Published: February 07, 2011
Aspen Insurance Holdings Reports Results for Fourth Quarter and Twelve Months of 2010
HAMILTON, Bermuda - (BUSINESS WIRE) - Aspen Insurance Holdings Limited (NYSE: AHL) today reported net income
after tax for the fourth quarter of 2010 of $92.7 million and operating
earnings of $1.02 per diluted ordinary share. Book value per share on a
diluted basis of $38.90 increased by 13.9% when compared to December 31,
2009 and by 1.8% since September 30, 2010.
|
Fourth Quarter 2010 Financial Highlights
|
|
($ in millions, except per share amounts and percentages)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2010
|
|
Q4 2009
|
|
Change
|
|
Gross written premium
|
|
$
|
412.8
|
|
|
$
|
405.7
|
|
|
1.8
|
%
|
|
Net earned premium
|
|
$
|
499.7
|
|
|
$
|
476.2
|
|
|
4.9
|
%
|
|
Net investment income
|
|
$
|
57.0
|
|
|
$
|
58.2
|
|
|
(2.1
|
%)
|
|
Net income after tax
|
|
$
|
92.7
|
|
|
$
|
126.3
|
|
|
(26.6
|
%)
|
|
Operating income after tax
|
|
$
|
85.0
|
|
|
$
|
129.2
|
|
|
(34.2
|
%)
|
|
Diluted net income per share
|
|
$
|
1.12
|
|
|
$
|
1.40
|
|
|
(20.0
|
%)
|
|
Diluted operating earnings per share
|
|
$
|
1.02
|
|
|
$
|
1.44
|
|
|
(29.2
|
%)
|
|
Net income annualized return on equity
|
|
|
13.2
|
%
|
|
|
18.4
|
%
|
|
|
|
Annualized operating return on equity
|
|
|
12.0
|
%
|
|
|
18.8
|
%
|
|
|
|
Combined ratio
|
|
|
95.3
|
%
|
|
|
84.7
|
%
|
|
|
|
Book value per ordinary share
|
|
$
|
40.96
|
|
|
$
|
35.42
|
|
|
15.6
|
%
|
|
Diluted book value per ordinary share
|
|
$
|
38.90
|
|
|
$
|
34.14
|
|
|
13.9
|
%
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31 Financial Highlights
|
|
($ in millions, except per share amounts and percentages)
|
|
(Unaudited)
|
|
|
|
|
|
2010
|
|
2009
|
|
Change
|
|
Gross written premium
|
|
$
|
2,076.8
|
|
|
$
|
2,067.1
|
|
|
0.5
|
%
|
|
Net earned premium
|
|
$
|
1,898.9
|
|
|
$
|
1,823.0
|
|
|
4.2
|
%
|
|
Net investment income
|
|
$
|
232.0
|
|
|
$
|
248.5
|
|
|
(6.6
|
%)
|
|
Net income after tax
|
|
$
|
312.7
|
|
|
$
|
473.9
|
|
|
(34.0
|
%)
|
|
Operating income after tax
|
|
$
|
265.7
|
|
|
$
|
464.3
|
|
|
(42.8
|
%)
|
|
Diluted net income per share
|
|
$
|
3.62
|
|
|
$
|
5.64
|
|
|
(35.8
|
%)
|
|
Diluted operating earnings per share
|
|
$
|
3.03
|
|
|
$
|
5.16
|
|
|
(41.3
|
%)
|
|
Net income annualized return on equity
|
|
|
11.2
|
%
|
|
|
18.4
|
%
|
|
|
|
Annualized operating return on equity
|
|
|
9.4
|
%
|
|
|
18.0
|
%
|
|
|
|
Combined ratio
|
|
|
96.7
|
%
|
|
|
84.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chris O'Kane, Chief Executive Officer said: "I am very pleased to report
that we grew BVPS by 13.9% in 2010 and 1.8% in Q4 against a backdrop of
continued low interest rates and a challenging underwriting environment.
The performance of our Reinsurance business was particularly strong and,
in a year which saw a significant impact from natural catastrophes, the
combined ratio of 88.2% reflects the benefits of our diversified
approach. We made good progress in furthering our key strategic
objectives in 2010 such as developing our Insurance franchise in the US
and parts of Europe and will continue selectively to seek out
opportunities to further our aims in 2011 as market conditions allow."
Overview of Operations for the Fourth Quarter and Full Year 2010
-
Gross written premiums of $412.8 million in the quarter, up 1.8% on
last year, with the increase coming mainly from the insurance segment.
-
Underwriting income for the quarter of $35.4 million included $32.8
million of further losses from the New Zealand earthquake, as
previously announced on December 16, 2010, against underwriting income
of $93.3 million in the previous year, which had no recorded
catastrophic losses.
-
Prior year reserve releases of $12.6 million in the quarter compared
with $13.4 million of reserve releases in the equivalent period in
2009. For the twelve months ended December 31, 2010, reserve releases
were $21.4 million compared with $84.4 million in 2009.
