Exhibit 99.2

 

		FINANCIAL SUPPLEMENT
		As of June 30, 2012
		Aspen Insurance Holdings Limited
		This financial supplement is for information purposes only. It should be read in conjunction with other documents filed or to be filed by Aspen Insurance Holdings Limited with the United States Securities and Exchange Commission.
		www.aspen.co
		Investor Contact:
		Aspen Insurance Holdings Limited
		Kerry Calaiaro, Senior Vice President, Investor Relations
		T: +1 646-502-1076
		email: kerry.calaiaro@aspen.co
		AHL: NYSE

 

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Table Of Contents

 

		Page
Basis of Presentation			1
Financial Highlights			2
Consolidated Statements of Operations - Quarterly Results			3
Consolidated Statements of Operations - Year to Date Results			4
Consolidated Balance Sheets			5
Earnings Per Share and Book Value Per Share			6
Return on Average Equity			7
Consolidated Underwriting Results by Operating Segment			8-9
Operating Segment - Quarterly Results			10-11
Written and Earned Premiums by Segment and Line of Business			12
Accident Year Loss Ratios			13-14
Consolidated Statements of Changes in Shareholders’ Equity			15
Consolidated Statements of Comprehensive Income			16
Consolidated Statements of Cash Flows			17
Reserves for Losses and Loss Adjustment Expenses			18
Reserves by Operating Segment			19
Prior Year Reserve Releases			20
Worldwide Natural Catastrophe Exposures: Major Peril Zones			21
Consolidated Investment Portfolio			22
Investment Analysis			23
Book Value Per Ordinary Share			24
Operating Income/(Loss) Reconciliation			25

 

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Basis of Presentation

Definitions and presentation: All financial information contained herein is unaudited except for information for the fiscal year ended December 31, 2011. Unless otherwise noted, all data is in U.S. dollars millions, except for per share amounts, percentages and ratio information.

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 this financial supplement.

Operating income (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, including net realized and unrealized gains and losses on interest rate swaps, and after-tax net foreign exchange gains or losses, including net realized and unrealized gains and losses on foreign exchange contracts.

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 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 page 25 for a reconciliation of operating income to net income.

Annualized Operating Return on Average Equity (“Operating ROE”) (a non-GAAP financial measure): Annualized Operating Return on Average Equity is calculated using operating income, as defined above, and average equity calculated as the arithmetic average on a monthly basis for the stated periods of shareholders’ equity excluding the aggregate value of the liquidation preferences net of issue expenses of our preference shares.

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 25 for a reconciliation of operating income to net income and page 7 for a reconciliation of average equity to closing shareholders’ equity.

Diluted Operating Earnings Per Share and Basic Operating Earnings Per Share (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 25 for a reconciliation of diluted and basic operating earnings per share to basic earnings per share.

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.

Underwriting ratios (GAAP financial measures): Aspen, along with others in the industry, uses underwriting ratios as measures of performance. The loss ratio is the ratio of net claims and claims adjustment expenses to net premiums earned. The acquisition expense ratio is the ratio of underwriting expenses (commissions, premium taxes, licenses and fees, as well as other underwriting expenses) to net premiums earned. The general and administrative expense ratio is the ratio of general and administrative expenses to net premiums earned. The combined ratio is the sum of the loss ratio, the acquisition expense ratio and the general and administrative expense ratio. These ratios are relative measurements that describe for every $100 of net premiums earned, the cost of losses and expenses, respectively. The combined ratio presents the total cost per $100 of earned premium. A combined ratio below 100% demonstrates underwriting profit; a combined ratio above 100% demonstrates underwriting loss.

GAAP combined ratios differ from U.S. statutory combined ratios primarily due to the deferral of certain third-party acquisition expenses for GAAP reporting purposes and the use of net premiums earned rather than net premiums written in the denominator when calculating the acquisition expense and the general and administrative expense ratios.

Accident Year Ratios (a non-GAAP financial measure): In addition to the underwriting ratios described above, management also uses accident year ratios to evaluate current underwriting performance. The accident year ratios exclude the effect of prior years’ premium adjustments and reserve developments. This ratio focuses on the relationship between current premiums earned and losses incurred related to the current period. Please see pages 13-14 for a reconciliation of accident year ratios to underwriting ratios calculated in accordance with U.S. GAAP.

 

1

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Financial Highlights

 

		Three Months Ended June 30,												Six Months Ended June 30,
(in US$ millions except for percentages, share and per share amounts)		2012				2011				Change				2012				2011				Change
Gross written premium		$	666.6			$	582.2				14.5%			$	1,448.7			$	1,253.5				15.6%
Net written premium		$	581.9			$	525.7				10.7%			$	1,215.4			$	1,035.3				17.4%
Net earned premium		$	513.4			$	459.8				11.7%			$	1,008.8			$	912.2				10.6%
Net income/(loss) after tax (1)		$	84.6			$	9.1				829.7%			$	163.3			$	(143.7)				NM
Operating income/(loss) after tax (1)		$	105.8			$	30.8				243.5%			$	176.3			$	(130.9)				NM
Net investment income		$	52.8			$	58.6				(9.9%)			$	105.2			$	114.1				(7.8%)
Earnings Per Share and Book Value Per Share
Basic earnings per ordinary share
Net income/(loss) adjusted for preference share dividend (1)		$	1.07			$	0.05				NM			$	2.10			$	(2.19)				NM
Operating income/(loss) adjusted for preference share dividend (1)		$	1.36			$	0.36				277.8%			$	2.28			$	(2.01)				NM
Diluted earnings per ordinary share
Net income/(loss) adjusted for preference share dividend (1)		$	1.03			$	0.05				NM			$	2.02			$	(2.19)				NM
Operating income/(loss) adjusted for preference share dividend (1)		$	1.32			$	0.35				277.1%			$	2.20			$	(2.01)				NM
Weighted average number of ordinary shares outstanding (in millions of shares)			71.304				70.792				0.7%				71.124				70.673				0.6%
Diluted weighted average number of ordinary shares outstanding (in millions of shares)			73.846				73.569				0.4%				73.844				70.673				4.5%
Book value per ordinary share (1)		$	41.41			$	38.64				7.2%			$	41.41			$	38.64				7.2%
Diluted book value per ordinary share (1)		$	40.01			$	37.24				7.4%			$	40.01			$	37.24				7.4%
Ordinary shares outstanding at June 30, 2012 and June 30, 2011 (in millions of shares)			70.687				70.833
Diluted ordinary shares outstanding at June 30, 2012 and June 30, 2011 (in millions of shares)			73.161				73.492
Underwriting Ratios
Loss ratio			51.1%				71.0%								54.1%				93.8%
Policy acquisition expense ratio			19.9%				18.9%								19.6%				18.4%
General, administrative and corporate expense ratio (1)			16.3%				15.4%								16.7%				14.6%
Expense ratio (1)			36.2%				34.3%								36.3%				33.0%
Combined ratio (1)			87.3%				105.3%								90.4%				126.8%
Return On Equity
Average equity (2)		$	2,849.4			$	2,766.1							$	2,837.1			$	2,767.3
Return on average equity
Net income/(loss) adjusted for preference share dividend (1)			2.7%				0.1%								5.3%				(5.6%)
Operating income/(loss) adjusted for preference share dividend (1)			3.4%				0.9%								5.7%				(5.1%)
Annualized return on average equity
Net income/(loss) (1)			10.8%				0.4%								10.6%				(11.2%)
Operating income/(loss) (1)			13.6%				3.6%								11.4%				(10.2%)

See pages 7, 24 and 25 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.

