Allied World Assurance 8-K Allied World Reports a 79.9% Combined Ratio

Exhibit 99.2

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

1st Quarter Ended March 31, 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
	- Gross Premiums Written by Segment and Geographic Location	11
	- Gross Premiums Written by Line of Business	12
IV.	Incurred Losses, Loss Reserves and PMLs
	- Consolidated Incurred Loss Analysis by Segment	13
	- Loss Reserve Development by Loss Year - Current Quarter	14
	- Loss Reserve Development by Loss Year - Prior Year Quarter	15
	- Reserves for Losses and Loss Expenses	16
	- Reinsurance Recoverable	17
	- Probable Maximum Losses	18
V.	Investment Portfolio
	- Consolidated Total Investment Portfolio	19
	- Investment Income, Book Yield and Portfolio Return	20
	- Additional Investment Detail	21
VI.	Capital Structure
	- Share Repurchase Detail	23
	- Capital Structure and Leverage Ratios	24
VII.	Non-GAAP Reconciliations
	- Operating Income Reconciliation and Basic and Diluted Earnings per Share	25
	- Return on Average Shareholders’ Equity and Reconciliation of Average Shareholders’ Equity	26
	- Reconciliation of Diluted Book Value per Share	27
	- Regulation G	28

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.

• 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 suchnon-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 28 for further details.

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ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED FINANCIAL HIGHLIGHTS

	Three Months Ended March 31,				$		%
	2014		2013		Better/(Worse)		Better/(Worse)
HIGHLIGHTS
Gross premiums written	$	901,393	$	837,081	$	64,312		7.7%
Net premiums written		771,614		695,052		76,562		11.0%
Net premiums earned		530,285		463,228		67,057		14.5%
Underwriting income		106,937		68,685		38,252		55.7%
Operating income		129,857		84,168		45,689		54.3%
Net income		176,972		158,992		17,980		11.3%
Total shareholders’ equity		3,616,678		3,431,963		184,715		5.4%
Cash flows provided by operating activities		303,096		13,569		289,527		2133.7%
PER SHARE AND SHARE DATA
Basic earnings per share
Net income	$	5.33	$	4.59	$	0.74		16.1%
Operating income	$	3.91	$	2.43	$	1.48		60.9%
Diluted earnings per share
Net income	$	5.23	$	4.49	$	0.74		16.5%
Operating income	$	3.84	$	2.38	$	1.46		61.3%
Book value per share	$	109.90	$	99.11	$	10.79		10.9%
Diluted book value per share	$	107.05	$	96.50	$	10.55		10.9%
FINANCIAL RATIOS
Annualized return on average equity (ROAE), net income		19.8%		18.8%				1.0 pts
Annualized ROAE, operating income		14.6%		10.0%				4.6 pts
Financial statement portfolio return		1.2%		1.3%				(0.1) pts
GAAP Ratios
Loss and loss expense ratio		51.9%		55.1%				3.2 pts
Acquisition cost ratio		12.8%		12.2%				(0.6) pts
General and administrative expense ratio		15.2%		17.8%				2.6 pts
Expense ratio		28.0%		30.0%				2.0 pts
Combined ratio		79.9%		85.1%				5.2 pts

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ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended										Three Months Ended
	March 31,       2014		December 31,     2013		September 30,   2013		June 30,       2013		March 31,       2013		March 31,       2014		March 31,       2013
Revenues
Gross premiums written	$	901,393	$	555,490	$	580,893	$	765,200	$	837,081	$	901,393	$	837,081
Net premiums written	$	771,614	$	391,130	$	453,077	$	581,222	$	695,052	$	771,614	$	695,052
Net premiums earned	$	530,285	$	524,561	$	510,773	$	507,271	$	463,228	$	530,285	$	463,228
Net investment income		47,619		47,270		39,271		37,635		33,388		47,619		33,388
Net realized investment gains (losses)		54,205		67,599		27,487		(115,198)		79,637		54,205		79,637
Total revenues	$	632,109	$	639,430	$	577,531	$	429,708	$	576,253	$	632,109	$	576,253
Expenses
Net losses and loss expenses	$	275,286	$	315,966	$	276,970	$	275,128	$	255,178	$	275,286	$	255,178
Acquisition costs		67,722		66,257		65,114		64,617		56,685		67,722		56,685
General and administrative expenses		80,340		100,467		88,553		80,585		82,680		80,340		82,680
Amortization of intangible assets		633		633		633		634		633		633		633
Interest expense		14,534		14,094		14,094		14,188		14,134		14,534		14,134
Foreign exchange loss		49		658		4,353		490		2,518		49		2,518
Total expenses	$	438,564	$	498,075	$	449,717	$	435,642	$	411,828	$	438,564	$	411,828
Income (loss) before income taxes	$	193,545	$	141,355	$	127,814	$	(5,934)	$	164,425	$	193,545	$	164,425
Income tax expense (benefit)		16,573		3,448		4,971		(4,072)		5,433		16,573		5,433
Net income (loss)	$	176,972	$	137,907	$	122,843	$	(1,862)	$	158,992	$	176,972	$	158,992
GAAP Ratios
Loss and loss expense ratio		51.9%		60.2%		54.2%		54.2%		55.1%		51.9%		55.1%
Acquisition cost ratio		12.8%		12.6%		12.7%		12.7%		12.2%		12.8%		12.2%
General and administrative expense ratio		15.2%		19.2%		17.3%		15.9%		17.8%		15.2%		17.8%
Expense ratio		28.0%		31.8%		30.0%		28.6%		30.0%		28.0%		30.0%
Combined ratio		79.9%		92.0%		84.2%		82.8%		85.1%		79.9%		85.1%
Per Share Data
Basic earnings per share
Net income (loss)	$	5.33	$	4.10	$	3.61	$	(0.05)	$	4.59	$	5.33	$	4.59
Operating income (loss)	$	3.91	$	2.21	$	2.99	$	3.01	$	2.43	$	3.91	$	2.43
Diluted earnings per share
Net income (loss)	$	5.23	$	4.01	$	3.54	$	(0.05)	$	4.49	$	5.23	$	4.49
Operating income (loss)	$	3.84	$	2.17	$	2.93	$	2.95	$	2.38	$	3.84	$	2.38