-
Cash flows from operating activities were $122.3 million for the
quarter and $624.6 million for the twelve months ended December 31,
2010 compared with $157.5 million and $646.6 million, respectively in
2009.
-
The effective tax rate for the fourth quarter of 3.3% is a product of
lowering the estimated annual effective tax rate from 10.0% at the end
of the third quarter of 2010 to an actual rate of 8.1% at the end of
the year. This compares with an effective tax rate of 11.4% for the
full year in 2009.
Operating Segment Highlights
Reinsurance Segment
Reinsurance segment underwriting income for the quarter was $53.7
million compared with $81.3 million last year. This underwriting result
reflects a combined ratio of 81.6% compared with 71.9% for the fourth
quarter in 2009. The combined ratio for the quarter includes 11.2
percentage points of losses from the earthquake in New Zealand bringing
total pre-tax losses for this event to $52.8 million, an increase of
$32.8 million over losses included in the third quarter of 2010 results.
Net favorable reserve development was $36.1 million compared with $22.7
million for the fourth quarter of 2009 with the increase attributable to
the property and specialty reinsurance lines of business. Gross written
premiums in the reinsurance segment for the quarter were $152.8 million
compared to $169.7 million in 2009 with decreases in property and
casualty reinsurance.
Underwriting income for the twelve months ended December 31, 2010 was
$133.6 million compared with $328.7 million in 2009. The combined ratio
for the twelve months ended December 31, 2010 of 88.2% has been impacted
by 15.3 percentage points, or $168.7 million of losses, net of
reinstatement premiums, from the earthquakes in Chile and New Zealand
and compares with 70.4% for the same period in 2009. The accident year
combined ratio for the twelve-month period of 79.1%, excluding the
impact of the earthquakes, is in line with 2009, which had no material
catastrophic losses. Gross written premiums for the twelve months ended
December 31, 2010 were $1,162.2 million compared with $1,176.0 million
in 2009.
Insurance Segment
Insurance segment underwriting loss for the quarter was $18.3 million
compared with an underwriting profit of $12.0 million in the fourth
quarter of 2009. The combined ratio was 108.8% for the fourth quarter
compared with 93.5% in 2009. There has been net reserve strengthening in
the insurance segment of $23.5 million for the quarter compared with
$9.3 million of strengthening in the fourth quarter last year arising
mainly in casualty insurance. Gross written premium was $260.0 million
compared with $236.0 million in 2009 with the increase attributable to
the marine, energy and transportation lines and financial and
professional lines.
The underwriting loss for the twelve-month period was $23.6 million
compared with an underwriting profit of $13.9 million in 2009. The 2010
combined ratio was 103.1% compared with 98.1% for the same period in
2009. The accident year combined ratio was 99.2% compared with 98.0% in
2009. For the twelve months ended December 31, 2010, gross written
premium was $914.6 million compared with $891.1 million in 2009.
Investment Performance
Net investment income for the quarter was $57.0 million, compared with
$58.2 million in the fourth quarter of 2009. Net realized and unrealized
investment gains included in income for the quarter were $10.5 million
compared with $7.5 million in the fourth quarter of 2009. There were no
securities selected for other-than-temporary impairment in the quarter
compared with $3.3 million for the same period in 2009.
Unrealized gains on the available-for-sale fixed income portfolio at the
end of the fourth quarter of 2010 were $239.6 million, a decrease of
$122.1 million, gross of tax, from the end of the third quarter in 2010
driven by rising interest rates.
Book yield on the fixed income portfolio of 3.7% was down from 3.9% at
the end of the third quarter of 2010. The average credit quality of the
portfolio remains AA+ with an average duration of 2.9 years, including
the impact of interest rate swaps.
Capital Position
As previously announced, in November 2010, the Company entered into an
accelerated share repurchase program to repurchase $184.0 million of its
ordinary shares. An initial amount of 5.7 million ordinary shares was
retired in the quarter. The Company may be entitled to receive
additional ordinary shares based on the average of the daily market
price of its ordinary shares during the term of the agreement. The
program is expected to be completed within seven months from the date of
the agreement. During the quarter, the Company also repurchased 0.5
million ordinary shares in the open market at an average price of $28.87
per share, for a total cost of $15.9 million. As of December 31, 2010,
the Company had approximately $192 million of remaining authorization
for ordinary share repurchases through March 2012.
On December 7, 2010, Aspen issued $250 million, 6% coupon 10-year senior
notes with the proceeds used for general corporate purposes.
Outlook for 2011
Given current market conditions, the Company anticipates gross written
premium for 2011 to be $2.1 billion +/- 5%, premium ceded to be between
8% and 12% of gross earned premium and the combined ratio to be in the
range of 93%-98% including a cat load of $170 million assuming normal
loss experience in the year. The Company expects the effective tax rate
in 2011 to be in the range of 8% to 12%.
Earnings conference call
Aspen will hold a conference call to discuss its financial results on
Tuesday, February 8, 2011 at 8:30 a.m. (Eastern Time).
