Allied World Assurance 8-K Allied World Reports Strong Growth Across U.s. Insurance Platform

Exhibit 99.2

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

3rd Quarter Ended September 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 the occurrence of any event, change or other circumstance that could give rise to the termination of the definitive agreements with Royal & Sun Alliance Insurance plc; the inability to receive the required regulatory approvals to complete the acquisitions; risks that the proposed acquisitions disrupt each company’s current plans and operations; the ability to retain key personnel; the ability to recognize the benefits of the acquisitions; the amount of costs, fees, expenses and charges related to the acquisitions; 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. 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										Nine Months Ended
			September 30,							$	%		September 30,							$	%
			2014			2013				Difference	Difference		2014			2013				Difference	Difference
HIGHLIGHTS
	Gross premiums written		$	707,884		$	580,893		$	126,991	21.9	%	$	2,369,682		$	2,183,174		$	186,508	8.5	%
	Net premiums written			568,742			453,077			115,665	25.5	%		1,894,280			1,729,351			164,929	9.5	%
	Net premiums earned			541,737			510,773			30,964	6.1	%		1,609,269			1,481,272			127,997	8.6	%
	Underwriting income			44,950			80,136			(35,186)	(43.9	)%		203,812			235,762			(31,950)	(13.6	)%
	Operating income			60,606			101,801			(41,195)	(40.5	)%		266,536			289,494			(22,958)	(7.9	)%
	Net income			30,915			122,843			(91,928)	74.8	%		359,750			279,973			79,777	28.5	%
	Total shareholders' equity			3,673,599			3,443,928			229,671	6.7	%		3,673,599			3,443,928			229,671	6.7	%
	Cash flows provided by operating activities			220,795			204,530			16,265	8.0	%		669,733			338,172			331,561	98.0	%
PER SHARE AND SHARE DATA
	Basic earnings per share
		Net income	$	0.32		$	1.20		$	(0.88)	73.3	%	$	3.67		$	2.72		$	0.95	34.9	%
		Operating income	$	0.62		$	0.99		$	(0.37)	(37.4	)%	$	2.72		$	2.81		$	(0.09)	(3.2	)%
	Diluted earnings per share
		Net income	$	0.31		$	1.18		$	(0.87)	73.7	%	$	3.60		$	2.66		$	0.94	35.3	%
		Operating income	$	0.61		$	0.98		$	(0.37)	(37.8	)%	$	2.67		$	2.75		$	(0.08)	(2.9	)%
	Book value per share		$	38.11		$	33.95		$	4.16	12.3	%	$	38.11		$	33.95		$	4.16	12.3	%
	Diluted book value per share		$	37.12		$	33.05		$	4.07	12.3	%	$	37.12		$	33.05		$	4.07	12.3	%
FINANCIAL RATIOS
	Annualized return on average equity (ROAE), net income			3.4	%		14.4	%			(11.0) pts			13.2	%		11.0	%			2.2 pts
	Annualized ROAE, operating income			6.6	%		11.9	%			(5.3) pts			9.7	%		11.4	%			(1.7) pts
	Financial statement portfolio return			0.1	%		0.8	%			(0.7) pts			2.7	%		1.2	%			1.5 pts
	GAAP Ratios
	Loss and loss expense ratio			62.0	%		54.2	%			(7.8) pts			57.6	%		54.5	%			(3.1) pts
	Acquisition cost ratio			13.4	%		12.7	%			(0.7) pts			13.3	%		12.6	%			(0.7) pts
	General and administrative expense ratio			16.3	%		17.3	%			1.0 pts			16.5	%		17.0	%			0.5 pts
	Expense ratio			29.7	%		30.0	%			0.3 pts			29.8	%		29.6	%			(0.2) pts
	Combined ratio			91.7	%		84.2	%			(7.5) pts			87.4	%		84.1	%			(3.3) pts

Page 5

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED STATEMENTS OF OPERATIONS

			Three Months Ended															Nine Months Ended
			September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
			2014			2014			2014			2013			2013			2014			2013
Revenues
	Gross premiums written		$	707,884		$	760,405		$	901,393		$	555,490		$	580,893		$	2,369,682		$	2,183,174
	Net premiums written		$	568,742		$	553,924		$	771,614		$	391,130		$	453,077		$	1,894,280		$	1,729,351
	Net premiums earned		$	541,737		$	537,247		$	530,285		$	524,561		$	510,773		$	1,609,269		$	1,481,272
	Net investment income			43,412			36,793			47,619			47,270			39,271			127,824			110,294
	Net realized investment (losses) gains			(35,136)			85,217			54,205			67,599			27,487			104,286			(8,074)
	Other income			1,032			—			—			—			—			1,032			—
		Total revenues	$	551,045		$	659,257		$	632,109		$	639,430		$	577,531		$	1,842,411		$	1,583,492
Expenses
	Net losses and loss expenses		$	336,090		$	314,855		$	275,286		$	315,966		$	276,970		$	926,231		$	807,276
	Acquisition costs			72,403			74,279			67,722			66,257			65,114			214,404			186,416
	General and administrative expenses			88,294			96,188			80,340			100,467			88,553			264,822			251,818
	Other expense			6,575			—			—			—			—			6,575			—
	Amortization of intangible assets			633			634			633			633			633			1,900			1,900
	Interest expense			14,325			14,592			14,534			14,094			14,094			43,451			42,416
	Foreign exchange loss			278			651			49			658			4,353			978			7,361
		Total expenses	$	518,598		$	501,199		$	438,564		$	498,075		$	449,717		$	1,458,361		$	1,297,187
Income before income taxes			$	32,447		$	158,058		$	193,545		$	141,355		$	127,814		$	384,050		$	286,305
	Income tax expense			1,532			6,195			16,573			3,448			4,971			24,300			6,332
Net income			$	30,915		$	151,863		$	176,972		$	137,907		$	122,843		$	359,750		$	279,973
GAAP Ratios
Loss and loss expense ratio				62.0	%		58.6	%		51.9	%		60.2	%		54.2	%		57.6	%		54.5	%
Acquisition cost ratio				13.4	%		13.8	%		12.8	%		12.6	%		12.7	%		13.3	%		12.6	%
General and administrative expense ratio				16.3	%		17.9	%		15.2	%		19.2	%		17.3	%		16.5	%		17.0	%
Expense ratio				29.7	%		31.7	%		28.0	%		31.8	%		30.0	%		29.8	%		29.6	%
Combined ratio				91.7	%		90.3	%		79.9	%		92.0	%		84.2	%		87.4	%		84.1	%
Per Share Data
Basic earnings per share
	Net income		$	0.32		$	1.55		$	1.78		$	1.37		$	1.20		$	3.67		$	2.72
	Operating income		$	0.62		$	0.78		$	1.31		$	0.74		$	0.99		$	2.72		$	2.81
Diluted earnings per share
	Net income		$	0.31		$	1.52		$	1.74		$	1.34		$	1.18		$	3.60		$	2.66
	Operating income		$	0.61		$	0.76		$	1.28		$	0.72		$	0.98		$	2.67		$	2.75