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ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED BALANCE SHEETS

	As of         March 31, 2014		As of    December 31, 2013
ASSETS
Fixed maturity investments trading, at fair value	$	6,068,666	$	6,100,798
Equity securities trading, at fair value		834,893		699,846
Other invested assets		989,791		911,392
Total investments		7,893,350		7,712,036
Cash and cash equivalents		565,802		531,936
Restricted cash		144,570		149,393
Insurance balances receivable		839,630		664,731
Funds held		447,801		632,430
Prepaid reinsurance		331,065		340,992
Reinsurance recoverable		1,280,525		1,234,504
Accrued investment income		29,539		32,236
Net deferred acquisition costs		167,104		126,661
Goodwill		268,376		268,376
Intangible assets		48,198		48,831
Balances receivable on sale of investments		198,640		76,544
Net deferred tax assets		36,948		37,469
Other assets		82,617		89,691
TOTAL ASSETS	$	12,334,165	$	11,945,830
LIABILITIES
Reserve for losses and loss expenses	$	5,856,798	$	5,766,529
Unearned premiums		1,627,658		1,396,256
Reinsurance balances payable		160,041		173,023
Balances due on purchases of investments		171,442		104,740
Senior notes		798,573		798,499
Dividends payable		16,495		16,732
Accounts payable and accrued liabilities		86,480		170,225
TOTAL LIABILITIES	$	8,717,487	$	8,426,004
SHAREHOLDERS’ EQUITY
Common shares: 2014: par value CHF 12.30 per share and 2013: par value CHF 12.30 per share (2014: 33,821,752; 2013: 34,492,484 shares issued and 2014: 32,908,821; 2013: 33,417,882 shares outstanding)		410,820	$	418,988
Treasury shares, at cost (2014: 912,931; 2013: 1,074,602)		(68,756)		(79,992)
Retained earnings		3,274,614		3,180,830
TOTAL SHAREHOLDERS’ EQUITY	$	3,616,678	$	3,519,826
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	12,334,165	$	11,945,830
Book value per share	$	109.90	$	105.33
Diluted book value per share	$	107.05	$	102.58

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ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended										Three Months Ended
	March 31,     2014		December 31,     2013		September 30,   2013		June 30,       2013		March 31,       2013		March 31,       2014		March 31,       2013
CASH FLOWS PROVIDED BY (USED IN) OPERATING ACTIVITIES:
Net income (loss)	$	176,972	$	137,907	$	122,843	$	(1,862)	$	158,992	$	176,972	$	158,992
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Net realized (losses) gains on sales of investments		(49,756)		(32,980)		(13,183)		(24,388)		(38,533)		(49,756)		(38,533)
Mark to market adjustments		(13,956)		(31,989)		(15,562)		141,810		(46,112)		(13,956)		(46,112)
Stock compensation expense		4,240		4,687		2,716		2,571		3,995		4,240		3,995
Undistributed income of equity method investments		(2,292)		(7,610)		(1,997)		(2,316)		—		(2,292)		—
Changes in:
Reserve for losses and loss expenses, net of reinsurance recoverables		44,248		(22,722)		37,407		7,623		5,278		44,248		5,278
Unearned premiums, net of prepaid reinsurance		241,329		(133,430)		(57,697)		73,952		231,824		241,329		231,824
Insurance balances receivable		(174,899)		75,381		74,508		(147,121)		(156,967)		(174,899)		(156,967)
Funds held		184,629		(257,299)		12,468		(17,019)		(34,212)		184,629		(34,212)
Reinsurance balances payable		(12,982)		(20,620)		(12,241)		87,423		(17,803)		(12,982)		(17,803)
Net deferred acquisition costs		(40,443)		19,290		7,861		(11,661)		(34,141)		(40,443)		(34,141)
Net deferred tax assets		521		4,363		(1,282)		(12,813)		(2,157)		521		(2,157)
Accounts payable and accrued liabilities		(83,745)		41,457		27,061		25,179		(70,780)		(83,745)		(70,780)
Other items, net		29,230		(176)		21,628		(1,305)		14,185		29,230		14,185
Net cash provided by (used in) operating activities		303,096		(223,741)		204,530		120,073		13,569		303,096		13,569
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Net (purchases) sales of investments		(191,042)		(236,042)		188,616		68,966		(98,465)		(191,042)		(98,465)
Purchases of fixed assets		(2,336)		(1,139)		(808)		(985)		(2,378)		(2,336)		(2,378)
Change in restricted cash		4,823		108,124		(63,471)		(127,346)		116,785		4,823		116,785
Net cash (used in) provided by investing activities		(188,555)		(129,057)		124,337		(59,365)		15,942		(188,555)		15,942
CASH FLOWS USED IN FINANCING ACTIVITIES:
Dividends paid — par value reduction		—		—		—		—		(12,981)		—		(12,981)
Dividends paid		(16,732)		(16,942)		(17,117)		—		—		(16,732)		—
Proceeds from the exercise of stock options		3,030		3,672		3,172		2,821		2,472		3,030		2,472
Share repurchases		(68,659)		(52,843)		(37,592)		(46,326)		(36,245)		(68,659)		(36,245)
Net cash used in financing activities		(82,361)		(66,113)		(51,537)		(43,505)		(46,754)		(82,361)		(46,754)
Effect of exchange rate changes on foreign currency cash		1,686		(2,200)		1,614		(5,681)		(2,055)		1,686		(2,055)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		33,866		(421,111)		278,944		11,522		(19,298)		33,866		(19,298)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		531,936		953,047		674,103		662,581		681,879		531,936		681,879
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	565,802	$	531,936	$	953,047	$	674,103	$	662,581	$	565,802	$	662,581

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ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED SEGMENT RESULTS – CURRENT QUARTER

