Aspen Reports $43 Million Q3 Loss; $122.9 Million Net Income for Nine Months

November 3, 2004

Aspen Insurance Holdings Limited became the latest Bermuda-based insurer to report negative earnings in the third quarter when it announced a net loss of $43 million, or 62 cents per diluted share, for the three months ended September 30, 2004.

Net income for the first nine-months of the year, however, was somewhat better at $122.9 million, or $1.71 per diluted share for the period. The company’s combined ratio ballooned to 126 percent in the third quarter, but remained at a respectable 87 percent for the first nine-months. Gross written premiums were $349.4 million for the third quarter 2004 and $1.37 billion for the nine months.

CEO Chris O’Kane commented: “Clearly the quarter was dominated by the hurricane and typhoon events which impacted earnings by $145 million. Inclusive of losses, our year to date combined ratio was 87 percent, and our annualized operating return on average equity was 12 percent. We anticipate that these storms will have a significant positive effect on the market for wind exposed property business in the US, and further we believe that they will have a stabilizing effect on the pricing of property reinsurance contracts where windstorm is not the dominant peril. Accordingly, we expect to start seeing the benefits in our 2005 results as earnings from the January 1, 2005 renewals emerge.

“All in all, it is reassuring that the other segments of our business which are not subject to storm losses continue to perform in line with plan, demonstrating the robustness of our business model of building a diversified Specialty Insurance and Reinsurance business.”

Aspen also reported net investment income of $19.4 million for the third quarter 2004 and $46.3 million for the nine months to September 30, 2004.

“The Company reports separately on its reinsurance and insurance operations,” the bulletin explained. Gross written premiums for the reinsurance segment were $231.2 million for the third quarter 2004 and $1.0826 billion for the nine months to September 30, 2004. “The reinsurance operations reported a combined ratio of 139 percent for the third quarter 2004 and 88 percent for the nine months to September 30, 2004. Gross written premiums for the insurance segment were $118.2 million for the third quarter 2004 and $287.4 million for the nine months to September 30, 2004. The insurance operations reported a combined ratio of 87 percent for the third quarter 2004 and 82 percent for the nine months to September 30, 2004.”

Shareholders’ equity increased from $1.2987 billion at December 31, 2003 to $1.4177 billion at September 30, 2004.

Aspen will hold a conference call on November 3, 2004 at 8:30 a.m. (ET) to discuss third quarter 2004 financial results. Investors may participate in the live conference call by dialing 800-473-6123 (toll-free domestic U.S.) or 973-582-2706 (international). Please call to register at least 10 minutes before the conference call begins. A replay of the call will be available for 10 days via telephone starting approximately two hours following the live call on November 3, 2004, and can be accessed at 877-519-4471 (toll-free domestic U.S.) or 973-341-3080 (international); passcode: 5204700. The live call and a replay can also be heard via Aspen’s Website at http://www.aspen.bm.

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