Aspen Insurance Holdings Limited (“Aspen”) (NYSE: AHL) today
reported net income after tax of $40.1 million, or $0.36 diluted
net income per share, for the second quarter of 2013.
Chris O’Kane, Chief Executive Officer commented, “In the second
quarter, Aspen delivered solid operating results in an above
average catastrophe quarter, with our combined ratio excluding
catastrophes improving modestly from last year. We continue to make
progress on the three initiatives we outlined earlier this year to
drive increased profitability. We have released $70 million of
capital in our U.S. property insurance line and our U.S. operations
overall continue to gain scale and momentum towards sustainable
profitability. We executed over $240 million of share repurchases
in the first six months of the year and continued to carefully
reallocate a portion of our investment portfolio to achieve higher
risk-adjusted returns. We remain intensely focused on executing
these initiatives and achieving increased profitability.”
Operating highlights for the quarter ended June 30,
2013
- Gross written premiums increased
overall by 3.1% to $687.3 million in the second quarter of 2013
from the second quarter of 2012. Gross written premiums in
Reinsurance were flat while Insurance grew 6.0%
- Combined ratio of 97.1% for the second
quarter of 2013 compared with a combined ratio of 87.3% for the
second quarter of 2012. This increase was due to $58.7 million or
10.9 percentage points, of pre-tax catastrophe losses net of
reinsurance recoveries and $5.2 million of reinstatement premiums
in the second quarter of 2013 compared with no catastrophe losses
in the second quarter of 2012
- Net favorable development on prior year
loss reserves of $27.4 million, or 5.0 combined ratio points, for
the second quarter of 2013 compared with $28.6 million, or 5.6
combined ratio points, for the second quarter of 2012
Financial highlights for the quarter and six months ended
June 30, 2013
- Annualized net income return on average
equity of 4.4% and annualized operating return on average equity of
6.4% for the second quarter of 2013 compared with 10.8% and 13.6%,
respectively in the second quarter of 2012(1)
- Annualized net income return on average
equity of 8.0% and annualized operating return on average equity of
8.6% for the first half of 2013 compared with 10.6% and 11.4%,
respectively in the first half of 2012(1)
- Diluted net income per share of $0.36
for the quarter ended June 30, 2013 compared with diluted net
income per share of $1.03 for the second quarter of 2012, and
diluted net income per share of $1.52 for the six months ended June
30, 2013 compared with diluted net income per share of $2.02 for
the six months ended June 30, 2012
- Diluted operating income per share of
$0.63 for the quarter ended June 30, 2013 compared with diluted
operating income per share of $1.32 for the second quarter of
2012(1) and diluted operating income per share of $1.70 for the six
months ended June 30, 2013 compared with diluted net income per
share of $2.20 for the six months ended June 30, 2012
- On an after-tax basis, catastrophe
losses were $53.7 million, or $0.77 per share, for the second
quarter of 2013, and $53.7 million, or $0.75 per share, for the
first six months of 2013
- Diluted book value per share of $38.87
at June 30, 2013 down 4.4% from March 31, 2013(1) mainly due to the
$138.4 million of unrealized losses in the investment portfolio as
a result of widening credit spreads and interest rate
movements
- On April 25, 2013, Aspen issued 11.0
million 5.950% Preference Shares with a liquidation preference of
$25 for an aggregate amount of $275.0 million and net proceeds of
approximately $270.4 million from this issuance
Segment highlights
Reinsurance
Operating highlights for Reinsurance for the quarter ended June
30, 2013 include:
- Gross written premiums of $298.6
million, largely flat compared with $299.8 million for the second
quarter of 2012
- Combined ratio of 88.9% compared with
79.0% for the second quarter of 2012
- Favorable prior year loss reserve
development of $24.1 million, or 8.7 combined ratio points,
compared with $14.1 million favorable prior year loss reserve
development, or 5.0 combined ratio points, for the second quarter
of 2012
The combined ratio of 88.9% for the second quarter of 2013
included $51.8 million, or 19.4 percentage points, of pre-tax
catastrophe losses, net of reinsurance recoveries and $5.2 million
of reinstatement premiums, related to flooding in Central Europe,
Canada and India, and tornadoes and hailstorms in the U.S. The
combined ratio of 79.0% for the second quarter of 2012 included no
natural catastrophe losses.