(1) In 2012, the Company adopted the provision of ASU 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.” Under the standard, the Company is required to expense the proportion of its general and administrative deferred acquisition costs not directly related to successful business acquisition. The application of this standard has resulted in a net $16.0 million write down of deferred acquisition costs through retained earnings brought forward and the restatement of our quarterly balance sheets from December 31, 2010 to December 31, 2011.

(2) Average equity excludes preference shares.

 

2

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Consolidated Statements of Operations - Quarterly

 

(in US$ millions except for percentages and per share amounts)		Q2 2012				Q1 2012				Q4 2011				Q3 2011				Q2 2011				Q1 2011
UNDERWRITING REVENUES
Gross written premiums		$	666.6			$	782.1			$	458.7			$	495.6			$	582.2			$	671.3
Premiums ceded			(84.7)				(148.6)				(27.5)				(33.0)				(56.5)				(161.7)
Net written premiums			581.9				633.5				431.2				462.6				525.7				509.6
Change in unearned premiums			(68.5)				(138.1)				58.2				24.3				(65.9)				(57.2)
Net earned premiums			513.4				495.4				489.4				486.9				459.8				452.4
UNDERWRITING EXPENSES
Losses and loss adjustment expenses			262.1				284.0				394.5				306.2				326.4				528.9
Policy acquisition expenses			102.0				96.1				85.5				93.4				86.7				81.4
General, administrative and corporate expenses (1)			83.5				84.8				79.3				72.1				70.7				62.5
Total underwriting expenses			447.6				464.9				559.3				471.7				483.8				672.8
Underwriting income/(loss) including corporate expenses			65.8				30.5				(69.9)				15.2				(24.0)				(220.4)
OTHER OPERATING REVENUE AND EXPENSES
Net investment income			52.8				52.4				54.2				57.3				58.6				55.5
Interest expense			(7.7)				(7.7)				(7.7)				(7.7)				(7.7)				(7.7)
Other income/(expense)			2.9				(0.3)				3.6				(9.1)				6.8				(8.1)
Total other operating revenue			48.0				44.4				50.1				40.5				57.7				39.7
OPERATING INCOME/(LOSS) BEFORE TAX			113.8				74.9				(19.8)				55.7				33.7				(180.7)
Net realized and unrealized exchange (losses)/gains (2)			(13.0)				3.7				2.3				0.3				(7.7)				2.9
Net realized and unrealized investment (losses)/gains (3)			(10.0)				5.5				6.0				(32.9)				(15.7)				8.5
INCOME/(LOSS) BEFORE TAX			90.8				84.1				(11.5)				23.1				10.3				(169.3)
Income tax (expense)/recovery			(6.2)				(5.4)				23.9				(2.0)				(1.2)				16.5
NET INCOME/(LOSS) AFTER TAX			84.6				78.7				12.4				21.1				9.1				(152.8)
Dividends paid on ordinary shares			(12.2)				(10.6)				(10.7)				(10.6)				(10.6)				(10.6)
Dividends paid on preference shares			(8.3)				(5.7)				(5.7)				(5.7)				(5.7)				(5.7)
Proportion due to non-controlling interest			0.2				0.1				(0.1)				(0.3)				0.2				0.2
Retained income/(loss)		$	64.3			$	62.5			$	(4.1)			$	4.5			$	(7.0)			$	(168.9)
Components of net income/(loss) after tax
Operating income/(loss)		$	105.8			$	70.5			$	5.0			$	55.4			$	30.8			$	(161.7)
Net realized and unrealized exchange (losses)/gains after tax (2)			(10.9)				3.0				3.7				(0.8)				(4.8)				1.8
Net realized and unrealized investment (losses)/gains after tax (3)			(10.3)				5.2				3.7				(33.5)				(16.9)				7.1
NET INCOME/(LOSS) AFTER TAX		$	84.6			$	78.7			$	12.4			$	21.1			$	9.1			$	(152.8)
Loss ratio			51.1%				57.3%				80.6%				62.9%				71.0%				116.9%
Policy acquisition expense ratio			19.9%				19.4%				17.5%				19.2%				18.9%				18.0%
General, administrative and corporate expense ratio			16.3%				17.1%				16.2%				14.8%				15.4%				13.8%
Expense ratio			36.2%				36.5%				33.7%				34.0%				34.3%				31.8%
Combined ratio			87.3%				93.8%				114.3%				96.9%				105.3%				148.7%
Basic earnings/(losses) per share (4)		$	1.07			$	1.03			$	0.09			$	0.22			$	0.05			$	(2.25)
Diluted earnings(losses) per share (4)		$	1.03			$	0.99			$	0.09			$	0.21			$	0.05			$	(2.25)
Annualized return on average equity
Net income/(loss)			10.8%				10.4%				0.8%				2.4%				0.4%				(22.8%)
Operating income/(loss)			13.6%				9.2%				-				7.2%				3.6%				(24.0%)

See pages 7, 24 and 25 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.

(1) In 2012, the Company adopted the provision of ASU 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.” Under the standard, the Company is required to expense the proportion of its general and administrative deferred acquisition costs not directly related to successful business acquisition. The application of this standard has resulted in a net $16.0 million write down of deferred acquisition costs through retained earnings brought forward and the restatement of our quarterly balance sheets from December 31, 2010 to December 31, 2011.

(2) Includes the net realized and unrealized gains/(losses) from foreign exchange contracts.

(3) Includes the net realized and unrealized gains/(losses) from interest rate swaps.

(4) Adjusted for preference share dividend.

 

3

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Consolidated Statements of Operations - Year To Date

 