	Three Months Ended March 31, 2014
	U.S.     Insurance		International   Insurance		Reinsurance		Consolidated   Totals
Revenues
Gross premiums written	$	269,945	$	134,364	$	497,084	$	901,393
Net premiums written	$	202,740	$	75,459	$	493,415	$	771,614
Net premiums earned	$	212,123	$	88,339	$	229,823	$	530,285
Total revenues	$	212,123	$	88,339	$	229,823	$	530,285
Expenses
Net losses and loss expenses	$	141,995	$	23,566	$	109,725	$	275,286
Acquisition costs		27,501		(947)		41,168		67,722
General and administrative expenses		37,436		24,761		18,143		80,340
Total expenses	$	206,932	$	47,380	$	169,036	$	423,348
Underwriting income	$	5,191	$	40,959	$	60,787	$	106,937
Net investment income								47,619
Net realized investment gains								54,205
Amortization of intangible assets								(633)
Interest expense								(14,534)
Foreign exchange loss								(49)
Income before income taxes							$	193,545
GAAP Ratios
Loss and loss expense ratio		66.9%		26.7 %		47.7%		51.9%
Acquisition cost ratio		13.0%		(1.1)%		17.9%		12.8%
General and administrative expense ratio		17.6%		28.0 %		7.9%		15.2%
Expense ratio		30.6%		26.9 %		25.8%		28.0%
Combined ratio		97.5%		53.6 %		73.5%		79.9%

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ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED SEGMENT RESULTS – PRIOR YEAR QUARTER

	Three Months Ended March 31, 2013
	U.S.     Insurance		International   Insurance		Reinsurance		Consolidated   Totals
Revenues
Gross premiums written	$	256,018	$	128,516	$	452,547	$	837,081
Net premiums written	$	192,253	$	77,745	$	425,054	$	695,052
Net premiums earned	$	188,439	$	84,214	$	190,575	$	463,228
Total revenues	$	188,439	$	84,214	$	190,575	$	463,228
Expenses
Net losses and loss expenses	$	133,324	$	28,935	$	92,919	$	255,178
Acquisition costs		23,128		(849)		34,406		56,685
General and administrative expenses		39,596		24,789		18,295		82,680
Total expenses	$	196,048	$	52,875	$	145,620	$	394,543
Underwriting (loss) income	$	(7,609)	$	31,339	$	44,955	$	68,685
Net investment income								33,388
Net realized investment gains								79,637
Amortization of intangible assets								(633)
Interest expense								(14,134)
Foreign exchange loss								(2,518)
Income before income taxes							$	164,425
GAAP Ratios
Loss and loss expense ratio		70.8%		34.4 %		48.8%		55.1%
Acquisition cost ratio		12.3%		(1.0)%		18.1%		12.2%
General and administrative expense ratio		21.0%		29.4 %		9.6%		17.8%
Expense ratio		33.3%		28.4 %		27.7%		30.0%
Combined ratio		104.1%		62.8 %		76.5%		85.1%

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ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

GROSS PREMIUMS WRITTEN BY SEGMENT AND GEOGRAPHIC LOCATION

	Three Months Ended
	March 31, 2014				March 31, 2013
	Amount		% of Total		Amount		% of Total
Gross Premiums Written by Segment
U.S. Insurance	$	269,945		30.0%	$	256,018		30.6%
International Insurance		134,364		14.9%		128,516		15.4%
Reinsurance		497,084		55.1%		452,547		54.0%
Total	$	901,393		100.0%	$	837,081		100.0%
Gross Premiums Written by Underwriting Location
United States	$	520,773		57.7%	$	478,443		57.2%
Bermuda		229,631		25.5%		228,672		27.3%
Europe		103,336		11.5%		86,509		10.3%
Asia		46,823		5.2%		43,457		5.2%
Canada		830		0.1%		—		0.0%
Total	$	901,393		100.0%	$	837,081		100.0%
Direct Premiums Written by Insured Location(1)
United States	$	345,849		85.5%	$	338,943		88.1%
United Kingdom		18,308		4.5%		12,811		3.3%
Germany		5,483		1.4%		4,698		1.2%
Australia		4,414		1.1%		4,683		1.2%
Italy		3,490		0.9%		1,312		0.3%
All other		26,765		6.6%		22,087		5.9%
Total	$	404,309		100.0%	$	384,534		100.0%
(1) Excludes reinsurance segment gross premiums written.

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ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

GROSS PREMIUMS WRITTEN BY LINE OF BUSINESS

	Three Months Ended
	March 31, 2014				March 31, 2013
	Amount		% of Total		Amount		% of Total
U.S. Insurance
General casualty	$	79,235		29.4%	$	66,881		26.1%
Professional liability		62,199		23.0%		63,086		24.6%
Programs		39,047		14.5%		32,942		12.9%
Healthcare		34,388		12.7%		53,522		20.9%
General property		18,978		7.0%		19,653		7.7%
Inland marine		12,093		4.5%		7,965		3.1%
Environmental		10,330		3.8%		6,613		2.6%
Other		13,675		5.1%		5,356		2.1%
Total	$	269,945		100.0%	$	256,018		100.0%
International Insurance
Professional liability	$	37,585		28.0%	$	33,159		25.8%
General property		36,627		27.3%		38,688		30.1%
Healthcare		27,201		20.2%		26,528		20.6%
General casualty		20,069		14.9%		23,964		18.6%
Trade credit		8,486		6.3%		6,177		4.9%
Aviation		2,872		2.1%		—		0.0%
Other		1,524		1.2%		—		0.0%
Total	$	134,364		100.0%	$	128,516		100.0%
Reinsurance
Property	$	250,453		50.4%	$	211,615		46.8%
Specialty		161,540		32.5%		143,396		31.6%
Casualty		85,091		17.1%		97,536		21.6%
Total	$	497,084		100.0%	$	452,547		100.0%

Page 12

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED INCURRED LOSS ANALYSIS BY SEGMENT

	Three Months Ended
	March 31, 2014				March 31, 2013
	Amount		% of NPE(1)		Amount		% of NPE(1)
U.S. Insurance
Current year - non-catastrophe	$	141,226		66.5 %	$	122,777		65.2 %
Current year - property catastrophe		—		0.0 %		—		0.0 %
Prior year - increase (decrease)		769		0.4 %		10,547		5.6 %
Net losses and loss expenses	$	141,995		66.9 %	$	133,324		70.8 %
International Insurance
Current year - non-catastrophe	$	52,930		59.9 %	$	58,599		69.6 %
Current year - property catastrophe		—		0.0 %		—		0.0 %
Prior year - increase (decrease)		(29,364)		(33.2)%		(29,664)		(35.2)%
Net losses and loss expenses	$	23,566		26.7 %	$	28,935		34.4 %
Reinsurance
Current year - non-catastrophe	$	129,991		56.5 %	$	117,872		61.9 %
Current year - property catastrophe		—		0.0 %		—		0.0 %
Prior year - increase (decrease)		(20,266)		(8.8)%		(24,953)		(13.1)%
Net losses and loss expenses	$	109,725		47.7 %	$	92,919		48.8 %
Consolidated
Current year - non-catastrophe	$	324,147		61.1 %	$	299,248		64.6 %
Current year - property catastrophe		—		0.0 %		—		0.0 %
Prior year - increase (decrease)		(48,861)		(9.2)%		(44,070)		(9.5)%
Net losses and loss expenses	$	275,286		51.9 %	$	255,178		55.1 %

(1) “NPE” means net premiums earned.