Page 6

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED BALANCE SHEETS

		As of		As of
		September 30, 2014		December 31, 2013
ASSETS
Fixed maturity investments trading, at fair value		$	6,128,237	$	6,100,798
Equity securities trading, at fair value			945,076		699,846
Other invested assets			929,201		911,392
	Total investments		8,002,514		7,712,036
Cash and cash equivalents			831,270		531,936
Restricted cash			178,958		149,393
Insurance balances receivable			926,183		664,731
Funds held			405,703		632,430
Prepaid reinsurance			376,651		340,992
Reinsurance recoverable			1,349,009		1,234,504
Accrued investment income			30,554		32,236
Net deferred acquisition costs			171,827		126,661
Goodwill			278,085		268,376
Intangible assets			46,931		48,831
Balances receivable on sale of investments			60,122		76,544
Net deferred tax assets			41,312		37,469
Other assets			110,449		89,691
TOTAL ASSETS		$	12,809,568	$	11,945,830
LIABILITIES
Reserve for losses and loss expenses		$	6,052,263	$	5,766,529
Unearned premiums			1,716,927		1,396,256
Reinsurance balances payable			203,428		173,023
Balances due on purchases of investments			166,026		104,740
Senior notes			798,725		798,499
Dividends payable			21,686		16,732
Accounts payable and accrued liabilities			176,914		170,225
TOTAL LIABILITIES		$	9,135,969	$	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: 100,775,256; 2013: 103,477,452 shares issued and 2014: 96,382,238; 2013: 100,253,646 shares outstanding)			407,990	$	418,988
Treasury shares, at cost (2014: 4,393,018; 2013: 3,223,806)			(134,633)		(79,992)
Retained earnings			3,400,242		3,180,830
TOTAL SHAREHOLDERS' EQUITY		$	3,673,599	$	3,519,826
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	12,809,568	$	11,945,830
Book value per share		$	38.11	$	35.11
Diluted book value per share		$	37.12	$	34.20

Page 7

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED STATEMENTS OF CASH FLOWS

			Three Months Ended											Nine Months Ended
			September 30,			June 30,		March 31,		December 31,		September 30,		September 30,		September 30,
			2014			2014		2014		2013		2013		2014		2013
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net income			$	30,915		$	151,863	$	176,972	$	137,907	$	122,843	$	359,750	$	279,973
Adjustments to reconcile net income (loss) to cash
	provided by operating activities:
		Net realized gains on sales of investments		(18,859)			(50,025)		(49,756)		(32,980)		(13,183)		(118,640)		(76,104)
		Mark to market adjustments		53,479			(45,157)		(13,956)		(31,989)		(15,562)		(5,634)		80,136
		Stock compensation expense		3,191			3,391		4,240		4,687		2,716		10,822		9,282
		Undistributed income of equity method investments		(3,292)			16,036		(2,292)		(7,610)		(1,997)		10,452		(4,313)
Changes in:
	Reserve for losses and loss expenses, net of
		reinsurance recoverables		69,318			57,663		44,248		(22,722)		37,407		171,229		50,308
	Unearned premiums, net of prepaid reinsurance			27,006			16,677		241,329		(133,430)		(57,697)		285,012		248,079
	Insurance balances receivable			50,258			(135,986)		(174,899)		75,381		74,508		(260,627)		(229,580)
	Funds held			8,742			33,356		184,629		(257,299)		12,468		226,727		(38,763)
	Reinsurance balances payable			(20,754)			64,141		(12,982)		(20,620)		(12,241)		30,405		57,379
	Net deferred acquisition costs			(8,568)			3,845		(40,443)		19,290		7,861		(45,166)		(37,941)
	Net deferred tax assets			(5,445)			1,413		521		4,363		(1,282)		(3,511)		(16,252)
	Accounts payable and accrued liabilities			57,870			30,348		(83,745)		41,457		27,061		4,473		(18,540)
	Other items, net			(23,066)			(1,723)		29,230		(176)		21,628		4,441		34,508
		Net cash provided by (used in) operating activities		220,795			145,842		303,096		(223,741)		204,530		669,733		338,172
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Net sales (purchases) of investments				90,152			(6,632)		(191,042)		(236,042)		188,616		(107,522)		159,117
Purchases of fixed assets				(8,889)			(3,265)		(2,336)		(1,139)		(808)		(14,490)		(4,171)
Change in restricted cash				(51,203)			16,815		4,823		108,124		(63,471)		(29,565)		(74,032)
Net cash paid for acquisitions				—			(2,565)		—		—		—		(2,565)		—
		Net cash provided by (used in) investing activities		30,060			4,353		(188,555)		(129,057)		124,337		(154,142)		80,914
CASH FLOWS USED IN FINANCING ACTIVITIES:
Dividends paid — par value reduction				—			—		—		—		—		—		(12,981)
Dividends paid				(21,857)			(16,475)		(16,732)		(16,942)		(17,117)		(55,064)		(17,117	)
Proceeds from the exercise of stock options				1,327			3,283		3,030		3,672		3,172		7,640		8,465
Share repurchases				(28,397	)		(69,151)		(68,659)		(52,843)		(37,592)		(166,207)		(120,163)
		Net cash used in financing activities		(48,927)			(82,343)		(82,361)		(66,113)		(51,537)		(213,631)		(141,796)
Effect of exchange rate changes on foreign currency cash				(5,796)			1,484		1,686		(2,200)		1,614		(2,626)		(6,122)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS				196,132			69,336		33,866		(421,111)		278,944		299,334		271,168
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD				635,138			565,802		531,936		953,047		674,103		531,936		681,879
CASH AND CASH EQUIVALENTS, END OF PERIOD			$	831,270		$	635,138	$	565,802	$	531,936	$	953,047	$	831,270	$	953,047

Page 8

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED SEGMENT RESULTS – CURRENT QUARTER

			Three Months Ended September 30, 2014
			U.S.			International						Consolidated
			Insurance			Insurance			Reinsurance			Totals
Revenues
	Gross premiums written		$	386,681		$	144,236		$	176,967		$	707,884
	Net premiums written		$	321,713		$	87,820		$	159,209		$	568,742
	Net premiums earned		$	224,764		$	94,013		$	222,960		$	541,737
		Total revenues	$	224,764		$	94,013		$	222,960		$	541,737
Expenses
	Net losses and loss expenses		$	153,010		$	55,814		$	127,266		$	336,090
	Acquisition costs			31,131			1209			40,063			72,403
	General and administrative expenses			41,730			27,993			18,571			88,294
		Total expenses	$	225,871		$	85,016		$	185,900		$	496,787
Underwriting (loss) income			$	(1,107)		$	8,997		$	37,060		$	44,950
	Other insurance-related income			1,032			—			—			1,032
	Other insurance-related expenses			1,270			5,305			—			6,575
Segment (loss) income			$	(1,345)		$	3,692		$	37,060		$	39,407
	Net investment income												43,412
	Net realized investment losses												(35,136)
	Amortization of intangible assets												(633)
	Interest expense												(14,325)
	Foreign exchange loss												(278)
Income before income taxes												$	32,447
GAAP Ratios
Loss and loss expense ratio				68.1	%		59.4	%		57.1	%		62.0	%
Acquisition cost ratio				13.9	%		1.3	%		18.0	%		13.4	%
General and administrative expense ratio				18.6	%		29.8	%		8.3	%		16.3	%
Expense ratio				32.5	%		31.1	%		26.3	%		29.7	%
Combined ratio				100.6	%		90.5	%		83.4	%		91.7	%

Page 9

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED SEGMENT RESULTS – PRIOR YEAR QUARTER

			Three Months Ended September 30, 2013
			U.S.			International						Consolidated
			Insurance			Insurance			Reinsurance			Totals
Revenues
	Gross premiums written		$	308,709		$	132,881		$	139,303		$	580,893
	Net premiums written		$	238,792		$	75,632		$	138,653		$	453,077
	Net premiums earned		$	207,602		$	87,554		$	215,617		$	510,773
		Total revenues	$	207,602		$	87,554		$	215,617		$	510,773
Expenses
	Net losses and loss expenses		$	141,222		$	31,094		$	104,654		$	276,970
	Acquisition costs			28,426			(282)			36,970			65,114
	General and administrative expenses			41,616			26,450			20,487			88,553
		Total expenses	$	211,264		$	57,262		$	162,111		$	430,637
Underwriting (loss) income			$	(3,662)		$	30,292		$	53,506		$	80,136
	Other insurance-related income			—			—			—			—
	Other insurance-related expenses			—			—			—			—
Segment (loss) income			$	(3,662)		$	30,292		$	53,506		$	80,136
	Net investment income												39,271
	Net realized investment losses												27,487
	Amortization of intangible assets												(633)
	Interest expense												(14,094)
	Foreign exchange loss												(4,353)
Income before income taxes												$	127,814
GAAP Ratios
Loss and loss expense ratio				68.0	%		35.5	%		48.5	%		54.2	%
Acquisition cost ratio				13.7	%		(0.3	)%		17.1	%		12.7	%
General and administrative expense ratio				20.0	%		30.2	%		9.5	%		17.3	%
Expense ratio				33.7	%		29.9	%		26.6	%		30.0	%
Combined ratio				101.7	%		65.4	%		75.1	%		84.2	%