CONFERENCE CALL PARTICIPATION DETAILS - February 8, 2011 at 8:30 a.m.
(ET)
|
Participant Dial-In Numbers:
|
|
+1 (888) 459-5609 (US Toll Free)
|
|
|
|
+1 (404) 665-9920 (International)
|
|
Conference ID:
|
|
34759395
|
|
|
|
|
Please call to register at least 10 minutes before the conference call
begins.
The conference call will be webcast live in the 'presentations' section
of the Investor Relations page of Aspen's website, which is located at www.aspen.bm.
The earnings press release and a detailed financial supplement will be
posted to the website, as well as a brief slide presentation which may
be used for reference during the earnings call.
REPLAY DETAILS
A replay of the call will be available for 14 days via telephone and
internet starting two hours following the end of the live call.
|
Replay Access:
|
|
+1 (800) 642-1687 (US Toll Free)
|
|
|
|
+1 (706) 645-9291 (International)
|
|
|
|
www.aspen.bm
|
|
Replay ID:
|
|
34759395
|
|
|
|
|
|
Aspen Insurance Holdings Limited
|
|
Summary Consolidated Balance Sheet
|
|
($ in millions, except per share data)
|
|
(Unaudited)
|
|
|
|
|
|
(in US$ millions)
|
|
As at December
31, 2010
|
|
As at December
31, 2009
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Total investments
|
|
$
|
6,086.3
|
|
$
|
5,997.0
|
|
Cash and cash equivalents
|
|
|
1,179.1
|
|
|
748.4
|
|
Reinsurance recoverables
|
|
|
342.3
|
|
|
425.3
|
|
Premiums receivable
|
|
|
821.7
|
|
|
708.3
|
|
Other assets
|
|
|
402.7
|
|
|
378.2
|
|
Total assets
|
|
$
|
8,832.1
|
|
$
|
8,257.2
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Losses and loss adjustment expenses
|
|
$
|
3,820.5
|
|
$
|
3,331.1
|
|
Unearned premiums
|
|
|
859.0
|
|
|
907.6
|
|
Other payables
|
|
|
411.9
|
|
|
463.5
|
|
Long-term debt
|
|
|
498.8
|
|
|
249.6
|
|
Total liabilities
|
|
$
|
5,590.2
|
|
$
|
4,951.8
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Total shareholders' equity
|
|
|
3,241.9
|
|
|
3,305.4
|
|
Total liabilities and shareholders' equity
|
|
$
|
8,832.1
|
|
$
|
8,257.2
|
|
|
|
|
|
|
|
Tangible book value per share
|
|
$
|
40.96
|
|
$
|
35.42
|
|
Diluted book value per share (treasury stock method)
|
|
$
|
38.90
|
|
$
|
34.14
|
|
|
|
|
|
|
|
|
|
Aspen Insurance Holdings Limited
|
|
Summary Quarterly Consolidated Statement of Income
|
|
($ in millions, except share, per share data and ratios)
|
|
(Unaudited)
|
|
|
|
(in US$ millions)
|
|
Three Months
Ended
December 31,
2010
|
|
Three Months
Ended
December 31,
2009
|
|
|
|
|
|
|
|
UNDERWRITING REVENUES
|
|
|
|
|
|
Gross written premiums
|
|
$
|
412.8
|
|
|
$
|
405.7
|
|
|
Premiums ceded
|
|
|
(17.6
|
)
|
|
|
(22.3
|
)
|
|
Net written premiums
|
|
|
395.2
|
|
|
|
383.4
|
|
|
Change in unearned premiums
|
|
|
104.5
|
|
|
|
92.8
|
|
|
Net earned premiums
|
|
|
499.7
|
|
|
|
476.2
|
|
|
UNDERWRITING EXPENSES
|
|
|
|
|
|
Losses and loss expenses
|
|
|
307.4
|
|
|
|
227.5
|
|
|
Acquisition expenses
|
|
|
90.6
|
|
|
|
95.1
|
|
|
General, administrative and corporate expenses
|
|
|
78.5
|
|
|
|
80.3
|
|
|
Total underwriting expenses
|
|
|
476.5
|
|
|
|
402.9
|
|
|
Underwriting income including corporate expenses
|
|
|
23.2
|
|
|
|
73.3
|
|
|
OTHER OPERATING REVENUE
|
|
|
|
|
|
Net investment income
|
|
|
57.0
|
|
|
|
58.2
|
|
|
Interest expense
|
|
|
(4.8
|
)
|
|
|
(3.8
|
)
|
|
Total other operating revenue
|
|
|
52.2
|
|
|
|
54.4
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
10.1
|
|
|
|
0.9
|
|
|
OPERATING INCOME BEFORE TAX
|
|
|
85.5
|
|
|
|
128.6
|
|
|
OTHER
|
|
|
|
|
|
Net realized and unrealized exchange gains/(losses)
|
|
|
(0.1
|
)
|
|
|
(6.7
|
)
|
