274
	Net premiums earned		$	385,875		$	171,255		$	413,369		$	970,499
		Total revenues	$	385,875		$	171,255		$	413,369		$	970,499
Expenses
	Net losses and loss expenses		$	257,688		$	59,903		$	212,715		$	530,306
	Acquisition costs			50,398			(1,207)			72,111			121,302
	General and administrative expenses			77,898			48,924			36,443			163,265
		Total expenses	$	385,984		$	107,620		$	321,269		$	814,873
Underwriting (loss) income			$	(109)		$	63,635		$	92,100		$	155,626
	Net investment income												71,023
	Net realized investment losses												(35,561)
	Amortization of intangible assets												(1,267)
	Interest expense												(28,322)
	Foreign exchange loss												(3,008)
Income before income taxes												$	158,491
GAAP Ratios
Loss and loss expense ratio				66.8	%		35.0	%		51.5	%		54.6	%
Acquisition cost ratio				13.1	%		(0.7	)%		17.4	%		12.5	%
General and administrative expense ratio				20.2	%		28.6	%		8.8	%		16.8	%
Expense ratio				33.3	%		27.9	%		26.2	%		29.3	%
Combined ratio				100.1	%		62.9	%		77.7	%		83.9	%

Page 12

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

GROSS PREMIUMS WRITTEN BY SEGMENT AND GEOGRAPHIC LOCATION

	Three Months Ended								Six Months Ended
	June 30, 2014				June 30, 2013				June 30, 2014				June 30, 2013
	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
Gross Premiums Written by Segment
U.S. Insurance	$	341,426	44.9	%	$	307,297	40.2	%	$	611,371	36.8	%	$	563,315	35.2	%
International Insurance		204,478	26.9	%		192,593	25.2	%		338,842	20.4	%		321,109	20.0	%
Reinsurance		214,501	28.2	%		265,310	34.6	%		711,585	42.8	%		717,857	44.8	%
Total	$	760,405	100.0	%	$	765,200	100.0	%	$	1,661,798	100.0	%	$	1,602,281	100.0	%
Gross Premiums Written by Underwriting Location
United States	$	442,549	58.2	%	$	440,151	57.5	%	$	963,321	58.0	%	$	918,594	57.3	%
Bermuda		185,872	24.4	%		211,040	27.6	%		415,503	25.0	%		439,712	27.4	%
Europe		77,985	10.3	%		60,234	7.9	%		181,321	10.9	%		146,743	9.2	%
Asia Pacific		50,905	6.7	%		53,775	7.0	%		97,729	5.9	%		97,232	6.1	%
Canada		3,094	0.4	%		—	0.0	%		3,924	0.2	%		—	0.0	%
Total	$	760,405	100.0	%	$	765,200	100.0	%	$	1,661,798	100.0	%	$	1,602,281	100.0	%
Direct Premiums Written by Insured Location(1)
United States	$	467,617	85.7	%	$	435,364	87.1	%	$	813,466	85.6	%	$	774,307	87.5	%
United Kingdom		23,758	4.4	%		17,464	3.5	%		42,066	4.4	%		30,275	3.4	%
Canada		7,185	1.3	%		2,787	0.6	%		10,674	1.1	%		4,701	0.5	%
Australia		6,167	1.1	%		4,976	1.0	%		10,581	1.1	%		9,658	1.1	%
Germany		3,634	0.7	%		3,395	0.7	%		9,117	1.0	%		8,093	0.9	%
All other		37,543	6.8	%		35,904	7.1	%		64,309	6.8	%		57,390	6.6	%
Total	$	545,904	100.0	%	$	499,890	100.0	%	$	950,213	100.0	%	$	884,424	100.0	%
(1) Excludes reinsurance segment gross premiums written.

Page 13

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

GROSS PREMIUMS WRITTEN BY LINE OF BUSINESS

	Three Months Ended								Six Months Ended
	June 30, 2014				June 30, 2013				June 30, 2014				June 30, 2013
	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
U.S. Insurance
General casualty	$	119,722	35.1	%	$	97,363	31.7	%	$	198,956	32.5	%	$	164,244	29.2	%
Professional liability		61,977	18.2	%		64,442	21.0	%		124,176	20.3	%		127,528	22.6	%
Healthcare		37,715	11.0	%		46,517	15.1	%		72,103	11.8	%		100,039	17.8	%
General property		34,758	10.2	%		35,641	11.6	%		53,736	8.8	%		55,294	9.8	%
Programs		34,187	10.0	%		33,659	11.0	%		73,234	12.0	%		66,601	11.8	%
Inland marine		20,709	6.1	%		12,733	4.1	%		32,801	5.4	%		20,697	3.7	%
Environmental		11,413	3.3	%		9,714	3.2	%		21,743	3.6	%		16,327	2.9	%
Other		20,945	6.1	%		7,228	2.3	%		34,622	5.6	%		12,585	2.2	%
Total	$	341,426	100.0	%	$	307,297	100.0	%	$	611,371	100.0	%	$	563,315	100.0	%
International Insurance
General property	$	65,520	32.0	%	$	65,180	33.8	%	$	102,146	30.1	%	$	103,868	32.3	%
Professional liability		62,191	30.4	%		57,204	29.7	%		99,778	29.4	%		90,363	28.1	%
General casualty		40,636	19.9	%		44,398	23.0	%		60,706	17.9	%		68,362	21.3	%
Healthcare		19,917	9.7	%		21,189	11.0	%		47,118	13.9	%		47,717	14.9	%
Trade credit		7,008	3.4	%		4,622	2.4	%		15,494	4.6	%		10,799	3.4	%
Aviation		6,643	3.2	%		—	0.0	%		9,515	2.8	%		—	0.0	%
Other		2,563	1.4	%		—	0.0	%		4,085	1.3	%		—	0.0	%
Total	$	204,478	100.0	%	$	192,593	99.9	%	$	338,842	100.0	%	$	321,109	100.0	%
Reinsurance
Property	$	119,808	55.9	%	$	152,403	57.4	%	$	370,262	52.0	%	$	364,018	50.7	%
Casualty		64,422	30.0	%		76,755	29.0	%		149,514	21.0	%		174,291	25.0	%
Specialty		30,271	14.1	%		36,152	13.6	%		191,809	27.0	%		179,548	25.0	%
Total	$	214,501	100.0	%	$	265,310	100.0	%	$	711,585	100.0	%	$	717,857	100.7	%

Page 14

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED INCURRED LOSS ANALYSIS BY SEGMENT

