Allied World Assurance Company Holdings, Ltd has opened a new office in Melbourne, adding a third location to its Australian network alongside existing operations in Sydney and Brisbane.
The Melbourne office will focus on commercial package, property, construction, and professional lines. The branch will work with brokers in Victoria that place complex and multi-faceted risks, including larger commercial and project-related exposures. Allied World has appointed senior staff with established broker relationships to the new office to provide local underwriting contact for Victorian intermediaries. The office will house underwriters able to make in-market decisions on placements that require detailed risk assessment, tailored structures, or coordination with other jurisdictions.
“This expansion reflects the growth of our business in Australia. Building our presence in Sydney and Brisbane and now expanding into Melbourne reinforces our ability to support brokers in Victoria with responsive, local underwriting expertise,” said Iain Macleod, Australia country head. The new office is part of Allied World’s wider plan to increase its scale in selected regional markets while maintaining a consistent underwriting framework. Australia is being treated as a focus market for specialty and commercial business where proximity to brokers and insureds is expected to influence how risks are placed and serviced.
Allied World operates globally as a provider of insurance and reinsurance solutions through subsidiaries under the Allied World brand. Since 2001, it has written primary and reinsurance business for corporate buyers, cedents, and other trading partners across multiple regions and lines of business. The company is a subsidiary of Fairfax Financial Holdings Ltd., a Canada-based holding company for a portfolio of property/casualty and reinsurance operations. As part of Fairfax, Allied World has access to group capital and group-level investment and risk-management functions, while operating as a separate underwriting entity in its local markets.
The Australian expansion follows a change in Fairfax’s external credit ratings. On June 11, 2025, S&P Global Ratings raised its long-term issuer credit and financial strength ratings on Fairfax’s core re/insurance operating subsidiaries to AA- from A+. At the same time, S&P upgraded the long-term issuer credit rating on Fairfax Financial Holdings Ltd. to A- from BBB+, with a stable outlook on the ratings. In its rationale, S&P cited capitalization it assessed as sustainable at the 99.95% confidence level through 2027, supported by diversified earnings and the group’s capital management. The agency also referred to Fairfax’s competitive position, built through a combination of organic growth and acquisitions, and underpinned by a portfolio of re/insurance operations that are established in their markets and largely run on a decentralized basis. Fairfax reported US$32.5 billion in gross premiums written in 2024, with an average annual growth rate of 13.6% over the period 2020-2024. Growth has been supported by favourable re/insurance pricing and the 2024 consolidation of Gulf Insurance Group. S&P expects Fairfax’s gross premiums to grow at a mid-single-digit rate between 2025 and 2027.
On the underwriting side, Fairfax recorded a combined ratio of 93.6% in 2024 on an undiscounted basis including allocated corporate expenses, after US$1.1 billion in natural catastrophe losses. In 2023, the combined ratio was 93.9% with US$897 million of catastrophe losses. S&P noted that catastrophe losses in the first quarter of 2025, including US$692 million from California wildfires, led to a combined ratio of 98.5% for the quarter, but the agency expects Fairfax to report underwriting profits for full-year 2025 with a combined ratio in the mid-90s and similar ranges in 2026-2027.
Fairfax applies a total return investment strategy with a significant portion of its portfolio in risk assets and level 3 investments. At year-end 2024, the group’s US$67.4 billion investment portfolio included 42% in risk assets. By the end of the first quarter of 2025, 18.5% of investments were classified as level 3, rising above 20% when level 3 exposures within investments in associates are included. This figure includes approximately US$5 billion in first mortgage loans secured by real estate in North America and Europe, originated and managed with Kennedy Wilson Holdings Inc.
Since 2022, Fairfax has shifted cash and proceeds from short-dated instruments into US Treasuries with five- to seven-year maturities. S&P reported that this repositioning increased the annual run rate of interest and dividend income from US$641 million in 2021 to US$2.5 billion in 2024, with similar levels projected through 2027. Deconsolidated financial leverage declined from 37.4% at year-end 2020 to 28.6% at year-end 2024 and 28.1% at the end of the first quarter of 2025. Fixed-charge coverage has remained above 10 times in recent years. S&P expects leverage to remain below 30% and EBITDA fixed-charge coverage in the 6 to 8 times range over 2025-2027.
