Aspen Insurance Holdings Limited (NYSE:AHL) today reported results
for the quarter and half year ended June 30, 2007. Net income of
$114.7 million for the quarter ended June 30, 2007 compared to
$101.8 million for the same quarter in 2006, up 13%. For the first
half of 2007 net income was $236.6 million versus $163.6 million
for the first half of 2006, up 45%. Diluted earnings per share of
$1.19 for the quarter ended June 30, 2007 versus $1.01 for the same
period in 2006, up 18%, after payment of preference share
dividends. For the first six months of 2007, diluted earnings per
share were $2.46 versus $1.61 from the first half of 2006, up 53%.
Annualized return on average equity for the quarter was 20.4%,
equaling the return for the second quarter of 2006 of 20.4%. Net
investment income in the second quarter of 2007 increased by 58% to
$78.8 million against $49.9 million in the second quarter of 2006.
The combined ratio for the second quarter of 2007 was 88.4% versus
81.6% for the same quarter in 2006. Net earned premium increased
for the quarter to $451.2 million versus $429.0 million in the same
period in 2006, up 5%. Book value per ordinary share at June 30,
2007 is $24.44 versus $20.19 at June 30, 2006, up 21%. The Company
also reported UK flood losses resulting from heavy storms during
June in northern England of $23.5 million. Chris O'Kane, Chief
Executive Officer, said, �I am delighted to report another very
strong quarter for Aspen this year. We reported a 21% increase year
on year in book value per share and an annualized return on average
equity of 20.4% for the quarter, which reflect strong performance
across our underwriting segments and an increasing contribution
from investment income. Our results this quarter and year-to-date
clearly show the impact of the changes to our business in 2006 and
the benefits of our targeted approach to managing our key
performance levers.� Earnings conference call Aspen will hold a
conference call tomorrow, July 27, 2007 at 8:30 a.m. (Eastern Time)
to discuss its 2007 second quarter results. Investors may
participate in the live conference call by dialing 877-860-4996
(toll-free domestic U.S.) or 973-582-2854 (international);
conference ID: 8937395. 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 July 27, 2007, and can be accessed
at 877-519-4471 (toll-free domestic U.S.) or 973-341-3080
(international); digital pin: 8937395. The live call and a replay
can also be heard via Aspen's website at www.aspen.bm. In addition,
a financial supplement relating to Aspen's financial results for
the second quarter 2007 is available in the Investor Relations
section of Aspen's website at www.aspen.bm. A brief slide
presentation which will be used for reference during the earnings
call will also be available in the Investor Relations section of
Aspen�s website. About Aspen Insurance Holdings Limited Aspen
Insurance Holdings Limited was established in June 2002. Aspen is a
Bermudian holding company that provides property and casualty
reinsurance in the global market, property and liability insurance
principally in the United Kingdom and the United States and
specialty insurance and reinsurance consisting mainly of marine and
energy and aviation worldwide. Aspen's operations are conducted
through its wholly-owned subsidiaries located in London, Bermuda
and the United States: Aspen Insurance UK Limited, Aspen Insurance
Limited and Aspen Specialty Insurance Company. Aspen has four
operating segments: property reinsurance, casualty reinsurance,
specialty insurance and reinsurance and property and casualty
insurance. For more information about Aspen, please visit Aspen's
website at 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," "project,"
"anticipate," "seek," "will," "estimate," "may," "continue," and
similar expressions of a future or forward-looking nature. 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 associated with these floods will remain within the
stated amount. 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: changes in the total
industry losses resulting from the UK and Australian floods and
Hurricanes Katrina, Rita and Wilma and the actual number of Aspen's
