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Aspen Insurance Holdings Reports Record Results for Third Quarter and Nine Months
Hamilton, Bermuda: November 1, 2007 --Aspen Insurance Holdings Limited (NYSE:AHL):
- Record third quarter net income of $117.2 million and nine months net income of $353.8 million, up 23.4% over the same quarter last year and 36.8% over prior nine months.
- Net investment income of $72.4 million, up 53.1% compared to $47.3 million in the third quarter of 2006.
- Book value per share of $26.46, up 21.0% year over year.
- EPS of $1.21 up 28.7% versus $0.94 in the third quarter of 2006, and $3.67 up 43.9% for the nine months.
- Annualized ROE of 20.2% for the quarter and 21.2% for the nine months.
- Combined ratio for the quarter of 84.5% and 84.1% for the nine months.
Aspen Insurance Holdings Limited (NYSE:AHL) today reported net income for the third quarter of 2007 of $117.2 million, or $1.21 per diluted ordinary share, an increase of 28.7% over the same quarter last year. Diluted operating income per share is $1.12 compared to $0.93 in the third quarter of 2006. The combined ratio was 84.5%, compared to 81.0% in the prior year period. Annualized return on equity rose to 20.2% for the quarter and 21.2% for the year to date. Book value per share increased 21.0% to $26.46.
Third Quarter Financial Highlights
($ in millions, except per share amounts)
(Unaudited)
Q3 2007 Q3 2006 Change
----------------------------------------------------------------------
Gross written premium $ 373.5 $ 457.5 (18.4)%
----------------------------------------------------------------------
Net earned premium $ 419.7 $ 429.3 (2.2)%
----------------------------------------------------------------------
Net investment income $ 72.4 $ 47.3 53.1%
----------------------------------------------------------------------
Net income $ 117.2 $ 95.0 23.4%
----------------------------------------------------------------------
Combined ratio 84.5% 81.0%
----------------------------------------------------------------------
Annualized return on equity 20.2% 18.0%
----------------------------------------------------------------------
Net earnings per share $ 1.21 $ 0.94 28.7%
----------------------------------------------------------------------
Book value per share $ 26.46 $ 21.87 21.0%
----------------------------------------------------------------------
Chris O'Kane, Chief Executive Officer, commented, "I am very pleased with the record third quarter results Aspen today announced, with net income up 23% to $117 million from the same period in 2006, year-to-date earnings per share up 44% to $3.67, and book value per share of $26.46. These strong results reflect our ongoing focus on managing, diversifying and leveraging our underwriting platforms and the excellent performance of the investment portfolio. We will continue to manage the business to ensure that we remain appropriately positioned for long term profitability and disciplined growth."
Third Quarter 2007 Operating Highlights- Very low catastrophe losses for the quarter of $10 million including $7 million for July U.K. flood claims.
- $956 million increase in total cash and investments year over year driven by strong operating cash flow.
- Continued strong results from the investment portfolio which delivered $72.4 million to net income. Funds of Hedge Funds produced an annualized return of 6.5% in the quarter and contributed $8 million to investment income.
- Repurchase of $50 million ordinary shares under share repurchase program.
- Improved tax rate of 15% versus 20% in 2006.
- Slight expense growth due to investment in new lines and offices, increased performance bonuses driven by strong results, and exchange rate differences from British Pound denominated costs.
- Entry into the Global Excess Casualty insurance market with the establishment of a dedicated underwriting team in Dublin.
- Entry into the Professional Liability insurance market with a focus on business in the U.K. and Australia.
- Aspen Re was named "Best Global Reinsurance Company for Specialty Lines" by Reactions Magazine.
Aspen will hold a conference call November 2nd, 2007 at 8:30am (Eastern Time).
Dial in details: +1 888-459-5609 (toll-free domestic U.S.) or +1 973-321-1024 (international) conference ID: 9256065.
A replay of the call will be available for 10 days starting approximately two hours following the live call, and can be accessed at +1 877-519-4471 (toll-free domestic U.S.) or +1 973-341-3080 (international); digital pin: 9256065.