		Six Months Ended June 30,
(in US$ millions except for percentages)		2012				2011				2010
UNDERWRITING REVENUES
Gross written premiums			$    1,448.7				$    1,253.5				$    1,248.2
Premiums ceded			(233.3)				(218.2)				(129.3)
Net written premiums			$    1,215.4				$    1,035.3				$    1,118.9
Change in unearned premiums			(206.6)				(123.1)				(171.4)
Net earned premiums			$    1,008.8				$       912.2				$       947.5
UNDERWRITING EXPENSES
Losses and loss adjustment expenses			546.1				855.3				655.5
Policy acquisition expenses			198.1				168.1				162.3
General, administrative and corporate expenses (1)			168.3				133.2				115.1
Total underwriting expenses			912.5				1,156.6				932.9
Underwriting income/(loss) including corporate expenses			96.3				(244.4)				14.6
OTHER OPERATING REVENUE AND EXPENSES
Net investment income			105.2				114.1				116.9
Interest expense			(15.4)				(15.4)				(7.8)
Other income/(expense)			2.6				(1.3)				0.8
Total other operating revenue			92.4				97.4				109.9
OPERATING INCOME/(LOSS) BEFORE TAX			188.7				(147.0)				124.5
Net realized and unrealized exchange (losses) (2)			(9.3)				(4.8)				(1.1)
Net realized and unrealized investment (losses)/gains (3)			(4.5)				(7.2)				17.9
INCOME/(LOSS) BEFORE TAX			174.9				(159.0)				141.3
Income tax (expense)/recovery			(11.6)				15.3				(14.1)
NET INCOME/(LOSS) AFTER TAX			163.3				(143.7)				127.2
Dividends paid on ordinary shares			(22.8)				(21.2)				(23.5)
Dividends paid on preference shares			(14.0)				(11.4)				(11.4)
Proportion due to non-controlling interest			0.3				0.4				-
Retained income/(loss)			$       126.8				$    (175.9)				$         92.3
Components of net income after tax
Operating income/(loss)			$       176.3				$    (130.9)				$       111.1
Net realized and unrealized exchange (losses) after tax (2)			(7.9)				(3.0)				(0.3)
Net realized and unrealized investment (losses)/gains after tax (3)			(5.1)				(9.8)				16.4
NET INCOME/(LOSS) AFTER TAX			$       163.3				$    (143.7)				$       127.2
Loss ratio			54.1%				93.8%				69.2%
Policy acquisition expense ratio			19.6%				18.4%				17.1%
General, administrative and corporate expense ratio			16.7%				14.6%				12.1%
Expense ratio			36.3%				33.0%				29.2%
Combined ratio			90.4%				126.8%				98.4%

See pages 7, 24 and 25 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.

(1) In 2012, the Company adopted the provision of ASU 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.” Under the standard, the Company is required to expense the proportion of its general and administrative deferred acquisition costs not directly related to successful business acquisition. The application of this standard has resulted in a net $16.0 million write down of deferred acquisition costs through retained earnings brought forward and the restatement of our quarterly balance sheets from December 31, 2010 to December 31, 2011.

(2) Includes the net realized and unrealized gains/(losses) from foreign exchange contracts.

(3) Includes the net realized and unrealized gains/(losses) from interest rate swaps.

 

4

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Consolidated Balance Sheets

 

(in US$ millions except for per share amounts)		June 30, 2012				March 31, 2012				December 31, 2011				September 30, 2011				June 30, 2011				March 31, 2011				December 31, 2010
ASSETS
Investments
Fixed income maturities		$	5,791.2			$	5,842.1			$	5,820.2			$	5,992.8			$	5,972.8			$	5,896.1			$	5,766.6
Equity securities			187.4				188.1				179.5				163.8				178.1				173.5				-
Other investments			33.1				33.1				33.1				32.3				30.0				30.1				30.0
Short-term investments			503.6				433.8				302.3				295.9				202.8				187.6				289.7
Total investments			6,515.3				6,497.1				6,335.1				6,484.8				6,383.7				6,287.3				6,086.3
Cash and cash equivalents			1,309.0				1,173.3				1,239.1				1,038.8				1,074.1				1,116.9				1,179.1
Reinsurance recoverables
Unpaid losses			457.4				455.4				426.6				357.7				359.3				334.0				279.9
Ceded unearned premiums			190.8				175.3				87.8				129.9				146.2				167.4				62.4
Receivables
Underwriting premiums			1,063.3				1,061.2				894.4				957.2				1,054.3				940.0				821.7
Other			75.1				70.2				69.7				69.3				70.0				62.8				67.9
Funds withheld			91.0				86.9				90.7				65.1				81.9				86.3				83.3
Deferred policy acquisition costs (1)			233.2				215.3				184.5				192.1				191.0				178.2				155.1
Derivatives at fair value			3.3				0.9				1.3				5.8				5.7				7.4				6.8
Receivable for securities sold			9.5				2.0				1.1				0.5				21.2				10.6				0.2
Office properties and equipment			56.9				58.5				53.9				49.5				45.0				38.6				34.8
Income tax receivable			15.7				20.3				19.5				2.5				19.9				5.2				-
Other assets			39.3				31.1				36.8				31.2				30.2				29.4				21.9
Intangible assets			19.5				19.7				20.0				20.3				20.5				20.7				21.0
Total assets		$	10,079.3			$	9,867.2			$	9,460.5			$	9,404.7			$	9,503.0			$	9,284.8			$	8,820.4
LIABILITIES
Insurance reserves
Losses and loss adjustment expenses		$	4,556.4			$	4,585.7			$	4,525.2			$	4,399.4			$	4,391.7			$	4,229.3			$	3,820.5
Unearned premiums			1,223.8				1,146.3				916.1				1,014.5				1,086.2				1,028.3				859.0
Total insurance reserves			5,780.2				5,732.0				5,441.3				5,413.9				5,477.9				5,257.6				4,679.5
Payables
Reinsurance premiums			109.5				192.2				155.8				135.2				181.6				226.9				113.7
Taxation			22.5				22.9				18.5				35.2				49.1				45.3				60.2
Accrued expenses and other payables			230.3				208.9				187.8				186.0				204.8				214.5				238.0
Liabilities under derivative contracts			2.7				1.3				2.1				-				-				3.5				-
Total payables			365.0				425.3				364.2				356.4				435.5				490.2				411.9
Long-term debt			499.0				499.0				499.0				498.9				498.9				498.8				498.8
Total liabilities			6,644.2				6,656.3				6,304.5				6,269.2				6,412.3				6,246.6				5,590.2
SHAREHOLDERS’ EQUITY
Ordinary shares			0.1				0.1				0.1				0.1				0.1				0.1				0.1
Non-controlling interest			0.1				0.3				0.4				0.3				0.1				0.3				0.5
Preference shares			-				-				-				-				-				-				-
Additional paid-in capital			1,523.2				1,390.8				1,385.0				1,381.8				1,388.2				1,388.2				1,388.3
Retained earnings (1)			1,468.4				1,404.1				1,341.6				1,345.6				1,341.1				1,348.1				1,517.0
Accumulated other comprehensive income, net of taxes			443.3				415.6				428.9				407.7				361.2				301.5				324.3
Total shareholders’ equity			3,435.1				3,210.9				3,156.0				3,135.5				3,090.7				3,038.2				3,230.2
Total liabilities and shareholders’ equity		$	10,079.3			$	9,867.2			$	9,460.5			$	9,404.7			$	9,503.0			$	9,284.8			$	8,820.4
Book value per ordinary share		$	41.41			$	39.96			$	39.66			$	39.41			$	38.64			$	37.96			$	40.80
Book value per diluted ordinary share		$	40.01			$	38.58			$	38.21			$	38.07			$	37.24			$	36.48			$	38.74

See pages 7, 24 and 25 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.

(1) In 2012, the Company adopted the provision of ASU 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.” Under the standard, the Company is required to expense the proportion of its general and administrative deferred acquisition costs not directly related to successful business acquisition. The application of this standard has resulted in a net $16.0 million write down of deferred acquisition costs through retained earnings brought forward and the restatement of our quarterly balance sheets from December 31, 2010 to December 31, 2011.

