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8-K - 8-K - ASPEN INSURANCE HOLDINGS LTD | u10525e8vk.htm |
EX-99.3 - EX-99.3 - ASPEN INSURANCE HOLDINGS LTD | u10525exv99w3.htm |
EX-99.2 - EX-99.2 - ASPEN INSURANCE HOLDINGS LTD | u10525exv99w2.htm |
Exhibit 99.1
ASPEN INSURANCE HOLDINGS REPORTS RESULTS FOR
FOURTH QUARTER AND TWELVE MONTHS OF 2010
FOURTH QUARTER AND TWELVE MONTHS OF 2010
§ | Diluted book value per share of $38.90, up 13.9% over the end of the fourth quarter
of 2009 and up 1.8% from third quarter of 2010. |
||
§ | Fourth quarter net income after tax of $92.7 million, down from $126.3 million in the
same quarter last year. |
||
§ | Annualized net income return on equity of 13.2% for the fourth quarter and 11.2% for the
twelve-month period. |
||
§ | Annualized operating return on equity of 12.0% for the quarter and 9.4% for the
twelve-month period. |
||
§ | Diluted operating earnings per share of $1.02 for the quarter, down from $1.44 for the
fourth quarter of 2009. |
HAMILTON, BERMUDA, February 7, 2011 Aspen Insurance Holdings Limited (NYSE: AHL) today
reported net income after tax for the fourth quarter of 2010 of $92.7 million and operating
earnings of $1.02 per diluted ordinary share. Book value per share on a diluted basis of $38.90
increased by 13.9% when compared to December 31, 2009 and by
1.8% since September 30, 2010.
Fourth Quarter 2010 Financial Highlights
($ in millions, except per share amounts and percentages)
(Unaudited)
Q4 2010 | Q4 2009 | Change | |||||||||||||||
Gross written premium |
$412.8 | $405.7 | 1.8% | ||||||||||||||
Net earned premium |
$499.7 | $476.2 | 4.9% | ||||||||||||||
Net investment income |
$57.0 | $58.2 | (2.1)% | ||||||||||||||
Net income after tax |
$92.7 | $126.3 | (26.6)% | ||||||||||||||
Operating income after tax |
$85.0 | $129.2 | (34.2)% | ||||||||||||||
Diluted net income per share |
$1.12 | $1.40 | (20.0)% | ||||||||||||||
Diluted operating earnings per share |
$1.02 | $1.44 | (29.2)% | ||||||||||||||
Net income annualized return on equity |
13.2% | 18.4% | |||||||||||||||
Annualized operating return on equity |
12.0% | 18.8% | |||||||||||||||
Combined ratio |
95.3% | 84.7% | |||||||||||||||
Book value per ordinary share |
$40.96 | $35.42 | 15.6% | ||||||||||||||
Diluted book value per ordinary share |
$38.90 | $34.14 | 13.9% | ||||||||||||||
1
Twelve Months Ended December 31 Financial Highlights
($ in millions, except per share amounts and percentages)
(Unaudited)
2010 | 2009 | Change | |||||||||||||||
Gross written premium |
$2,076.8 | $2,067.1 | 0.5% | ||||||||||||||
Net earned premium |
$1,898.9 | $1,823.0 | 4.2% | ||||||||||||||
Net investment income |
$232.0 | $248.5 | (6.6)% | ||||||||||||||
Net income after tax |
$312.7 | $473.9 | (34.0)% | ||||||||||||||
Operating income after tax |
$265.7 | $464.3 | (42.8)% | ||||||||||||||
Diluted net income per share |
$3.62 | $5.64 | (35.8)% | ||||||||||||||
Diluted operating earnings per share |
$3.03 | $5.16 | (41.3)% | ||||||||||||||
Net income annualized return on equity |
11.2% | 18.4% | |||||||||||||||
Annualized operating return on equity |
9.4% | 18.0% | |||||||||||||||
Combined ratio |
96.7% | 84.1% | |||||||||||||||
Chris OKane, Chief Executive Officer said: I am very pleased to report that we grew BVPS by
13.9% in 2010 and 1.8% in Q4 against a backdrop of continued low interest rates and a challenging
underwriting environment. The performance of our Reinsurance business
was particularly strong and, in a
year which saw a significant impact from natural catastrophes, the combined ratio of 88.2%
reflects the benefits of our diversified approach. We made good progress in furthering our key
strategic objectives in 2010 such as developing our Insurance franchise in the US and parts of
Europe and will continue selectively to seek out opportunities to further our aims in 2011 as
market conditions allow.