Page 13

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

NET LOSS RESERVE DEVELOPMENT BY LOSS YEAR – CURRENT QUARTER

	Three Months Ended March 31, 2014
(Favorable) Unfavorable Development ($ in millions)	2004 and Prior		2005		2006		2007		2008		2009		2010		2011		2012		2013		Total
U.S. Insurance
General casualty	$	(2.9)	$	—	$	—	$	(0.5)	$	(2.3)	$	0.3	$	(0.1)	$	2.0	$	—	$	—	$	(3.5)
Programs		—		—		—		1.0		1.6		(3.0)		—		(1.0)		(0.2)		—		(1.6)
General property		—		—		—		—		—		—		—		—		—		—		—
Healthcare		(0.2)		—		—		(0.3)		0.2		2.0		—		4.3		1.8		—		7.8
Professional liability		—		—		—		—		—		0.4		—		(0.5)		(1.2)		—		(1.3)
Inland Marine		—		—		—		—		—		—		—		(0.3)		(0.3)		—		(0.6)
Environmental		—		—		—		—		—		—		—		—		—		—		—
Other		—		—		—		—		—		—		—		—		—		—		—
Total	$	(3.1)	$	—	$	—	$	0.2	$	(0.5)	$	(0.3)	$	(0.1)	$	4.5	$	0.1	$	—	$	0.8
International Insurance
General casualty	$	4.4	$	(0.7)	$	(1.3)	$	(2.1)	$	(4.1)	$	(2.7)	$	(4.7)	$	(0.1)	$	—	$	—	$	(11.3)
General property		(0.3)		0.3		(0.1)		(1.0)		(0.3)		(0.5)		0.5		(3.2)		(2.3)		(4.2)		(11.1)
Professional liability		(0.2)		(0.9)		(0.3)		(13.7)		(0.6)		(2.6)		(0.1)		(0.4)		(0.1)		—		(18.9)
Healthcare		—		(1.0)		(0.9)		(1.0)		(0.8)		—		—		(0.3)		—		16.0		12.0
Trade Credit		—		—		—		—		—		—		(0.1)		(1.0)		1.0		—		(0.1)
Aviation		—		—		—		—		—		—		—		—		—		—		—
Total	$	3.9	$	(2.3)	$	(2.6)	$	(17.8)	$	(5.8)	$	(5.8)	$	(4.4)	$	(5.0)	$	(1.4)	$	11.8	$	(29.4)
Reinsurance
Property	$	—	$	—	$	(0.1)	$	(0.2)	$	(0.3)	$	(0.1)	$	0.6	$	(0.7)	$	(1.7)	$	(13.7)	$	(16.2)
Casualty		(1.4)		0.6		(1.3)		(1.9)		(1.4)		0.2		0.8		0.9		0.7		2.2		(0.6)
Specialty		—		0.2		—		—		—		0.1		0.1		—		(1.1)		(2.8)		(3.5)
Total	$	(1.4)	$	0.8	$	(1.4)	$	(2.1)	$	(1.7)	$	0.2	$	1.5	$	0.2	$	(2.1)	$	(14.3)	$	(20.3)
Consolidated
U.S. insurance	$	(3.1)	$	—	$	—	$	0.2	$	(0.5)	$	(0.3)	$	(0.1)	$	4.5	$	0.1	$	—	$	0.8
International insurance		3.9		(2.3)		(2.6)		(17.8)		(5.8)		(5.8)		(4.4)		(5.0)		(1.4)		11.8		(29.4)
Reinsurance		(1.4)		0.8		(1.4)		(2.1)		(1.7)		0.2		1.5		0.2		(2.1)		(14.3)		(20.3)
Total	$	(0.6)	$	(1.5)	$	(4.0)	$	(19.7)	$	(8.0)	$	(5.9)	$	(3.0)	$	(0.3)	$	(3.4)	$	(2.5)	$	(48.9)