|
Net realized and unrealized investment gains/(losses)
|
|
|
10.5
|
|
|
|
4.2
|
|
|
INCOME BEFORE TAX
|
|
|
95.9
|
|
|
|
126.1
|
|
|
Income taxes expense
|
|
|
(3.2
|
)
|
|
|
0.2
|
|
|
NET INCOME AFTER TAX
|
|
|
92.7
|
|
|
|
126.3
|
|
|
Dividends paid on ordinary shares
|
|
|
(11.5
|
)
|
|
|
(12.6
|
)
|
|
Dividend paid on preference shares
|
|
|
(5.7
|
)
|
|
|
(5.5
|
)
|
|
Retained income
|
|
$
|
75.5
|
|
|
$
|
108.2
|
|
|
Components of net income (after tax)
|
|
|
|
|
|
Operating income
|
|
$
|
85.0
|
|
|
$
|
129.2
|
|
|
Net realized and unrealized exchange gains/(losses) after tax
|
|
|
0.2
|
|
|
|
(6.7
|
)
|
|
Net realized investment gains/(losses) after tax
|
|
|
7.5
|
|
|
|
3.8
|
|
|
NET INCOME AFTER TAX
|
|
$
|
92.7
|
|
|
$
|
126.3
|
|
|
|
|
|
|
|
|
Loss ratio
|
|
|
61.5
|
%
|
|
|
47.8
|
%
|
|
Policy acquisition expense ratio
|
|
|
18.1
|
%
|
|
|
20.0
|
%
|
|
General and administrative expense ratio
|
|
|
15.7
|
%
|
|
|
16.9
|
%
|
|
Expense ratio
|
|
|
33.8
|
%
|
|
|
36.9
|
%
|
|
Combined ratio
|
|
|
95.3
|
%
|
|
|
84.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Aspen Insurance Holdings Limited
|
|
Summary Annual Consolidated Statement of Income
|
|
($ in millions, except share, per share data and ratios)
|
|
(Unaudited)
|
|
|
|
(in US$ millions)
|
|
Twelve
Months Ended
December 31,
2010
|
|
Twelve
Months Ended
December 31,
2009
|
|
|
|
|
|
|
|
UNDERWRITING REVENUES
|
|
|
|
|
|
Gross written premiums
|
|
$
|
2,076.8
|
|
|
$
|
2,067.1
|
|
|
Premiums ceded
|
|
|
(185.7
|
)
|
|
|
(230.3
|
)
|
|
Net written premiums
|
|
|
1,891.1
|
|
|
|
1,836.8
|
|
|
Change in unearned premiums
|
|
|
7.8
|
|
|
|
(13.8
|
)
|
|
Net earned premiums
|
|
|
1,898.9
|
|
|
|
1,823.0
|
|
|
UNDERWRITING EXPENSES
|
|
|
|
|
|
Losses and loss expenses
|
|
|
1,248.7
|
|
|
|
948.1
|
|
|
Acquisition expenses
|
|
|
328.5
|
|
|
|
334.1
|
|
|
General, administrative and corporate expenses
|
|
|
258.6
|
|
|
|
252.4
|
|
|
Total underwriting expenses
|
|
|
1,835.8
|
|
|
|
1,534.6
|
|
|
Underwriting income including corporate expenses
|
|
|
63.1
|
|
|
|
288.4
|
|
|
OTHER OPERATING REVENUE
|
|
|
|
|
|
Net investment income
|
|
|
232.0
|
|
|
|
248.5
|
|
|
Interest expense
|
|
|
(16.5
|
)
|
|
|
(15.6
|
)
|
|
Total other operating revenue
|
|
|
215.5
|
|
|
|
232.9
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
8.9
|
|
|
|
0.0
|
|
|
OPERATING INCOME BEFORE TAX
|
|
|
287.5
|
|
|
|
521.3
|
|
|
OTHER
|
|
|
|
|
|
Net realized and unrealized exchange gains/(losses)
|
|
|
2.2
|
|
|
|
2.0
|
|
|
Net realized and unrealized investment gains/(losses)
|
|
|
50.6
|
|
|
|
11.4
|
|
|
INCOME BEFORE TAX
|
|
|
340.3
|
|
|
|
534.7
|
|
|
Income taxes expense
|
|
|
(27.6
|
)
|
|
|
(60.8
|
)
|
|
NET INCOME AFTER TAX
|
|
|
312.7
|
|
|
|
473.9
|
|
|
Dividends paid on ordinary shares
|
|
|
(46.5
|
)
|
|
|
(49.8
|
)
|
|
Dividend paid on preference shares
|
|
|
(22.8
|
)
|
|
|
(23.8
|
)
|
|
Retained income
|
|
$
|
243.4
|
|
|
$
|
400.3
|
|
|
Components of net income (after tax)
|
|
|
|
|
|
Operating income
|
|
$
|
265.7
|
|
|
$
|
464.3
|
|
|
Net realized and unrealized exchange gains/(losses) after tax
|
|
|
2.9
|
|
|
|
2.0
|
|
|
Net realized investment gains/(losses) after tax
|
|
|
44.1
|
|
|
|
7.6
|
|
|
NET INCOME AFTER TAX
|
|
$
|
312.7
|
|
|
$
|
473.9
|
|
|
|
|
|
|
|
|
Loss ratio
|
|
|
65.8
|
%
|
|
|
52.0
|
%
|
|
Policy acquisition expense ratio
|
|
|
17.3
|
%
|
|
|
18.3
|
%
|
|
General and administrative expense ratio
|
|
|
13.6
|
%
|
|
|
13.8
|
%
|
|
Expense ratio
|
|
|
30.9
|
%
|
|
|
32.1
|
%
|
|
Combined ratio
|
|
|
96.7
|
%
|
|
|