 

5

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Earnings Per Share and Book Value Per Share

 

		Three Months Ended								Six Months Ended
(in US$ except for number of shares)		June 30, 2012				June 30, 2011 (1)				June 30, 2012				June 30, 2011 (1)
Basic earnings per ordinary share
Net income/(loss) adjusted for preference share dividend			$    1.07				$    0.05				$    2.10				$  (2.19)
Operating income/(loss) adjusted for preference share dividend			$    1.36				$    0.36				$    2.28				$  (2.01)
Diluted earnings per ordinary share
Net income/(loss) adjusted for preference share dividend			$    1.03				$    0.05				$    2.02				$  (2.19)
Operating income/(loss) adjusted for preference share dividend			$    1.32				$    0.35				$    2.20				$  (2.01)
Weighted average number of ordinary shares outstanding (in millions) (2)			71.304				70.792				71.124				70.673
Weighted average number of ordinary shares outstanding and dilutive potential ordinary shares (in millions) (2)			73.846				73.569				73.844				70.673
Book value per ordinary share			$  41.41				$  38.64				$  41.41				$  38.64
Diluted book value per ordinary share			$  40.01				$  37.24				$  40.01				$  37.24
Ordinary shares outstanding at end of the period (in millions)			70.687				70.833				70.687				70.833
Ordinary shares outstanding and dilutive potential ordinary shares at end of the period (in millions)			73.161				73.492				73.161				73.492

(1) In 2012, the Company adopted the provision of ASU 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.” Under the standard, the Company is required to expense the proportion of its general and administrative deferred acquisition costs not directly related to successful business acquisition. The application of this standard has resulted in a net $16.0 million write down of deferred acquisition costs through retained earnings brought forward and the restatement of our quarterly balance sheets from December 31, 2010 to December 31, 2011.

(2) The basic and diluted number of ordinary shares for the six months ended June 30, 2011 is the same, as the inclusion of dilutive securities in a loss-making period would be anti-dilutive.

See pages 7, 24 and 25 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.

 

6

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Return On Average Equity

 

		Three Months Ended								Six Months Ended
(in US$ millions except for percentages)		June 30, 2012				June 30, 2011				June 30, 2012				June 30, 2011
Average shareholders’ equity (1)			$3,323.0				$3,119.7				$3,259.3				$3,120.9
Average preference shares			(473.6)				(353.6)				(422.2)				(353.6)
Average equity (2)			$2,849.4				$2,766.1				$2,837.1				$2,767.3
Return on average equity:
Net income/(loss) adjusted for preference share dividend			2.7%				0.1%				5.3%				(5.6%)
Operating income/(loss) adjusted for preference share dividend			3.4%				0.9%				5.7%				(5.1%)
Annualized return on average equity:
Net income/(loss)			10.8%				0.4%				10.6%				(11.2%)
Operating income/(loss)			13.6%				3.6%				11.4%				(10.2%)
Components of return on average equity:
Return on average equity from underwriting activity (3)			2.3%				(0.9%)				3.4%				(8.8%)
Return on average equity from investment and other activity (4)			1.4%				1.9%				2.8%				3.1%
Pre-tax operating income/(loss) return on average equity			3.7%				1.0%				6.2%				(5.7%)
Post-tax operating income/(loss) return on average equity (5)			3.4%				0.9%				5.7%				(5.1%)

See pages 24 and 25 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.

(1) In 2012, the Company adopted the provision of ASU 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.” Under the standard, the Company is required to expense the proportion of its general and administrative deferred acquisition costs not directly related to successful business acquisition. The application of this standard has resulted in a net $16.0 million write down of deferred acquisition costs through retained earnings brought forward and the restatement of our quarterly balance sheets from December 31, 2010 to December 31, 2011.

(2) As defined on page 1 and including accumulated other comprehensive income.

(3) Calculated by using underwriting income.

(4) Calculated by using total other operating revenue and other income/(expense) adjusted for preference share dividends.

(5) Calculated by using operating income after-tax adjusted for preference share dividends.

 

7

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Consolidated Underwriting Results by Operating Segment

 

		Three Months Ended June 30, 2012												Three Months Ended June 30, 2011
(in US$ millions except for percentages)		Reinsurance				Insurance				Total				Reinsurance				Insurance				Total
Gross written premiums			$299.8				$366.8				$666.6				$288.0				$294.2				$582.2
Net written premiums			276.8				305.1				581.9				256.9				268.8				525.7
Gross earned premiums			300.8				279.9				580.7				290.7				234.1				524.8
Net earned premiums			282.0				231.4				513.4				268.0				191.8				459.8
Losses and loss adjustment expenses			133.7				128.4				262.1				206.3				120.1				326.4
Policy acquisition expenses			59.3				42.7				102.0				49.1				37.6				86.7
General and administrative expenses (1)			30.0				42.1				72.1				26.9				29.8				56.7
Underwriting income/(loss)			$  59.0				$  18.2				$  77.2				$(14.3)				$    4.3				$(10.0)
Net investment income											52.8												58.6
Net realized and unrealized investment (losses) (2)											(10.0)												(15.7)
Corporate (expenses)											(11.4)												(14.0)
Other income											2.9												6.8
Interest (expenses)											(7.7)												(7.7)
Net realized and unrealized foreign exchange (losses) (3)											(13.0)												(7.7)
Income before income taxes											$  90.8												$  10.3
Income tax (expense)											(6.2)												(1.2)
Net income											$  84.6												$    9.1
Ratios
Loss ratio			47.4%				55.5%				51.1%				77.0%				62.6%				71.0%
Policy acquisition expense ratio			21.0%				18.5%				19.9%				18.3%				19.6%				18.9%
General and administrative expense ratio (1)(4)			10.6%				18.2%				16.3%				10.0%				15.5%				15.4%
Expense ratio			31.6%				36.7%				36.2%				28.3%				35.1%				34.3%
Combined ratio			79.0%				92.2%				87.3%				105.3%				97.7%				105.3%

(1) In 2012, the Company adopted the provision of ASU 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.” Under the standard, the Company is required to expense the proportion of its general and administrative deferred acquisition costs not directly related to successful business acquisition. The application of this standard has resulted in a net $16.0 million write down of deferred acquisition costs through retained earnings brought forward and the restatement of our quarterly balance sheets from December 31, 2010 to December 31, 2011.

(2) Includes the net realized and unrealized gains/(losses) from interest rate swaps.

(3) Includes the net realized and unrealized gains/(losses) from foreign exchange contracts.

(4) The total group general and administrative expense ratio includes the impact from corporate expenses.