	Three Months Ended								Six Months Ended
	June 30, 2014				June 30, 2013				June 30, 2014				June 30, 2013
	Amount		% of NPE(1)		Amount		% of NPE(1)		Amount		% of NPE(1)		Amount			% of NPE(1)
U.S. Insurance
Current year - non-catastrophe	$	144,420	67.3	%	$	127,306	64.5	%	$	285,646	67.0	%	$	250,083		64.8	%
Current year - property catastrophe		—	0.0	%		—	0.0	%		—	0.0	%		—		0.0	%
Prior year - increase (decrease)		1,065	0.5	%		(2,942)	(1.5	)%		1,834	0.4	%		7,605		2.0	%
Net losses and loss expenses	$	145,485	67.8	%	$	124,364	63.0	%	$	287,480	67.4	%	$	257,688		66.8	%
International Insurance
Current year - non-catastrophe	$	55,939	62.7	%	$	56,664	65.1	%	$	108,870	61.3	%	$	115,263		67.3	%
Current year - property catastrophe		—	0.0	%		—	0.0	%		—	0.0	%		—		0.0	%
Prior year - increase (decrease)		(20,019)	(22.4	)%		(25,696)	(29.5	)%		(49,384)	(27.8	)%		(55,360)		(32.3	)%
Net losses and loss expenses	$	35,920	40.3	%	$	30,968	35.6	%	$	59,486	33.5	%	$	59,903		35.0	%
Reinsurance
Current year - non-catastrophe	$	159,634	68.4	%	$	139,586	62.7	%	$	289,624	62.5	%	$	257,458		62.3	%
Current year - property catastrophe		—	0.0	%		—	0.0	%		—	0.0	%		—		0.0	%
Prior year - increase (decrease)		(26,184)	(11.2	)%		(19,790)	(8.9	)%		(46,450)	(10.0	)%		(44,743)		(10.8	)%
Net losses and loss expenses	$	133,450	57.2	%	$	119,796	53.8	%	$	243,174	52.5	%	$	212,715		51.5	%
Consolidated
Current year - non-catastrophe	$	359,993	67.0	%	$	323,556	63.7	%	$	684,140	64.1	%	$	622,804		64.1	%
Current year - property catastrophe		—	0.0	%		—	0.0	%		—	0.0	%		—		0.0	%
Prior year - increase (decrease)		(45,138)	(8.4	)%		(48,428)	(9.5	)%		(94,000)	(8.8	)%		(92,498	)	(9.5	)%
Net losses and loss expenses	$	314,855	58.6	%	$	275,128	54.2	%	$	590,140	55.3	%	$	530,306		54.6	%
(1) "NPE" means net premiums earned.

Page 15

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

NET LOSS RESERVE DEVELOPMENT BY LOSS YEAR – CURRENT QUARTER

	Three Months Ended June 30, 2014
(Favorable) Unfavorable Development ($ in millions)	2004 and Prior		2005			2006		2007		2008		2009		2010		2011		2012			2013		Total
U.S. Insurance
General casualty	$	(0.1)	$	—		$	—	$	(0.2)	$	(2.5)	$	—	$	1.4	$	—	$	(1.9)		$	4.2	$	0.9
Programs		—		—			—		(0.1)		(0.3)		(0.3)		0.3		(0.8)		(0.6)			(1.4)		(3.2)
General property		—		—			—		—		—		—		0.5		(1.6)		(0.3)			3.2		1.8
Healthcare		(1.4)		(0.5)			—		0.0		(0.8)		1.1		0.1		9.9		2.0			2.1		12.5
Professional liability		—		—			—		(0.3)		(0.4)		(9.5)		(1.0)		1.7		1.6			—		(7.9)
Inland Marine		—		—			—		—		—		—		—		—		(0.2)			(0.4)		(0.6)
Environmental		—		—			—		—		—		—		(0.2)		(1.0)		(1.2)			—		(2.4)
Total	$	(1.5)	$	(0.5	)	$	—	$	(0.6)	$	(4.0)	$	(8.7)	$	1.1	$	8.2	$	(0.6)		$	7.7	$	1.1
International Insurance
General casualty	$	5.2	$	(0.7)		$	(1.2)	$	(1.4)	$	15.5	$	(6.6)	$	(4.1)	$	2.0	$	(0.1)		$	—	$	8.6
General property		—		(0.2)			(0.4)		(0.1)		—		(0.2)		(0.4)		(1.4)		(2.3)			(5.9)		(10.9)
Professional liability		(1.2)		(0.7)			3.5		(9.1)		(0.4)		(7.7)		(3.5)		(0.4)		6.0			—		(13.5)
Healthcare		(0.1)		0.1			—		—		—		—		(3.9)		(0.2)		(0.2	)		—		(4.3)
Trade Credit		—		—			—		—		—		—		—		—		(1.2	)		1.3		0.1
Total	$	3.9	$	(1.5)		$	1.9	$	(10.6)	$	15.1	$	(14.5)	$	(11.9)	$	0.0	$	2.2		$	(4.6)	$	(20.0)
Reinsurance
Property	$	0.4	$	—		$	(0.1)	$	0.0	$	0.1	$	0.4	$	0.4	$	(5.1)	$	(2.6)		$	(15.9)	$	(22.4)
Casualty		0.7		(0.6	)		(0.5)		(0.2)		0.2		(1.2)		0.2		0.2		(0.9)			(0.8)		(2.9)
Specialty		(0.4)		(0.5)			(0.1)		(0.1)		—		0.2		0.2		(0.4)		5.9			(5.7)		(0.9)
Total	$	0.7	$	(1.1)		$	(0.7)	$	(0.3)	$	0.3	$	(0.6)	$	0.8	$	(5.3)	$	2.4		$	(22.4)	$	(26.2)
Consolidated
U.S. insurance	$	(1.5)	$	(0.5)		$	—	$	(0.6)	$	(4.0)	$	(8.7)	$	1.1	$	8.2	$	(0.6)		$	7.7	$	1.1
International insurance		3.9		(1.5)			1.9		(10.6)		15.1		(14.5)		(11.9)		0.0		2.2			(4.6)		(20.0)
Reinsurance		0.7		(1.1)			(0.7)		(0.3)		0.3		(0.6)		0.8		(5.3)		2.4			(22.4)		(26.2)
Total	$	3.1	$	(3.1)		$	1.2	$	(11.5)	$	11.4	$	(23.8)	$	(10.0)	$	2.9	$	4.0		$	(19.3)	$	(45.1)