Page 10

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED SEGMENT RESULTS – CURRENT YEAR TO DATE

			Nine Months Ended September 30, 2014
			U.S.			International						Consolidated
			Insurance			Insurance			Reinsurance			Totals
Revenues
	Gross premiums written		$	998,051		$	483,079		$	888,552		$	2,369,682
	Net premiums written		$	746,403		$	285,450		$	862,427		$	1,894,280
	Net premiums earned		$	651,480		$	271,557		$	686,232		$	1,609,269
		Total revenues	$	651,480		$	271,557		$	686,232		$	1,609,269
Expenses
	Net losses and loss expenses		$	440,491		$	115,299		$	370,441		$	926,231
	Acquisition costs			88,311			835			125,258			214,404
	General and administrative expenses			125,760			82,164			56,898			264,822
		Total expenses	$	654,562		$	198,298		$	552,597		$	1,405,457
Underwriting (loss) income			$	(3,082)		$	73,259		$	133,635		$	203,812
	Other insurance-related income			1,032			—			—			1,032
	Other insurance-related expenses			1,270			5,305			—			6,575
Segment (loss) income			$	(3,320)		$	67,954		$	133,635		$	198,269
	Net investment income												127,824
	Net realized investment gains												104,286
	Amortization of intangible assets												(1,900)
	Interest expense												(43,451)
	Foreign exchange loss												(978)
Income before income taxes												$	384,050
GAAP Ratios
Loss and loss expense ratio				67.6	%		42.5	%		54.0	%		57.6	%
Acquisition cost ratio				13.6	%		0.3	%		18.3	%		13.3	%
General and administrative expense ratio				19.3	%		30.3	%		8.3	%		16.5	%
Expense ratio				32.9	%		30.6	%		26.6	%		29.8	%
Combined ratio				100.5	%		73.1	%		80.6	%		87.4	%

Page 11

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED SEGMENT RESULTS – PRIOR YEAR TO DATE

			Nine Months Ended September 30, 2013
			U.S.			International						Consolidated
			Insurance			Insurance			Reinsurance			Totals
Revenues
	Gross premiums written		$	872,024		$	453,990		$	857,160		$	2,183,174
	Net premiums written		$	652,464		$	259,771		$	817,116		$	1,729,351
	Net premiums earned		$	593,477		$	258,809		$	628,986		$	1,481,272
		Total revenues	$	593,477		$	258,809		$	628,986		$	1,481,272
Expenses
	Net losses and loss expenses		$	398,910		$	90,997		$	317,369		$	807,276
	Acquisition costs			78,824			(1,489)			109,081			186,416
	General and administrative expenses			119,514			75,374			56,930			251,818
		Total expenses	$	597,248		$	164,882		$	483,380		$	1,245,510
Underwriting (loss) income			$	(3,771)		$	93,927		$	145,606		$	235,762
	Other insurance-related income			—			—			—			—
	Other insurance-related expenses			—			—			—			—
Segment (loss) income			$	(3,771)		$	93,927		$	145,606		$	235,762
	Net investment income												110,294
	Net realized investment losses												(8,074)
	Amortization of intangible assets												(1,900)
	Interest expense												(42,416)
	Foreign exchange loss												(7,361)
Income before income taxes												$	286,305
GAAP Ratios
Loss and loss expense ratio				67.2	%		35.2	%		50.5	%		54.5	%
Acquisition cost ratio				13.3	%		(0.6	)%		17.3	%		12.6	%
General and administrative expense ratio				20.1	%		29.1	%		9.1	%		17.0	%
Expense ratio				33.4	%		28.5	%		26.4	%		29.6	%
Combined ratio				100.6	%		63.7	%		76.9	%		84.1	%

Page 12

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

GROSS PREMIUMS WRITTEN BY SEGMENT AND GEOGRAPHIC LOCATION

	Three Months Ended								Nine Months Ended
	September 30, 2014				September 30, 2013				September 30, 2014				September 30, 2013
	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
Gross Premiums Written by Segment
U.S. Insurance	$	386,681	54.6	%	$	308,709	53.1	%	$	998,051	42.1	%	$	872,024	39.9	%
International Insurance		144,236	20.4	%		132,881	22.9	%		483,079	20.4	%		453,990	20.8	%
Reinsurance		176,967	25.0	%		139,303	24.0	%		888,552	37.5	%		857,160	39.3	%
Total	$	707,884	100.0	%	$	580,893	100.0	%	$	2,369,682	100.0	%	$	2,183,174	100.0	%
Gross Premiums Written by Underwriting Location
United States	$	483,992	68.4	%	$	377,618	65.0	%	$	1,447,652	61.1	%	$	1,296,212	59.4	%
Bermuda		109,503	15.5	%		111,103	19.1	%		525,005	22.2	%		550,815	25.2	%
Europe		64,947	9.2	%		52,004	9.0	%		245,931	10.4	%		198,747	9.1	%
Asia Pacific		45,070	6.4	%		40,168	6.9	%		142,798	6.0	%		137,400	6.3	%
Canada		4,372	0.5	%		—	0.0	%		8,296	0.3	%		—	0.0	%
Total	$	707,884	100.0	%	$	580,893	100.0	%	$	2,369,682	100.0	%	$	2,183,174	100.0	%
Direct Premiums Written by Insured Location(1)
United States	$	460,676	86.8	%	$	381,061	86.3	%	$	1,274,142	86.0	%	$	1,155,368	87.1	%
United Kingdom		22,811	4.3	%		27,905	6.3	%		64,877	4.4	%		58,180	4.4	%
Canada		7,524	1.4	%		2,096	0.5	%		18,198	1.2	%		6,798	0.5	%
Australia		6,665	1.3	%		4,345	1.0	%		17,246	1.2	%		14,004	1.1	%
Argentina		2,915	0.5	%		179	0.0	%		4,468	0.3	%		3,060	0.2	%
All other		30,326	5.7	%		26,004	5.9	%		102,199	6.9	%		88,604	6.7	%
Total	$	530,917	100.0	%	$	441,590	100.0	%	$	1,481,130	100.0	%	$	1,326,014	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								Nine Months Ended
	September 30, 2014				September 30, 2013				September 30, 2014				September 30, 2013
	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
U.S. Insurance
General casualty	$	153,025	39.6	%	$	107,222	34.7	%	$	351,980	35.3	%	$	271,466	31.1	%
Professional liability		66,010	17.1	%		66,199	21.4	%		190,185	19.1	%		193,727	22.2	%
Programs		46,694	12.1	%		41,114	13.3	%		119,929	12.0	%		107,715	12.4	%
Healthcare		38,937	10.1	%		43,378	14.1	%		111,040	11.1	%		143,417	16.4	%
General property		22,403	5.8	%		18,686	6.1	%		76,138	7.6	%		73,980	8.5	%
Inland marine		17,371	4.5	%		12,107	3.9	%		50,173	5.0	%		32,804	3.8	%
Environmental		15,821	4.1	%		8,363	2.7	%		37,564	3.8	%		24,690	2.8	%
Other		26,420	6.7	%		11,640	3.8	%		61,042	6.1	%		24,225	2.8	%
Total	$	386,681	100.0	%	$	308,709	100.0	%	$	998,051	100.0	%	$	872,024	100.0	%
International Insurance
Professional liability	$	51,505	35.7	%	$	43,808	33.0	%	$	151,281	31.3	%	$	134,171	29.6	%
General casualty		32,376	22.4	%		28,597	21.5	%		93,081	19.3	%		96,959	21.4	%
General property		23,299	16.2	%		22,701	17.1	%		125,446	26.0	%		126,569	27.9	%
Healthcare		19,192	13.3	%		18,603	14.0	%		66,311	13.7	%		66,320	14.6	%
Aviation		8,660	6.0	%		13,110	9.9	%		18,176	3.8	%		13,110	2.9	%
Trade credit		6,944	4.8	%		6,062	4.5	%		22,438	4.6	%		16,861	3.6	%
Other		2,260	1.6	%		—	0.0	%		6,346	1.3	%		—	0.0	%
Total	$	144,236	100.0	%	$	132,881	100.0	%	$	483,079	100.0	%	$	453,990	100.0	%
Reinsurance
Casualty	$	86,687	49.0	%	$	56,044	40.2	%	$	236,199	26.6	%	$	230,335	26.9	%
Property		83,041	46.9	%		72,530	52.1	%		453,305	51.0	%		436,548	50.9	%
Specialty		7,239	4.1	%		10,729	7.7	%		199,048	22.4	%		190,277	22.2	%
Total	$	176,967	100.0	%	$	139,303	100.0	%	$	888,552	100.0	%	$	857,160	100.0	%