insureds incurring losses from these events; with respect to the UK
and Australian floods and Hurricanes Katrina, Rita and Wilma,
Aspen�s reliance on loss reports received from cedants and loss
adjustors, Aspen's reliance on industry loss estimates and those
generated by modeling techniques, the impact of these events on
Aspen's reinsurers, any changes in Aspen's reinsurers' credit
quality, the amount and timing of reinsurance recoverables and
reimbursements actually received by Aspen from its reinsurers and
the overall level of competition and the related demand and supply
dynamics as contracts come up for renewal; the impact that our
future operating results, capital position and rating agency and
other considerations have on the execution of any capital
management initiatives; the impact of any capital management
activities on our financial condition; the impact of acts of
terrorism and related legislation and acts of war; the possibility
of greater frequency or severity of claims and loss activity,
including as a result of natural or man-made catastrophic events
than our underwriting, reserving or investment practices have
anticipated; evolving interpretive issues with respect to coverage
as a result of Hurricanes Katrina, Rita and Wilma and any other
events such as the UK floods; the level of inflation in repair
costs due to limited availability of labor and materials after
catastrophes; the effectiveness of Aspen's loss limitation methods;
changes in the availability, cost or quality of reinsurance or
retrocessional coverage, which may affect our decision to purchase
such coverage; the reliability of, and changes in assumptions to,
catastrophe pricing, accumulation and estimated loss models; loss
of key personnel; a decline in our operating subsidiaries' ratings
with Standard & Poor's, A.M. Best Company or Moody's Investors
Service; changes in general economic conditions including
inflation, foreign currency exchange rates, interest rates and
other factors that could affect our investment portfolio; the
number and type of insurance and reinsurance contracts that we
wrote at the January 1st and other renewal periods in 2007 and the
premium rates available at the time of such renewals within our
targeted business lines; increased competition on the basis of
pricing, capacity, coverage terms or other factors; decreased
demand for Aspen�s insurance or reinsurance products and cyclical
downturn of the industry; changes in governmental regulations,
interpretations or tax laws in jurisdictions where Aspen conducts
business; proposed and future changes to insurance laws and
regulations, including with respect to U.S. state- and other
government-sponsored reinsurance funds and primary insurers; Aspen
or its Bermudian subsidiary becoming subject to income taxes in the
United States or the United Kingdom; the effect on insurance
markets, business practices and relationships of ongoing
litigation, investigations and regulatory activity by the New York
State Attorney General's office and other authorities concerning
contingent commission arrangements with brokers and bid
solicitation activities. 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 22, 2007. 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. Summary of Results �
Consolidated Income Statements � (in US$ millions) Three Months
Ended June 30, 2007 Three Months Ended June 30, 2006 Six Months
Ended June 30, 2007 Six Months Ended June 30, 2006 UNDERWRITING
REVENUES Gross written premiums 503.5 522.4 1,140.0 1,201.1
Premiums ceded (85.0 ) (22.3 ) (166.4 ) (249.1 ) Net written
premiums 418.5 500.1 973.6 952.0 Change in unearned premiums 32.7 �
(71.1 ) (83.4 ) (120.4 ) Net earned premiums 451.2 429.0 890.2
831.6 UNDERWRITING EXPENSES Losses and loss expenses (272.7 )
(223.8 ) (498.2 ) (456.2 ) Acquisition expenses (81.7 ) (83.2 )
(159.4 ) (176.5 ) General and administrative expenses (44.4 ) (43.0
) (89.7 ) (81.2 ) Total underwriting expenses (398.8 ) (350.0 )
(747.3 ) (713.9 ) Underwriting income 52.4 � 79.0 � 142.9 � 117.7 �
OTHER OPERATING REVENUE Net investment income 78.8 49.9 146.3 94.4
Interest expense (4.4 ) (4.0 ) (8.6 ) (7.9 ) Total other operating
revenue 74.4 45.9 137.7 86.5 Other income (expense) 1.9 � (0.6 )