Overview of Operations for the Fourth Quarter and Full Year 2010
§ | Gross written premiums of $412.8 million in the quarter, up 1.8% on last year,
with the increase coming mainly from the insurance segment. |
||
§ | Underwriting income for the
quarter of $35.4 million
included $32.8 million of further losses from the New Zealand earthquake, as previously announced
on December 16, 2010, against underwriting income of $93.3 million in the previous year,
which had no recorded catastrophic losses. |
||
§ | Prior year reserve releases of $12.6 million in the quarter compared with $13.4 million of reserve
releases in the equivalent period in 2009. For the twelve months ended December 31, 2010,
reserve releases were $21.4 million compared with $84.4 million in 2009. |
||
§ | Cash flows from operating activities were $122.3 million for the quarter and $624.6
million for the twelve months ended December 31, 2010 compared with $157.5 million and
$646.6 million, respectively in 2009. |
||
§ | The effective tax rate for the fourth quarter of 3.3% is a product of lowering
the estimated annual effective tax rate from 10.0% at the end of the third quarter of 2010 to an
actual rate of 8.1% at the end of the year. This compares with an effective tax rate of
11.4% for the full year in 2009. |
2
Operating Segment Highlights
Reinsurance Segment
Reinsurance segment underwriting income for the quarter was $53.7 million compared with $81.3
million last year. This underwriting result reflects a combined ratio of 81.6% compared with 71.9%
for the fourth quarter in 2009. The combined ratio for the quarter includes 11.2 percentage points
of losses from the earthquake in New Zealand bringing total pre-tax losses for this event to $52.8
million, an increase of $32.8 million over losses included in the third quarter of 2010 results.
Net favorable reserve development was $36.1 million compared with $22.7 million for the fourth
quarter of 2009 with the increase attributable to the property and specialty reinsurance lines of
business. Gross written premiums in the reinsurance segment for the quarter were $152.8 million
compared to $169.7 million in 2009 with decreases in property and casualty reinsurance.
Underwriting income for the twelve months ended December 31, 2010 was $133.6 million compared with
$328.7 million in 2009. The combined ratio for the twelve months ended December 31, 2010 of 88.2%
has been impacted by 15.3 percentage points, or $168.7 million of losses, net of reinstatement
premiums, from the earthquakes in Chile and New Zealand and compares with 70.4% for the same period
in 2009. The accident year combined ratio for the twelve-month period
of 79.1%, excluding the impact of the
earthquakes is in line with 2009, which had no material catastrophic losses. Gross
written premiums for the twelve months ended December 31, 2010 were $1,162.2 million compared with
$1,176.0 million in 2009.
Insurance Segment
Insurance segment underwriting loss for the quarter was $18.3 million compared with an
underwriting profit of $12.0 million in the fourth quarter of 2009. The combined ratio was 108.8%
for the fourth quarter compared with 93.5% in 2009. There has been net reserve strengthening in the
insurance segment of $23.5 million for the quarter compared with $9.3 million of strengthening in
the fourth quarter last year arising mainly in casualty insurance. Gross written premium
was $260.0 million compared with $236.0 million in 2009 with the increase
attributable to the marine, energy and transportation lines and financial and professional lines.
The underwriting loss for the twelve-month period was $23.6 million compared with an underwriting
profit of $13.9 million in 2009. The 2010 combined ratio was 103.1% compared with 98.1% for the same
period in 2009. The accident year combined ratio was 99.2% compared
with 98.0% in 2009. For the twelve months ended December 31, 2010, gross
written premium was $914.6 million compared with $891.1 million in 2009.
Investment Performance
Net investment income for the quarter was $57.0 million, compared with $58.2 million in the fourth
quarter of 2009. Net realized and unrealized investment gains included in income for the quarter were $10.5
million compared with $7.5 million in the fourth quarter of 2009. There were no securities selected
for other-than-temporary impairment in the quarter compared with $3.3 million for the same period
in 2009.