Page 14

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED INCURRED LOSS ANALYSIS BY SEGMENT

	Three Months Ended								Nine Months Ended
	September 30, 2014				September 30, 2013				September 30, 2014				September 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	$	152,427	67.8	%	$	137,470	66.2	%	$	438,074	67.2	%	$	387,553		65.3	%
Current year - property catastrophe		—	0.0	%		—	0.0	%		—	0.0	%		—		0.0	%
Prior year - increase (decrease)		583	0.3	%		3,752	1.8	%		2,417	0.4	%		11,357		1.9	%
Net losses and loss expenses	$	153,010	68.1	%	$	141,222	68.0	%	$	440,491	67.6	%	$	398,910		67.2	%
International Insurance
Current year - non-catastrophe	$	70,069	74.5	%	$	60,853	69.5	%	$	178,938	66.0	%	$	176,116		68.1	%
Current year - property catastrophe		15,000	16.0	%		—	0.0	%		15,000	5.5	%		—		0.0	%
Prior year - increase (decrease)		(29,255)	(31.1	)%		(29,759)	(34.0	)%		(78,639)	(29.0	)%		(85,119)		(32.9	)%
Net losses and loss expenses	$	55,814	59.4	%	$	31,094	35.5	%	$	115,299	42.5	%	$	90,997		35.2	%
Reinsurance
Current year - non-catastrophe	$	130,724	58.7	%	$	140,097	64.9	%	$	407,099	59.3	%	$	397,555		63.2	%
Current year - property catastrophe		14,750	6.6	%		—	0.0	%		28,000	4.1	%		—		0.0	%
Prior year - increase (decrease)		(18,208)	(8.2	)%		(35,443)	(16.4	)%		(64,658)	(9.4	)%		(80,186)		(12.7	)%
Net losses and loss expenses	$	127,266	57.1	%	$	104,654	48.5	%	$	370,441	54.0	%	$	317,369		50.5	%
Consolidated
Current year - non-catastrophe	$	353,220	65.2	%	$	338,420	66.2	%	$	1,024,111	63.7	%	$	961,224		64.9	%
Current year - property catastrophe		29,750	5.5	%		—	0.0	%		43,000	2.7	%		—		0.0	%
Prior year - increase (decrease)		(46,880)	(8.7	)%		(61,450)	(12.0	)%		(140,880)	(8.8	)%		(153,948	)	(10.4	)%
Net losses and loss expenses	$	336,090	62.0	%	$	276,970	54.2	%	$	926,231	57.6	%	$	807,276		54.5	%
(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 September 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)	$	0.7	$	—		$	(0.1)	$	—	$	—	$	1.9		$	0.8	$	2.1	$	—	$	5.3
Programs		—		—		(0.2	)		(0.6)		(0.8)		(1.1)		(1.4)			(2.3)		1.1		0.2		(5.1)
General property		—		0.5		—			—		—		—		(0.2)			3.0		(0.6)		—		2.7
Healthcare		0.4		(1.1)		(0.6	)		0.1		—		(0.1)		—			1.9		4.1		7.6		12.3
Professional liability		(0.4)		10.1		(15.8	)		8.7		(2.7)		(14.2)		(2.6)			(1.1)		(2.1)		7.3		(12.8)
Inland Marine		—		—		—			—		—		—		—			—		(0.7)		(1.2)		(1.9)
Environmental		—		—		—			—		—		—		—			—		0.1		—		0.1
Total	$	(0.1)	$	10.2	$	(16.6)		$	8.1	$	(3.5)	$	(15.4)	$	(2.3)		$	2.3	$	4.0	$	13.9	$	0.6
International Insurance
General casualty	$	0.8	$	(0.6)	$	(1.0)		$	(1.1)	$	(3.7)	$	(5.0)	$	(0.3)		$	(2.5)	$	(0.1)	$	—	$	(13.5)
General property		0.1		0.6		(0.4)			—		(0.4)		—		(0.5)			(3.5)		(0.2)		(1.3)		(5.6)
Professional liability		(0.2)		(0.4)		(1.3)			(7.2)		(0.8)		(2.0)		(3.9)			(1.5)		14.9		—		(2.4)
Healthcare		(1.2)		(0.9)		(1.1)			(0.2)		(0.2)		(0.1)		(4.0)			0.1		(1.2)		1.2		(7.6)
Trade Credit		—		—		—			—		—		—		—			—		(2.0)		1.9		(0.1)
Total	$	(0.5)	$	(1.3)	$	(3.8)		$	(8.5)	$	(5.1)	$	(7.1)	$	(8.7)		$	(7.4)	$	11.4	$	1.8	$	(29.2)
Reinsurance
Property	$	(0.1)	$	0.9	$	—		$	0.1	$	(0.1)	$	—	$	0.6		$	0.6	$	1.1	$	(14.8)	$	(11.7)
Casualty		0.1		4.6		(1.0)			(1.6)		(4.1)		(0.8)		(0.6)			(3.1)		(0.1)		(0.1)		(6.7)
Specialty		0.2		(0.2)		—			(0.1)		(0.1)		(0.1)		(0.6)			(0.6)		0.9		0.7		0.1
Total	$	0.2	$	5.3	$	(1.0)		$	(1.6)	$	(4.3)	$	(0.9)	$	(0.6)		$	(3.1)	$	1.9	$	(14.2)	$	(18.3)
Consolidated
U.S. insurance	$	(0.1)	$	10.2	$	(16.6)		$	8.1	$	(3.5)	$	(15.4)	$	(2.3)		$	2.3	$	4.0	$	13.9	$	0.6
International insurance		(0.5)		(1.3)		(3.8)			(8.5)		(5.1)		(7.1)		(8.7)			(7.4)		11.4		1.8		(29.2)
Reinsurance		0.2		5.3		(1.0)			(1.6)		(4.3)		(0.9)		(0.6	)		(3.1)		1.9		(14.2)		(18.3)
Total	$	(0.4)	$	14.2	$	(21.4)		$	(2.0)	$	(12.9)	$	(23.4)	$	(11.6)		$	(8.2)	$	17.3	$	1.5	$	(46.9)

