Allied World Announces Second Quarter 2011 Catastrophe Loss Estimates

ZUG, Switzerland, July 8, 2011 -

Allied World Assurance Company Holdings, AG (NYSE: AWH)
announced today that it expects to record approximately $65 million
to $75 million in catastrophe related losses and loss expenses in
the second quarter of 2011.  This range is comprised of
approximately $40 million to $50 million from second quarter 2011
weather-related events in the United States and approximately $25
million for additional expected losses from first quarter
catastrophe events in New Zealand and Japan.  These amounts
are pre-tax and net of reinsurance recoverables.

Allied World’s loss estimates for these events are derived from
preliminary information obtained from clients and brokers, a review
of the terms of in-force policies and contracts, a review of
outward reinsurance agreements and from our catastrophe modeling
analysis.  Actual ultimate losses from these events may vary
materially from the current estimates due to inherent uncertainties
resulting from several factors, including the preliminary nature of
loss data available, potential inaccuracies and inadequacies in the
data that has been provided and the potential for catastrophe
modeling inaccuracies.

About Allied World Assurance
Company

Allied World Assurance Company Holdings, AG, 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 offices and
branches.  All of Allied World’s rated insurance and
reinsurance subsidiaries are rated A by A.M. Best Company, A by
Standard & Poor’s and A2 by Moody’s, and our Lloyd’s Syndicate
2232 is rated A+ by Standard & Poor’s and Fitch.  Please
visit 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 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 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.

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