Page 14

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

NET LOSS RESERVE DEVELOPMENT BY LOSS YEAR – PRIOR YEAR QUARTER

	Three Months Ended March 31, 2013
(Favorable) Unfavorable Development ($ in millions)	2003 and Prior		2004		2005		2006		2007		2008		2009		2010		2011		2012		Total
U.S. Insurance
General casualty	$	—	$	(0.4)	$	(0.3)	$	—	$	(3.3)	$	(1.7)	$	(0.2)	$	—	$	1.2	$	—	$	(4.7)
Programs		—		—		—		—		(1.6)		0.1		(0.6)		(0.9)		(0.4)		1.4		(2.0)
General property		—		—		—		—		—		—		(1.4)		2.3		(0.1)		2.0		2.8
Healthcare		(0.1)		(0.3)		(0.9)		(1.0)		(0.8)		(2.6)		0.1		(0.6)		3.0		6.8		3.6
Professional liability		—		(0.5)		(0.9)		(0.5)		(1.2)		0.5		(0.6)		(0.9)		0.8		13.3		10.0
Other		—		—		—		—		—		—		—		—		—		0.8		0.8
Total	$	(0.1)	$	(1.2)	$	(2.1)	$	(1.5)	$	(6.9)	$	(3.7)	$	(2.7)	$	(0.1)	$	4.5	$	24.3	$	10.5
International Insurance
General casualty	$	(0.3)	$	3.1	$	(5.6)	$	(3.4)	$	(6.3)	$	(2.7)	$	(2.9)	$	(0.2)	$	0.2	$	0.9	$	(17.2)
General property		—		—		—		(0.4)		0.3		(0.6)		0.2		(1.3)		(7.9)		(3.2)		(12.9)
Professional liability		(0.1)		(0.3)		(1.2)		(1.5)		(5.4)		0.3		(0.4)		(0.3)		—		—		(8.9)
Healthcare		(0.1)		(0.1)		(0.4)		(0.7)		8.6		(4.1)		6.7		(0.7)		0.1		—		9.3
Total	$	(0.5)	$	2.7	$	(7.2)	$	(6.0)	$	(2.8)	$	(7.1)	$	3.6	$	(2.5)	$	(7.6)	$	(2.3)	$	(29.7)
Reinsurance
Property	$	—	$	—	$	(1.8)	$	—	$	—	$	(0.1)	$	(0.1)	$	(2.3)	$	(7.0)	$	(12.9)	$	(24.2)
Casualty		0.5		(0.1)		(0.2)		(0.1)		(2.2)		(2.5)		(0.3)		0.2		—		—		(4.7)
Specialty		—		—		(0.1)		(0.1)		—		(0.4)		(0.6)		(0.1)		1.5		3.8		4.0
Total	$	0.5	$	(0.1)	$	(2.1)	$	(0.2)	$	(2.2)	$	(3.0)	$	(1.0)	$	(2.2)	$	(5.5)	$	(9.1)	$	(24.9)
Consolidated
U.S. insurance	$	(0.1)	$	(1.2)	$	(2.1)	$	(1.5)	$	(6.9)	$	(3.7)	$	(2.7)	$	(0.1)	$	4.5	$	24.3	$	10.5
International insurance		(0.5)		2.7		(7.2)		(6.0)		(2.8)		(7.1)		3.6		(2.5)		(7.6)		(2.3)		(29.7)
Reinsurance		0.5		(0.1)		(2.1)		(0.2)		(2.2)		(3.0)		(1.0)		(2.2)		(5.5)		(9.1)		(24.9)
Total	$	(0.1)	$	1.4	$	(11.4)	$	(7.7)	$	(11.9)	$	(13.8)	$	(0.1)	$	(4.8)	$	(8.6)	$	12.9	$	(44.1)

Page 15

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

RESERVE FOR LOSSES AND LOSS EXPENSES

	As of March 31, 2014
	U.S. Insurance		International Insurance		Reinsurance		Consolidated Total
Case reserves (net of reinsurance recoverable)	$	499,464	$	286,724	$	459,003	$	1,245,191
IBNR (net of reinsurance recoverable)		1,106,353		1,170,945		1,053,784		3,331,082
Total	$	1,605,817	$	1,457,669	$	1,512,787	$	4,576,273
IBNR/Total reserves (net of reinsurance recoverable)		68.9%		80.3%		69.7%		72.8%
	As of December 31, 2013
	U.S.   Insurance		International Insurance		Reinsurance		Consolidated   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 16

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

REINSURANCE RECOVERABLE

	March 31, 2014							December 31, 2013
Top Ten Reinsurers	A.M. Best   Rating	Reinsurance  Recoverable		Percentage		Collateral		A.M. Best   Rating	Reinsurance  Recoverable		Percentage		Collateral
Munich Re	A+	$	228,275		17.8%	$	59,275	A+	$	214,070		17.3%	$	57,621
Axis Capital	A+		146,329		11.6%		7,506	A+		143,063		11.6%		6,485
Arch Re	A+		141,996		11.1%		3,588	A+		143,037		11.6%		3,588
Platinum Underwriters	A		97,857		7.6%		—	A		98,811		8.0%		—
Markel	A		88,664		6.9%		38,889	A		86,462		7.0%		39,292
Odyssey Reinsurance Company	A		74,640		5.8%		—	A		77,023		6.2%		—
XL Group	A		72,985		5.7%		—	A		68,857		5.6%		27,048
National Indemnity Company	A++		61,361		4.8%		—	A++		61,547		5.0%		—
Swiss Re	A+		53,723		4.2%		—	A+		50,588		4.1%		—
Transatlantic Holdings, Inc.	A		52,966		4.1%		—	A		50,125		4.1%		—
Top ten reinsurers			1,018,796		79.6%		109,258			993,583		80.5%		134,034
Other reinsurers’ balances			261,729		20.4%		22,171			240,921		19.5%		19,546
Total reinsurance recoverable		$	1,280,525		100.0%	$	131,429		$	1,234,504		100.0%	$	153,580
A.M Best Rating		Reinsurance Recoverable		Percentage		Collateral			Reinsurance Recoverable		Percentage		Collateral
A++		$	77,421		6.0%	$	886		$	76,994		6.2%	$	637
A+			688,789		53.9%		78,818			652,440		53.0%		79,291
A			500,821		39.1%		43,274			486,989		39.4%		72,959
A-			2,126		0.2%		—			1,750		0.1%		—
Total “A-” or higher			1,269,157		99.2%		122,978			1,218,173		98.7%		152,887
B++			3,075		0.2%		693			2,830		0.2%		693
NR			8,293		0.6%		7,758			13,501		1.1%		—
Total reinsurance recoverable		$	1,280,525		100.0%	$	131,429		$	1,234,504		100.0%	$	153,580

Page 17

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	$          630		$          805		U.S. Southeast	(1)	Hurricane	$            479	$            651
U.S. total	Earthquake	$          401		$          551		U.S. Gulf Coast	(2)	Hurricane	$            316	$            464
						U.S. Northeast	(3)	Hurricane	$            247	$            448
						California		Earthquake	$            361	$            494
						(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 March 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 18

