Allied World Announces Proposed Redomestication of Group Holding Company to Switzerland

PEMBROKE, Bermuda, September 30, 2010 - Allied World Assurance Company Holdings, Ltd (NYSE: AWH) today announced
that its Board of Directors has unanimously approved a plan for the group
holding company to redomesticate its place of incorporation from Bermuda to
Switzerland. Holders of Allied World's voting and non-voting common shares
will be asked to vote in favor of the proposal at special shareholders
meetings that are expected to be scheduled for later this year.

Scott Carmilani, Allied World's President and Chief Executive Officer,
said "We are announcing our proposed redomestication to Switzerland as we
believe the time has come to increase our focus on global distribution as
well as global product capabilities. Allied World is nearing its 10th
anniversary, having grown from a single office in Bermuda to 16 offices
worldwide that service an increasingly global customer base. This
redomestication will allow us to better manage our position in local markets
around the world, as well as continue to maintain a strong presence in the
Bermuda market."

Following the redomestication, the holding company's Bermuda insurance
and reinsurance subsidiary will continue to operate and service business in
Bermuda where the company was formed in 2001.

In order to effect the redomestication, Allied World has formed a new
Swiss company, Allied World Assurance Company Holdings, AG, that will replace
Allied World Assurance Company Holdings, Ltd as the ultimate holding company
of the group. Under the proposed redomestication, all outstanding common
shares of Allied World that existed before the transaction is completed will
be cancelled, and the holders will receive in lieu thereof registered
securities of Allied World Switzerland on a one-for-one basis. The proposed
redomestication will be subject to approval by the company's shareholders and
the Supreme Court of Bermuda, as well as the satisfaction of other conditions
that will be described in the proxy statement the company will file with the
U.S. Securities and Exchange Commission ("SEC"). Allied World expects the
redomestication to be effective by the end of the calendar year 2010.

Assuming completion of the redomestication, Allied World Switzerland's
shares are expected to continue to trade on the New York Stock Exchange
("NYSE") under the ticker symbol "AWH". The company will remain subject to
SEC reporting requirements, the mandates of the Sarbanes-Oxley Act of 2002
and the corporate governance rules of the NYSE. Finally, the company will
continue to report its consolidated financial results in U.S. dollars and
under U.S. generally accepted accounting principles.

Allied World will file a proxy statement with the SEC that will provide
full details of the proposed redomestication and the attendant benefits and
risks. This press release is not a substitute for the proxy statement.
Investors and security holders are urged to read the proxy statement when it
becomes available because it will contain important information about the
proposed redomestication. Investors and security holders may obtain a free
copy of the proxy statement (when available) and other relevant documents
filed with the SEC from the SEC's website at www.sec.gov as well as by
directing a request by mail or telephone to Allied World's Corporate
Secretary, 27 Richmond Road, Pembroke HM 08, Bermuda, telephone
(441)-278-5400.

Allied World and its directors and executive officers may be deemed to be
participants in the solicitation of proxies in connection with the proposed
redomestication. Information about Allied World's directors and executive
officers is set forth in Allied World's proxy statement, dated March 17,
2010, relating to its 2010 annual general meeting of shareholders. Additional
information may be obtained regarding the interests of such persons, which
may be different from those of Allied World's shareholders generally, by
reading the proxy statement and other relevant documents regarding the
proposed redomestication that will be filed with the SEC.

Conference Call

Allied World will host a conference call on Monday, October 4, 2010 at
9:00 a.m. (Eastern Time) to discuss the proposed redomestication. The public
may access a live webcast of the conference call at the "Investor Relations"
section of the company's website at www.awac.com. In addition, the
conference call can be accessed by dialing +1-877-317-6701 (U.S. and Canada
callers) or +1-412-317-6701 (international callers) and entering the passcode
8101010 approximately ten minutes prior to the call.

Following the conclusion of the presentation, a replay of the call will
be available through Monday, October 18, 2010 by dialing +1-877-344-7529
(U.S. and Canada callers) or +1-412-317-0088 (international callers) and
entering the passcode 444981. In addition, the webcast will remain available
online through Monday, October 18, 2010 at www.awac.com.

About Allied World Assurance Company

Allied World Assurance Company Holdings, Ltd, through its subsidiaries,
is a global provider of innovative property, casualty and specialty insurance
and reinsurance solutions, offering superior client service through a global
network of branches and affiliates. Our insurance and reinsurance
subsidiaries are rated A (Excellent) by A.M. Best Company, and our Lloyd's
Syndicate 2232 is rated A+ (Strong) by Standard & Poor's and Fitch. Please
visit our website at www.awac.com for further information on Allied
World.

Cautionary Statement Regarding Forward-Looking Statements

Any forward-looking statements made in this press release reflect our
current views with respect to future events and financial performance and are
made pursuant to the safe harbor provisions of the 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 inability to obtain shareholder approval or the failure to satisfy other
conditions required to complete the redomestication; risks that the proposed
redomestication disrupts current plans and operations; difficulties moving
jurisdictions and opening new offices and functions; tax and financial
expectations might not materialize; the inability to recognize other
benefits of the redomestication; risks that Swiss corporate governance and
regulatory schemes could prove different or more challenging than currently
expected; the amount of the costs, fees, expenses and charges related to the
redomestication; pricing and policy term trends; increased competition; the
impact of acts of terrorism and acts of war; greater frequency or severity
of unpredictable catastrophic events; negative rating agency actions; the
adequacy of our loss reserves; the company or its subsidiaries becoming
subject to significant income taxes in the United States or elsewhere;
changes in regulations or tax laws; changes in the availability, cost or
quality of reinsurance or retrocessional coverage; adverse general economic
conditions; and judicial, legislative, political and other governmental
developments, as well as management's response to these factors, and other
factors identified in our filings with the U.S. Securities and Exchange
Commission. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date on which they
are made. We are under no obligation (and expressly disclaim any such
obligation) to update or revise any forward-looking statement that may be
made from time to time, whether as a result of new information, future
developments or otherwise.

Faye Cook, VP, Marketing & Communications, +1-441-278-5406, faye.cook at awac.com, Investors: Keith J. Lennox, Investor Relations Officer, +1-646-794-0750, keith.lennox at awac.com