Allied World Assurance Company Announces Pricing of Senior Notes Offering.

HAMILTON, Bermuda -- Allied World Assurance Company Holdings, Ltd (NYSE: AWH) announced today that it has priced an underwritten public offering of $500 million aggregate principal amount of senior notes due 2016. The senior notes will bear interest at an annual rate of 7.50% per year.

The proceeds from the offering will be used to repay the remaining portion of the Company's bank debt and for general corporate purposes. Goldman Sachs & Co. and Banc of America Securities LLC are joint bookrunning managers for the offering. The offering is expected to close on or near July 26, 2006.

Full details of the offering, including a description of the notes, are contained in a registration statement relating to these securities that has been filed and declared effective by the U.S. Securities and Exchange Commission ("SEC"). Copies of the prospectus, which forms a part of the registration statement relating to the offering may be obtained, when available, by contacting Goldman, Sachs & Co., Attention: Prospectus Department, 85 Broad St., New York, NY 10004, or by calling 1-866-471-2526. The registration statement is available on the SEC's website at http://www.sec.gov.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Allied World Assurance Company

Allied World Assurance Company Holdings, Ltd, founded in November 2001, is one of Bermuda's leading property and casualty insurers. The company, through its operating subsidiaries, offers property and casualty insurance and reinsurance on a worldwide basis. The principal operating subsidiaries of Allied World Assurance Company Holdings, Ltd have A (Excellent) ratings from A.M. Best Company and A- ratings from Standard and Poor's. The company's Bermuda and U.S. operating subsidiaries are rated A2 by Moody's Investors Service.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 that involve inherent risks and uncertainties. Statements that are not historical facts, including statements that use terms such as "believes," "anticipates," "intends" or "expects" and that relate to our plans and objectives for future operations, are forward-looking statements. In light of the risks and uncertainties inherent in all forward-looking statements, the inclusion of such statements in this press release should not be considered as a representation by us or any other person that our objectives or plans will be achieved. These statements are based on current plans, estimates and expectations. Actual results may differ materially from those projected in such forward-looking statements and therefore you should not place undue reliance on them. A non-exclusive list of the important factors that could cause actual results to differ materially from those in such forward-looking statements includes the following: (a) the effects of competitors' pricing policies, and of changes in laws and regulations on competition, including industry consolidation and development of competing financial products; (b) the effects of investigations into market practices, in particular insurance brokerage practices, together with any legal or regulatory proceedings, related settlements and industry reform or other changes arising therefrom; (c) the impact of acts of terrorism and acts of war; (d) greater frequency or severity of claims and loss activity, including as a result of natural or man-made catastrophic events, than our underwriting, reserving or investment practices have anticipated; (e) increased competition due to an increase in capacity of property and casualty insurers or reinsurers; (f) the inability to obtain or maintain financial strength ratings by one or more of the company's subsidiaries; (g) the adequacy of our loss reserves and the need to adjust such reserves as claims develop over time; (h) the company or one of its subsidiaries becoming subject to significant income taxes in the United States or elsewhere; (i) changes in regulations or tax laws applicable to the company, its subsidiaries, brokers or customers; (j) changes in the availability, cost or quality of reinsurance or retrocessional coverage; (k) loss of key personnel; (l) changes in general economic conditions, including inflation, foreign currency exchange rates, interest rates and other factors that could affect the company's investment portfolio; and (m) such other risk factors as may be discussed in the final prospectus relating to this offering and subsequent reports filed with the Securities and Exchange Commission. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.