84.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Aspen Insurance Holdings Limited
|
|
Summary Consolidated Financial Data
|
|
($ in millions, except share, per share data and ratios)
|
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
(in US$ except for number of shares)
|
|
December
31, 2010
|
|
December
31, 2009
|
|
December
31, 2010
|
|
December
31, 2009
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per ordinary share
|
|
|
|
|
|
|
|
|
|
Net income adjusted for preference share dividend
|
|
$
|
1.18
|
|
$
|
1.45
|
|
$
|
3.80
|
|
$
|
5.82
|
|
Operating income adjusted for preference dividend
|
|
$
|
1.08
|
|
$
|
1.48
|
|
$
|
3.18
|
|
$
|
5.33
|
|
Diluted earnings per ordinary share
|
|
|
|
|
|
|
|
|
|
Net income adjusted for preference share dividend
|
|
$
|
1.12
|
|
$
|
1.40
|
|
$
|
3.62
|
|
$
|
5.64
|
|
Operating income adjusted for preference dividend
|
|
$
|
1.02
|
|
$
|
1.44
|
|
$
|
3.03
|
|
$
|
5.16
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares outstanding (in
millions)
|
|
|
73.996
|
|
|
83.239
|
|
|
76.343
|
|
|
82.698
|
|
Weighted average number of ordinary shares outstanding and
dilutive potential ordinary shares (in millions)
|
|
|
|
|
|
|
|
|
|
|
|
77.733
|
|
|
86.412
|
|
|
80.016
|
|
|
85.327
|
|
|
|
|
|
|
|
|
|
|
|
Book value per ordinary share
|
|
|
|
|
|
$
|
40.96
|
|
$
|
35.42
|
|
Diluted book value (treasury stock method)
|
|
|
|
|
|
$
|
38.90
|
|
$
|
34.14
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares outstanding at end of the period (in millions)
|
|
|
|
|
|
|
70.508
|
|
|
83.328
|
|
Ordinary shares outstanding and dilutive potential ordinary shares
at end of the period (treasury stock method) (in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
74.253
|
|
|
86.465
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aspen Insurance Holdings Limited
|
|
Summary Quarterly Consolidated Segment Information
|
|
($ in millions except ratios)
|
|
(Unaudited)
|
|
|
|
(in US$ millions except for ratios)
|
|
Three Months Ended December 31, 2010
|
|
Three Months Ended December 31, 2009
|
|
|
Reinsurance
|
|
Insurance
|
|
Total
|
|
Reinsurance
|
|
Insurance
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross written premiums
|
|
$
|
152.8
|
|
|
$
|
260.0
|
|
|
$
|
412.8
|
|
|
$
|
169.7
|
|
|
$
|
236.0
|
|
|
$
|
405.7
|
|
|
Net written premiums
|
|
|
148.5
|
|
|
|
246.7
|
|
|
|
395.2
|
|
|
|
158.3
|
|
|
|
225.1
|
|
|
|
383.4
|
|
|
Gross earned premiums
|
|
|
303.9
|
|
|
|
246.5
|
|
|
|
550.4
|
|
|
|
306.5
|
|
|
|
222.2
|
|
|
|
528.7
|
|
|
Net earned premiums
|
|
|
292.1
|
|
|
|
207.6
|
|
|
|
499.7
|
|
|
|
289.0
|
|
|
|
187.2
|
|
|
|
476.2
|
|
|
Losses and loss expenses
|
|
|
146.8
|
|
|
|
160.6
|
|
|
|
307.4
|
|
|
|
115.3
|
|
|
|
112.2
|
|
|
|
227.5
|
|
|
Policy acquisition expenses
|
|
|
58.8
|
|
|
|
31.8
|
|
|
|
90.6
|
|
|
|
62.1
|
|
|
|
33.0
|
|
|
|
95.1
|
|
|
Operating and administrative expenses
|
|
|
32.8
|
|
|
|
33.5
|
|
|
|
66.3
|
|
|
|
30.3
|
|
|
|
30.0
|
|
|
|
60.3
|
|
|
Underwriting income/(loss)
|
|
$
|
53.7
|
|
|
$
|
(18.3
|
)
|
|
$
|
35.4
|
|
|
$
|
81.3
|
|
|
$
|
12.0
|
|
|
$
|
93.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
|
|
|
57.0
|
|
|
|
|
|
|
|
58.2
|
|
|
Net realized gains
|
|
|
|
|
|
|
10.5
|
|
|
|
|
|
|
|
4.2
|
|
|
Corporate (expenses)
|
|
|
|
|
|
|
(12.2
|
)
|
|
|
|
|
|
|
(20.0
|
)
|
|
Other (expenses)/income
|
|
|
|
|
|
|
10.1
|
|
|
|
|
|
|
|
0.9
|
|
|
Interest (expenses)
|
|
|
|
|
|
|
(4.8
|
)
|
|
|
|
|
|
|
(3.8
|
)
|
|
Net foreign exchange gains/(losses)
|
|
|
|
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
(6.7
|
)
|
|
Income before income taxes