Insurance
Operating highlights for Insurance for the quarter ended June
30, 2013 include:
- Gross written premiums of $388.7
million, up 6.0% compared with $366.8 million for the second
quarter of 2012
- Combined ratio of 99.8% compared with
92.2% for the second quarter of 2012
- Favorable prior year loss reserve
development of $3.3 million, or 1.2 combined ratio points, compared
with $14.5 million, or 6.3 combined ratio points, for the second
quarter of 2012
The increase in gross written premiums was mainly attributable
to growth in Marine, Energy and Construction Liability, Global
Casualty, as well as the U.S.-based insurance teams specifically in
Programs, Professional Liability and Marine. The combined ratio for
the second quarter of 2013 included $6.9 million, or 2.6 percentage
points, of pre-tax catastrophe losses net of reinsurance recoveries
and reinstatement premiums related to tornadoes and hailstorms in
the U.S. The combined ratio for the second quarter of 2012 included
no natural catastrophe losses.
Investment performance
Aspen’s investment portfolio continues to be comprised primarily
of high quality fixed income securities with an average credit
quality of “AA”. The average duration of the fixed income portfolio
was 3.4 years at June 30, 2013, excluding the impact of interest
rate swaps, or 3.0 years including the impact of interest rate
swaps. The total return on the Company’s investment portfolio was
negative 1.2% for the second quarter of 2013, compared to a gain of
1.0% for the second quarter of 2012. The equity portfolio had a
loss of 0.3% for the quarter and a gain of 8.3% for the first half
of 2013.
Net investment income for the second quarter of 2013 was $45.9
million. Book yield as at June 30, 2013 on the fixed income
portfolio was 2.71% compared to 3.19% at June 30, 2012. The decline
in the yield primarily reflects the effect of lower prevailing
interest rates.
Net realized and unrealized investment losses including
unrealized movements in the trading portfolio included in net
income for the quarter were $6.6 million. Total unrealized gains in
the available for sale investment portfolio, including equity
securities, decreased $138.4 million from March 31, 2013 to $199.0
million at June 30, 2013.
Capital
Total shareholders’ equity decreased by $104.7 million in the
quarter to $3.2 billion at June 30, 2013.
During the second quarter of 2013, Aspen repurchased 800,042
ordinary shares in the open market at an average price of $37.38
per share for a total cost of $29.9 million. Between July 1, 2013
and July 22, 2013, Aspen repurchased 174,202 ordinary shares under
its Rule 10b5-1 plan at an average price of $37.83 per share for a
total cost of $6.6 million. Aspen had $287 million remaining under
its current share repurchase authorization at July 22, 2013.
On April 25, 2013 Aspen elected to mandatorily redeem all of its
outstanding 5.625% Perpetual Preferred Income Equity Replacement
Securities (“Perpetual PIERS”). Accordingly, the conversion
settlement amount for each $50 liquidation preference of Perpetual
PIERS was paid in the following forms of consideration: $50.00 in
cash and approximately 0.3991 shares of Aspen ordinary shares. As a
result, Aspen issued a total of 1,835,860 ordinary shares.
On April 25, 2013 Aspen priced 11,000,000 shares of 5.95%
Fixed-to-Floating Rate Perpetual Non-Cumulative Preference Shares
with a liquidation preference of $25 per share or $275 million in
aggregate liquidation preference.
Guidance
Aspen continues to expect to achieve an operating return on
equity of 10% in 2014, assuming a pre-tax catastrophe load of $190
million per annum and normal loss experience and given the current
interest rate environment. While recent decreases in pricing in
certain business lines, if sustained, are expected to have an
adverse effect on operating return on equity, Aspen continues to
identify actions in each of its three operating return on equity
levers – optimization of the business portfolio, capital efficiency
and enhancing investment returns – to help mitigate the impact of
pricing declines on operating return on equity.
See “Forward-looking Statements Safe Harbor” below.
(1) See definition of non-GAAP financial measures on
pages 12 and 13
Earnings conference call and web cast
Aspen will host a conference call to discuss the results at 9:00
am (EST) on Thursday, July 25, 2013.
To participate in the July 25 conference call by
phonePlease call to register at least 10 minutes before the
conference call begins by dialing:
+1 (888) 459 5609 (US toll free) or+1 (404) 665 9920
(international)Conference ID 97869477
To listen live onlineAspen will provide a live webcast on
Aspen’s website at www.aspen.co
To download the materialsThe earnings press release and a
detailed financial supplement will also be published on Aspen’s
website at www.aspen.co.