Page 16

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

NET LOSS RESERVE DEVELOPMENT BY LOSS YEAR – CURRENT YEAR TO DATE

	Six Months Ended June 30, 2014
(Favorable) Unfavorable Development ($ in millions)	2004 and Prior		2005		2006		2007		2008		2009		2010		2011			2012		2013		Total
U.S. Insurance
General casualty	$	(3.0)	$	—	$	—	$	(0.7)	$	(4.8)	$	0.3	$	1.3	$	2.0		$	(1.9)	$	4.2	$	(2.6)
Programs		—		—		—		0.9		1.3		(3.3)		0.3		(1.8)			(0.8)		(1.4)		(4.8)
General property		—		—		—		—		—		—		0.5		(1.6)			(0.3)		3.2		1.8
Healthcare		(1.7)		(0.5)		—		(0.3)		(0.6)		3.1		0.1		14.2			3.8		2.1		20.2
Professional liability		—		—		—		(0.3)		(0.4)		(9.1)		(1.0)		1.2			0.4		—		(9.2)
Inland Marine		—		—		—		—		—		—		—		(0.3)			(0.5)		(0.4)		(1.2)
Environmental		—		—		—		—		—		—		(0.2)		(1.0)			(1.2)		—		(2.4)
Total	$	(4.7)	$	(0.5)	$	—	$	(0.4)	$	(4.5)	$	(9.0)	$	1.0	$	12.7		$	(0.5)	$	7.7	$	1.8
International Insurance
General casualty	$	9.6	$	(1.4)	$	(2.5)	$	(3.5)	$	11.4	$	(9.3)	$	(8.8)	$	1.9		$	(0.1)	$	—	$	(2.7)
General property		(0.3)		0.1		(0.5)		(1.1)		(0.3)		(0.7)		0.1		(4.6)			(4.6)		(10.1)		(22.0)
Professional liability		(1.4)		(1.6)		3.2		(22.8)		(1.0)		(10.3)		(3.6)		(0.8)			5.9		—		(32.4)
Healthcare		(0.1)		(0.9)		(0.9)		(1.0)		(0.8)		—		(3.9)		(0.5)			(0.2)		16.0		7.7
Trade Credit		—		—		—		—		—		—		(0.1)		(1.0)			(0.2)		1.3		0.0
Total	$	7.8	$	(3.8)	$	(0.7)	$	(28.4)	$	9.3	$	(20.3)	$	(16.3)	$	(5.0)		$	0.8	$	7.2	$	(49.4)
Reinsurance
Property	$	0.5	$	—	$	(0.2)	$	(0.2)	$	(0.2)	$	0.3	$	1.0	$	(5.8)		$	(4.3)	$	(29.6)	$	(38.5)
Casualty		(0.7)		—		(1.8)		(2.1)		(1.2)		(1.0)		1.0		1.1			(0.2)		1.4		(3.5)
Specialty		(0.4)		(0.3)		(0.1)		(0.1)		—		0.3		0.3		(0.4	)		4.8		(8.5)		(4.4)
Total	$	(0.6)	$	(0.3)	$	(2.1)	$	(2.4)	$	(1.4)	$	(0.4)	$	2.3	$	(5.1)		$	0.3	$	(36.7)	$	(46.4)
Consolidated
U.S. insurance	$	(4.7)	$	(0.5)	$	—	$	(0.4)	$	(4.5)	$	(9.0)	$	1.0	$	12.7		$	(0.5)	$	7.7	$	1.8
International insurance		7.8		(3.8)		(0.7)		(28.4)		9.3		(20.3)		(16.3)		(5.0)			0.8		7.2		(49.4)
Reinsurance		(0.6)		(0.3)		(2.1)		(2.4)		(1.4)		(0.4)		2.3		(5.1)			0.3		(36.7)		(46.4)
Total	$	2.5	$	(4.6)	$	(2.8)	$	(31.2)	$	3.4	$	(29.7)	$	(13.0)	$	2.6		$	0.6	$	(21.8)	$	(94.0)

Page 17

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

NET LOSS RESERVE DEVELOPMENT BY LOSS YEAR – PRIOR YEAR QUARTER

	Three Months Ended June 30, 2013
(Favorable) Unfavorable Development ($ in millions)	2003 and Prior		2004		2005		2006			2007		2008		2009		2010		2011		2012		Total
U.S. Insurance
General casualty	$	—	$	(0.3)	$	(0.2)	$	—		$	(1.2)	$	(1.4)	$	0.3	$	—	$	0.8	$	0.5	$	(1.5)
Programs		—		—		—		(1.4	)		(1.7)		0.1		(0.1)		(1.8)		(0.2)		1.4		(3.7)
General property		—		0.1		—		0.3			(0.2)		(1.3)		0.1		(2.5)		1.6		—		(1.9)
Healthcare		—		(0.7)		(0.7)		(1.7)			(1.5)		(3.6)		(1.3)		(1.0)		10.1		2.2		1.8
Professional liability		—		—		(0.5)		3.2			(1.5)		(4.3)		0.7		(1.8)		1.3		5.0		2.1
Other		—		—		—		—			—		—		—		(0.1)		(0.4)		0.8		0.3
Total	$	0.0	$	(0.9)	$	(1.4)	$	0.4		$	(6.1)	$	(10.5)	$	(0.3)	$	(7.2)	$	13.2	$	9.9	$	(2.9)
International Insurance
General casualty	$	6.6	$	(0.7)	$	(1.4)	$	(3.3)		$	(2.4)	$	(2.0)	$	1.7	$	—	$	(0.2)	$	—	$	(1.7)
General property		—		—		(0.1)		0.2			0.8		(0.4)		(3.7)		(2.7)		(1.6)		(4.9)		(12.4)
Professional liability		(0.2)		(4.7)		4.5		(1.4)			(5.5)		—		(6.1)		(0.1)		(0.1)		—		(13.6)
Healthcare		—		(0.2)		(0.1)		(0.4)			(0.4)		(0.4)		3.9		(0.2)		(0.2)		—		2.0
Total	$	6.4	$	(5.6)	$	2.9	$	(4.9)		$	(7.5)	$	(2.8)	$	(4.2)	$	(3.0)	$	(2.1)	$	(4.9)	$	(25.7)
Reinsurance
Property	$	—	$	0.1	$	(0.5)	$	0.1		$	—	$	(0.1)	$	—	$	(0.6)	$	(1.5)	$	(22.6)	$	(25.1)
Casualty		(0.3)		(1.1)		(0.1)		0.8			—		(1.1)		(0.1)		0.7		3.3		5.3		7.4
Specialty		—		(0.3)		(0.4)		0.4			—		(2.7)		1.5		—		0.8		(1.4)		(2.1)
Total	$	(0.3)	$	(1.3)	$	(1.0)	$	1.3		$	—	$	(3.9)	$	1.4	$	0.1	$	2.6	$	(18.7)	$	(19.8)
Consolidated
U.S. insurance	$	—	$	(0.9)	$	(1.4)	$	0.4		$	(6.1)	$	(10.5)	$	(0.3)	$	(7.2)	$	13.2	$	9.9	$	(2.9)
International insurance		6.4		(5.6)		2.9		(4.9)			(7.5)		(2.8)		(4.2)		(3.0)		(2.1)		(4.9)		(25.7)
Reinsurance		(0.3)		(1.3)		(1.0)		1.3			—		(3.9)		1.4		0.1		2.6		(18.7)		(19.8)
Total	$	6.1	$	(7.8)	$	0.5	$	(3.2)		$	(13.6)	$	(17.2)	$	(3.1)	$	(10.1)	$	13.7	$	(13.7)	$	(48.4)