|
|
|
|
|
|
|
95.9
|
|
|
|
|
|
|
|
126.1
|
|
|
Income tax (expense)/recovery
|
|
|
|
|
|
|
(3.2
|
)
|
|
|
|
|
|
|
0.2
|
|
|
Net income
|
|
|
|
|
|
$
|
92.7
|
|
|
|
|
|
|
$
|
126.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio
|
|
|
50.3
|
%
|
|
|
77.4
|
%
|
|
|
61.5
|
%
|
|
|
39.9
|
%
|
|
|
59.9
|
%
|
|
|
47.8
|
%
|
|
Policy acquisition expense ratio
|
|
|
20.1
|
%
|
|
|
15.3
|
%
|
|
|
18.1
|
%
|
|
|
21.5
|
%
|
|
|
17.6
|
%
|
|
|
20.0
|
%
|
|
Operating and administrative expense ratio
|
|
|
11.2
|
%
|
|
|
16.1
|
%
|
|
|
15.7
|
%
|
|
|
10.5
|
%
|
|
|
16.0
|
%
|
|
|
16.9
|
%
|
|
Expense ratio
|
|
|
31.3
|
%
|
|
|
31.4
|
%
|
|
|
33.8
|
%
|
|
|
32.0
|
%
|
|
|
33.6
|
%
|
|
|
36.9
|
%
|
|
Combined ratio
|
|
|
81.6
|
%
|
|
|
108.8
|
%
|
|
|
95.3
|
%
|
|
|
71.9
|
%
|
|
|
93.5
|
%
|
|
|
84.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aspen Insurance Holdings Limited
|
|
Summary Annual Consolidated Segment Information
|
|
($ in millions except ratios)
|
|
(Unaudited)
|
|
|
|
|
|
(in US$ millions except for percentages)
|
|
Twelve Months Ended December 31, 2010
|
|
Twelve Months Ended December 31, 2009
|
|
|
Reinsurance
|
|
Insurance
|
|
Total
|
|
Reinsurance
|
|
Insurance
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross written premiums
|
|
$1,162.2
|
|
$914.6
|
|
$2,076.8
|
|
$1,176.0
|
|
$891.1
|
|
$2,067.1
|
|
Net written premiums
|
|
1,118.5
|
|
772.6
|
|
1,891.1
|
|
1,116.7
|
|
720.1
|
|
1,836.8
|
|
Gross earned premiums
|
|
1,186.4
|
|
907.9
|
|
2,094.3
|
|
1,164.4
|
|
871.0
|
|
2,035.4
|
|
Net earned premiums
|
|
1,141.8
|
|
757.1
|
|
1,898.9
|
|
1,108.1
|
|
714.9
|
|
1,823.0
|
|
Losses and loss expenses
|
|
693.5
|
|
555.2
|
|
1,248.7
|
|
467.3
|
|
480.8
|
|
948.1
|
|
Policy acquisition expenses
|
|
202.4
|
|
126.1
|
|
328.5
|
|
214.6
|
|
119.5
|
|
334.1
|
|
Operating and administrative expenses
|
|
112.3
|
|
99.4
|
|
211.7
|
|
97.5
|
|
100.7
|
|
198.2
|
|
Underwriting income/(loss)
|
|
$133.6
|
|
$(23.6)
|
|
$110.0
|
|
$328.7
|
|
$13.9
|
|
$342.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
|
|
232.0
|
|
|
|
|
|
248.5
|
|
Net realized gains/(losses)
|
|
|
|
|
|
50.6
|
|
|
|
|
|
11.4
|
|
Corporate (expenses)
|
|
|
|
|
|
(46.9)
|
|
|
|
|
|
(54.2)
|
|
Other (expenses)/income
|
|
|
|
|
|
8.9
|
|
|
|
|
|
-
|
|
Interest (expenses)
|
|
|
|
|
|
(16.5)
|
|
|
|
|
|
(15.6)
|
|
Net foreign exchange gains/(losses)
|
|
|
|
|
|
2.2
|
|
|
|
|
|
2.0
|
|
Income before income taxes
|
|
|
|
|
|
340.3
|
|
|
|
|
|
534.7
|
|
Income tax (expense)
|
|
|
|
|
|
(27.6)
|
|
|
|
|
|
(60.8)
|
|
Net income
|
|
|
|
|
|
$312.7
|
|
|
|
|
|
$473.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss ratio
|
|
60.7%
|
|
73.3%
|
|
65.8%
|
|
42.2%
|
|
67.3%
|
|
52.0%
|
|
Policy acquisition expense ratio
|
|
17.7%
|
|
16.7%
|
|
17.3%
|
|
19.4%
|
|
16.7%
|
|
18.3%
|
|
Operating and administrative expense ratio
|
|
9.8%
|
|
13.1%
|
|
13.6%
|
|
8.8%
|
|
14.1%
|
|
13.8%
|
|
Expense ratio
|
|
27.5%
|
|
29.8%
|
|
30.9%
|
|
28.2%
|
|
30.8%
|
|
32.1%
|
|
Combined ratio
|
|
88.2%
|
|
103.1%
|
|
96.7%
|
|
70.4%
|
|
98.1%
|
|
84.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
About Aspen Insurance Holdings Limited
Aspen provides reinsurance and insurance coverage to clients in various
domestic and global markets through wholly-owned subsidiaries and
offices in Bermuda, France, Ireland, Singapore, the United States, the
United Kingdom, Switzerland and Germany. For the twelve months ended
December 31, 2010, Aspen reported gross written premiums of $2,076.8
million, net income of $312.7 million and total assets of $8.8 billion.