Page 16

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

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

	Nine Months Ended September 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	$	(3.1)	$	0.7	$	—		$	(0.8)	$	(4.8)	$	0.3	$	3.2	$	2.8	$	0.2	$	4.2	$	2.7
Programs		—		—		(0.2)			0.3		0.5		(4.4)		(1.1)		(4.1)		0.3		(1.2)		(9.9)
General property		—		0.5		—			—		—		—		0.3		1.4		(0.9)		3.2		4.5
Healthcare		(1.3)		(1.6)		(0.6)			(0.2)		(0.6)		3.0		0.1		16.1		7.9		9.7		32.5
Professional liability		(0.4)		10.1		(15.8)			8.4		(3.1)		(23.3)		(3.6)		0.1		(1.7)		7.3		(22.0)
Inland marine		—		—		—			—		—		—		—		(0.3)		(1.2)		(1.6)		(3.1)
Environmental		—		—		—			—		—		—		(0.2)		(1.0)		(1.1)		—		(2.3)
Total	$	(4.8)	$	9.7	$	(16.6)		$	7.7	$	(8.0)	$	(24.4)	$	(1.3)	$	15.0	$	3.5	$	21.6	$	2.4
International Insurance
General casualty	$	10.4	$	(2.0)	$	(3.5)		$	(4.6)	$	7.7	$	(14.3)	$	(9.1)	$	(0.6)	$	(0.2)	$	—	$	(16.2)
General property		(0.2)		0.7		(0.9)			(1.1)		(0.7)		(0.7)		(0.4)		(8.1)		(4.8)		(11.4)		(27.6)
Professional liability		(1.6)		(2.0)		1.9			(30.0)		(1.8)		(12.3)		(7.5)		(2.3)		20.8		—		(34.8)
Healthcare		(1.3)		(1.8)		(2.0)			(1.2)		(1.0)		(0.1)		(7.9)		(0.4)		(1.4)		17.2		0.1
Trade credit		—		—		—			—		—		—		(0.1)		(1.0)		(2.2)		3.2		(0.1)
Total	$	7.3	$	(5.1)	$	(4.5)		$	(36.9)	$	4.2	$	(27.4)	$	(25.0)	$	(12.4)	$	12.2	$	9.0	$	(78.6)
Reinsurance
Property	$	0.4	$	0.9	$	(0.2)		$	(0.1)	$	(0.3)	$	0.3	$	1.6	$	(5.2)	$	(3.2)	$	(44.4)	$	(50.2)
Casualty		(0.6)		4.6		(2.8)			(3.7)		(5.3)		(1.8)		0.4		(2.0)		(0.3)		1.3		(10.2)
Specialty		(0.2)		(0.5)		(0.1)			(0.2)		(0.1)		0.2		(0.3)		(1.0)		5.7		(7.8)		(4.3)
Total	$	(0.4)	$	5.0	$	(3.1)		$	(4.0)	$	(5.7)	$	(1.3)	$	1.7	$	(8.2)	$	2.2	$	(50.9)	$	(64.7)
Consolidated
U.S. insurance	$	(4.8)	$	9.7	$	(16.6	)	$	7.7	$	(8.0)	$	(24.4)	$	(1.3)	$	15.0	$	3.5	$	21.6	$	2.4
International insurance		7.3		(5.1)		(4.5)			(36.9)		4.2		(27.4)		(25.0)		(12.4)		12.2		9.0		(78.6)
Reinsurance		(0.4)		5.0		(3.1)			(4.0)		(5.7)		(1.3)		1.7		(8.2)		2.2		(50.9)		(64.7)
Total	$	2.1	$	9.6	$	(24.2)		$	(33.2)	$	(9.5)	$	(53.1)	$	(24.6)	$	(5.6)	$	17.9	$	(20.3)	$	(140.9)

Page 17

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

NET LOSS RESERVE DEVELOPMENT BY LOSS YEAR – PRIOR YEAR QUARTER

	Three Months Ended September 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	$	—	$	—	$	—	$	—	$	(4.6)	$	—	$	(0.3)	$	—	$	0.6	$	3.0	$	(1.3)
Programs		—		—		—		—		(0.2)		(1.7)		(1.2)		(1.4)		0.5		0.5		(3.5)
General property		—		0.6		(0.2)		3.2		—		—		—		0.2		(0.2)		(1.0)		2.6
Healthcare		(3.0)		(0.8)		0.2		—		—		(2.1)		(2.3)		—		10.1		5.1		7.2
Professional liability		—		(0.4)		(1.1)		(9.3)		(0.7)		0.9		0.3		(3.6)		2.4		10.5		(1.0)
Other		—		—		—		—		—		—		—		—		(0.2)		—		(0.2)
Total	$	(3.0)	$	(0.6)	$	(1.1)	$	(6.1)	$	(5.5)	$	(2.9)	$	(3.5)	$	(4.8)	$	13.2	$	18.1	$	3.8
International Insurance
General casualty	$	0.7	$	(0.6)	$	(1.4)	$	(2.3)	$	(1.8)	$	(4.1)	$	(0.6)	$	(2.9)	$	(0.1)	$	—	$	(13.1)
General property		—		—		3.4		(0.1)		(0.1)		(0.1)		(0.1)		(0.8)		(1.3)		(2.5)		(1.6)
Professional liability		0.2		(0.4)		1.4		(1.1)		(3.6)		(0.2)		(0.3)		(0.2)		(0.4)		—		(4.6)
Healthcare		(0.7)		(0.2)		(0.2)		(0.5)		(3.1)		(0.3)		(4.9)		(0.2)		(0.3)		—		(10.4)
Total	$	0.2	$	(1.2)	$	3.2	$	(4.0)	$	(8.6)	$	(4.7)	$	(5.9)	$	(4.1)	$	(2.1)	$	(2.5)	$	(29.7)
Reinsurance
Property	$	—	$	0.1	$	1.0	$	—	$	—	$	0.0	$	(0.4)	$	(2.2)	$	(6.0)	$	(14.2)	$	(21.7)
Casualty		(1.6)		(2.4)		0.6		0.1		0.3		(2.0)		(1.4)		(0.7)		(0.2)		0.4		(6.9)
Specialty		—		(0.1)		(0.1)		(0.1)		(0.1)		(0.1)		(0.2)		0.3		(5.9)		(0.6)		(6.9)
Total	$	(1.6)	$	(2.4)	$	1.5	$	0.0	$	0.2	$	(2.1)	$	(2.0)	$	(2.6)	$	(12.1)	$	(14.4)	$	(35.5)
Consolidated
U.S. insurance	$	(3.0)	$	(0.6)	$	(1.1)	$	(6.1)	$	(5.5)	$	(2.9)	$	(3.5)	$	(4.8)	$	13.2	$	18.1	$	3.8
International insurance		0.2		(1.2)		3.2		(4.0)		(8.6)		(4.7)		(5.9)		(4.1)		(2.1)		(2.5)		(29.7)
Reinsurance		(1.6)		(2.4)		1.5		—		0.2		(2.1)		(2.0)		(2.6)		(12.1)		(14.4)		(35.5)
Total	$	(4.4)	$	(4.2)	$	3.6	$	(10.1)	$	(13.9)	$	(9.7)	$	(11.4)	$	(11.5)	$	(1.0)	$	1.2	$	(61.4)