To listen laterA replay of the call will be available for
14 days via phone and internet, available two hours after the end
of the live call. To listen to the replay by phone please dial:
+1 (855) 859 2056 (US toll free) or+1 (404) 537 3406
(international)Replay ID 97869477
The recording will be also available at www.aspen.co on the
Event Calendar page within the Investor Relations section.
Aspen Insurance Holdings Limited Summary
consolidated balance sheet (unaudited)
$ in millions, except per share data
As at
June 30,
2013
As at
December 31,
2012
ASSETS Total investments
$6,746.7 $6,692.4 Cash and
cash equivalents
1,188.9 1,463.6 Reinsurance recoverables
698.3 621.6 Premiums receivable
1,197.6 1,057.5 Other
assets
522.3 475.5 Total assets
$10,353.8 $10,310.6
LIABILITIES Losses and loss adjustment expenses
$4,734.9 $4,779.7 Unearned premiums
1,375.3 1,120.8
Other payables
509.5 422.6 Long-term debt
499.2 499.1
Total liabilities
7,118.9 6,822.2 SHAREHOLDERS’
EQUITY Total shareholders’ equity
3,234.9 3,488.4 Total
liabilities and shareholders’ equity
$10,353.8 $10,310.6
Book value per share
$39.99 $42.12 Diluted book value
per share (treasury stock method)
$38.87 $40.65
Aspen Insurance
Holdings Limited Summary consolidated statement of income
(unaudited)
$ in millions, except ratios
Three Months Ended
June 30,
2013
June 30,
2012
UNDERWRITING REVENUES Gross
written premiums
$687.3 $666.6 Premiums ceded
(74.6) (84.7) Net written
premiums
612.7 581.9 Change in unearned premiums
(68.7) (68.5) Net
earned premiums
544.0
513.4 UNDERWRITING EXPENSES Losses and loss
adjustment expenses
333.4 262.1 Policy acquisition expenses
107.2 102.0 General, administrative and corporate expenses
87.7 83.5
Total underwriting expenses
528.3
447.6 Underwriting income including
corporate expenses
15.7
65.8 OTHER OPERATING REVENUE Net investment income
45.9 52.8 Interest expense
(7.8) (7.7) Other income
0.9 2.9
Total other operating revenue
39.0
48.0 OPERATING INCOME BEFORE TAX
54.7 113.8 Net realized and unrealized exchange
(losses)
(13.8) (13.0) Net realized and unrealized
investment gains (losses)
0.2
(10.0) INCOME BEFORE TAX
41.1 90.8
Income tax expense
(1.0)
(6.2) NET INCOME AFTER TAX
40.1 84.6 Dividends
paid on ordinary shares
(11.9) (12.2) Dividends paid on
preference shares
(8.0) (8.3) Change in redemption value of
Perpetual PIERS
(7.1) ─ Proportion due to
non-controlling interest
─
0.2 Retained income
$13.1
$64.3 Components of net income
(after tax) Operating income
$52.2 105.8 Net realized
and unrealized exchange (losses) after tax
(12.0) (10.9) Net
realized investment (losses) after tax
(0.1)
(10.3) NET INCOME AFTER TAX
$40.1 $84.6
Loss ratio
61.3% 51.1% Policy acquisition expense
ratio
19.7% 19.9% General, administrative and corporate
expense ratio
16.1% 16.3% Expense ratio
35.8% 36.2%
Combined ratio
97.1%
87.3%
Aspen Insurance Holdings Limited Summary consolidated
statement of income (unaudited)
$ in millions, except ratios
Six Months Ended
June 30,
2013
June 30,
2012
UNDERWRITING REVENUES Gross written
premiums
$1,460.7 $1,448.7 Premiums ceded
(251.0) (233.3) Net written
premiums
1,209.7 1,215.4 Change in unearned premiums
(154.8) (206.6) Net earned
premiums
1,054.9 1,008.8
UNDERWRITING EXPENSES Losses and loss adjustment expenses
602.1 546.1 Policy acquisition expenses
211.8 198.1
General, administrative and corporate expenses
174.3
168.3 Total underwriting expenses
988.2 912.5 Underwriting
income including corporate expenses
66.7
96.3 OTHER OPERATING REVENUE Net investment
income
94.2 105.2 Interest expense
(15.5) (15.4)
Other income
1.4 2.6
Total other operating revenue
80.1
92.4 OPERATING INCOME BEFORE TAX
146.8
188.7 Net realized and unrealized exchange (losses)
(24.0) (9.3) Net realized and unrealized investment gains
(losses)
16.0 (4.5)
INCOME BEFORE TAX
138.8 174.9 Income tax expense
(6.9) (11.6) NET INCOME AFTER
TAX
131.9 163.3 Dividends paid on ordinary shares
(23.8) (22.8) Dividends paid on preference shares
(16.6) (14.0) Change in redemption value of Perpetual PIERS
(7.1) ─ Proportion due to non-controlling interest
─ 0.3 Retained income