Its operating subsidiaries have been assigned a rating of "A" ("Strong" )
by Standard & Poor's, an "A" ("Excellent" ) by A.M. Best and an "A2"
("Good" ) by Moody's Investors Service. For more information about Aspen,
please visit www.aspen.bm.
Application of the Safe Harbor of the Private Securities Litigation
Reform Act of 1995:
This press release contains, and Aspen's earnings conference call will
contain, written or oral "forward-looking statements" within the meaning
of the U.S. federal securities laws. These statements are made pursuant
to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Forward-looking statements include all statements
that do not relate solely to historical or current facts, and can be
identified by the use of words such as "expect," "intend," "plan,"
"believe," "do not believe," "aim," "project," "anticipate," "seek,"
"will," "estimate," "may," "continue," "guidance," and similar
expressions of a future or forward-looking nature.
All forward-looking statements address matters that involve risks and
uncertainties. Accordingly, there are or will be important factors that
could cause actual results to differ materially from those indicated in
these statements. Aspen believes these factors include, but are not
limited to: the possibility of greater frequency or severity of claims
and loss activity, including as a result of natural or man-made
(including economic and political risks) catastrophic or material loss
events, than our underwriting, reserving, reinsurance purchasing or
investment practices have anticipated; the reliability of, and changes
in assumptions to, natural and man-made catastrophe pricing,
accumulation and estimated loss models; evolving issues with respect to
interpretation of coverage after major loss events and any intervening
legislative or governmental action; the effectiveness of our loss
limitation methods; changes in the total industry losses, or our share
of total industry losses, resulting from past events and, with respect
to such events, our reliance on loss reports received from cedants and
loss adjustors, our reliance on industry loss estimates and those
generated by modeling techniques, changes in rulings on flood damage or
other exclusions as a result of prevailing lawsuits and case law; the
impact of acts of terrorism and related legislation and acts of war;
decreased demand for our insurance or reinsurance products and cyclical
changes in the insurance and reinsurance sectors; any changes in our
reinsurers' credit quality and the amount and timing of reinsurance
recoverables; changes in the availability, cost or quality of
reinsurance or retrocessional coverage; the continuing and uncertain
impact of the current depressed economic environment in many of the
countries in which we operate; the level of inflation in repair costs
due to limited availability of labor and materials after catastrophes;
changes in insurance and reinsurance market conditions; increased
competition on the basis of pricing, capacity, coverage terms or other
factors and the related demand and supply dynamics as contracts come up
for renewal; a decline in our operating subsidiaries' ratings with
Standard & Poor's ("S&P" ), A.M. Best or Moody's Investor Service
("Moody's" ); our ability to execute our business plan to enter new
markets, introduce new products and develop new distribution channels,
including their integration into our existing operations; changes in
general economic conditions, including inflation, foreign currency
exchange rates, interest rates and other factors that could affect our
investment portfolio; the risk of a material decline in the value or
liquidity of all or parts of our investment portfolio; changes in our
ability to exercise capital management initiatives or to arrange banking
facilities as a result of prevailing market changes or changes in our
financial position; changes in government regulations or tax laws in
jurisdictions where we conduct business; Aspen Holdings or Aspen Bermuda
becoming subject to income taxes in the United States or the United
Kingdom; loss of key personnel; and increased counterparty risk due to
the credit impairment of financial institutions. For a more detailed
description of these uncertainties and other factors, please see the
"Risk Factors" section in Aspen's Annual Reports on Form 10-K as filed
with the U.S. Securities and Exchange Commission on February 26, 2010.