 

8

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Consolidated Underwriting Results by Operating Segment

 

		Six Months Ended June 30, 2012												Six Months Ended June 30, 2011
(in US$ millions except for percentages)		Reinsurance				Insurance				Total				Reinsurance				Insurance				Total
Gross written premiums			$774.0				$674.7				$1,448.7				$  725.1				$528.4				$1,253.5
Net written premiums			706.3				509.1				1,215.4				645.3				390.0				1,035.3
Gross earned premiums			591.0				546.8				1,137.8				575.5				458.1				1,033.6
Net earned premiums			553.0				455.8				1,008.8				540.0				372.2				912.2
Losses and loss adjustment expenses			269.3				276.8				546.1				616.4				238.9				855.3
Policy acquisition expenses			111.1				87.0				198.1				98.5				69.6				168.1
General and administrative expenses (1)			59.0				83.5				142.5				51.9				59.6				111.5
Underwriting income/(loss)			$113.6				$    8.5				$   122.1				$(226.8)				$    4.1				$ (222.7)
Net investment income											105.2												114.1
Net realized and unrealized investment (losses) (2)											(4.5)												(7.2)
Corporate (expenses)											(25.8)												(21.7)
Other income/(expenses)											2.6												(1.3)
Interest (expense)											(15.4)												(15.4)
Net realized and unrealized foreign exchange (losses) (3)											(9.3)												(4.8)
Income/(loss) before income tax											$   174.9												$ (159.0)
Income tax (expense)/recovery											(11.6)												15.3
Net income/(loss)											$   163.3												$ (143.7)
Ratios
Loss ratio			48.7%				60.7%				54.1%				114.1%				64.2%				93.8%
Policy acquisition expense ratio			20.1%				19.1%				19.6%				18.2%				18.7%				18.4%
General and administrative expense ratio (1)(4)			10.7%				18.3%				16.7%				9.6%				16.0%				14.6%
Expense ratio			30.8%				37.4%				36.3%				27.8%				34.7%				33.0%
Combined ratio			79.5%				98.1%				90.4%				141.9%				98.9%				126.8%

(1) In 2012, the Company adopted the provision of ASU 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.” Under the standard, the Company is required to expense the proportion of its general and administrative deferred acquisition costs not directly related to successful business acquisition. The application of this standard has resulted in a net $16.0 million write down of deferred acquisition costs through retained earnings brought forward and the restatement of our quarterly balance sheets from December 31, 2010 to December 31, 2011.

(2) Includes the net realized and unrealized gains/(losses) from interest rate swaps.

(3) Includes the net realized and unrealized gains/(losses) from foreign exchange contracts.

(4) The total group general and administrative expense ratio includes the impact from corporate expenses.

 

9

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Reinsurance Segment - Quarterly Results

 

(in US$ millions except for percentages)		Q2 2012				Q1 2012				Q4 2011				Q3 2011				Q2 2011				Q1 2011
Gross written premiums			$299.8				$474.2				$186.3				$276.1				$288.0				$437.1
Net written premiums			276.8				429.5				182.3				270.5				256.9				388.4
Gross earned premiums			300.8				290.2				311.9				303.2				290.7				284.8
Net earned premiums			282.0				271.0				288.7				279.6				268.0				272.0
Net losses and loss adjustment expenses			133.7				135.6				278.1				188.8				206.3				410.1
Policy acquisition expenses			59.3				51.8				47.4				51.8				49.1				49.4
General and administrative expenses (1)			30.0				29.0				33.2				26.8				26.9				25.0
Underwriting income/(loss)			$59.0				$54.6				$(70.0)				$12.2				$(14.3)				$(212.5)
Ratios
Loss ratio			47.4%				50.0%				96.3%				67.5%				77.0%				150.8%
Policy acquisition expense ratio			21.0%				19.1%				16.4%				18.5%				18.3%				18.2%
General and administrative expense ratio			10.6%				10.7%				11.5%				9.6%				10.0%				9.2%
Expense ratio			31.6%				29.8%				27.9%				28.1%				28.3%				27.4%
Combined ratio			79.0%				79.8%				124.2%				95.6%				105.3%				178.2%

(1) In 2012, the Company adopted the provision of ASU 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.” Under the standard, the Company is required to expense the proportion of its general and administrative deferred acquisition costs not directly related to successful business acquisition. The application of this standard has resulted in a net $16.0 million write down of deferred acquisition costs through retained earnings brought forward and the restatement of our quarterly balance sheets from December 31, 2010 to December 31, 2011.

 

 

10

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Insurance Segment - Quarterly Results

 

(in US$ millions except for percentages)		Q2 2012				Q1 2012				Q4 2011				Q3 2011				Q2 2011				Q1 2011
Gross written premiums			$366.8				$307.9				$272.4				$219.5				$294.2				$234.2
Net written premiums			305.1				204.0				248.9				192.1				268.8				121.2
Gross earned premiums			279.9				266.9				245.7				246.7				234.1				224.0
Net earned premiums			231.4				224.4				200.7				207.3				191.8				180.4
Net losses and loss adjustment expenses			128.4				148.4				116.4				117.4				120.1				118.8
Policy acquisition expenses			42.7				44.3				38.1				41.6				37.6				32.0
General and administrative expenses (1)			42.1				41.4				33.5				34.9				29.8				29.8
Underwriting income/(loss)			$18.2				$(9.7)				$12.7				$13.4				$4.3				$(0.2)
Ratios
Loss ratio			55.5%				66.1%				58.0%				56.6%				62.6%				65.9%
Policy acquisition expense ratio			18.5%				19.7%				19.0%				20.1%				19.6%				17.7%
General and administrative expense ratio			18.2%				18.4%				16.7%				16.8%				15.5%				16.5%
Expense ratio			36.7%				38.1%				35.7%				36.9%				35.1%				34.2%
Combined ratio			92.2%				104.2%				93.7%				93.5%				97.7%				100.1%

(1) In 2012, the Company adopted the provision of ASU 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.” Under the standard, the Company is required to expense the proportion of its general and administrative deferred acquisition costs not directly related to successful business acquisition. The application of this standard has resulted in a net $16.0 million write down of deferred acquisition costs through retained earnings brought forward and the restatement of our quarterly balance sheets from December 31, 2010 to December 31, 2011.

 

 

11

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Written and Earned Premiums by Segment and Line of Business

(in US$ millions)

 