Unrealized gains on the available-for-sale fixed income portfolio at the end of the fourth quarter
of 2010 were $239.6 million, a decrease of $122.1 million, gross of tax, from the end of the third
quarter in 2010 driven by rising interest rates.
Book yield on the fixed income portfolio of 3.7% was down from 3.9% at the end of the third
quarter of 2010. The average credit quality of the portfolio remains AA+ with an average duration
of 2.9 years, including the impact of interest rate swaps.
3
Capital Position
As previously announced, in November 2010, the Company entered into an accelerated share
repurchase program to repurchase $184.0 million of its ordinary shares. An initial amount of 5.7
million ordinary shares was retired in the quarter. The Company may be entitled to
receive additional ordinary shares based on the average of the daily market price of its ordinary
shares during the term of the agreement. The program is expected to
be completed within seven months
from the date of the agreement. During the quarter, the Company also
repurchased 0.5 million ordinary
shares in the open market at an average price of $28.87 per share, for a total cost of $15.9
million. As of December 31, 2010, the Company had approximately $192 million of remaining
authorization for ordinary share repurchases through March 2012.
On
December 7, 2010, Aspen issued $250 million, 6% coupon 10-year
senior notes with the proceeds used for general corporate purposes.
Outlook for 2011
Given
current market conditions, the Company anticipates gross written
premium for 2011 to be $2.1 billion +/- 5%, premium ceded to be between 8% and 12% of gross earned premium and
the combined ratio to be in the range of 93%-98% including a cat load of $170 million assuming
normal loss experience in the year. The Company expects the effective
tax rate in 2011 to be in the range
of 8% to 12%.
Earnings conference call
Aspen will hold a conference call to discuss its financial results on Tuesday, February 8, 2011 at
8:30 a.m. (Eastern Time).
CONFERENCE CALL PARTICIPATION DETAILS February 8, 2011 at 8:30 a.m. (ET)
Participant Dial-In Numbers:
|
+1 (888) 459-5609 (US Toll Free) +1 (404) 665-9920 (International) |
|
Conference ID:
|
34759395 |
Please call to register at least 10 minutes before the conference call begins.
The conference call will be webcast live in the presentations section of the Investor Relations
page of Aspens website, which is located at www.aspen.bm. The earnings press release and a
detailed financial supplement will be posted to the website, as well as a brief slide presentation
which may be used for reference during the earnings call.
4
REPLAY DETAILS
A replay of the call will be available for 14 days via telephone and internet starting two hours
following the end of the live call.
Replay Access:
|
+1 (800) 642-1687 (US Toll Free) +1 (706) 645-9291 (International) www.aspen.bm |
|
Replay ID:
|
34759395 |
Investor Contact: |
||
Aspen Insurance Holdings Limited |
||
Noah Fields, Head of Investor Relations
|
T: +1 441-297-9382 | |
European Press Contact: |
||
Citigate Dewe Rogerson |
||
Justin Griffiths/Sarah Gestetner
|
T: +44 (0) 20 7282 2920 | |
North American Press Contact: |
||
Abernathy MacGregor |
||
Carina Davidson/Allyson Morris
|
T: +1 212-371-5999 |
5
Aspen Insurance Holdings Limited
Summary Consolidated Balance Sheet
($ in millions, except per share data)
(Unaudited)
Summary Consolidated Balance Sheet
($ in millions, except per share data)
(Unaudited)
As at December 31, | As at December 31, | |||||||
(in US$ millions) | 2010 | 2009 | ||||||
ASSETS |
||||||||
Total investments |
$6,086.3 | $5,997.0 | ||||||
Cash and cash equivalents |
1,179.1 | 748.4 | ||||||
Reinsurance recoverables |
342.3 | 425.3 | ||||||
Premiums receivable |
821.7 | 708.3 | ||||||
Other assets |
402.7 | 378.2 | ||||||
Total assets |
