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Aspen Reports Results For The Quarter And Nine Months Ended September 30, 2013

Stocks in this article: AHL

Aspen Insurance Holdings Limited (“Aspen”) (NYSE:AHL) today reported net income after tax of $107.4 million, or $1.43 diluted net income per share, for the third quarter of 2013.

Chris O’Kane, Chief Executive Officer commented, “In the third quarter, Aspen continued to make good progress in terms of strategic execution, operating results and profitability. We are pleased with the headway we are making on the three levers we outlined earlier this year. We repurchased $296 million of ordinary shares to date and continued to reallocate a portion of our investment portfolio to achieve higher risk-adjusted returns.”

Operating highlights for the quarter ended September 30, 2013

  • Gross written premiums increased overall by 4.2% to $581.6 million in the third quarter of 2013 from the third quarter of 2012. Gross written premiums in Reinsurance decreased by 15.4% while Insurance grew 21.1%
  • Combined ratio of 91.8% for the third quarter of 2013 compared with a combined ratio of 87.0% for the third quarter of 2012. There were $14.2 million, or 2.6 combined ratio points, of catastrophe losses pre-tax net of reinsurance recoveries and reinstatement premiums in the third quarter of 2013 compared with minimal catastrophe losses in the third quarter of 2012. Catastrophe losses included hailstorms in Germany of $14.9 million, $5.7 million related to floods in Toronto and Mexico, and a $6.4 million net reduction in loss estimates for natural catastrophe losses which occurred in the first half of 2013
  • Net favorable development on prior year loss reserves of $33.6 million, or 6.2 combined ratio points, for the third quarter of 2013 compared with $29.8 million, or 5.8 combined ratio points, for the third quarter of 2012

Financial highlights for the quarter and nine months ended September 30, 2013

  • Annualized net income return on average equity of 14.8% and annualized operating return on average equity of 10.8% for the third quarter of 2013 compared with 14.4% and 13.2%, respectively in the third quarter of 2012 (1)
  • Annualized net income return on average equity of 10.1% and annualized operating return on average equity of 9.2% for the first nine months of 2013 compared with 11.9% and 12.0%, respectively in the first nine months of 2012 (1)
  • Diluted net income per share of $1.43 for the quarter ended September 30, 2013 compared with diluted net income per share of $1.45 for the third quarter of 2012, and diluted net income per share of $2.95 for the nine months ended September 30, 2013 compared with diluted net income per share of $3.47 for the nine months ended September 30, 2012
  • Diluted operating income per share of $1.05 for the quarter ended September 30, 2013 compared with diluted operating income per share of $1.34 for the third quarter of 2012 (1) and diluted operating income per share of $2.78 for the nine months ended September 30, 2013 compared with diluted net income per share of $3.53 for the nine months ended September 30, 2012
  • On an after-tax basis, net catastrophe losses were $13.3 million, or $0.20 per share, for the third quarter of 2013, and $62.5 million, or $0.93 per share, for the first nine months of 2013
  • Diluted book value per share of $40.43 at September 30, 2013, up 4.0% from June 30, 2013 (1)

Segment highlights

Reinsurance

Operating highlights for Reinsurance for the quarter ended September 30, 2013 include:

  • Gross written premiums of $219.5 million, decreased 15.4% compared with $259.5 million for the third quarter of 2012
  • Combined ratio of 80.5% compared with 73.8% for the third quarter of 2012
  • Favorable prior year loss reserve development of $32.3 million, or 12.6 combined ratio points, compared with $22.0 million favorable prior year loss reserve development, or 7.9 combined ratio points, for the third quarter of 2012

Gross written premiums in reinsurance declined primarily due to prior year premium adjustments and higher commutations.

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