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CONSOLIDATED TOTAL INVESTMENT PORTFOLIO

	As of March 31, 2014											As of December 31, 2013
	Fair Value		Average  Rating	Portfolio  Percentage		Investment  Grade		Non-Investment Grade		Total		Fair Value
Cash and cash equivalents	$	710,372	AAA		8.3%	$	710,372	$	—	$	710,372	$	681,329
U.S. government securities		1,135,246	AA+		13.1%		1,135,246		—		1,135,246		1,370,089
U.S. government agencies		341,217	AA+		4.0%		341,217		—		341,217		306,700
Non-U.S. government and government agencies		182,415	AA+		2.1%		182,415		—		182,415		191,776
State, municipalities and political subdivisions		230,669	AA		2.7%		230,669		—		230,669		231,555
Mortgage-backed securities:
Agency MBS		701,997	AA+		8.2%		701,997		—		701,997		725,515
Non-agency RMBS		115,406	B		1.3%		30,312		85,094		115,406		275,820
CMBS		486,727	BBB+		5.7%		314,396		172,331		486,727		291,167
Total mortgage-backed securities		1,304,130			15.2%		1,046,705		257,425		1,304,130		1,292,502
Corporate securities(1):
Financials		1,097,649	A		12.8%		1,053,100		44,549		1,097,649		958,794
Industrials		1,116,004	BBB		13.0%		817,669		298,335		1,116,004		1,174,047
Utilities		96,807	BBB+		1.1%		93,162		3,645		96,807		69,426
Total corporate securities		2,310,460			26.9%		1,963,931		346,529		2,310,460		2,202,267
Asset-backed securities:
Credit cards		13,097	AAA		0.2%		13,097		—		13,097		20,945
Auto receivables		14,420	AAA		0.2%		14,420		—		14,420		18,513
Student Loans		154,714	AA+		1.8%		154,714		—		154,714		151,507
Collateralized loan obligations		315,860	AA		3.7%		291,179		24,681		315,860		251,233
Other		66,438	AA+		0.8%		63,703		2,735		66,438		63,711
Total asset-backed securities		564,529			6.6%		537,113		27,416		564,529		505,909
Equities		834,893	N/A		9.7%		—		834,893		834,893		699,846
Other invested assets:
Private equity		235,808	N/A		2.7%		—		235,808		235,808		216,825
Hedge funds		571,259	N/A		6.6%		—		571,259		571,259		515,298
Other private securities		149,804	N/A		1.7%		—		149,804		149,804		147,311
High yield loan fund		32,920	N/A		0.4%		—		32,920		32,920		31,958
Total other invested assets		989,791			11.4%		—		989,791		989,791		911,392
Total investment portfolio	$	8,603,722			100.0%	$	6,147,668	$	2,456,054	$	8,603,722	$	8,393,365
Annualized book yield, year to date		2.3%											1.6%
Duration(2)		2.3 years											2.4 years
Average credit quality (S&P)		AA-											AA-

(1) Includes floating rate bank loans.

(2) Includes only fixed maturity investments and cash and cash equivalents.

Page 19

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

INVESTMENT INCOME, BOOK YIELD AND PORTFOLIO RETURN

	Three Months Ended
	March 31, 2014		March 31, 2013
NET INVESTMENT INCOME
Fixed maturity investments	$	36,299	$	32,525
Equity securities		3,253		3,199
Other invested assets: hedge funds and private equity		3,992		1,464
Other invested assets: other private securities		7,416		—
Cash and cash equivalents		439		488
Expenses		(3,780)		(4,288)
Net investment income	$	47,619	$	33,388
NET REALIZED INVESTMENT GAINS
Net realized gains on sale:
Fixed maturity investments	$	7,458	$	21,926
Equity securities		36,208		9,796
Other invested assets: hedge funds and private equity		6,378		5,562
Mark-to-market gains (losses):
Fixed maturity investments		22,455		(16,475)
Equity securities		(21,605)		32,973
Other invested assets: hedge funds and private equity		16,230		26,832
Net realized and unrealized (losses) on derivatives		(12,919)		(977)
Net realized investment gains	$	54,205	$	79,637
TOTAL FINANCIAL STATEMENT PORTFOLIO RETURN	$	101,824	$	113,025
ANNUALIZED INVESTMENT BOOK YIELD
Net investment income, recurring	$	47,619	$	33,388
Annualized net investment income		190,476		133,552
Average aggregate invested assets, at cost	$	8,290,100	$	8,202,863
Annualized investment book yield		2.3%		1.6%
FINANCIAL STATEMENT PORTFOLIO RETURN
Total financial statement portfolio return	$	101,824	$	113,025
Average aggregate invested assets, at fair value	$	8,498,045	$	8,471,639
Financial statement portfolio return		1.2%		1.3%

Page 20

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

ADDITIONAL INVESTMENT DETAIL

Other Invested Assets:					Top 10 Corporate Exposures:
Fund Details	Carrying Value   March 31, 2014		Unfunded     Commitments		Corporate				Fair Value     March 31, 2014		Portfolio     Percentage
Private Equity:					Bank of America Corp				$	60,630		0.7%
Primary and secondary	$	144,582	$	262,450	JPMorgan Chase & Co					59,217		0.7%
Mezzanine debt		81,474		182,562	Morgan Stanley					58,228		0.7%
Distressed		9,752		5,249	General Electric Co					54,928		0.6%
Total private equity		235,808		450,261	Mitsubishi UFJ Financial Group					43,776		0.5%
Hedge Funds:					Verizon Communications Inc					39,239		0.5%
Distressed		161,033		—	Wells Fargo & Co					34,855		0.4%
Equity long/short		163,964		—	Citigroup Inc					33,925		0.4%
Multi-strategy		122,584		—	BNP Paribas SA					33,846		0.4%
Global macro		—		—	American Express Co					32,275		0.4%
Event driven		6,407		—
Relative value credit		117,271		—
Total hedge funds		571,259		—
Other private securities		149,804		—
High yield loan fund		32,920		—
Total other invested assets	$	989,791	$	450,261
Fixed Income Credit Quality:	March 31, 2014				December 31, 2013
Rating	Fair Value		Percentage		Fair Value		Percentage
U.S. government and agencies	$	1,476,463		24.3%	$	1,676,789		27.5%
AAA/Aaa		813,875		13.4%		755,360		12.4%
AA/Aa		1,447,524		23.9%		1,458,497		23.9%
A/A		1,117,141		18.4%		1,022,281		16.8%
BBB/Baa		582,294		9.6%		533,238		8.7%
Total BBB/Baa and above		5,437,297		89.6%		5,446,165		89.3%
BB/Bb		85,118		1.4%		195,653		3.2%
B/B		377,607		6.2%		329,267		5.4%
CCC+ and below		168,644		2.8%		129,713		2.1%
Total	$	6,068,666		100.0%	$	6,100,798		100.0%

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ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