Gross Written Premium		Q2 2012				Q1 2012				Q4 2011				Q3 2011				Q2 2011				Q1 2011
Reinsurance
Property Catastrophe Reinsurance			$91.9				$152.9				$9.4				$53.5				$93.0				$151.0
Other Property Reinsurance			81.0				78.5				64.8				78.6				70.9				64.8
Casualty Reinsurance			66.6				138.9				42.5				83.4				44.6				138.6
Specialty Reinsurance			60.3				103.9				69.6				60.6				79.5				82.7
Total Reinsurance			$299.8				$474.2				$186.3				$276.1				$288.0				$437.1
Insurance
Property Insurance			$113.0				$73.6				$65.7				$42.5				$73.6				$38.6
Casualty Insurance			51.8				35.0				46.6				38.1				32.9				19.6
Marine, Energy and Transportation Insurance			133.7				149.6				107.6				70.5				130.3				123.8
Financial and Professional Lines Insurance			68.3				49.7				52.5				68.4				57.4				52.2
Total Insurance			$366.8				$307.9				$272.4				$219.5				$294.2				$234.2
Total Gross Written Premiums			$666.6				$782.1				$458.7				$495.6				$582.2				$671.3
Net Written Premium
Reinsurance
Property Catastrophe Reinsurance			$76.0				$123.5				$9.2				$53.5				$69.6				$116.1
Other Property Reinsurance			76.8				64.8				61.0				73.8				63.5				53.3
Casualty Reinsurance			66.5				137.3				42.5				82.6				44.3				136.4
Specialty Reinsurance			57.5				103.9				69.6				60.6				79.5				82.6
Total Reinsurance			$276.8				$429.5				$182.3				$270.5				$256.9				$388.4
Insurance
Property Insurance			$101.8				$40.0				$58.7				$31.2				$65.2				$1.6
Casualty Insurance			40.9				26.4				34.7				31.2				24.9				10.5
Marine, Energy and Transportation Insurance			103.4				140.7				107.5				59.8				121.5				98.8
Financial and Professional Lines Insurance			59.0				(3.1)				48.0				69.9				57.2				10.3
Total Insurance			$305.1				$204.0				$248.9				$192.1				$268.8				$121.2
Total Net Written Premiums			$581.9				$633.5				$431.2				$462.6				$525.7				$509.6
Net Earned Premium
Reinsurance
Property Catastrophe Reinsurance			$60.8				$62.9				$60.4				$52.1				$58.5				$71.6
Other Property Reinsurance			68.2				68.2				70.0				64.4				57.0				60.1
Casualty Reinsurance			88.1				66.9				75.7				95.3				75.7				82.4
Specialty Reinsurance			64.9				73.0				82.6				67.8				76.8				57.9
Total Reinsurance			$282.0				$271.0				$288.7				$279.6				$268.0				$272.0
Insurance
Property Insurance			$49.6				$42.4				$38.8				$28.0				$29.1				$28.2
Casualty Insurance			31.0				27.9				24.6				25.4				26.5				25.4
Marine, Energy and Transportation Insurance			110.9				102.6				100.4				96.6				99.2				93.3
Financial and Professional Lines Insurance			39.9				51.5				36.9				57.3				37.0				33.5
Total Insurance			$231.4				$224.4				$200.7				$207.3				$191.8				$180.4
Total Net Earned Premiums			$513.4				$495.4				$489.4				$486.9				$459.8				$452.4

 

12

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Accident Year Ratios

 

		Three Months Ended June 30, 2012												Three Months Ended June 30, 2011
		Reinsurance				Insurance				Total				Reinsurance				Insurance				Total
Before Accident Year Adjustment
Loss ratio			47.4%				55.5%				51.1%				77.0%				62.6%				71.0%
Policy acquisition expense ratio			21.0%				18.5%				19.9%				18.3%				19.6%				18.9%
General and administrative expense ratio (1)(2)			10.6%				18.2%				16.3%				10.0%				15.5%				15.4%
Expense ratio			31.6%				36.7%				36.2%				28.3%				35.1%				34.3%
Combined ratio			79.0%				92.2%				87.3%				105.3%				97.7%				105.3%
Accident Year Adjustment
Loss ratio			8.8%				7.6%				8.4%				10.6%				2.4%				7.1%
Policy acquisition expense ratio			0.7%				-				0.3%				(0.3)%				-				(0.1)%
General and administrative expense ratio (1)			0.8%				0.4%				0.8%				0.1%				(0.3)%				-
Expense ratio			1.5%				0.4%				1.1%				(0.2)%				(0.3)%				(0.1)%
Combined ratio			10.3%				8.0%				9.5%				10.4%				2.1%				7.0%
Accident Year Ratios
Current accident year loss ratio			56.2%				63.1%				59.5%				87.6%				65.0%				78.1%
Policy acquisition expense ratio			21.7%				18.5%				20.2%				18.0%				19.6%				18.8%
General and administrative expense ratio (1)			11.4%				18.6%				17.1%				10.1%				15.2%				15.4%
Expense ratio			33.1%				37.1%				37.3%				28.1%				34.8%				34.2%
Combined ratio			89.3%				100.2%				96.8%				115.7%				99.8%				112.3%

(1) The total group general and administrative expense ratio includes the impact from corporate expenses.

(2) In 2012, the Company adopted the provision of ASU 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.” Under the standard, the Company is required to expense the proportion of its general and administrative deferred acquisition costs not directly related to successful business acquisition. The application of this standard has resulted in a net $16.0 million write down of deferred acquisition costs through retained earnings brought forward and the restatement of our quarterly balance sheets from December 31, 2010 to December 31, 2011.

 

13

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Accident Year Loss Ratios

 

		Six Months Ended June 30, 2012												Six Months Ended June 30, 2011
		Reinsurance				Insurance				Total				Reinsurance				Insurance				Total
Before Accident Year Adjustment
Loss ratio			48.7%				60.7%				54.1%				114.1%				64.2%				93.8%
Policy acquisition expense ratio			20.1%				19.1%				19.6%				18.2%				18.7%				18.4%
General and administrative expense ratio (1)(2)			10.7%				18.3%				16.7%				9.6%				16.0%				14.6%
Expense ratio			30.8%				37.4%				36.3%				27.8%				34.7%				33.0%
Combined ratio			79.5%				98.1%				90.4%				141.9%				98.9%				126.8%
Accident Year Adjustment
Loss ratio			10.1%				6.9%				8.7%				9.6%				1.9%				6.3%
Policy acquisition expense ratio			0.4%				0.1%				0.2%				(0.8)%				-				(0.4)%
General and administrative expense ratio (1)			0.5%				0.5%				0.6%				0.1%				(0.1)%				-
Expense ratio			0.9%				0.6%				0.8%				(0.7)%				(0.1)%				(0.4)%
Combined ratio			11.0%				7.5%				9.5%				8.9%				1.8%				5.9%
Accident Year Ratios
Current accident year loss ratio			58.8%				67.6%				62.8%				123.7%				66.1%				100.1%
Policy acquisition expense ratio			20.5%				19.2%				19.8%				17.4%				18.7%				18.0%
General and administrative expense ratio (1)			11.2%				18.8%				17.3%				9.7%				15.9%				14.6%
Expense ratio			31.7%				38.0%				37.1%				27.1%				34.6%				32.6%
Combined ratio			90.5%				105.6%				99.9%				150.8%				100.7%				132.7%

(1) The total group general and administrative expense ratio includes the impact from corporate expenses.

(2) In 2012, the Company adopted the provision of ASU 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.” Under the standard, the Company is required to expense the proportion of its general and administrative deferred acquisition costs not directly related to successful business acquisition. The application of this standard has resulted in a net $16.0 million write down of deferred acquisition costs through retained earnings brought forward and the restatement of our quarterly balance sheets from December 31, 2010 to December 31, 2011.