Page 18

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

NET LOSS RESERVE DEVELOPMENT BY LOSS YEAR – PRIOR YEAR TO DATE

	Six Months Ended June 30, 2013
(Favorable) Unfavorable Development ($ in millions)	2003 and Prior		2004		2005		2006		2007		2008		2009		2010		2011		2012		Total
U.S. Insurance
General casualty	$	—	$	(0.7)	$	(0.5)	$	—	$	(4.5)	$	(3.1)	$	0.1	$	—	$	2.0	$	0.5	$	(6.2)
Programs		—		—		—		(1.4)		(3.3)		0.2		(0.7)		(2.7)		(0.6)		2.8		(5.7)
General property		—		0.1		—		0.3		(0.2)		(1.3)		(1.3)		(0.2)		1.5		2.0		0.9
Healthcare		(0.1)		(1.0)		(1.6)		(2.7)		(2.3)		(6.2)		(1.2)		(1.6)		13.1		9.0		5.4
Professional liability		—		(0.5)		(1.4)		2.7		(2.7)		(3.8)		0.1		(2.7)		2.1		18.3		12.1
Other		—		—		—		—		—		—		—		(0.1)		(0.4)		1.6		1.1
Total	$	(0.1)	$	(2.1)	$	(3.5)	$	(1.1)	$	(13.0)	$	(14.2)	$	(3.0)	$	(7.3)	$	17.7	$	34.2	$	7.6
International Insurance
General casualty	$	6.3	$	2.4	$	(7.0)	$	(6.7)	$	(8.7)	$	(4.7)	$	(1.2)	$	(0.2)	$	—	$	0.9	$	(18.9)
General property		—		—		(0.1)		(0.2)		1.1		(1.0)		(3.5)		(4.0)		(9.5)		(8.1)		(25.3)
Professional liability		(0.3)		(5.0)		3.3		(2.9)		(10.9)		0.3		(6.5)		(0.4)		(0.1)		—		(22.5)
Healthcare		(0.1)		(0.3)		(0.5)		(1.1)		8.2		(4.5)		10.6		(0.9)		(0.1)		—		11.3
Total	$	5.9	$	(2.9)	$	(4.3)	$	(10.9)	$	(10.3)	$	(9.9)	$	(0.6)	$	(5.5)	$	(9.7)	$	(7.2)	$	(55.4)
Reinsurance
Property	$	—	$	0.1	$	(2.3)	$	0.1	$	—	$	(0.2)	$	(0.1)	$	(2.9)	$	(8.5)	$	(35.5)	$	(49.3)
Casualty		0.2		(1.2)		(0.3)		0.7		(2.2)		(3.6)		(0.4)		0.9		3.3		5.3		2.7
Specialty		—		(0.3)		(0.5)		0.3		—		(3.1)		0.9		(0.1)		2.3		2.4		1.9
Total	$	0.2	$	(1.4)	$	(3.1)	$	1.1	$	(2.2)	$	(6.9)	$	0.4	$	(2.1)	$	(2.9)	$	(27.8)	$	(44.7)
Consolidated
U.S. insurance	$	(0.1)	$	(2.1)	$	(3.5)	$	(1.1)	$	(13.0)	$	(14.2)	$	(3.0)	$	(7.3)	$	17.7	$	34.2	$	7.6
International insurance		5.9		(2.9)		(4.3)		(10.9)		(10.3)		(9.9)		(0.6)		(5.5)		(9.7)		(7.2)		(55.4)
Reinsurance		0.2		(1.4)		(3.1)		1.1		(2.2)		(6.9)		0.4		(2.1)		(2.9)		(27.8)		(44.7)
Total	$	6.0	$	(6.4)	$	(10.9)	$	(10.9)	$	(25.5)	$	(31.0)	$	(3.2)	$	(14.9)	$	5.1	$	(0.8)	$	(92.5)

Page 19

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

RESERVE FOR LOSSES AND LOSS EXPENSES

	As of June 30, 2014
	U.S.			International						Consolidated
	Insurance			Insurance			Reinsurance			Total
Case reserves (net of reinsurance recoverable)	$	483,069		$	347,515		$	464,119		$	1,294,703
IBNR (net of reinsurance recoverable)		1,139,795			1,102,485			1,096,953			3,339,233
Total	$	1,622,864		$	1,450,000		$	1,561,072		$	4,633,936
IBNR/Total reserves (net of reinsurance recoverable)		70.2	%		76.0	%		70.3	%		72.1	%
	As of December 31, 2013
	U.S.			International						Consolidated
	Insurance			Insurance			Reinsurance			Total
Case reserves (net of reinsurance recoverable)	$	494,164		$	332,382		$	468,525		$	1,295,071
IBNR (net of reinsurance recoverable)		1,066,119			1,149,402			1,021,433			3,236,954
Total	$	1,560,283		$	1,481,784		$	1,489,958		$	4,532,025
IBNR/Total reserves (net of reinsurance recoverable)		68.3	%		77.6	%		68.6	%		71.4	%

Page 20

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

REINSURANCE RECOVERABLE

	June 30, 2014							December 31, 2013
	A.M. Best	Reinsurance						A.M. Best	Reinsurance
Top Ten Reinsurers	Rating	Recoverable		Percentage		Collateral		Rating	Recoverable		Percentage		Collateral
Munich Re	A+	$	235,756	18.1	%	$	59,275	A+	$	214,070	17.3	%	$	57,621
Axis Capital	A+		144,837	11.1	%		7,789	A+		143,063	11.6	%		6,485
Arch Re	A+		144,014	11.1	%		3,588	A+		143,037	11.6	%		3,588
Platinum Underwriters	A		95,267	7.3	%		—	A		98,811	8.0	%		—
Markel	A		90,000	6.9	%		35,898	A		86,462	7.0	%		39,292
Odyssey Reinsurance Company	A		83,206	6.4	%		—	A		77,023	6.2	%		—
XL Group	A		76,614	5.9	%		—	A		68,857	5.6	%		27,048
National Indemnity Company	A++		60,038	4.6	%		—	A++		61,547	5.0	%		—
Swiss Re	A+		58,497	4.5	%		—	A+		50,588	4.1	%		—
Transatlantic Holdings, Inc.	A		53,219	4.1	%		—	A		50,125	4.1	%		—
Top ten reinsurers			1,041,448	80.0	%		106,550			993,583	80.5	%		134,034
Other reinsurers' balances			260,294	20.0	%		22,320			240,921	19.5	%		19,546
Total reinsurance recoverable		$	1,301,742	100.0	%	$	128,870		$	1,234,504	100.0	%	$	153,580
		Reinsurance							Reinsurance
A.M Best Rating		Recoverable		Percentage		Collateral			Recoverable		Percentage		Collateral
A++		$	79,187	6.1	%	$	947		$	76,994	6.2	%	$	637
A+			704,023	54.1	%		79,180			652,440	53.0	%		79,291
A			505,140	38.8	%		40,291			486,989	39.4	%		72,959
A-			2,562	0.2	%		—			1,750	0.1	%		—
Total "A-" or higher			1,290,912	99.2	%		120,418			1,218,173	98.7	%		152,887
B++			5	0.0	%		—			2,830	0.2	%		693
NR			10,825	0.8	%		8,452			13,501	1.1	%		—
Total reinsurance recoverable		$	1,301,742	100.0	%	$	128,870		$	1,234,504	100.0	%	$	153,580