Page 18

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

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

	Nine Months Ended September 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)	$	—	$	(9.1)	$	(3.1)	$	(0.2)	$	—	$	2.6	$	3.5	$	(7.5)
Programs		—		—		—		(1.4)		(3.5)		(1.5)		(1.9)		(4.1)		(0.1)		3.3		(9.2)
General property		—		0.7		(0.2)		3.5		(0.2)		(1.3)		(1.3)		—		1.3		1.0		3.5
Healthcare		(3.1)		(1.8)		(1.4)		(2.7)		(2.3)		(8.3)		(3.5)		(1.6)		23.2		14.1		12.6
Professional liability		—		(0.9)		(2.5)		(6.6)		(3.4)		(2.9)		0.4		(6.3)		4.5		28.8		11.1
Other		—		—		—		—		—		—		—		(0.1)		(0.6)		1.6		0.9
Total	$	(3.1)	$	(2.7)	$	(4.6)	$	(7.2)	$	(18.5)	$	(17.1)	$	(6.5)	$	(12.1)	$	30.9	$	52.3	$	11.4
International Insurance
General casualty	$	7.0	$	1.8	$	(8.4)	$	(9.0)	$	(10.5)	$	(8.8)	$	(1.8)	$	(3.1)	$	(0.1)	$	0.9	$	(32.0)
General property		—		—		3.3		(0.3)		1.0		(1.1)		(3.6)		(4.8)		(10.8)		(10.6)		(26.9)
Professional liability		(0.1)		(5.4)		4.7		(4.0)		(14.5)		0.1		(6.8)		(0.6)		(0.5)		—		(27.1)
Healthcare		(0.8)		(0.5)		(0.7)		(1.6)		5.1		(4.8)		5.7		(1.1)		(0.4)		—		0.9
Total	$	6.1	$	(4.1)	$	(1.1)	$	(14.9)	$	(18.9)	$	(14.6)	$	(6.5)	$	(9.6)	$	(11.8)	$	(9.7)	$	(85.1)
Reinsurance
Property	$	—	$	0.2	$	(1.3)	$	0.1	$	—	$	(0.2)	$	(0.5)	$	(5.1)	$	(14.5)	$	(49.7)	$	(71.0)
Casualty		(1.4)		(3.6)		0.3		0.8		(1.9)		(5.6)		(1.8)		0.2		3.1		5.7		(4.2)
Specialty		—		(0.4)		(0.6)		0.2		(0.1)		(3.2)		0.7		0.2		(3.6)		1.8		(5.0)
Total	$	(1.4)	$	(3.8)	$	(1.6)	$	1.1	$	(2.0)	$	(9.0)	$	(1.6)	$	(4.7)	$	(15.0)	$	(42.2)	$	(80.2)
Consolidated
U.S. insurance	$	(3.1)	$	(2.7)	$	(4.6)	$	(7.2)	$	(18.5)	$	(17.1)	$	(6.5)	$	(12.1)	$	30.9	$	52.3	$	11.4
International insurance		6.1		(4.1)		(1.1)		(14.9)		(18.9)		(14.6)		(6.5)		(9.6)		(11.8)		(9.7)		(85.1)
Reinsurance		(1.4)		(3.8)		(1.6)		1.1		(2.0)		(9.0)		(1.6)		(4.7)		(15.0)		(42.2)		(80.2)
Total	$	1.6	$	(10.6)	$	(7.3)	$	(21.0)	$	(39.4)	$	(40.7)	$	(14.6)	$	(26.4)	$	4.1	$	0.4	$	(153.9)

Page 19

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

RESERVE FOR LOSSES AND LOSS EXPENSES

	As of September 30, 2014
	U.S.			International						Consolidated
	Insurance			Insurance			Reinsurance			Total
Case reserves (net of reinsurance recoverable)	$	497,942		$	353,884		$	472,591		$	1,324,417
IBNR (net of reinsurance recoverable)		1,162,523			1,098,500			1,117,814			3,378,837
Total	$	1,660,465		$	1,452,384		$	1,590,405		$	4,703,254
IBNR/Total reserves (net of reinsurance recoverable)		70.0	%		75.6	%		70.3	%		71.8	%
	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

	September 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+	$	280,865	20.8	%	$	59,185	A+	$	214,070	17.3	%	$	57,621
Axis Capital	A+		148,994	11.0	%		7,789	A+		143,063	11.6	%		6,485
Arch Re	A+		137,210	10.2	%		3,588	A+		143,037	11.6	%		3,588
Markel	A		88,015	6.6	%		35,898	A		86,462	7.0	%		39,292
Platinum Underwriters	A		85,186	6.3	%		—	A		98,811	8.0	%		—
Odyssey Reinsurance Company	A		82,819	6.1	%		—	A		77,023	6.2	%		—
XL Group	A		79,824	5.9	%		—	A		68,857	5.6	%		27,048
Swiss Re	A+		60,678	4.5	%		—	A+		50,588	4.1	%		—
National Indemnity Company	A++		56,981	4.2	%		—	A++		61,547	5.0	%		—
Transatlantic Holdings, Inc.	A		56,627	4.2	%		—	A		50,125	4.1	%		—
Top ten reinsurers			1,077,199	79.8	%		106,460			993,583	80.5	%		134,034
Other reinsurers' balances			271,810	20.2	%		20,994			240,921	19.5	%		19,546
Total reinsurance recoverable		$	1,349,009	100.0	%	$	127,454		$	1,234,504	100.0	%	$	153,580
		Reinsurance							Reinsurance
A.M Best Rating		Recoverable		Percentage		Collateral			Recoverable		Percentage		Collateral
A++		$	79,305	5.9	%	$	947		$	76,994	6.2	%	$	637
A+			753,604	55.9	%		79,090			652,440	53.0	%		79,291
A			501,526	37.2	%		38,965			486,989	39.4	%		72,959
A-			2,983	0.2	%		—			1,750	0.1	%		—
Total "A-" or higher			1,337,418	99.2	%		119,002			1,218,173	98.7	%		152,887
B++			4	0.0	%		—			2,830	0.2	%		693
NR			11,587	0.8	%		8,452			13,501	1.1	%		—
Total reinsurance recoverable		$	1,349,009	100.0	%	$	127,454		$	1,234,504	100.0	%	$	153,580

Page 21

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

PROBABLE MAXIMUM LOSSES

Consolidated Estimated Net Loss as of September 1, 2014
		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	$	499	$	704	U.S. Southeast (1)	Hurricane	$	398	$	540
U.S. total	Earthquake	$	379	$	496	U.S. Gulf Coast (2)	Hurricane	$	313	$	397
						U.S. Northeast (3)	Hurricane	$	267	$	442
						California	Earthquake	$	349	$	438

PMLs Over the Most Recent Six Quarters as a % of Total Capital

(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.

(4) Total capital combines shareholders' equity and senior notes.

Note: We develop the estimates of losses expected from certain catastrophes for our portfolio of (re)insurance contracts using commercially available catastrophe models, including RMS and AIR. 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 September 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.

Page 22

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED TOTAL INVESTMENT PORTFOLIO

				As of September 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				$	1,010,228		AAA	11.2	%	$	1,010,228	$	—	$	1,010,228	$	681,329
U.S. government securities					998,487		AA+	11.1	%		998,487		—		998,487		1,370,089
U.S. government agencies					185,628		AA+	2.1	%		185,628		—		185,628		306,700
Non-U.S. government and government agencies					219,287		AA+	2.4	%		219,287		—		219,287		191,776
State, municipalities and political subdivisions					260,690		AA-	2.9	%		236,163		24,527		260,690		231,555
Mortgage-backed securities:
	Agency MBS				593,178		AA+	6.6	%		593,178		—		593,178		725,515
	Non-agency RMBS				125,990		B+	1.4	%		38,140		87,850		125,990		275,820
	CMBS				521,194		BBB	5.8	%		304,201		216,993		521,194		291,167
		Total mortgage-backed securities			1,240,362			13.8	%		935,519		304,843		1,240,362		1,292,502
Corporate securities(1):
	Financials				1,194,949		A	13.3	%		1,158,666		36,283		1,194,949		958,794
	Industrials				1,202,906		BBB	13.3	%		883,715		319,191		1,202,906		1,174,047
	Utilities				125,513		BBB+	1.4	%		116,253		9,260		125,513		69,426
		Total corporate securities			2,523,368			28.0	%		2,158,634		364,734		2,523,368		2,202,267
Asset-backed securities:
	Credit cards				72,741		AAA	0.8	%		72,741		—		72,741		20,945
	Auto receivables				27,253		AAA	0.3	%		27,253		—		27,253		18,513
	Student Loans				164,107		AA+	1.8	%		164,107		—		164,107		151,507
	Collateralized loan obligations				372,231		AA	4.1	%		332,649		39,582		372,231		251,233
	Other				64,083		AAA	0.7	%		64,083		—		64,083		63,711
		Total asset-backed securities			700,415			7.7	%		660,833		39,582		700,415		505,909
Equities					945,076		N/A	10.5	%		—		945,076		945,076		699,846
Other invested assets:
	Private equity				303,111		N/A	3.4	%		—		303,111		303,111		216,825
	Hedge funds				471,469		N/A	5.2	%		—		471,469		471,469		515,298
	Other private securities				123,077		N/A	1.4	%		—		123,077		123,077		147,311
	High yield loan fund				31,544		N/A	0.3	%		—		31,544		31,544		31,958
		Total other invested assets			929,201			10.3	%		—		929,201		929,201		911,392
			Total investment portfolio	$	9,012,742			100.0	%	$	6,404,779	$	2,607,963	$	9,012,742	$	8,393,365
Annualized book yield, year to date					2.0	%											1.9	%
Duration(2)					2.0 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						Nine Months Ended
			September 30,			September 30,			September 30,			September 30,
			2014			2013			2014			2013
NET INVESTMENT INCOME
Fixed maturity investments		$	38,762		$	31,179		$	110,998		$	96,366
Equity securities			3,711			6,110			12,876			13,718
Other invested assets: hedge funds and private equity			2,249			3,812			8,767			6,001
Other invested assets: other private securities			3,292			1,997			7,291			5,115
Cash and cash equivalents			552			302			1,562			1,319
Expenses			(5,154)			(4,129)			(13,670)			(12,225)
Net investment income		$	43,412		$	39,271		$	127,824		$	110,294
NET REALIZED INVESTMENT (LOSSES) GAINS
Net realized gains (losses) on sale:
	Fixed maturity investments	$	5,841		$	(4,836)		$	23,607		$	24,714
	Equity securities		(627)			13,913			43,774			30,100
	Other invested assets: hedge funds and private equity		13,604			2,068			53,171			16,761
Mark-to-market (losses) gains:
	Fixed maturity investments		(40,843)			30,383			18,039			(101,205)
	Equity securities		(8,479)			(17,198)			(8,768)			(18,555)
	Other invested assets: hedge funds and private equity		(6,804)			7,326			(1,068)			36,719
	Net realized and unrealized gains (losses) on derivatives		2,172			(4,169)			(24,469)			3,392
Net realized investment (losses) gains		$	(35,136)		$	27,487		$	104,286		$	(8,074)
TOTAL FINANCIAL STATEMENT PORTFOLIO RETURN		$	8,276		$	66,758		$	232,110		$	102,220
ANNUALIZED INVESTMENT BOOK YIELD
Net investment income, recurring		$	43,412		$	39,271		$	127,824		$	110,294
Annualized net investment income			173,648			157,084			170,432			147,059
Average aggregate invested assets, at cost		$	8,612,758		$	8,361,648		$	8,432,498		$	8,325,506
Annualized investment book yield			2.0	%		1.9	%		2.0	%		1.8	%
FINANCIAL STATEMENT PORTFOLIO RETURN
Total financial statement portfolio return		$	8,276		$	66,758		$	232,110		$	102,220
Average aggregate invested assets, at fair value		$	8,840,953		$	8,522,686		$	8,636,003		$	8,534,852
Financial statement portfolio return			0.1	%		0.8	%		2.7	%		1.2	%