$8,832.1 | $8,257.2 | ||||||
LIABILITIES |
||||||||
Losses and loss adjustment expenses |
$3,820.5 | $3,331.1 | ||||||
Unearned premiums |
859.0 | 907.6 | ||||||
Other payables |
411.9 | 463.5 | ||||||
Long-term debt |
498.8 | 249.6 | ||||||
Total liabilities |
$5,590.2 | $4,951.8 | ||||||
SHAREHOLDERS EQUITY |
||||||||
Total shareholders equity |
3,241.9 | 3,305.4 | ||||||
Total liabilities and shareholders equity |
$8,832.1 | $8,257.2 | ||||||
Tangible book value per share |
$40.96 | $35.42 | ||||||
Diluted book value per share (treasury stock method) |
$38.90 | $34.14 |
6
Aspen Insurance Holdings Limited
Summary Quarterly Consolidated Statement of Income
($ in millions, except share, per share data and ratios)
(Unaudited)
Summary Quarterly Consolidated Statement of Income
($ in millions, except share, per share data and ratios)
(Unaudited)
Three Months Ended | Three Months Ended | ||||||||
(in US$ millions) | December 31, 2010 | December 31, 2009 | |||||||
UNDERWRITING REVENUES |
|||||||||
Gross written premiums |
$412.8 | $405.7 | |||||||
Premiums ceded |
(17.6) | (22.3) | |||||||
Net written premiums |
395.2 | 383.4 | |||||||
Change in unearned premiums |
104.5 | 92.8 | |||||||
Net earned premiums |
499.7 | 476.2 | |||||||
UNDERWRITING EXPENSES |
|||||||||
Losses and loss expenses |
307.4 | 227.5 | |||||||
Acquisition expenses |
90.6 | 95.1 | |||||||
General, administrative and corporate expenses |
78.5 | 80.3 | |||||||
Total underwriting expenses |
476.5 | 402.9 | |||||||
Underwriting income including corporate expenses |
23.2 | 73.3 | |||||||
OTHER OPERATING REVENUE |
|||||||||
Net investment income |
57.0 | 58.2 | |||||||
Interest expense |
(4.8) | (3.8) | |||||||
Total other operating revenue |
52.2 | 54.4 | |||||||
Other income (expense) |
10.1 | 0.9 | |||||||
OPERATING INCOME BEFORE TAX |
85.5 | 128.6 | |||||||
OTHER |
|||||||||
Net realized and unrealized exchange gains/(losses) |
(0.1) | (6.7) | |||||||
Net realized and unrealized investment gains/(losses) |
10.5 | 4.2 | |||||||
INCOME BEFORE TAX |
95.9 | 126.1 | |||||||
Income taxes expense |
(3.2) | 0.2 | |||||||
NET INCOME AFTER TAX |
92.7 | 126.3 | |||||||
Dividends paid on ordinary shares |
(11.5) | (12.6) | |||||||
Dividend paid on preference shares |
(5.7) | (5.5) | |||||||
Retained income |
$75.5 | $108.2 | |||||||
Components of net income (after tax) |
|||||||||
Operating income |
$85.0 | $129.2 | |||||||
Net realized and unrealized exchange gains/(losses) after tax |
0.2 | (6.7) | |||||||
Net realized investment gains/(losses) after tax |
7.5 | 3.8 | |||||||
NET INCOME AFTER TAX |
$92.7 | $126.3 | |||||||
Loss ratio |
61.5% | 47.8% | |||||||
Policy acquisition expense ratio |
18.1% | 20.0% | |||||||
General and administrative expense ratio |
15.7% | 16.9% | |||||||
Expense ratio |
33.8% | 36.9% | |||||||
Combined ratio |
95.3% | 84.7% |
7
Aspen Insurance Holdings Limited
Summary Annual Consolidated Statement of Income
($ in millions, except share, per share data and ratios)
(Unaudited)
Summary Annual Consolidated Statement of Income
($ in millions, except share, per share data and ratios)
(Unaudited)
Twelve Months Ended | Twelve Months Ended | |||||||
(in US$ millions) | December 31, 2010 | December 31, 2009 | ||||||
UNDERWRITING REVENUES |
||||||||
Gross written premiums |
$2,076.8 | $2,067.1 | ||||||
Premiums ceded |
(185.7) | (230.3) | ||||||
Net written premiums |
1,891.1 | 1,836.8 | ||||||
Change in unearned premiums |
7.8 | (13.8) | ||||||
Net earned premiums |
1,898.9 | 1,823.0 | ||||||
UNDERWRITING EXPENSES |
||||||||
Losses and loss expenses |
1,248.7 | 948.1 | ||||||
Acquisition expenses |
328.5 | 334.1 | ||||||
General, administrative and corporate expenses |
258.6 | 252.4 | ||||||
Total underwriting expenses |
1,835.8 | 1,534.6 | ||||||
Underwriting income including corporate expenses |
63.1 | 288.4 | ||||||