$84.4 $126.8 Components
of net income (after tax) Operating income
$137.9
176.3 Net realized and unrealized exchange (losses) after tax
(21.5) (7.9) Net realized investment gains (losses) after
tax
15.5 (5.1) NET INCOME
AFTER TAX
$131.9 $163.3
Loss ratio
57.1% 54.1% Policy acquisition expense
ratio
20.1% 19.6% General, administrative and corporate
expense ratio
16.5% 16.7% Expense ratio
36.6% 36.3%
Combined ratio
93.7% 90.4%
Aspen Insurance Holdings Limited
Summary consolidated financial data (unaudited)
$ in millions, except number of shares
Three Months Ended
Six Months Ended
June 30,2013
June 30,2012
June 30,2013
June 30,2012
Basic earnings per ordinary share Net income adjusted
for preference share dividend
$0.38 $1.07
$1.60 $2.10
Operating income adjusted for preference dividend
$0.67
$1.36
$1.80 $2.28 Diluted earnings per ordinary share Net
income adjusted for preference share dividend
$0.36 $1.03
$1.52 $2.02 Operating income adjusted for preference
dividend
$0.63 $1.32
$1.70 $2.20 Weighted
average number of ordinary shares outstanding (in millions)
66.191 71.304
67.601 71.124 Weighted average number
of ordinary shares outstanding and dilutive potential ordinary
shares (in millions)
69.291 73.846
71.087 73.844
Book value per ordinary share
$39.99 $41.41 Diluted
book value (treasury stock method)
$38.87 $40.01
Ordinary shares outstanding at end of the period (in millions)
67.003 70.687 Ordinary shares outstanding and dilutive
potential ordinary shares at end of the period (treasury stock
method) (in millions)
68.934 73.161
Aspen Insurance Holdings
Limited Summary consolidated segment information
(unaudited)
$ in millions, except ratios
Three Months Ended June 30, 2013 Three Months Ended June
30, 2012 Reinsurance Insurance
Total Reinsurance
Insurance Total
Gross written premiums
$298.6 $388.7 $687.3 $299.8 $366.8 $666.6 Net
written premiums
288.6 324.1 612.7 276.8 305.1
581.9 Gross earned premiums
288.4 331.3 619.7
300.8 279.9 580.7 Net earned premiums
275.8 268.2
544.0 282.0 231.4 513.4 Losses and loss adjustment expenses
158.4 175.0 333.4 133.7 128.4 262.1 Policy
acquisition expenses
56.6 50.6 107.2 59.3 42.7
102.0 General and administrative expenses
30.4
42.1 72.5 30.0 42.1 72.1 Underwriting
income
$30.4 $0.5 $30.9 $59.0
$18.2 $77.2 Net investment income
45.9
52.8 Net realized and unrealized investment gains (losses) (1)
0.2 (10.0) Corporate expenses
(15.2) (11.4) Other
income
0.9 2.9 Interest expenses
(7.8) (7.7) Net
realized and unrealized foreign exchange (losses) (2)
(13.8)
(13.0) Income before tax
41.1 90.8 Income tax expense
(1.0) (6.2)
Net income $40.1 $84.6
Ratios Loss ratio
57.4% 65.2% 61.3%
47.4% 55.5% 51.1% Policy acquisition expense ratio
20.5% 18.9% 19.7% 21.0% 18.5% 19.9% General
and administrative expense ratio (3)
11.0% 15.7%
16.1% 10.6% 18.2% 16.3% Expense ratio
31.5%
34.6% 35.8% 31.6% 36.7% 36.2% Combined ratio
88.9% 99.8% 97.1%
79.0% 92.2%
87.3%
(1)
Includes realized and unrealized capital
gains and losses and realized and unrealized gains and losses on
interest rate swaps
(2)
Includes realized and unrealized foreign
exchange gains and losses and realized and unrealized gains and
losses on foreign exchange contracts
(3)
The total group general and administrative
expense ratio includes the impact from corporate expenses
Aspen Insurance Holdings
Limited
Summary consolidated segment
information (unaudited)
$ in millions, except ratios
Six Months Ended June 30, 2013 Six Months Ended June 30,
2012 Reinsurance Insurance
Total Reinsurance
Insurance Total Gross
written premiums
$738.2 $722.5
$1,460.7 $774.0
$674.7 $1,448.7 Net written premiums
689.1 520.6 1,209.7 706.3 509.1 1,215.4 Gross
earned premiums
560.3 644.2 1,204.5 591.0
546.8 1,137.8 Net earned premiums
532.5 522.4
1,054.9 553.0 455.8 1,008.8 Losses and loss adjustment
expenses
272.7 329.4 602.1 269.3 276.8 546.1
Policy acquisition expenses
111.9 99.9 211.8
111.1 87.0 198.1 General and administrative expenses
62.6
84.5 147.1
59.0 83.5 142.5
Underwriting income
$85.3 $8.6
$93.9 $113.6 $8.5 $122.1 Net investment
income
94.2 105.2 Net realized and unrealized investment