(5.4 ) (2.5 ) OPERATING INCOME BEFORE TAX 128.7 � 124.3 � 275.2 �
201.7 � OTHER Net realized exchange gains 8.0 6.6 13.5 7.9 Net
realized investment losses (5.6 ) (3.7 ) (10.4 ) (5.1 ) INCOME
BEFORE TAX 131.1 127.2 278.3 204.5 Income taxes expense (16.4 )
(25.4 ) (41.7 ) (40.9 ) NET INCOME AFTER TAX 114.7 � 101.8 � 236.6
� 163.6 � Dividends paid on ordinary shares (13.2 ) (14.3 ) (26.4 )
(28.6 ) Dividend paid on preference shares (7.0 ) (3.2 ) (13.9 )
(7.1 ) Retained income 94.5 � 84.3 � 196.3 � 127.9 � Components of
net income (after tax) Operating income 110.8 98.3 231.4 160.0 Net
realized exchange gains (after tax) 8.0 6.6 13.5 7.9 Net realized
investment losses (after tax) (4.1 ) (3.1 ) (8.3 ) (4.3 ) NET
INCOME AFTER TAX 114.7 � 101.8 � 236.6 � 163.6 � Per Share Data �
(in US$ except for number of shares) Three Months Ended June 30,
2007 Three Months Ended June 30, 2006 Six Months Ended June 30,
2007 Six Months Ended June 30, 2006 � Basic earnings per ordinary
share Net income adjusted for preference share dividend 1.22 1.04
2.53 1.64 Operating income adjusted for preference dividend 1.18
1.00 2.47 1.61 Diluted earnings per ordinary share Net income
adjusted for preference share dividend 1.19 1.01 2.46 1.61
Operating income adjusted for preference dividend 1.14 0.98 2.40
1.57 � Weighted average ordinary shares outstanding 88,204,654
95,250,409 88,013,841 95,246,684 Weighted average ordinary shares
outstanding and dilutive potential ordinary shares 90,826,560
97,332,916 90,633,531 97,243,409 � Book value per ordinary share
24.44 20.19 Diluted book value (treasury stock method) 23.63 19.76
� Ordinary shares outstanding at end of the period 88,544,590
95,250,451 Ordinary shares outstanding and dilutive potential
ordinary shares at end of the period 91,553,439 97,334,195
Consolidated Balance Sheets � (in US$ millions) As at June 30, 2007
As at December 31, 2006 ASSETS Investments Fixed maturities 4,083.9
3,828.7 Other investments 481.6 156.9 Short-term investments 492.1
695.5 Total investments 5,057.6 4,681.1 � Cash and cash equivalents
397.9 495.0 Reinsurance recoverables Unpaid losses 324.4 468.3
Ceded unearned premiums 130.2 29.8 Receivables Underwriting
premiums 904.0 688.1 Other 48.8 62.2 Deferred policy acquisition
costs 166.3 141.4 Derivatives at fair value 27.2 33.8 Office
properties and equipment 24.9 24.6 Other assets 13.3 7.6 Intangible
assets 8.2 8.2 Total assets 7,102.8 6,640.1 LIABILITIES Insurance
reserves Losses and loss adjustment expenses 2,854.5 2,820.0
Unearned premiums 1,028.8 841.3 Total insurance reserves 3,883.3
3,661.3 Payables Reinsurance premiums 132.2 62.4 Taxation 90.2 61.8
Accrued expenses and other payables 134.3 186.2 Liabilities under
derivative contracts 22.4 29.7 Total payables 379.1 340.1 Long-term
debt 249.4 249.4 Total liabilities 4,511.8 4,250.8 SHAREHOLDERS�
EQUITY Ordinary shares 0.1 0.1 Preference shares - - Additional
paid-in capital 1,933.8 1,921.7 Retained earnings 646.8 450.5
Accumulated other comprehensive income, net of taxes 10.3 17.0
Total shareholders� equity 2,591.0 2,389.3 Total liabilities and
shareholders� equity 7,102.8 6,640.1 Summarized Cash Flows (in US$
millions) Six Months Ended June 30, 2007 Six Months Ended June 30,
2006 Net cash from operating activities 319.5 148.5 Net cash used
in investing activities (381.7 ) (544.4 ) Net cash used in
financing activities (33.2 ) (6.5 ) Effect of exchange rate
movements on cash and cash equivalents (1.7 ) 7.2 � Decrease in
cash and cash equivalents (97.1 ) (395.2 ) Cash at beginning of the
period 495.0 � 748.3 � Cash at end of the period 397.9 � 353.1 �
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
ROAE�) 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 ROAE 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 22 of Aspen's
financial supplement for a reconciliation of operating income to
net income and page 15 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 22 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 22 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.
Aspen Insurance (NYSE:AHL)
Historical Stock Chart
From Jun 2024 to Jul 2024
Aspen Insurance (NYSE:AHL)
Historical Stock Chart
From Jul 2023 to Jul 2024