OTHER OPERATING REVENUE |
||||||||
Net investment income |
232.0 | 248.5 | ||||||
Interest expense |
(16.5) | (15.6) | ||||||
Total other operating revenue |
215.5 | 232.9 | ||||||
Other income (expense) |
8.9 | 0.0 | ||||||
OPERATING INCOME BEFORE TAX |
287.5 | 521.3 | ||||||
OTHER |
||||||||
Net realized and unrealized exchange gains/(losses) |
2.2 | 2.0 | ||||||
Net realized and unrealized investment gains/(losses) |
50.6 | 11.4 | ||||||
INCOME BEFORE TAX |
340.3 | 534.7 | ||||||
Income taxes expense |
(27.6) | (60.8) | ||||||
NET INCOME AFTER TAX |
312.7 | 473.9 | ||||||
Dividends paid on ordinary shares |
(46.5) | (49.8) | ||||||
Dividend paid on preference shares |
(22.8) | (23.8) | ||||||
Retained income |
$243.4 | $400.3 | ||||||
Components of net income (after tax) |
||||||||
Operating income |
$265.7 | $464.3 | ||||||
Net realized and unrealized exchange gains/(losses) after tax |
2.9 | 2.0 | ||||||
Net realized investment gains/(losses) after tax |
44.1 | 7.6 | ||||||
NET INCOME AFTER TAX |
$312.7 | $473.9 | ||||||
Loss ratio |
65.8% | 52.0% | ||||||
Policy acquisition expense ratio |
17.3% | 18.3% | ||||||
General and administrative expense ratio |
13.6% | 13.8% | ||||||
Expense ratio |
30.9% | 32.1% | ||||||
Combined ratio |
96.7% | 84.1% |
8
Aspen Insurance Holdings Limited
Summary Consolidated Financial Data
($ in millions, except share, per share data and ratios)
(Unaudited)
Summary Consolidated Financial Data
($ in millions, except share, per share data and ratios)
(Unaudited)
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||
(in US$ except for number of shares) | 2010 | 2009 | 2010 | 2009 | ||||||||||||
Basic earnings per ordinary share |
||||||||||||||||
Net income adjusted for preference
share dividend |
$1.18 | $1.45 | $3.80 | $5.82 | ||||||||||||
Operating income adjusted for
preference dividend |
$1.08 | $1.48 | $3.18 | $5.33 | ||||||||||||
Diluted earnings per ordinary share |
||||||||||||||||
Net income adjusted
for preference
share dividend |
$1.12 | $1.40 | $3.62 | $5.64 | ||||||||||||
Operating income
adjusted for
preference dividend |
$1.02 | $1.44 | $3.03 | $5.16 | ||||||||||||
Weighted average number of ordinary shares outstanding (in
millions) |
73.996 | 83.239 | 76.343 | 82.698 | ||||||||||||
Weighted average number of ordinary shares outstanding and
dilutive potential ordinary shares (in millions) |
77.733 | 86.412 | 80.016 | 85.327 | ||||||||||||
Book value per ordinary share |
$40.96 | $35.42 | ||||||||||||||
Diluted book value (treasury stock method) |
$38.90 | $34.14 | ||||||||||||||
Ordinary shares outstanding at end of the period (in
millions) |
70.508 | 83.328 | ||||||||||||||
Ordinary shares outstanding and dilutive potential ordinary
shares at end of the period (treasury stock method) (in
millions) |
74.253 | 86.465 |
9
Aspen Insurance Holdings Limited
Summary Quarterly Consolidated Segment Information
($ in millions except ratios)
(Unaudited)
Summary Quarterly Consolidated Segment Information
($ in millions except ratios)
(Unaudited)
Three Months Ended December 31, 2010 | Three Months Ended December 31, 2009 | |||||||||||||||||||||||
(in US$ millions except for ratios) | Reinsurance | Insurance | Total | Reinsurance | Insurance | Total | ||||||||||||||||||
Gross written premiums |
$152.8 | $260.0 | $412.8 | $169.7 | $236.0 | $405.7 | ||||||||||||||||||
Net written premiums |
148.5 | 246.7 | 395.2 | 158.3 | 225.1 | 383.4 | ||||||||||||||||||
Gross earned premiums |
303.9 | 246.5 | 550.4 | 306.5 | 222.2 | 528.7 | ||||||||||||||||||
Net earned premiums |
292.1 | 207.6 | 499.7 | 289.0 | 187.2 | 476.2 | ||||||||||||||||||
Losses and loss expenses |
146.8 | 160.6 | 307.4 | 115.3 | 112.2 | 227.5 | ||||||||||||||||||
Policy acquisition expenses |
58.8 | 31.8 | 90.6 | 62.1 | 33.0 | 95.1 | ||||||||||||||||||
Operating and administrative expenses |