 

14

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Consolidated Statements of Changes in Shareholders’ Equity

 

		Six Months Ended June 30,
(in US$ millions)		2012				2011
Ordinary shares
Beginning and end of period			$0.1				$0.1
Preference shares
Beginning and end of period			-				-
Non-Controlling Interest
Beginning of period			0.4				0.5
Change in non-controlling interest for the period			(0.3)				(0.4)
End of period			0.1				0.1
Additional paid-in capital
Beginning of period			1,385.0				1,388.3
New shares issued			2.0				0.5
Ordinary shares repurchased			(26.8)				(1.7)
Preference shares issued			154.5				-
Share-based compensation			8.5				1.1
End of period			1,523.2				1,388.2
Retained earnings
Beginning of period (1)			1,341.6				1,517.0
Net income/(loss) for the period (1)			163.3				(143.7)
Dividends paid on ordinary and preference shares			(36.8)				(32.6)
Proportion due to non-controlling interest			0.3				0.4
End of period			1,468.4				1,314.1
Accumulated other comprehensive income:
Cumulative foreign currency translation adjustments, net of taxes
Beginning of period			124.2				113.4
Change for the period			(10.9)				17.7
End of period			113.3				131.1
Loss on derivatives
Beginning of period			(0.7)				(1.0)
Reclassification to interest payable			0.1				0.1
End of period			(0.6)				(0.9)
Unrealized appreciation/(depreciation) on investments, net of taxes
Beginning of period			305.4				211.9
Change for the period			25.2				19.1
End of period			330.6				231.0
Total accumulated other comprehensive income			443.3				361.2
Total shareholders’ equity			$3,435.1				$3,090.7

(1) In 2012, the Company adopted the provision of ASU 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.” Under the standard, the Company is required to expense the proportion of its general and administrative deferred acquisition costs not directly related to successful business acquisition. The application of this standard has resulted in a net $16.0 million write down of deferred acquisition costs through retained earnings brought forward and the restatement of our quarterly balance sheets from December 31, 2010 to December 31, 2011.

 

15

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Consolidated Statements of Comprehensive Income

 

		Three Months Ended June 30,								Six Months Ended June 30,
(in US$ millions)		2012				2011				2012				2011
Net income/(loss) (1)			$  84.6				$  9.1				$163.3				$(143.7)
Other comprehensive income/(loss), net of taxes:
Available for sale investments:
Reclassification adjustment for net realized (gains) included in net income			1.2				(1.4)				0.3				(8.4)
Change in net unrealized gains and losses on available for sale securities held			35.8				49.0				24.9				27.5
Loss on derivatives reclassified to interest expense			0.1				-				0.1				0.1
Change in foreign currency translation adjustment			(9.4)				12.1				(10.9)				17.7
Other comprehensive income			27.7				59.7				14.4				36.9
Comprehensive income/(loss)			$112.3				$68.8				$177.7				$(106.8)

(1) In 2012, the Company adopted the provision of ASU 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.” Under the standard, the Company is required to expense the proportion of its general and administrative deferred acquisition costs not directly related to successful business acquisition. The application of this standard has resulted in a net $16.0 million write down of deferred acquisition costs through retained earnings brought forward and the restatement of our quarterly balance sheets from December 31, 2010 to December 31, 2011.

 

16

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Condensed Consolidated Statements of Cash Flows

 

		Three Months Ended June 30,								Six Months Ended June 30,
(in US$ millions)		2012				2011				2012				2011
Net cash from operating activities			$     60.2				$     39.3				$   159.6				$   194.0
Net cash (used in) investing activities			(23.3)				(65.0)				(179.6)				(279.8)
Net cash (used in) financing activities			107.9				(16.3)				92.9				(33.8)
Effect of exchange rate movements on cash and cash equivalents			(9.1)				(0.8)				(3.0)				14.6
Increase in cash and cash equivalents			135.7				(42.8)				69.9				(105.0)
Cash at beginning of period			1,173.3				1,116.9				1,239.1				1,179.1
Cash at end of period			$1,309.0				$1,074.1				$1,309.0				$1,074.1

 

17

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Reserves for Losses and Loss Adjustment Expenses

 

(in US$ millions)		For the Six Months Ended June 30, 2012				For the Twelve Months Ended December 31, 2011
Provision for losses and loss adjustment expenses at the start of the period			$4,525.2				$3,820.5
Reinsurance recoverables			(426.6)				(279.9)
Net loss and loss adjustment expenses at the start of the period			4,098.6				3,540.6
Net loss and loss adjustment expenses disposed			(8.8)				(20.6)
Provision for losses and loss adjustment expenses for claims incurred
Current period			611.6				1,648.3
Prior period release			(65.5)				(92.3)
Total incurred			546.1				1,556.0
Losses and loss adjustment expenses payments for claims incurred			(518.9)				(982.2)
Foreign exchange (gains)/losses			(18.0)				4.8
Net loss and loss adjustment expenses reserves at the end of the period			4,099.0				4,098.6
Reinsurance recoverables on unpaid losses at the end of the period			457.4				426.6
Gross loss and loss adjustment expenses reserves at the end of the period			$4,556.4				$4,525.2

 

18

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Reserves by Operating Segment

 

(in US$ millions)		As At June 30, 2012												As At December 31, 2011
		Gross				Reinsurance Recoverables				Net				Gross				Reinsurance Recoverables				Net
Reinsurance			$2,905.7				$(190.2)				$2,715.5				$2,953.5				$(183.5)				$2,770.0
Insurance			1,650.7				(267.2)				1,383.5				1,571.7				(243.1)				1,328.6
Total losses and loss adjustment expense reserves			$4,556.4				$(457.4)				$4,099.0				$4,525.2				$(426.6)				$4,098.6

 

19

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Prior Year Reserve Releases

 

(in US$ millions)		Three Months Ended June 30, 2012												Three Months Ended June 30, 2011
		Gross				Reinsurance Recoverables				Net				Gross				Reinsurance Recoverables				Net
Reinsurance			$12.6				$1.5				$14.1				$24.3				$1.0				$25.3
Insurance			15.5				(1.0)				14.5				(5.9)				13.4				$7.5
Release in reserves for prior years during the period			$28.1				$0.5				$28.6				$18.4				$14.4				$32.8
		Six Months Ended June 30, 2012												Six Months Ended June 30, 2011
		Gross				Reinsurance Recoverables				Net				Gross				Reinsurance Recoverables				Net
Reinsurance			$37.1				$5.1				$42.2				$46.0				$0.1				$46.1
Insurance			18.8				4.5				23.3				(15.5)				24.1				8.6
Release in reserves for prior years during the period			$55.9				$9.6				$65.5				$30.5				$24.2				$54.7

 

20

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Worldwide Natural Catastrophe Exposures: Major Peril Zones

 

Source: Aspen analysis using RMS v11 occurrence exceedance probability as at June 1, 2012 and Shareholders’ Equity of $3,435.1 million at June 30, 2012. U.S. Wind is a blend of RMS v11 and AIR v13 weighted 50% for each model.