gains (losses) (1)
16.0 (4.5) Corporate expenses
(27.2) (25.8) Other income
1.4 2.6 Interest expenses
(15.5) (15.4) Net realized and unrealized foreign exchange
(losses) (2)
(24.0) (9.3) Income before tax
138.8
174.9 Income tax expense
(6.9) (11.6)
Net income
$131.9 $163.3
Ratios Loss ratio
51.2%
63.1% 57.1% 48.7% 60.7% 54.1% Policy
acquisition expense ratio
21.0% 19.1% 20.1%
20.1% 19.1% 19.6% General and administrative expense ratio (3)
11.8% 16.2% 16.5% 10.7% 18.3% 16.7% Expense
ratio
32.8% 35.3% 36.6% 30.8% 37.4% 36.3%
Combined ratio
84.0% 98.4%
93.7%
79.5% 98.1%
90.4%
(1)
Includes realized and unrealized capital
gains and losses and realized and unrealized gains and losses on
interest rate swaps
(2)
Includes realized and unrealized foreign
exchange gains and losses and realized and unrealized gains and
losses on foreign exchange contracts
(3)
The total group general and administrative
expense ratio includes the impact from corporate expenses
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, Germany, Ireland,
Singapore, Switzerland, the United Kingdom and the United States.
For the year ended December 31, 2012, Aspen reported $10.3 billion
in total assets, $4.8 billion in gross reserves, $3.5 billion in
total shareholders’ equity and $2.6 billion in gross written
premiums. 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.co.
Forward-looking Statements Safe Harbor
This press release contains, and Aspen's earnings conference
call will contain, written or oral "forward-looking statements"
within the meaning of the US 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," “likely,”
"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; decreased demand for our
insurance or reinsurance products and cyclical changes in the
insurance and reinsurance sectors; changes in insurance and
reinsurance market conditions; increased competition on the basis
of pricing, capacity, coverage terms, new capital, binding
authorities to brokers or other factors and the related demand and
supply dynamics as contracts come up for renewal; cost or quality
of reinsurance or retrocessional coverage; changes in general
economic conditions, including inflation, foreign currency exchange
rates, interest rates and other factors that could affect our
financial results; the risk of a material decline in the value or
liquidity of all or parts of our investment portfolio; 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 one
or more large losses from events other than natural catastrophes or
by an unexpected accumulation of attritional losses; the impact of
acts of terrorism and related legislation and acts of war; any
changes in our reinsurers’ credit quality and the amount and timing
of reinsurance recoverables; changes in the availability, 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; a decline in our operating
subsidiaries’ ratings with S&P, A.M. Best or Moody’s; the
failure of our reinsurers, policyholders, brokers or other
intermediaries to honor their payment obligations; 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; our reliance on the
assessment and pricing of individual risks by third parties; our
dependence on a few brokers for a large portion of our revenues;
the persistence of heightened financial risks, including excess
sovereign debt, the banking system and the Eurozone debt crisis;
our ability to successfully implement steps to further optimize the
business portfolio ensure capital efficiency and enhance investment
returns; changes in our ability to exercise capital management
initiatives (including our share repurchase program) 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 one or more of our
senior underwriters or key personnel; our reliance on information
technology and third party service providers for our operations and
systems; 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 Report on Form 10-K as
filed with the U.S. Securities and Exchange Commission on February
26, 2013. 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
financial 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.co.