Page 21

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

PROBABLE MAXIMUM LOSSES

Consolidated Estimated Net Loss

Consolidated Estimated Net Loss

1-in-100 Year

1-in-250 Year

1-in-100 Year

1-in-250 Year

($ in millions)

($ in millions)

Zone

Peril

PML

PML

Zone

Peril

PML

PML

U.S. total

Hurricane

$

517

$

713

U.S. Southeast

(1)

Hurricane

$

397

$

525

U.S. total

Earthquake

$

394

$

512

U.S. Gulf Coast

(2)

Hurricane

$

303

$

380

U.S. Northeast

(3)

Hurricane

$

228

$

388

California

Earthquake

$

363

$

470

(1) Florida, Georgia, North Carolina and South Carolina.

(2) Alabama, Louisiana, Mississippi and Texas.

(3) Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island and Vermont.

The above tables show our largest Probable Maximum Losses ("PMLs") from a single catastrophic event (1) within a specific peril which corresponds to peak industry

catastrophe exposures and (2) within a defined zone which corresponds to peak industry catastrophe exposures at June 1, 2014. A zone is a geographic area

in which the insurance risks are considered to be correlated to a single catastrophic event. Net loss estimates and zonal aggregates are before income tax and net of

reinsurance and retrocessional recoveries. The 1-in-100 year and 1-in-250 year return periods refer to the frequency with which losses of a given amount or greater

are expected to occur.

We develop the estimates of losses expected from certain catastrophes for our portfolio of insurance and reinsurance contracts using commercially available

catastrophe models, including RMS and AIR. These estimates include assumptions regarding the location, size and magnitude of an event, the frequency of

events, the construction type and susceptibility to damage of property in a zone, policy terms and conditions and the cost of rebuilding property in a zone, among

other assumptions. If the estimates and assumptions that are entered into the risk model are incorrect, or if the risk model proves to be an inaccurate forecasting

tool, the losses the Company might incur from an actual catastrophe could be materially higher than its expectation of losses generated from modeled

catastrophe scenarios. Further, the Company cannot assure that such third party models are free of defects in the modeling logic or in the software code.

Our PML estimates are based on assumptions that are inherently subject to significant uncertainties and contingencies. These uncertainties and contingencies

can affect actual losses and could cause actual losses to differ materially from those expressed above. Investors should not rely on the information set forth in

this presentation when considering investment in the Company. The information contained in this presentation has not been audited nor has it been subject to

independent verification. Our estimated net losses from peak zone catastrophes may change from period to period as a result of several factors, which include

but are not limited to, updates to vendor catastrophe models, changes in our own modeling, changes in our underwriting portfolios, changes to our reinsurance

purchasing strategy and changes in foreign exchange rates. The events presented reflect a specific set of proscribed calculations and do not necessarily reflect

all events that may impact us. The estimates set forth above speak only as of the date of this presentation and the Company undertakes no obligation to update or

revise such information to reflect the occurrence of future events, including, but not limited to, the composition of the Company's business.

Page 22

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED TOTAL INVESTMENT PORTFOLIO

				As of June 30, 2014												As of December 31, 2013
							Average	Portfolio		Investment		Non-Investment
				Fair Value			Rating	Percentage		Grade		Grade		Total			Fair Value
Cash and cash equivalents				$	762,893		AAA	8.7	%	$	762,893	$	—	$	762,893	$	681,329
U.S. government securities					1,058,607		AA+	12.0	%		1,058,607		—		1,058,607		1,370,089
U.S. government agencies					215,723		AA+	2.5	%		215,723		—		215,723		306,700
Non-U.S. government and government agencies					185,071		AA+	2.1	%		185,071		—		185,071		191,776
State, municipalities and political subdivisions					261,267		AA-	3.0	%		242,300		18,967		261,267		231,555
Mortgage-backed securities:
	Agency MBS				658,975		AA+	7.5	%		658,975		—		658,975		725,515
	Non-agency RMBS				129,536		B+	1.5	%		39,613		89,923		129,536		275,820
	CMBS				535,252		BBB	6.1	%		309,172		226,080		535,252		291,167
		Total mortgage-backed securities			1,323,763			15.1	%		1,007,760		316,003		1,323,763		1,292,502
Corporate securities(1):
	Financials				1,168,937		A	13.3	%		1,132,942		35,995		1,168,937		958,794
	Industrials				1,167,470		BBB	13.3	%		852,999		314,471		1,167,470		1,174,047
	Utilities				98,878		BBB+	1.1	%		93,781		5,097		98,878		69,426
		Total corporate securities			2,435,285			27.7	%		2,079,722		355,563		2,435,285		2,202,267
Asset-backed securities:
	Credit cards				67,593		AAA	0.8	%		67,593		—		67,593		20,945
	Auto receivables				11,241		AAA	0.1	%		11,241		—		11,241		18,513
	Student Loans				154,895		AA+	1.8	%		154,895		—		154,895		151,507
	Collateralized loan obligations				381,579		AA	4.3	%		351,736		29,843		381,579		251,233
	Other				62,059		AAA	0.7	%		62,059		—		62,059		63,711
		Total asset-backed securities			677,367			7.6	%		647,524		29,843		677,367		505,909
Equities					938,117		N/A	10.7	%		—		938,117		938,117		699,846
Other invested assets:
	Private equity				266,837		N/A	3.0	%		—		266,837		266,837		216,825
	Hedge funds				505,176		N/A	5.7	%		—		505,176		505,176		515,298
	Other private securities				128,134		N/A	1.5	%		—		128,134		128,134		147,311
	High yield loan fund				32,492		N/A	0.4	%		—		32,492		32,492		31,958
		Total other invested assets			932,639			10.6	%		—		932,639		932,639		911,392
			Total investment portfolio	$	8,790,732			100.0	%	$	6,199,600	$	2,591,132	$	8,790,732	$	8,393,365
Annualized book yield, year to date					2.0	%											1.9	%
Duration(2)					2.1 years												2.4 years
Average credit quality (S&P)					A+												AA-
(1) Includes floating rate bank loans.
(2) Includes only fixed maturity investments and cash and cash equivalents.