 

21

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Consolidated Investment Portfolio

(in US$ millions)

 

		Fair Market Value
Marketable Securities - Available For Sale		As At June 30, 2012				As At March 31, 2012				As At December 31, 2011				As At September 30, 2011				As At June 30, 2011
U.S. government securities			$975.7				$897.8				$932.4				$889.4				$777.4
U.S. agency securities			309.2				331.3				295.5				281.5				283.3
Municipal securities			39.9				38.7				35.6				36.5				30.8
Corporate securities			1,896.7				1,889.1				1,846.5				1,968.3				1,992.6
Foreign government securities			596.3				619.5				660.4				681.2				744.7
Asset-backed securities			62.0				63.4				61.0				59.0				60.4
FDIC Guaranteed			3.0				63.6				72.9				93.6				111.8
Bonds backed by foreign government			119.8				158.5				167.8				191.2				193.5
Mortgage-backed securities			1,384.8				1,382.7				1,353.7				1,408.0				1,395.6
Total fixed income maturities			5,387.4				5,444.6				5,425.8				5,608.7				5,590.1
Short-term investments			489.6				423.5				298.2				290.6				200.2
Equity securities			187.4				188.1				179.5				163.8				178.1
Total Available For Sale			$6,064.4				$6,056.2				$5,903.5				$6,063.1				$5,968.4
Marketable Securities - Trading
U.S. government securities			$38.8				$37.4				$32.3				$18.0				$6.0
U.S. agency securities			1.9				1.8				1.8				1.7				1.6
Municipal securities			2.9				2.9				2.9				2.9				2.9
Corporate securities			337.7				341.9				349.3				346.1				356.8
Foreign government securities			21.9				12.9				7.4				9.6				9.7
Asset-backed securities			0.6				0.6				0.7				5.8				5.7
Total fixed income maturities			403.8				397.5				394.4				384.1				382.7
Short-term investments			14.0				10.3				4.1				5.3				2.6
Total Trading			$417.8				$407.8				$398.5				$389.4				$385.3
Other investments			$33.1				$33.1				$33.1				$32.3				$30.0
Cash			1,309.0				1,173.3				1,239.1				1,038.8				1,074.1
Accrued interest			48.8				48.7				49.6				53.6				54.2
Total Cash and Accrued Interest			$1,357.8				$1,222.0				$1,288.7				$1,092.4				$1,128.3
Total Cash and Investments			$7,873.1				$7,719.1				$7,623.8				$7,577.2				$7,512.0

 

22

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Investment Analysis

 

(in US$ millions except for percentages)		Q2 2012				Q1 2012				Q4 2011				Q3 2011				Q2 2011				Q1 2011
Net investment income from fixed income investments and cash			$50.8				$51.0				$52.9				$55.6				$55.6				$55.3
Net investment income from equity securities			2.0				1.4				1.3				1.7				3.0				0.2
Net investment income			52.8				52.4				54.2				57.3				58.6				55.5
Net realized and unrealized investment gains (1)			2.2				9.0				8.9				3.2				9.8				8.4
Other-than-temporary impairment charges			(0.9)				-				-				-				-				-
Change in unrealized gains/(losses) on available for sale investments (gross of tax)			36.6				(11.7)				6.1				71.6				52.1				(33.6)
Total return on investments			$90.7				$49.7				$69.2				$132.1				$120.5				$30.3
Portfolio Characteristics
Fixed income portfolio book yield			3.19%				3.31%				3.37%				3.54%				3.64%				3.65%
Fixed income portfolio duration			2.9 years				3.0 years				2.9 years				3.1 years				3.1 years				3.2 years

(1) Excludes the net realized and unrealized gains/(losses) from the interest rate swaps and includes the net realized and unrealized gains/(losses) on the trading portfolio.

 

23

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Book Value Per Ordinary Share

 

(in US$ millions except for number of shares and per share amounts)		June 30, 2012				March 31, 2012				December 31, 2011				September 30, 2011				June 30, 2011
Net assets (1)			$3,435.1				$3,210.9				$3,156.0				$3,135.5				$3,090.7
Less: Preference shares			(508.1)				(353.6)				(353.6)				(353.6)				(353.6)
Total			$2,927.0				$2,857.3				$2,802.4				$2,781.9				$2,737.1
Ordinary shares outstanding (in millions)			70.687				71.496				70.656				70.595				70.833
Ordinary shares and dilutive potential ordinary shares (in millions)			73.161				74.064				73.339				73.079				73.492
Book value per ordinary share			$41.41				$39.96				$39.66				$39.41				$38.64
Diluted book value per ordinary share			$40.01				$38.58				$38.21				$38.07				$37.24

The dilutive effect of options has been calculated using the treasury stock method. The treasury stock method assumes that the proceeds received from the exercise of options will be used to purchase the Company’s ordinary shares at the average market price during the period of calculation.

(1) In 2012, the Company adopted the provision of ASU 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.” Under the standard, the Company is required to expense the proportion of its general and administrative deferred acquisition costs not directly related to successful business acquisition. The application of this standard has resulted in a net $16.0 million write down of deferred acquisition costs through retained earnings brought forward and the restatement of our quarterly balance sheets from December 31, 2010 to December 31, 2011.

 

24

---

		ASPEN INSURANCE HOLDINGS LIMITED
		Operating Income/(Loss) Reconciliation

Net income/(loss) is adjusted to exclude after-tax change in net foreign exchange gains and losses and realized gains and losses in investments.

 

		Three Months Ended								Six Months Ended
		June 30, 2012				June 30, 2011				June 30, 2012				June 30, 2011
(in US$ millions except where stated)
Net income/(loss) as reported (1)			$84.6				$9.1				$163.3				($143.7)
Preference share dividends			(8.3)				(5.7)				(14.0)				(11.4)
Net income/(loss) available to ordinary shareholders			76.3				3.4				149.3				(155.1)
Add (deduct) after tax income:
Net foreign exchange (gains)			10.9				4.8				7.9				3.0
Net realized (gains) on investments			10.3				16.9				5.1				9.8
Operating income/(loss) after tax available to ordinary shareholders			97.5				25.1				162.3				(142.3)
Tax on operating income/(loss)			8.0				2.9				12.4				(16.1)
Operating income/(loss) before tax available to ordinary shareholders			$105.5				$28.0				$174.7				($158.4)
Basic earnings per ordinary share
Net income/(loss) adjusted for preference share dividend			$1.07				$0.05				$2.10				$(2.19)
Add (deduct) after tax income:
Net foreign exchange (gains)			0.15				0.07				0.11				0.04
Net realized (gains) on investments			0.14				0.24				0.07				0.14
Operating income/(loss) adjusted for preference shares dividend			$1.36				$0.36				$2.28				$(2.01)
Diluted earnings per ordinary share
Net income/(loss) adjusted for preference share dividend			$1.03				$0.05				$2.02				$(2.19)
Add (deduct) after tax income:
Net foreign exchange (gains)			0.15				0.07				0.11				0.04
Net realized (gains) on investments			0.14				0.23				0.07				0.14
Operating income/(loss) adjusted for preference shares dividend			$1.32				$0.35				$2.20				$(2.01)

(1) In 2011, the Company adopted the provision of ASU 2010-26, “Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts.” Under the standard, the Company is required to expense the proportion of its general and administrative deferred acquisition costs not directly related to successful business. The application of this standard has resulted in a net $16.0 million write down of deferred acquisition costs through retained earnings brought forward and the restatement of our quarterly balance sheets from December 31, 2010 to December 31, 2011.

 

25