Page 24

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

ADDITIONAL INVESTMENT DETAIL

Other Invested Assets:								Top 10 Corporate Exposures:
			Carrying Value										Fair Value
Fund Details			September 30, 2014		Unfunded Commitments			Corporate					September 30, 2014		Portfolio Percentage
Private Equity:								General Electric Co					$	62,773		0.7	%
Primary and secondary			$	179,196	$	223,030		Bank of America Corp						54,446		0.6	%
Mezzanine debt				114,399		251,486		Morgan Stanley						53,112		0.6	%
Distressed				9,516		5,119		JPMorgan Chase & Co						51,802		0.6	%
Real estate				—		50,000		Mitsubishi UFJ Financial Group						51,580		0.6	%
	Total private equity			303,111		529,635		Wells Fargo & Co						40,206		0.5	%
Hedge Funds:								Comcast Corp						37,375		0.4	%
Distressed				173,111		—		American Express Co						36,694		0.4	%
Equity long/short				111,627		—		ING Groep NV						33,581		0.4	%
Multi-strategy				81,576		—		PNC Financial Services Group						30,047		0.3	%
Relative value credit				105,155		—
	Total hedge funds			471,469		—
	Other private securities			123,077		—
	High yield loan fund			31,544		—
		Total other invested assets	$	929,201	$	529,635
Fixed Income Credit Quality:			September 30, 2014					December 31, 2013
Rating			Fair Value		Percentage			Fair Value		Percentage
U.S. government and agencies			$	1,184,115		19.3	%	$	1,676,789		27.5	%
AAA/Aaa				972,721		15.9	%		755,360		12.4	%
AA/Aa				1,341,316		21.9	%		1,458,497		23.9	%
A/A				1,307,315		21.3	%		1,022,281		16.8	%
BBB/Baa				589,084		9.6	%		533,238		8.7	%
	Total BBB/Baa and above			5,394,551		88.0	%		5,446,165		89.3	%
BB/Bb				68,178		1.1	%		195,653		3.2	%
B/B				394,325		6.5	%		329,267		5.4	%
CCC+ and below				271,183		4.4	%		129,713		2.1	%
		Total	$	6,128,237		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 - September 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	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	6,158	$	—	$	600	$	6,758
Australia	Australia		20,352		0		—		—		—		—		—		53,402		1,830		—		3,269		78,853
	Total		20,352		0		—		—		—		—		—		53,402		1,830		—		3,269		78,853
Europe	Austria		—		—		—		—		—		—		—		—		—		—		100		100
	Belgium		—		—		—		—		—		—		—		—		11,857		—		3,662		15,519
	Denmark		—		—		—		—		—		—		—		—		—		—		2,314		2,314
	Finland		—		—		—		—		—		—		—		—		—		—		1,542		1,542
	France		—		—		—		—		—		—		—		77,362		26,131		10,014		111,596		225,103
	Germany		29,020		838		—		—		—		—		—		3,639		6,877		—		6,657		47,031
	Greece		—		—		—		—		—		—		—		—		—		—		536		536
	Hungary		—		—		—		—		—		—		—		—		—		—		318		318
	Ireland		—		—		—		—		—		—		—		—		273		—		1,764		2,037
	Italy		—		—		—		—		—		—		—		516		—		—		3,870		4,386
	Luxembourg		—		—		—		—		—		—		3,631		3,136		12,252		—		122		19,141
	Netherlands		—		34,075		—		—		—		—				66,068		10,994		764		9,584		121,485
	Norway		—		—		—		—		—		—		—		24,580		2,754		—		888		28,222
	Portugal		—		—		—		—		—		—		—		—		—		—		568		568
	Spain		—		—		—		—		—		—		—		3,274		14,615		—		648		18,537
	Sweden		—		—		—		—		—		—		—		35,646		1,687		—		7,245		44,578
	Switzerland		2,157		—		—		—		—		—		—		21,570		6,757		—		21,487		51,971
	United Kingdom		25,963		—		—		—		4,135		—		—		65,237		67,286		164		28,335		191,120
	Total		57,140		34,913		—		—		4,135		—		3,631		301,028		161,483		10,942		201,236		774,508
Latin	Brazil		3,332		—		—		—		—		—		—		0		7,120		—		714		11,166
America	Chile		—		—		—		—		—		—		—		6,200		88		—		—		6,288
	Mexico		24,150		—		—		—		—		—		—		—		6,405		—		477		31,032
	Panama		—		—		—		—		—		—		—		—		—		—		1,101		1,101
	Total		27,482		—		—		—		—		—		—		6,200		13,613		—		2,292		49,587
North	Bermuda		—		—		—		—		—		—		—		—		—		—		2,948		2,948
America	Canada		54,539		—		—		—		—		—		—		72,800		36,909		7,273		12,269		183,790
	Cayman Islands		—		—		—		—		—		—		168,256		—		867		—		—		169,123
	United States		1,210,065		—		260,690		593,177		121,855		521,194		528,529		689,550		963,120		107,298		544,891		5,540,369
	Total		1,264,604		—		260,690		593,177		121,855		521,194		696,785		762,350		1,000,896		114,571		560,108		5,896,230
Asia /	China		6,985		—		—		—		—		—		—		—		2,740		—		43,716		53,441
Middle East	Hong Kong		24,591		—		—		—		—		—		—		—		—		—		1,138		25,729
	India		—		—		—		—		—		—		—		—		0		—		658		658
	Indonesia		—		—		—		—		—		—		—		—		0		—		119		119
	Israel		—		—		—		—		—		—		—		—		1,064		—		—		1,064
	Japan		—		—		—		—		—		—		—		37,896		11,112		—		122,232		171,240
	Kyrgyzstan		—		—		—		—		—		—		—		—		—		—		154		154
	Macau		—		—		—		—		—		—		—		—		—		—		438		438
	Malaysia		—		—		—		—		—		—		—		—		—		—		1,353		1,353
	Singapore		—		—		—		—		—		—		—				967		—		3,202		4,169
	South Korea		1,408				—		—		—		—		—		—		—		—		1,829		3,237
	Taiwan		—		—		—		—		—		—		—		—		3,043		—		1,729		4,772
	Thailand		—		—		—		—		—		—		—		—		—		—		1,003		1,003
	Total		32,984		—		—		—		—		—		—		37,896		18,926		0		177,571		267,377
	Grand Total	$	1,402,562	$	34,913	$	260,690	$	593,177	$	125,990	$	521,194	$	700,416	$	1,160,876	$	1,202,906	$	125,513	$	945,076	$	7,073,313

