Bermuda-based Aspen Insurance Holdings Limited reported net income after tax for the third quarter of 2010 of $92.8 million and operating earnings of $0.79 per diluted ordinary share, compared to Q3 2009 net income after tax of $145.8 million, and operating earnings of $1.40 per diluted share in Q3 2009.
Book value per share on a diluted basis of $38.22 increased by 15.3 percent when compared to September 30, 2009 and by 3.4 percent since the end of June 2010 as a result of $75.6 million of retained income and a $61.5 million increase in unrealized gains, net of tax, from the fixed income investment portfolio in the quarter.
Other earnings highlights include the following:
— Operating income after tax of $69.7 million for the third quarter impacted by $20.4 million of pre-tax losses from the New Zealand Earthquake.
— Diluted operating earnings per share of $0.79 for the quarter, down from $1.40 for the third quarter of 2009.
— Annualized net income return on equity of 13.2 percent for the third quarter and 10.4 percent for the nine month period.
— Annualized operating return on equity of 9.6 percent for the quarter and 8.4 percent for the nine month period.
— Combined ratio for the quarter was 94.4 percent, compared to 80.3 percent in Q3 2009. Combined ratio for the first nine months of 2010 was 97.2 percent, compared to 84 percent in the same period of 2009.
CEO Chris O’Kane commented: “I am pleased to announce our 8th successive quarter of increasing book value per share, a 15 percent increase year on year. Third quarter net income amounted to $92.8 million and we reported an annualized return on equity of 13.2 percent.
“Market conditions remain highly challenging; in these circumstances our underwriters are hard at work in identifying those few segments where good profits are available and increasing our exposure to them. Elsewhere, it is a question of cutting back top line volume, rigorous risk selection and maintaining a very defensive underwriting posture.”
Aspen gave the following “overview” of operations for Q3 and the first nine months:
— Gross written premiums of $415.8 million in the quarter, down 15 percent on last year, with the decrease coming mainly from the reinsurance segment.
— Underwriting income for the quarter of $25.3 million against $92.5 million in the previous year included $20.4 million of losses from the New Zealand earthquake and three large insurance losses totaling $40.0 million from oil and gas pipelines. — Reserves were strengthened in the quarter by $6.2 million compared with $44.2 million of reserve releases in the equivalent period in 2009. For the nine months in 2010, reserve releases were $8.8 million compared with $71.0 million in 2009.
— Unrealized gains in the available-for-sale fixed income portfolio increased by $68.3 million in the quarter to $361.6 million compared with unrealized gains of $106.3 million in the third quarter of 2009.
— Cash flows from operating activities were $255.9 million for the quarter and $503.8 million for the nine months in 2010 compared with $186.8 million and $489.1 million, respectively in 2009.
— Continued investment in the Company’s U.S. insurance capability and the establishment of a U.K. regional platform and Swiss market presence increased the expense ratio in the quarter by 1 percentage point when compared to the same period in 2009.
Aspen will hold a conference call to discuss its financial results today, Thursday, October 28 at 10:30 a.m. (Eastern Time).
Participant Dial-In Numbers:+1 (888) 459-5609 (US Toll Free)
+1 (404) 665-9920 (International)
Conference ID: 14788114
— 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 web site. 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.
Source: Aspen Insurance Holdings
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