Aspen Reports Q1 After-Tax Net Income of $128M; Combined Ratio of 88.9%

April 23, 2015

Bermuda-based Aspen Insurance Holdings Limited reported after tax net income of $128.0 million, or $1.87 diluted net income per share, for the first quarter of 2015, compared with $120.4 million, or diluted net income per share of $1.66, reported for the same period in 2014.

“In the first quarter of 2015, Aspen continued to execute on its strategic growth plan achieving a book value of $46.02 and an annualized operating return on equity of 12.4 percent,” said Chris O’Kane, chief executive officer. “We continue to see the results of our diversified strategy across insurance and reinsurance, and across property, casualty, and financial risks, executed on a broad geographical basis.”

He said the company’s insurance performance has a good growth rate with continued improvement in profitability. “Our reinsurance business has access to many of the most sought after risks as a result of our deep client relationships, thoughtful approach, ability to provide creative solutions to our clients, and excellent execution. Overall, I would characterize Aspen in the first quarter as running on all cylinders. As we move forward in 2015, we will remain sharply focused on driving operating return on equity and book value growth.”

Other first quarter earnings highlights from Aspen include:

  • Gross written premiums increased by 7.4 percent to $919.2 million in the first quarter of 2015 from $855.5 million in the first quarter of 2014.
  • Combined ratio was 88.9 percent for the first quarter of 2015 compared with 87.6 percent for the first quarter of 2014. Net favorable development on prior year loss reserves of $27.5 million, or 4.6 combined ratio points, for the first quarter of 2015 compared with $28.2 million, or 5.0 combined ratio points, in the comparable period a year ago.
  • Pre-tax catastrophe losses net of reinsurance recoveries totaled $13.5 million or 2.3 combined ratio points in the first quarter of 2015 compared with $10.6 million, or 1.9 combined ratio points, of pre-tax catastrophe losses in the first quarter of 2014.
Insurance Segment

Commenting on the company’s insurance division earnings, Mario Vitale, CEO of Insurance, said, “Our insurance business continues to reap the benefits of prior investments. Gross written premiums rose 13.3 percent in the quarter with a very satisfactory accident year ex cat loss ratio. Our U.S. teams continue to gain scale and maintain underwriting discipline with gross written premium growth of 17.5 percent for the quarter and an accident year ex-cat loss ratio of 60.4 percent. For the trailing 12 months, the U.S. platform delivered net earned premium of $566.4 million.”

He said the insurance division remains on track to achieve $600 million of net earned premium in the U.S. by the end of 2015.

“Our international business has close to $500 million of annualized net earned premium emanating from our established Lloyd’s platform and has had strong success in U.K. regional property and casualty,” Vitale continued.

Reinsurance Segment

Commenting on the first quarter earnings for Aspen’s reinsurance division, Stephen Postlewhite, CEO of Reinsurance, said, “Reinsurance had another very strong quarter. We grew premiums slightly while achieving an impressive accident year ex-cat loss ratio of 44.5 percent. The January and April renewals have been highly successful, achieved through superior client relationships, nimble underwriting, creative client solutions, and a comprehensive approach to distribution all of which make us a preferred market for our clients.”

Postlewhite said capital is managed effectively, withdrawing it from areas where rates and terms and conditions do not meet Aspen’s requirements and deploying it in areas where the business is better rated.

“As we navigate the marketplace, we continue to capitalize on our established regional strategy, with Asia Pacific, Latin America and MENA gross written premiums rising 25 percent in the first quarter. Aspen Capital Markets is maintaining its trajectory of growth as we leverage our access to third party capital,” he said.

Capital

During the first quarter of 2015, there were 787,138 ordinary shares repurchased at an average price of $46.32 per share for a total cost of $36.5 million and from April 1 to April 21, 2015, there were 110,112 ordinary shares repurchased at an average price of $47.20 per share for a total cost of $5.2 million.

Source: Aspen Insurance Holdings

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