Summary of ALLIED WORLD ASSURANCE CO HOLDINGS LTD

Item 1.01 Entry into a Material Definitive Agreement.

On December 30, 2008, Allied World Assurance Company, Ltd ("Allied World"), a subsidiary of Allied World Assurance Company Holdings, Ltd (the "Company"), amended its existing collateralized letter of credit facility, dated March 5, 2007, with Citibank Europe plc ("CEP") to provide Allied World with greater flexibility by expanding the types of securities that are eligible to be posted as collateral thereunder (the "Amended LOC Facility"). CEP has also increased the maximum aggregate amount available under the facility from $750 million to $900 million on an uncommitted basis.

In order to effectuate the expansion of eligible securities under the Amended LOC Facility, on December 30, 2008, Allied World, CEP and The Bank of New York Mellon (formerly Mellon Bank, N.A.) ("BNY Mellon") entered into a letter agreement (the "Letter Agreement") that amended: (i) Schedule 1 to the Pledge Agreement, dated as of February 28, 2007 (the "Pledge Agreement"), by and between Allied World and CEP; and (ii) Exhibit A to the Account Control Agreement, dated March 5, 2007 (the "Account Control Agreement"), by and among CEP (as secured party), Allied World (as pledgor) and BNY Mellon. Pursuant to the Letter Agreement, certain securities issued by the U.S. Government or its agencies (fully guaranteed) or the central government of an OECD country, in each case rated AA or AA equivalent or better, may be posted as collateral under the Amended LOC Facility. In addition, securities of other institutions that are fully guaranteed by the U.S. Government or the central government of an OECD country and which are rated AA or AA equivalent or better may be deemed eligible by CEP at its sole discretion and posted as collateral by Allied World. All other terms of the Pledge Agreement and the Account Control Agreement, as previously filed by the Company with the Securities and Exchange Commission in a Current Report on Form 8-K on March 6, 2007, remain in full force and effect.

The Letter Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The description of the Letter Agreement contained herein is qualified in its entirety by reference to the Letter Agreement filed herewith.