Aspen Insurance Holdings Limited Announces Completion Of Innovative Insurance Policy, Similar To Credit Default Swap

Hamilton, Bermuda: December 6, 2006 €” Aspen Insurance Holdings Limited ("Aspen") (NYSE:AHL; BSX:AHL.BH) today announced the completion of an innovative insurance policy which has characteristics similar to a credit derivative.  The policy is for up to $420 million of reinsurance receivables, in a transaction with Deutsche Bank, an AA rated investment bank.  Pricing terms of the transaction were not disclosed.

The insurance policy will protect a portfolio of Aspen's reinsurance contracts against the risk of default because of a reinsurer's inability to pay.  This transaction provides an AA rated credit wrapper around a portfolio of Aspen's current reinsurance receivables.

"At Aspen we have embraced the convergence between the traditional reinsurance market and the capabilities and depth offered by the capital markets.  The ground-breaking insurance policy we announced today extracts from the best of both markets," said Chris O'Kane, Chief Executive Officer of Aspen.

The five year policy provides cover for current and future receivables under existing reinsurance policies and reinsurance policies taken out during the policy term.

The policy is triggered by certain non-standard credit events designed to isolate the specific nature of counterparty risk in the reinsurance market. Policy payments are made on the basis of a customized methodology developed between Aspen and Deutsche Bank.

"The benefit to Aspen is a clear mechanism for obtaining enhanced recovery in the event of a reinsurer's default," said Nick Foden-Pattinson, Director of R K Carvill (Holdings) Ltd, an advisor to Aspen on the transaction.

"Tapping into the capital market's appetite for credit products compliments our approach to attracting capital and managing risk, to which Aspen is committed. We are effectively compartmentalizing risk amongst investors with different risk profiles.  What makes this interesting is that there is no significant correlation of risk between a major catastrophic event and capital markets event risk," commented Aspen's Chief Financial Officer, Julian Cusack.

As of September 30, 2006, Aspen's reinsurance receivables totalled $788 million.

About Aspen Insurance Holdings Limited

Aspen Insurance Holdings Limited was established in June 2002.  Aspen is a Bermudian holding company that provides property and casualty reinsurance in the global market, property and liability insurance principally in the United Kingdom and the United States and specialty insurance and reinsurance consisting mainly of marine and energy and aviation worldwide. Aspen's operations are conducted through its wholly-owned subsidiaries located in London, Bermuda and the United States: Aspen Insurance UK Limited, Aspen Insurance Limited and Aspen Specialty Insurance Company. Aspen has four operating segments: property reinsurance, casualty reinsurance, specialty insurance and reinsurance and property and casualty insurance. For more information about Aspen, please visit the Company's website at www.aspen.bm.  

Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995

This press release contains written, and Aspen's officers may make related oral, "forward-looking statements" within the meaning of the U.S. federal securities laws regarding the possible repurchase of Aspen's ordinary shares and the financing of any such repurchases.  These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as "expect," "intend," "plan," "believe," "project," "anticipate," "seek," "will,"  "estimate," "may," "continue," and similar expressions of a future or forward-looking nature.

All forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and other factors, many of which are outside Aspen's control that could cause actual results to differ materially from such statements.  Any ordinary share repurchases by Aspen are subject to rating agency considerations, the market price of its ordinary shares, Aspen's ongoing sources and uses of cash and the liquidity requirements of its insurance and reinsurance business.  Any issuance by Aspen of any perpetual preference shares or other security is subject to market conditions for such security, the satisfactory agreement with any underwriters or other purchasers in relation to the terms and price of such security and customary conditions to the completion of any such financing transaction. For a more detailed description of additional uncertainties and other factors that could impact the forward-looking statements in this release, please see the "Risk Factors" section in Aspen's Annual Report on Form 10-K for the year ended December 31, 2005, filed with the U.S. Securities and Exchange Commission on March 6, 2006.