Page 23

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

INVESTMENT INCOME, BOOK YIELD AND PORTFOLIO RETURN

		Three Months Ended						Six Months Ended
			June 30,			June 30,			June 30,			June 30,
			2014			2013			2014			2013
NET INVESTMENT INCOME
Fixed maturity investments		$	35,936		$	32,662		$	72,235		$	65,187
Equity securities			5,912			4,409			9,165			7,608
Other invested assets: hedge funds and private equity			2,527			725			6,519			2,189
Other invested assets: other private securities			(3,417)			3,118			3,999			3,118
Cash and cash equivalents			571			529			1,010			1,017
Expenses			(4,736)			(3,808)			(8,516)			(8,096)
Net investment income		$	36,793		$	37,635		$	84,412		$	71,023
NET REALIZED INVESTMENT GAINS
Net realized gains on sale:
	Fixed maturity investments	$	10,307		$	7,624		$	17,765		$	29,550
	Equity securities		8,193			6,391			44,401			16,187
	Other invested assets: hedge funds and private equity		33,189			9,131			39,567			14,693
Mark-to-market gains (losses):
	Fixed maturity investments		36,426			(115,113)			58,882			(131,588)
	Equity securities		21,316			(34,330)			(289)			(1,357)
	Other invested assets: hedge funds and private equity		(10,494)			2,561			5,736			29,393
	Net realized and unrealized (losses) on derivatives		(13,720)			8,538			(26,640)			7,561
Net realized investment gains		$	85,217		$	(115,198)		$	139,422		$	(35,561)
TOTAL FINANCIAL STATEMENT PORTFOLIO RETURN		$	122,010		$	(77,563)		$	223,834		$	35,462
ANNUALIZED INVESTMENT BOOK YIELD
Net investment income, recurring		$	36,793		$	37,635		$	84,412		$	71,023
Annualized net investment income			147,172			150,540			168,824			142,046
Average aggregate invested assets, at cost		$	8,470,360		$	8,239,006		$	8,340,009		$	8,247,988
Annualized investment book yield			1.7	%		1.8	%		2.0	%		1.7	%
FINANCIAL STATEMENT PORTFOLIO RETURN
Total financial statement portfolio return		$	122,010		$	(77,563)		$	223,834		$	35,462
Average aggregate invested assets, at fair value		$	8,702,994		$	8,459,473		$	8,570,119		$	8,446,080
Financial statement portfolio return			1.4	%		(0.9	)%		2.6	%		0.4	%

Page 24

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

ADDITIONAL INVESTMENT DETAIL

Other Invested Assets:								Top 10 Corporate Exposures:
			Carrying Value		Unfunded								Fair Value		Portfolio
Fund Details			June 30, 2014		Commitments			Corporate					June 30, 2014		Percentage
Private Equity:								Bank of America Corp					$	66,349		0.8	%
Primary and secondary			$	161,667	$	239,697		JPMorgan Chase & Co						62,580		0.7	%
Mezzanine debt				95,162		206,856		General Electric Co						59,822		0.7	%
Distressed				10,008		4,941		Morgan Stanley						59,192		0.7	%
	Total private equity			266,837		451,494		Mitsubishi UFJ Financial Group						43,608		0.5	%
Hedge Funds:								Wells Fargo & Co						42,835		0.5	%
Distressed				165,253		—		Verizon Communications Inc						41,006		0.5	%
Equity long/short				134,036		—		Citigroup Inc						36,845		0.4	%
Multi-strategy				100,263		—		BNP Paribas SA						32,757		0.4	%
Relative value credit				105,624		—		American Express Co						32,331		0.4	%
	Total hedge funds			505,176		—
	Other private securities			128,134		—
	High yield loan fund			32,492		—
		Total other invested assets	$	932,639	$	451,494
Fixed Income Credit Quality:			June 30, 2014					December 31, 2013
Rating			Fair Value		Percentage			Fair Value		Percentage
U.S. government and agencies			$	1,274,331		20.7	%	$	1,676,789		27.5	%
AAA/Aaa				917,449		14.9	%		755,360		12.4	%
AA/Aa				1,410,093		22.9	%		1,458,497		23.9	%
A/A				1,239,008		20.1	%		1,022,281		16.8	%
BBB/Baa				595,827		9.7	%		533,238		8.7	%
	Total BBB/Baa and above			5,436,708		88.3	%		5,446,165		89.3	%
BB/Bb				75,236		1.2	%		195,653		3.2	%
B/B				401,402		6.5	%		329,267		5.4	%
CCC+ and below				243,738		4.0	%		129,713		2.1	%
		Total	$	6,157,084		100.0	%	$	6,100,798		100.0	%