32.8 | 33.5 | 66.3 | 30.3 | 30.0 | 60.3 | ||||||||||||||||||
Underwriting income/(loss) |
$53.7 | $(18.3) | $35.4 | $81.3 | $12.0 | $93.3 | ||||||||||||||||||
Net investment income |
57.0 | 58.2 | ||||||||||||||||||||||
Net realized gains |
10.5 | 4.2 | ||||||||||||||||||||||
Corporate (expenses) |
(12.2) | (20.0) | ||||||||||||||||||||||
Other (expenses)/income |
10.1 | 0.9 | ||||||||||||||||||||||
Interest (expenses) |
(4.8) | (3.8) | ||||||||||||||||||||||
Net foreign exchange gains/(losses) |
(0.1) | (6.7) | ||||||||||||||||||||||
Income before income taxes |
95.9 | 126.1 | ||||||||||||||||||||||
Income tax (expense)/recovery |
(3.2) | 0.2 | ||||||||||||||||||||||
Net income |
$92.7 | $126.3 | ||||||||||||||||||||||
Ratios |
||||||||||||||||||||||||
Loss ratio |
50.3% | 77.4% | 61.5% | 39.9% | 59.9% | 47.8% | ||||||||||||||||||
Policy acquisition expense ratio |
20.1% | 15.3% | 18.1% | 21.5% | 17.6% | 20.0% | ||||||||||||||||||
Operating and administrative expense
ratio |
11.2% | 16.1% | 15.7% | 10.5% | 16.0% | 16.9% | ||||||||||||||||||
Expense ratio |
31.3% | 31.4% | 33.8% | 32.0% | 33.6% | 36.9% | ||||||||||||||||||
Combined ratio |
81.6% | 108.8% | 95.3% | 71.9% | 93.5% | 84.7% |
10
Aspen Insurance Holdings Limited
Summary Annual Consolidated Segment Information
($ in millions except ratios)
(Unaudited)
Summary Annual Consolidated Segment Information
($ in millions except ratios)
(Unaudited)
Twelve Months Ended December 31, 2010 | Twelve Months Ended December 31, 2009 | |||||||||||||||||||||||
(in US$ millions except for percentages) | Reinsurance | Insurance | Total | Reinsurance | Insurance | Total | ||||||||||||||||||
Gross written premiums |
$1,162.2 | $914.6 | $2,076.8 | $1,176.0 | $891.1 | $2,067.1 | ||||||||||||||||||
Net written premiums |
1,118.5 | 772.6 | 1,891.1 | 1,116.7 | 720.1 | 1,836.8 | ||||||||||||||||||
Gross earned premiums |
1,186.4 | 907.9 | 2,094.3 | 1,164.4 | 871.0 | 2,035.4 | ||||||||||||||||||
Net earned premiums |
1,141.8 | 757.1 | 1,898.9 | 1,108.1 | 714.9 | 1,823.0 | ||||||||||||||||||
Losses and loss expenses |
693.5 | 555.2 | 1,248.7 | 467.3 | 480.8 | 948.1 | ||||||||||||||||||
Policy acquisition expenses |
202.4 | 126.1 | 328.5 | 214.6 | 119.5 | 334.1 | ||||||||||||||||||
Operating and administrative expenses |
112.3 | 99.4 | 211.7 | 97.5 | 100.7 | 198.2 | ||||||||||||||||||
Underwriting income/(loss) |
$133.6 | $(23.6) | $110.0 | $328.7 | $13.9 | $342.6 | ||||||||||||||||||
Net investment income |
232.0 | 248.5 | ||||||||||||||||||||||
Net realized gains/(losses) |
50.6 | 11.4 | ||||||||||||||||||||||
Corporate (expenses) |
(46.9) | (54.2) | ||||||||||||||||||||||
Other (expenses)/income |
8.9 | | ||||||||||||||||||||||
Interest (expenses) |
(16.5) | (15.6) | ||||||||||||||||||||||
Net foreign exchange gains/(losses) |
2.2 | 2.0 | ||||||||||||||||||||||
Income before income taxes |
340.3 | 534.7 | ||||||||||||||||||||||
Income tax (expense) |
(27.6) | (60.8) | ||||||||||||||||||||||
Net income |
$312.7 | $473.9 | ||||||||||||||||||||||
Ratios |
||||||||||||||||||||||||
Loss ratio |
60.7% | 73.3% | 65.8% | 42.2% | 67.3% | 52.0% | ||||||||||||||||||
Policy acquisition expense ratio |
17.7% | 16.7% | 17.3% | 19.4% | 16.7% | 18.3% | ||||||||||||||||||
Operating and administrative expense ratio |
9.8% | 13.1% | 13.6% | 8.8% | 14.1% | 13.8% | ||||||||||||||||||
Expense ratio |
27.5% | 29.8% | 30.9% | 28.2% | 30.8% | 32.1% | ||||||||||||||||||
Combined ratio |
88.2% | 103.1% | 96.7% | 70.4% | 98.1% | 84.1% |
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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, Ireland, Singapore, the United
States, the United Kingdom, Switzerland and Germany. For the twelve months ended December 31, 2010,
Aspen reported gross written premiums of $2,076.8 million, net
income of $312.7 million and total