Aspen undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the
dates on which they are made.
In addition, any estimates relating to loss events involve the exercise
of considerable judgment and reflect a combination of ground-up
evaluations, information available to date from brokers and cedants,
market intelligence, initial tentative loss reports and other sources.
Due to the complexity of factors contributing to the losses and the
preliminary nature of the information used to prepare these estimates,
there can be no assurance that Aspen's ultimate losses will remain
within the stated amount.
Non-GAAP Financial Measures
In presenting Aspen's results, management has included and discussed
certain "non-GAAP financial measures" as such term is defined in
Regulation G. Management believes that these non-GAAP measures, which
may be defined differently by other companies, better explain Aspen's
results of operations in a manner that allows for a more complete
understanding of the underlying trends in Aspen's business. However,
these measures should not be viewed as a substitute for those determined
in accordance with GAAP. The reconciliation of such non-GAAP financial
measures to their respective most directly comparable GAAP financial
measures in accordance with Regulation G is included in the financial
supplement, which can be obtained from the Investor Relations section of
Aspen's website at www.aspen.bm.
(1) Annualized Operating Return on Average Equity ("Operating ROE" )
is a non-GAAP financial measure. Annualized Operating Return on Average
Equity 1) is calculated using operating income, as defined below and 2)
excludes from average equity, the average after-tax unrealized
appreciation or depreciation on investments and the average after-tax
unrealized foreign exchange gains or losses and the aggregate value of
the liquidation preferences of our preference shares. Unrealized
appreciation (depreciation) on investments is primarily the result of
interest rate movements and the resultant impact on fixed income
securities, and unrealized appreciation (depreciation) on foreign
exchange is the result of exchange rate movements between the U.S.
dollar and the British pound. Such appreciation (depreciation) is not
related to management actions or operational performance (nor is it
likely to be realized). Therefore, Aspen believes that excluding these
unrealized appreciations (depreciations) provides a more consistent and
useful measurement of operating performance, which supplements GAAP
information. Average equity is calculated as the arithmetic average on a
monthly basis for the stated periods.
Aspen presents Operating ROE as a measure that is commonly recognized as
a standard of performance by investors, analysts, rating agencies and
other users of its financial information.
See page 28 of Aspen's financial supplement for a reconciliation of
operating income to net income and page 7 for a reconciliation of
average equity.
(2) Operating income is a non-GAAP financial measure. Operating
income is an internal performance measure used by Aspen in the
management of its operations and represents after-tax operational
results excluding, as applicable, after-tax net realized capital gains
or losses and after-tax net foreign exchange gains or losses.
Aspen excludes after-tax net realized capital gains or losses and
after-tax net foreign exchange gains or losses from its calculation of
operating income because the amount of these gains or losses is heavily
influenced by, and fluctuates in part, according to the availability of
market opportunities. Aspen believes these amounts are largely
independent of its business and underwriting process and including them
distorts the analysis of trends in its operations. In addition to
presenting net income determined in accordance with GAAP, Aspen believes
that showing operating income enables investors, analysts, rating
agencies and other users of its financial information to more easily
analyze Aspen's results of operations in a manner similar to how
management analyzes Aspen's underlying business performance. Operating
income should not be viewed as a substitute for GAAP net income. Please
see above and page 28 of Aspen's financial supplement for a
reconciliation of operating income to net income. Aspen's financial
supplement can be obtained from the Investor Relations section of
Aspen's website at www.aspen.bm.
(3) Diluted book value per ordinary share is a non-GAAP financial
measure. Aspen has included diluted book value per ordinary share
because it takes into account the effect of dilutive securities;
therefore, Aspen believes it is a better measure of calculating
shareholder returns than book value per share. Please see page 26 of
Aspen's financial supplement for a reconciliation of diluted book value
per share to basic book value per share. Aspen's financial supplement
can be obtained from the Investor Relations section of Aspen's website
at www.aspen.bm.
(4) Diluted Operating Earnings Per Share and Basic Operating Earnings
Per Share is a non-GAAP financial measure. Aspen believes that the
presentation of diluted operating earnings per share and basic operating
earnings per share supports meaningful comparison from period to period
and the analysis of normal business operations. Diluted operating
earnings per share and basic operating earnings per share are calculated
by dividing operating income by the diluted or basic weighted average
number of shares outstanding for the period. See page 28 for a
reconciliation of diluted and basic operating earnings per share to
basic earnings per share. Aspen's financial supplement can be obtained
from the Investor Relations section of Aspen's website at www.aspen.bm.
Investor Contact:
Aspen
Insurance Holdings Limited
Noah Fields, +1 441-297-9382
Head
of Investor Relations
or
European
Press Contact:
Citigate Dewe Rogerson
Justin
Griffiths/Sarah Gestetner, +44 (0) 20 7282 2920
or
North
American Press Contact:
Abernathy MacGregor
Carina
Davidson/Allyson Morris, +1 212-371-5999
Copyright © 2012, Business Wire, Inc., All rights reserved.
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