ADDITIONAL INVESTMENT DETAIL

TOTAL EXPOSURE BY ASSET TYPE AND REGION - MARCH 31, 2014
				Sovereign Guarantee				Mortgage-Backed Securities						Asset-		Corporate Securities
Region	Country	Sovereign*		Financial   Institutions		State and   Municipalities		Agency     MBS		MBS		CMBS		Backed   Securities		Financials		Industrials		Utilities		Equity   Securities		Total   Exposure
Africa	South Africa	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	6,233	$	—	$	1,051	$	7,284
Australia	Australia		—		40,303		—		—		—		—		—		44,569		15,017		—		1,848		101,737
	Total		—		40,303		—		—		—		—		—		44,569		15,017		—		1,848		101,737
Europe	Austria		—		—		—		—		—		—		—		—		—		—		133		133
	Belgium		—		—		—		—		—		—		—		—		16,212		—		3,285		19,497
	Denmark		—		—		—		—		—		—		—		—		—		—		2,007		2,007
	Finland		—		—		—		—		—		—		—		—		—		—		1,102		1,102
	France		—		—		—		—		—		—		1,442		53,562		27,436		10,144		29,243		121,827
	Germany		30,872		859		—		—		—		—		1,496		4,183		10,610		—		57,737		105,757
	Ireland		—		—		—		—		—		—		6,350		—		278		—		1,328		7,956
	Italy		—		—		—		—		—		—		—		512		—		—		5,601		6,113
	Luxembourg		—		—		—		—		—		—		3,730		—		13,960		—		172		17,862
	Netherlands		—		34,551		—		—		—		—		864		55,064		14,524		—		5,110		110,113
	Norway		—		—		—		—		—		—		—		20,989		2,750		—		857		24,596
	Poland		—		—		—		—		—		—		—		—		—		—		620		620
	Portugal		—		—		—		—		—		—		—		—		—		—		659		659
	Spain		—		—		—		—		—		—		—		4,741		10,285		—		847		15,873
	Sweden		5,886		—		—		—		—		—		—		35,936		—		—		7,291		49,113
	Switzerland		2,374		—		—		—		—		—		—		7,102		846		—		16,685		27,007
	United Kingdom		26,657		—		—		—		10,236		—		—		64,194		88,842		167		28,012		218,108
	Total		65,789		35,410		—		—		10,236		—		13,882		246,283		185,743		10,311		160,689		728,343
Latin America	Brazil		2,895		—		—		—		—		—		—		1,601		10,698		—		445		15,639
	Chile		—		—		—		—		—		—		—		196		—		—		—		196
	Mexico		24,606		—		—		—		—		—		—		—		309		—		453		25,368
	Panama		—		—		—		—		—		—		—		—		—		—		1,521		1,521
	Total		27,501		—		—		—		—		—		—		1,797		11,007		—		2,419		42,724
North America	Canada		57,481		—		—		—		—		—		—		52,940		32,805		7,277		10,938		161,441
	Cayman Islands		—		—		—		—		—		—		246,737		—		1,063		—		—		247,800
	United States		1,502,374		—		230,669		701,997		105,170		486,727		303,910		632,209		852,879		76,031		527,544		5,419,510
	Total		1,559,855		—		230,669		701,997		105,170		486,727		550,647		685,149		886,747		83,308		538,482		5,828,751
Asia / Middle	China		—		—		—		—		—		—		—		—		1,152		—		37,038		38,190
	Hong Kong		—		—		—		—		—		—		—		—		—		—		1,353		1,353
	Israel		—		—		—		—		—		—		—		—		1,097		—		196		1,293
	Japan		—		—		—		—		—		—		—		31,528		5,759		—		89,121		126,408
	Kyrgyzstan		—		—		—		—		—		—		—		—		—		—		116		116
	Macau		—		—		—		—		—		—		—		—		—		—		379		379
	Malaysia		—		—		—		—		—		—		—		—		—		—		1,026		1,026
	Qatar		—		—		—		—		—		—		—		7,054		240		—		—		7,294
	South Korea		4,874		—		—		—		—		—		—		5,693		—		3,188		—		13,755
	Taiwan		—		—		—		—		—		—		—		—		3,009		—		645		3,654
	Thailand		—		—		—		—		—		—		—		—		—		—		530		530
	UAE		—		—		—		—		—		—		—		721		—		—		—		721
	Total		4,874		—		—		—		—		—		—		44,996		11,257		3,188		130,404		194,719
	Grand Total	$	1,658,019	$	75,713	$	230,669	$	701,997	$	115,406	$	486,727	$	564,529	$	1,022,79	$	1,116,004	$	96,807	$	834,893	$	6,903,558

*Allied World has no direct exposure to any of the Sovereign governments of Portugal, Italy, Ireland, Greece or Spain.

Page 22

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

SHARE REPURCHASE DETAIL

Period	Aggregate Cost     of Shares Repurchased		Number of Shares       Repurchased		Average Price paid Per Share         Repurchased		Average Diluted Book   Value Per Share (1)		Average Repurchase     Price to Diluted     Book Value		Remaining Share Repurchase       Authorization
Three Months Ended:
March 31, 2013	$	36,245		432,117	$	83.88	$	94.55		88.7%
June 30, 2013		46,326		508,328		91.13		96.34		94.6%
September 30, 2013		40,574		427,388		94.93		97.67		97.2%
December 31, 2013		51,540		480,311		107.31		100.87		106.4%
Total - 2013	$	174,685		1,848,144	$	94.52	$	97.59		96.9%
Three Months Ended:
March 31, 2014	$	68,659		670,732	$	102.36	$	104.82		97.7%
Total - 2014	$	68,659		670,732	$	102.36	$	104.82		97.7%	$	166,887

    (1) Average of beginning and ending diluted book value per share for each period presented and weighted average total.

