The shake-up of the Florida insurance and reinsurance market, following a move by Florida legislators to double the size of the state-sponsored catastrophe insurance fund and the Citizens Property Insurance Corporation to give residents lower insurance premiums, will have no direct impact on Allied World Assurance Company (AWAC) according to president and CEO Scott Carmilani.

And he said two legal actions involving the company, one of which is now all but settled, are expected to have no bearing on the its 2007 fortunes.

Looking to the coming year, AWAC is preparing to give itself a new logo and image. It is involved in two US court cases and has set-aside $2.1 million to cover anticipated settlement payments relating to a Civil Investigative Demand in Texas. In a conference call following the release of record operating income of $472.1 million and net income of $442.8 million for 2006, Mr. Carmilani said: ?Allied World is expected to conclude very shortly on this matter and we have been able to reserve $2.1m and take that charge in 2006 for settlements that we expect to make in relation to this matter.

?As it has not been finalised I can?t comment other than to say we have reserved the money we expect to pay. This matter is basically behind us from an operational and performance perspective for 2007.?

A second legal matter in the district court of New Jersey, in which AWAC is one of 78 named insurers, is ongoing but the liability ? if any ? from that case is not thought to be as high as the anticipated Texas settlement. However, AWAC is not able to assess the possible loss range at present.

The company, which has a staff of 165 in Bermuda, is keeping a watchful eye on developments in Florida regarding the change in legislation that now favours the state?s own catastrophe insurance fund and Citizens? corporation.

In Florida AWAC is involved in the commercial insurance side, not homeowner policies, therefore Mr. Carmilani believes it will not be impacted directly by the Florida changes. However, what will happen later in the year with regards to other insurers and reinsurers looking to re-direct their capital could create increased competition in the commercial sector.

?Florida will have absolutely no direct impact on Allied World. We do not write personal lines business in the state and we do not have individual Florida catastrophe policies from a re-insurance perspective. We are 100 percent