(1) Annualized Operating Return on Average Equity (“Operating
ROE”) is a non-GAAP financial measure. Annualized Operating
Return on Average Equity is calculated using operating income, as
defined below and average equity is calculated as the arithmetic
average on a monthly basis for the stated periods of shareholders’
equity excluding the aggregate value of the liquidation preferences
of our preference shares net of issuance costs.
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 24 of Aspen's financial supplement for a reconciliation of
operating income to net income and page 8 for a reconciliation of
average ordinary shareholders’ equity to average shareholders’
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 and unrealized capital gains or losses, including net
realized and unrealized gains or losses on interest rate swaps,
after-tax net foreign exchange gains or losses, including net
realized and unrealized gains and losses from foreign exchange
contracts, and issue costs associated with equity instruments that
were redeemed.
Aspen excludes these items 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 would distort 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 24 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.co.
(3) Diluted Book Value per Ordinary Share is not a
non-GAAP financial measure. Aspen has included diluted book value
per ordinary share as it illustrates the effect on basic book value
per share of dilutive securities thereby providing a better
benchmark for comparison with other companies. Diluted book value
per share is calculated using the treasury stock method, defined on
page 23 of Aspen’s financial supplement, which can be obtained from
the Investor Relations section of Aspen’s website at
www.aspen.co.
(4) Diluted Operating Earnings per Share and Basic Operating
Earnings per Share are non-GAAP financial measures. 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 24 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.co.
(5) Combined Ratio Excluding Catastrophes is a non-GAAP
financial measure. Aspen believes that the presentation of combined
ratio excluding catastrophes supports meaningful comparison from
period to period of the underlying performance of the business.
Combined ratio excluding catastrophes is calculated by dividing net
losses excluding catastrophe losses and net expenses by net earned
premiums excluding catastrophe related reinstatement premiums. We
have defined catastrophe losses in the current period as losses
associated with floods in Central Europe, Canada and India as well
as tornadoes and hailstorms in the United States. We have defined
catastrophe losses in the comparative period as losses associated
with the severe weather in the U.S. in February and March 2012.
Other
(1) Catastrophe Load included in our guidance is
an estimate of the average annual aggregate loss before reinsurance
and tax from natural catastrophe events based on 50,000 simulations
of our internal capital model which, in relation to its catastrophe
modeling components, is based on a combination of catastrophe
models selected by Aspen to best fit its current understanding of
the worldwide natural catastrophe perils to which Aspen has known
exposures. It does not include losses from non-natural catastrophe
events such as terrorism or industrial accidents.
This load is attributed and then released quarter by quarter
based on historic claims patterns. For example, there is a higher
proportion allocated to the third quarter due to the historical
frequency of U.S. Wind events in this period. As an organization,
Aspen monitors its current catastrophe losses to date against
expected losses and updates the projected numbers accordingly based
on this experience.
Actual catastrophe loss experience may materially differ from
the catastrophe load in any one year for reasons which include
natural variability in the frequency and severity of catastrophe
events, and limitations in one or more of the models or
uncertainties in the application of policy terms and limits.
InvestorsAspenKerry Calaiaro, +1-646-502-1076Senior Vice
President, Investor
RelationsKerry.Calaiaro@aspen.coorMediaAspenSteve Colton,
+44-20-7184-8337Head of
CommunicationsSteve.Colton@aspen.coorInternationalCitigate Dewe
RogersonCaroline Merrell,
+44-20-7638-9571caroline.merrell@citigatedr.co.ukorJos Bieneman,
+44-20-7638-9571jos.bieneman@citigatedr.co.ukorNorth
AmericaAbernathy MacGregorAllyson Vento,
+1-212-371-5999amv@abmac.com
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