Page 25

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

ADDITIONAL INVESTMENT DETAIL

TOTAL EXPOSURE BY ASSET TYPE AND REGION - June 30, 2014
				Sovereign
				Guaranteed				Mortgage-Backed Securities						Asset-		Corporate Securities
				Financial		State and		Agency						Backed								Equity		Total
Region	Country	Sovereign*		Institutions		Municipalities		MBS		MBS		CMBS		Securities		Financials		Industrials		Utilities		Securities		Exposure
Africa	South Africa	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	6,210	$	—	$	708	$	6,918
Australia	Australia		—		0		—		—		—		—		—		62,040		1,841		—		3,479		67,360
	Total		—		0		—		—		—		—		—		62,040		1,841		—		3,479		67,360
Europe	Austria		—		—		—		—		—		—		—		—		—		—		125		125
	Belgium		—		—		—		—		—		—		—		—		12,040		—		3,750		15,790
	Denmark		—		—		—		—		—		—		—		—		—		—		2,021		2,021
	Finland		—		—		—		—		—		—		—		—		—		—		1,215		1,215
	France		—		—		—		—		—		—		870		68,579		26,543		10,215		102,070		208,277
	Germany		30,906		885		—		—		—		—		—		3,625		10,619		—		6,882		52,917
	Hungary		—		—		—		—		—		—		—		—		—		—		163		163
	Ireland		—		—		—		—		—		—		5,189		—		277		—		1,224		6,690
	Italy		—		—		—		—		—		—		—		520		—		—		4,881		5,401
	Luxembourg		—		—		—		—		—		—		3,685		—		14,024		—		258		17,967
	Netherlands		—		34,329		—		—		—		—		830		60,202		10,331		—		9,348		115,040
	Norway		—		—		—		—		—		—		—		21,031		2,761		—		881		24,673
	Poland		—		—		—		—		—		—		—				—		—		667		667
	Portugal		—		—		—		—		—		—		—		—		—		—		668		668
	Spain		—		—		—		—		—		—		—		3,244		13,702		—		827		17,773
	Sweden		—		—		—		—		—		—		—		36,099		1,689		—		7,884		45,672
	Switzerland		2,344		—		—		—		—		—		—		21,329		366		—		21,892		45,931
	United Kingdom		27,282		—		—		—		4,246		—		—		55,185		70,237		166		30,083		187,199
	Total		60,532		35,214		—		—		4,246		—		10,574		269,814		162,589		10,381		194,839		748,189
Latin	Brazil		3,638		—		—		—		—		—		—		0		11,945		—		309		15,892
America	Chile		—		—		—		—		—		—		—		6,206		—		—		—		6,206
	Mexico		25,813		—		—		—		—		—		—		—		6,493		—		506		32,812
	Panama		—		—		—		—		—		—		—		—		—		—		1,463		1,463
	Total		29,451		—		—		—		—		—		—		6,206		18,438		—		2,278		56,373
North	Bermuda		—		—		—		—		—		—		—		—		—		—		2,668		2,668
America	Canada		54,758		—		—		—		—		—		—		64,440		40,989		10,058		48,783		219,028
	Cayman Islands		—		—		—		—		—		—		144,873		—		3,612		—		—		148,485
	United States		1,300,492		—		261,267		658,975		125,290		535,252		521,920		681,055		921,915		75,261		514,589		5,596,016
	Total		1,355,250		—		261,267		658,975		125,290		535,252		666,793		745,495		966,516		85,319		566,040		5,966,197
Asia /	China		7,003		—		—		—		—		—		—		—		1,157		—		38,295		46,455
Middle East	Hong Kong		—		—		—		—		—		—		—		—		—		—		1,305		1,305
	Israel		—		—		—		—		—		—		—		—		808		—		193		1,001
	Japan		—		—		—		—		—		—		—		37,592		5,651		—		121,750		164,993
	Kyrgyzstan		—		—		—		—		—		—		—		—		—		—		214		214
	Macau		—		—		—		—		—		—		—		—		—		—		528		528
	Malaysia		—		—		—		—		—		—		—		—		—		—		926		926
	Qatar		—		—		—		—		—		—		—		7,060		239		—		—		7,299
	Singapore		—		—		—		—		—		—		—				971		—		3,393		4,364
	South Korea		6,282				—		—		—		—		—		5,679		—		3,178		1,540		16,679
	Taiwan		—		—		—		—		—		—		—		—		3,050		—		2,014		5,064
	Thailand		—		—		—		—		—		—		—		—		—		—		615		615
	UAE		—		—		—		—		—		—		—		720		—		—		—		720
	Total		13,285		—		—		—		—		—		—		51,051		11,876		3,178		170,773		250,163
	Grand Total	$	1,458,518	$	35,214	$	261,267	$	658,975	$	129,536	$	535,252	$	677,367	$	1,134,606	$	1,167,470	$	98,878	$	938,117	$	7,095,200

Page 26

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

SHARE REPURCHASE DETAIL

					Average				Average		Remaining
		Aggregate Cost		Number of	Price paid		Average		Repurchase		Share
		of Shares		Shares	Per Share		Diluted Book		Price to Diluted		Repurchase
Period		Repurchased		Repurchased	Repurchased		Value Per Share  (1)		Book Value		Authorization
Three Months Ended:
	March 31, 2013	$	36,245	1,296,351	$	27.96	$	31.52	88.7	%
	June 30, 2013		46,326	1,524,984		30.38		32.11	94.6	%
	September 30, 2013		40,574	1,282,164		31.64		32.56	97.2	%
	December 31, 2013		51,540	1,440,933		35.77		33.62	106.4	%
	Total - 2013	$	174,685	5,544,432	$	31.51	$	32.53	96.9	%
Three Months Ended:
	March 31, 2014	$	68,659	2,012,196	$	34.12	$	34.94	97.7	%
	June 30, 2014		70,874	1,949,496		36.36		36.37	100.0	%
	Total - 2014	$	139,533	3,961,692	$	35.22	$	35.63	98.8	%	$	454,201
(1) Average of beginning and ending diluted book value per share for each period presented and weighted average total.

Page 27

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CAPITAL STRUCTURE AND LEVERAGE RATIOS

	As of				As of
	June 30, 2014				December 31, 2013
Senior notes	$	798,648			$	798,499
Shareholders' equity		3,682,762				3,519,826
Total capitalization	$	4,481,410			$	4,318,325
Leverage Ratios
Debt to total capitalization		17.8	%			18.5	%
Net premiums written (trailing 12 months)	$	2,169,745			$	2,120,481
Net premiums written (trailing 12 months) to shareholders' equity		0.59		x		0.60		x
Total investments and cash & cash equivalents	$	8,790,733			$	8,393,365
Total investments and cash & cash equivalents to shareholders' equity		2.39		x		2.38		x
Reserve for losses and loss expenses	$	5,935,678			$	5,766,529
Deduct: reinsurance recoverable		(1,301,742)				(1,234,504)
Net reserve for losses and loss expenses	$	4,633,936				4,532,025
Net reserve for losses and loss expenses to shareholders' equity		1.26		x		1.29		x

Fixed Charge Coverage Ratio	Three Months Ended							Six Months Ended
		June 30,			June 30,				June 30,			June 30,
		2014			2013				2014			2013
Interest expense	$	14,592		$	14,188			$	29,126		$	28,322
Income (loss) before income taxes		158,058			(5,934	)			351,603			158,491
Interest expense		14,592			14,188				29,126			28,322
Earnings for calculation of fixed coverage ratio	$	172,650		$	8,254			$	380,729		$	186,813
Fixed charge coverage ratio		11.8	x		0.6		x		13.1	x		6.6	x