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		36.33	100.1	%
	September 30, 2014		24,996	654,851		38.17		37.05	103.0	%
	Total - 2014	$	164,529	4,616,543	$	35.64	$	35.66	99.9	%	$	429,205
(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
	September 30, 2014				December 31, 2013
Senior notes	$	798,725			$	798,499
Shareholders' equity		3,673,599				3,519,826
Total capitalization	$	4,472,324			$	4,318,325
Leverage Ratios
Debt to total capitalization		17.9	%			18.5	%
Net premiums written (trailing 12 months)	$	2,285,410			$	2,120,481
Net premiums written (trailing 12 months) to shareholders' equity		0.62		x		0.60		x
Total investments and cash & cash equivalents	$	9,012,742			$	8,393,365
Total investments and cash & cash equivalents to shareholders' equity		2.45		x		2.38		x
Reserve for losses and loss expenses	$	6,052,263			$	5,766,529
Deduct: reinsurance recoverable		(1,349,009)				(1,234,504)
Net reserve for losses and loss expenses	$	4,703,254				4,532,025
Net reserve for losses and loss expenses to shareholders' equity		1.28		x		1.29		x

Fixed Charge Coverage Ratio	Three Months Ended						Nine Months Ended
		September 30,			September 30,			September 30,			September 30,
		2014			2013			2014			2013
Interest expense	$	14,325		$	14,094		$	43,451		$	42,416
Income before income taxes		32,447			127,814			384,050			286,305
Interest expense		14,325			14,094			43,451			42,416
Earnings for calculation of fixed coverage ratio	$	46,772		$	141,908		$	427,501		$	328,721
Fixed charge coverage ratio		3.3	x		10.1	x		9.8	x		7.7	x

Page 28

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

OPERATING INCOME RECONCILIATION AND

BASIC AND DILUTED EARNINGS PER SHARE INFORMATION

		Three Months Ended										Nine Months Ended
		September 30,		June 30,		March 31,		December 31,		September 30,		September 30,		September 30,
		2014		2014		2014		2013		2013		2014		2013
Net income		$	30,915	$	151,863	$	176,972	$	137,907	$	122,843	$	359,750	$	279,973
Add after tax effect of:
	Net realized investment losses (gains)		29,413		(76,443)		(47,164)		(64,027)		(25,395)		(94,192)		2,160
	Foreign exchange loss		278		651		49		658		4,353		978		7,361
Operating income		$	60,606	$	76,071	$	129,857	$	74,538	$	101,801	$	266,536	$	289,494
Weighted average common shares outstanding
Basic			96,458,231		97,809,639		99,545,187		100,814,955		101,974,077		97,926,378		103,020,681
Diluted			98,444,238		99,724,802		101,584,662		103,129,812		104,184,579		99,965,296		105,393,276
Basic per share data
Net income		$	0.32	$	1.55	$	1.78	$	1.37	$	1.20	$	3.67	$	2.72
Add after tax effect of:
	Net realized investment losses (gains)		0.30		(0.78)		(0.47)		(0.64)		(0.25)		(0.96)		0.02
	Foreign exchange loss		0.00		0.01		0.00		0.01		0.04		0.01		0.07
Operating income		$	0.62	$	0.78	$	1.31	$	0.74	$	0.99	$	2.72	$	2.81
Diluted per share data
Net income		$	0.31	$	1.52	$	1.74	$	1.34	$	1.18	$	3.60	$	2.66
Add after tax effect of:
	Net realized investment losses (gains)		0.30		(0.77)		(0.46)		(0.62)		(0.24)		(0.94)		0.02
	Foreign exchange loss		0.00		0.01		0.00		0.01		0.04		0.01		0.07
Operating income		$	0.61	$	0.76	$	1.28	$	0.72	$	0.98	$	2.67	$	2.75

Page 29

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

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

		Three Months Ended															Nine Months Ended
		September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
		2014			2014			2014			2013			2013			2014			2013
Opening shareholders' equity		$	3,682,762		$	3,616,678		$	3,519,826		$	3,443,928		$	3,373,229		$	3,616,678		$	3,326,335
Deduct: accumulated other comprehensive income			—			—			—			—			—			—			—
Adjusted opening shareholders' equity		$	3,682,762		$	3,616,678		$	3,519,826		$	3,443,928		$	3,373,229		$	3,616,678		$	3,326,335
Closing shareholders' equity		$	3,673,599		$	3,682,762		$	3,616,678		$	3,519,826		$	3,443,928		$	3,673,599		$	3,443,928
Deduct: accumulated other comprehensive income			—			—			—			—			—			—			—
Adjusted closing shareholders' equity		$	3,673,599		$	3,682,762		$	3,616,678		$	3,519,826		$	3,443,928		$	3,673,599		$	3,443,928
Average adjusted shareholders' equity		$	3,678,181		$	3,649,720		$	3,568,252		$	3,481,877		$	3,408,579		$	3,645,139		$	3,385,132
Net income available to shareholders		$	30,915		$	151,863		$	176,972		$	137,907		$	122,843		$	359,750		$	279,973
Annualized net income available to
	shareholders	$	123,660		$	607,452		$	707,888		$	551,628		$	491,372		$	479,667		$	373,297
Annualized return on average shareholders' equity -
	net income available to shareholders		3.4	%		16.6	%		19.8	%		15.8	%		14.4	%		13.2	%		11.0	%
Operating income available to shareholders		$	60,606		$	76,071		$	129,857		$	74,538		$	101,801		$	266,536		$	289,494
Annualized operating income available to
	shareholders	$	242,424		$	304,284		$	519,428		$	298,152		$	407,204		$	355,381		$	385,992
Annualized return on average shareholders' equity -
	operating income available to shareholders		6.6	%		8.3	%		14.6	%		8.6	%		11.9	%		9.7	%		11.4	%

Page 30

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

RECONCILIATION OF DILUTED BOOK VALUE PER SHARE

		As of			As of			As of
		September 30,			December 31,			September 30,
		2014			2013			2013
Price per share at period end		$	36.84		$	37.60		$	33.13
Total shareholders' equity		$	3,673,599		$	3,519,826		$	3,443,928
Basic common shares outstanding			96,382,238			100,253,646			101,444,760
Add: unvested restricted stock units			512,112			143,697			249,720
Add: performance based equity awards			619,428			804,519			812,559
Add: employee purchase plan			28,381			55,596			45,960
Add: dilutive stock options outstanding			2,532,918			2,928,312			3,152,496
	Weighted average exercise price per share	$	16.30		$	16.07		$	15.92
Deduct: stock options bought back via treasury method			(1,120,699)			(1,251,687)			(1,515,171)
Common shares and common share equivalents outstanding			98,954,378			102,934,083			104,190,324
Basic book value per common share		$	38.11		$	35.11		$	33.95
Year-to-date percentage change in basic book value per common share			8.5	%		3.4	%
Diluted book value per common share		$	37.12		$	34.20		$	33.05
Year-to-date percentage change in diluted book value per common share			8.5	%		3.5	%

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