Page 23

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

CAPITAL STRUCTURE AND LEVERAGE RATIOS

	As of         March 31, 2014			As of         December 31, 2013
Senior notes	$	798,573		$	798,499
Shareholders’ equity		3,616,678			3,519,826
Total capitalization	$	4,415,251		$	4,318,325
Leverage ratios
Debt to total capitalization		18.1%			18.5%
Net premiums written (trailing 12 months)	$	2,197,043		$	2,120,481
Net premiums written (trailing 12 months) to shareholders’ equity		0.61	x		0.60  x
Total investments and cash & cash equivalents	$	8,603,722		$	8,393,365
Total investments and cash & cash equivalents to shareholders’ equity		2.38	x		2.38  x
Reserve for losses and loss expenses	$	5,856,798		$	5,766,529
Deduct: reinsurance recoverable		(1,280,525)			(1,234,504)
Net reserve for losses and loss expenses	$	4,576,273			4,532,025
Net reserve for losses and loss expenses to shareholders’ equity		1.27	x		1.29  x

Page 24

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

OPERATING INCOME RECONCILIATION AND

BASIC AND DILUTED EARNINGS PER SHARE INFORMATION

	Three Months Ended												Three Months Ended
	March 31, 2014		December 31, 2013		September 30, 2013		June 30, 2013			March 31, 2013			March 31, 2014		March 31, 2013
Net income (loss)	$	176,972	$	137,907	$	122,843	$	(1,862)		$	158,992		$	176,972	$	158,992
Add after tax effect of:
Net realized investment (gains) losses		(47,164)		(64,027)		(25,395)		104,897			(77,342)			(47,164)		(77,342)
Foreign exchange loss		49		658		4,353		490			2,518			49		2,518
Operating income (loss)	$	129,857	$	74,538	$	101,801	$	103,525		$	84,168		$	129,857	$	84,168
Weighted average common shares outstanding
Basic		33,181,729		33,604,985		33,991,359		34,422,553			34,613,606			33,181,729		34,613,606
Diluted		33,861,554		34,376,604		34,728,193		35,136,296	*		35,431,843			33,861,554		35,431,843
Basic per share data
Net income (loss)	$	5.33	$	4.10	$	3.61	$	(0.05)		$	4.59		$	5.33	$	4.59
Add after tax effect of:												��
Net realized investment (gains) losses		(1.42)		(1.91)		(0.75)		3.05			(2.23)			(1.42)		(2.23)
Foreign exchange loss		0.00		0.02		0.13		0.01			0.07			0.00		0.07
Operating income (loss)	$	3.91	$	2.21	$	2.99	$	3.01		$	2.43		$	3.91	$	2.43
Diluted per share data
Net income (loss)	$	5.23	$	4.01	$	3.54	$	(0.05)	*	$	4.49		$	5.23	$	4.49
Add after tax effect of:
Net realized investment (gains) losses		(1.39)		(1.86)		(0.73)		2.99			(2.18)			(1.39)		(2.18)
Foreign exchange loss		0.00		0.02		0.12		0.01			0.07			0.00		0.07
Operating income (loss)	$	3.84	$	2.17	$	2.93	$	2.95		$	2.38		$	3.84	$	2.38

* 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 25

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

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

	Three Months Ended										Three Months Ended
	March 31,    2014		December 31,  2013		September 30,  2013		June 30,     2013		March 31,    2013		March 31,    2014		March 31,    2013
Opening shareholders’ equity	$	3,519,826	$	3,443,928	$	3,373,229	$	3,431,963	$	3,326,335	$	3,519,826	$	3,326,335
Deduct: accumulated other comprehensive income		—		—		—		—		—		—		—
Adjusted opening shareholders’ equity	$	3,519,826	$	3,443,928	$	3,373,229	$	3,431,963	$	3,326,335	$	3,519,826	$	3,326,335
Closing shareholders’ equity	$	3,616,678	$	3,519,826	$	3,443,928	$	3,373,229	$	3,431,963	$	3,616,678	$	3,431,963
Deduct: accumulated other comprehensive income		—		—		—		—		—		—		—
Adjusted closing shareholders’ equity	$	3,616,678	$	3,519,826	$	3,443,928	$	3,373,229	$	3,431,963	$	3,616,678	$	3,431,963
Average adjusted shareholders’ equity	$	3,568,252	$	3,481,877	$	3,408,579	$	3,402,596	$	3,379,149	$	3,568,252	$	3,379,149
Net income (loss) available to shareholders	$	176,972	$	137,907	$	122,843	$	(1,862)	$	158,992	$	176,972	$	158,992
Annualized net income (loss) available to shareholders	$	707,888	$	551,628	$	491,372	$	(7,448)	$	635,968	$	707,888	$	635,968
Annualized return on average shareholders’ equity - net income (loss) available to shareholders		19.8%		15.8%		14.4%		(0.2)%		18.8%		19.8%		18.8%
Operating income (loss) available to shareholders	$	129,857	$	74,538	$	101,801	$	103,525	$	84,168	$	129,857	$	84,168
Annualized operating income (loss) available to shareholders	$	519,428	$	298,152	$	407,204	$	414,100	$	336,672	$	519,428	$	336,672
Annualized return on average shareholders’ equity - operating income (loss) available to shareholders		14.6%		8.6%		11.9%		12.2%		10.0%		14.6%		10.0%

Page 26

ALLIED WORLD ASSURANCE COMPANY HOLDINGS, AG

RECONCILIATION OF DILUTED BOOK VALUE PER SHARE

	As of March 31, 2014		As of December 31, 2013		As of March 31, 2013
Price per share at period end	$	103.19	$	112.81	$	92.72
Total shareholders’ equity	$	3,616,678	$	3,519,826	$	3,431,963
Basic common shares outstanding		32,908,821		33,417,882		34,626,361
Add: unvested restricted stock units		174,415		47,899		91,159
Add: performance based equity awards		207,092		268,173		272,062
Add: employee purchase plan		5,572		18,532		5,616
Add: dilutive options outstanding		920,101		976,104		1,166,137
Weighted average exercise price per share	$	48.33	$	48.22	$	47.34
Deduct: options bought back via treasury method		(430,938)		(417,229)		(595,451)
Common shares and common share equivalents outstanding		33,785,063		34,311,361		35,565,884
Basic book value per common share	$	109.90	$	105.33	$	99.11
Year-to-date percentage change in basic book value per common share		4.3%		6.3%
Diluted book value per common share	$	107.05	$	102.58	$	96.50
Year-to-date percentage change in diluted book value per common share		4.4%		6.3%

Page 27

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 25 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 26 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 25 for the reconciliation of net income to operating income and page 26 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 27 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 20 for the calculation of annualized investment book yield.

Page 28