Page 28

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

OPERATING INCOME RECONCILIATION AND

BASIC AND DILUTED EARNINGS PER SHARE INFORMATION

		Three Months Ended										Six Months Ended
		June 30,		March 31,		December 31,		September 30,		June 30,		June 30,		June 30,
		2014		2014		2013		2013		2013		2014		2013
Net income (loss)		$	151,863	$	176,972	$	137,907	$	122,843	$	(1,862)	$	328,835	$	157,130
Add after tax effect of:
	Net realized investment (gains) losses		(76,443)		(47,164)		(64,027)		(25,395)		104,897		(123,605)		27,555
	Foreign exchange loss		651		49		658		4,353		490		700		3,008
Operating income		$	76,071	$	129,857	$	74,538	$	101,801	$	103,525	$	205,930	$	187,693
Weighted average common shares outstanding
Basic			97,809,639		99,545,187		100,814,955		101,974,077		103,267,659		98,672,618		103,552,656
Diluted			99,724,802		101,584,662		103,129,812		104,184,579		105,408,888*		100,691,568		105,949,785
Basic per share data
Net income (loss)		$	1.55	$	1.78	$	1.37	$	1.20	$	(0.02)	$	3.33	$	1.52
Add after tax effect of:
	Net realized investment (gains) losses		(0.78)		(0.47)		(0.64)		(0.25)		1.02		(1.25)		0.27
	Foreign exchange loss		0.01		0.00		0.01		0.04		0.00		0.01		0.03
Operating income		$	0.78	$	1.31	$	0.74	$	0.99	$	1.00	$	2.09	$	1.82
Diluted per share data
Net income (loss)		$	1.52	$	1.74	$	1.34	$	1.18	$	(0.02)*	$	3.27	$	1.48
Add after tax effect of:
	Net realized investment (gains) losses		(0.77)		(0.46)		(0.62)		(0.24)		1.00		(1.23)		0.26
	Foreign exchange loss		0.01		0.00		0.01		0.04		0.00		0.01		0.03
Operating income		$	0.76	$	1.28	$	0.72	$	0.98	$	0.98	$	2.05	$	1.77
* Diluted weighted average common shares outstanding were only used in the calculation of diluted operating income per share. There were no common share equivalents included
in calculating diluted earnings per share as there was a net loss and any additional shares would be anti-dilutive.

Page 29

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

RETURN ON AVERAGE SHAREHOLDERS’ EQUITY AND RECONCILIATION OF AVERAGE SHAREHOLDERS’ EQUITY

		Three Months Ended															Six Months Ended
		June 30,			March 31,			December 31,			September 30,			June 30,			June 30,			June 30,
		2014			2014			2013			2013			2013			2014			2013
Opening shareholders' equity		$	3,616,678		$	3,519,826		$	3,443,928		$	3,373,229		$	3,431,963		$	3,519,826		$	3,326,335
Deduct: accumulated other comprehensive income			—			—			—			—			—			—			—
Adjusted opening shareholders' equity		$	3,616,678		$	3,519,826		$	3,443,928		$	3,373,229		$	3,431,963		$	3,519,826		$	3,326,335
Closing shareholders' equity		$	3,682,762		$	3,616,678		$	3,519,826		$	3,443,928		$	3,373,229		$	3,682,762		$	3,373,229
Deduct: accumulated other comprehensive income			—			—			—			—			—			—			—
Adjusted closing shareholders' equity		$	3,682,762		$	3,616,678		$	3,519,826		$	3,443,928		$	3,373,229		$	3,682,762		$	3,373,229
Average adjusted shareholders' equity		$	3,649,720		$	3,568,252		$	3,481,877		$	3,408,579		$	3,402,596		$	3,601,294		$	3,349,782
Net income (loss) available to shareholders		$	151,863		$	176,972		$	137,907		$	122,843		$	(1,862)		$	328,835		$	157,130
Annualized net income (loss) available to
	shareholders	$	607,452		$	707,888		$	551,628		$	491,372		$	(7,448)		$	657,670		$	314,260
Annualized return on average shareholders' equity -
	net income (loss) available to shareholders		16.6	%		19.8	%		15.8	%		14.4	%		(0.2	)%		18.3	%		9.4	%
Operating income available to shareholders		$	76,071		$	129,857		$	74,538		$	101,801		$	103,525		$	205,930		$	187,693
Annualized operating income available to
	shareholders	$	304,284		$	519,428		$	298,152		$	407,204		$	414,100		$	411,860		$	375,386
Annualized return on average shareholders' equity -
	operating income available to shareholders		8.3	%		14.6	%		8.6	%		11.9	%		12.2	%		11.4	%		11.2	%

Page 30

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

RECONCILIATION OF DILUTED BOOK VALUE PER SHARE

		As of			As of			As of
		June 30,			December 31,			June 30,
		2014			2013			2013
Price per share at period end		$	38.02		$	37.60		$	30.50
Total shareholders' equity		$	3,682,762		$	3,519,826		$	3,373,229
Basic common shares outstanding			96,929,091			100,253,646			102,527,493
Add: unvested restricted stock units			516,546			143,697			251,190
Add: performance based equity awards			619,428			804,519			812,559
Add: employee purchase plan			29,293			55,596			31,866
Add: dilutive stock options outstanding			2,620,016			2,928,312			3,333,798
	Weighted average exercise price per share	$	16.24		$	16.07		$	15.88
Deduct: stock options bought back via treasury method			(1,119,123)			(1,251,687)			(1,735,830)
Common shares and common share equivalents outstanding			99,595,251			102,934,083			105,221,076
Basic book value per common share		$	37.99		$	35.11		$	32.90
Year-to-date percentage change in basic book value per common share			8.2	%		6.7	%
Diluted book value per common share		$	36.98		$	34.20		$	32.06
Year-to-date percentage change in diluted book value per common share			8.1	%		6.7	%

Page 31

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

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, net foreign exchange gain or loss, impairment of intangible assets and other non-recurring items. The company excludes net realized investment gains or losses, net foreign exchange gain or loss and other non-recurring items from its calculation of operating income because these amounts are heavily influenced by and fluctuate in part according to the availability of market opportunities and other factors. 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 and the company's underlying business performance. Operating income should not be viewed as a substitute for GAAP net income. See page 29 for the reconciliation of net income to operating income.

ANNUALIZED RETURN ON AVERAGE SHAREHOLDERS' EQUITY ("ROAE")

Annualized return on average shareholders' equity is calculated using average shareholders’ equity, excluding the average after tax unrealized gains or losses on investments. Unrealized gains (losses) on investments are primarily the result of interest rate and credit spread 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 page 30 for the reconciliation of average shareholders’ equity.

ANNUALIZED OPERATING RETURN ON AVERAGE SHAREHOLDERS' EQUITY

Annualized operating return on average shareholders' 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 shareholders' 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 shareholders' equity explanation above. See page 29 for the reconciliation of net income to operating income and page 30 for the reconciliation of average shareholders’ 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 an important measure of calculating shareholder returns. See page 31 for the 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. Aggregate invested assets includes cash and cash equivalents, fixed maturity securities, equity securities, other invested assets and the net balances receivable or payable on purchases and sales of investments. 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 page 24 for the calculation of annualized investment book yield.

Page 32