assets of $8.8 billion. Its operating subsidiaries have been assigned a rating of A (Strong) by
Standard & Poors, an A (Excellent) by A.M. Best and an A2 (Good) by Moodys Investors
Service. For more information about Aspen, please visit www.aspen.bm.
Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995:
This press release contains, and Aspens 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, do not believe, aim, project, anticipate, seek, will, 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; 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 acts of terrorism and related legislation
and acts of war; decreased demand for our insurance or reinsurance products and cyclical changes in
the insurance and reinsurance sectors; any changes in our reinsurers credit quality and the amount
and timing of reinsurance recoverables; changes in the availability, cost or quality of reinsurance
or retrocessional coverage; 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; changes in insurance and
reinsurance market conditions; increased competition on the basis of pricing, capacity, coverage
terms or other factors and the related demand and supply dynamics as contracts come up for renewal;
a decline in our operating subsidiaries ratings with Standard & Poors (S&P), A.M. Best or
Moodys Investor Service (Moodys); 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; changes in general economic conditions, including inflation, foreign
currency exchange rates, interest rates and other factors that could affect our investment
portfolio; the risk of a material decline in the value or liquidity of all or parts of our
investment portfolio; changes in our ability to exercise capital management initiatives 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 key personnel; 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 Aspens Annual Reports on Form 10-K as filed with
the U.S. Securities and Exchange Commission on February 26, 2010. 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 Aspens ultimate losses will remain
within the stated amount.
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Non-GAAP Financial Measures
In presenting Aspens 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 Aspens results of
operations in a manner that allows for a more complete understanding of the underlying trends in
Aspens 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 Aspens website
at www.aspen.bm.
(1) Annualized Operating Return on Average Equity (Operating ROE) 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 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 28 of Aspens financial supplement for a reconciliation of operating income to net income
and page 7 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 Aspens results of operations in a manner similar to how
management analyzes Aspens underlying business performance. Operating income should not be viewed
as a substitute for GAAP net income. Please see above and page 28 of Aspens financial supplement
for a reconciliation of operating income to net income. Aspens financial supplement can be
obtained from the Investor Relations section of Aspens 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 26 of Aspens financial supplement for a reconciliation
of diluted book value per share to basic book value per share. Aspens financial supplement can be
obtained from the Investor Relations section of Aspens website at www.aspen.bm.
(4) Diluted Operating Earnings Per Share and Basic Operating Earnings Per Share is a non-GAAP
financial measure. 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 28 for a reconciliation of diluted
and basic operating earnings per share to basic earnings per share. Aspens financial supplement
can be obtained from the Investor Relations section of Aspens website at www.aspen.bm.
-end-
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