The live call and a replay can also be heard via Aspen's website at www.aspen.bm. In addition, a financial supplement relating to Aspen's financial results for the third quarter 2007 is available in the Investor Relations section of Aspen's website at www.aspen.bm. A brief slide presentation which will be used for reference during the earnings call will also be available in the Investor Relations section of Aspen's website.
Aspen Insurance Holdings Limited
Summary Consolidated Balance Sheet
($ in millions, except per share data)
(Unaudited)
(in US$ millions) As at September 30, 2007 As at December 31, 2006
------------------------ -----------------------
ASSETS
Total investments 5,219.2 4,681.1
Cash and cash
equivalents 567.2 495.0
Reinsurance
recoverables 417.9 498.1
Premiums receivables 818.0 688.1
Other assets 303.8 277.8
------------------------ -----------------------
Total assets 7,326.1 6,640.1
======================== =======================
LIABILITIES
Losses and loss
adjustment expenses 2,963.0 2,820.0
Unearned premiums 931.7 841.3
Other payables 448.7 340.1
Long-term debt 249.5 249.4
------------------------ -----------------------
Total liabilities 4,592.9 4,250.8
------------------------ -----------------------
SHAREHOLDERS' EQUITY
Total shareholders'
equity 2,733.2 2,389.3
------------------------ -----------------------
Total liabilities and
shareholders' equity 7,326.1 6,640.1
======================== =======================
Book value per share 26.46 22.35
Diluted book value per
share (treasury stock
method) 25.68 21.83
Aspen Insurance Holdings Limited
Summary Consolidated Statements of Income
($ in millions, except share, per share data and ratios)
(Unaudited)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
(in US$ September 30, September 30, September 30, September 30,
millions) 2007 2006 2007 2006
------------- ------------- ------------- -------------
UNDERWRITING
REVENUES
Gross written
premiums 373.5 457.5 1,513.5 1,658.6
Premiums ceded (24.7) (24.0) (191.1) (273.1)
------------- ------------- ------------- -------------
Net written
premiums 348.8 433.5 1,322.4 1,385.5
Change in
unearned
premiums 70.9 (4.2) (12.5) (124.6)
------------- ------------- ------------- -------------
Net earned
premiums 419.7 429.3 1,309.9 1,260.9
------------- ------------- ------------- -------------
UNDERWRITING
EXPENSES
Losses and loss
expenses (219.9) (232.0) (718.1) (688.2)
Acquisition
expenses (76.1) (78.9) (235.5) (255.4)
General and
administrative
expenses (58.6) (36.8) (148.3) (118.0)
------------- ------------- ------------- -------------
Total
underwriting
expenses (354.6) (347.7) (1,101.9) (1,061.6)
------------- ------------- ------------- -------------
Underwriting
income 65.1 81.6 208.0 199.3
------------- ------------- ------------- -------------
OTHER OPERATING
REVENUE
Net investment
income 72.4 47.3 218.7 141.7
Interest
expense (4.2) (4.6) (12.8) (12.5)
------------- ------------- ------------- -------------
Total other
operating
revenue 68.2 42.7 205.9 129.2
------------- ------------- ------------- -------------
Other income
(expense) (2.7) (7.1) (8.1) (9.6)
------------- ------------- ------------- -------------
OPERATING
INCOME BEFORE
TAX 130.6 117.2 405.8 318.9
OTHER
Net realized
exchange gains 9.2 2.5 22.7 10.4
Net realized
investment
losses (1.9) (1.0) (12.3) (6.1)
------------- ------------- ------------- -------------
INCOME BEFORE
TAX 137.9 118.7 416.2 323.2
Income taxes
expense (20.7) (23.7) (62.4) (64.6)
------------- ------------- ------------- -------------
NET INCOME
AFTER TAX 117.2 95.0 353.8 258.6
Dividends paid
on ordinary
shares (13.3) (14.4) (39.7) (42.9)
Dividend paid
on preference
shares (6.9) (3.2) (20.8) (10.4)
------------- ------------- ------------- -------------
Retained income 97.0 77.4 293.3 205.3
------------- ------------- ------------- -------------
Components of
net income
(after tax)
Operating
income 109.2 93.5 340.6 253.5
Net realized
exchange
gains (after
tax) 9.2 2.5 22.7 10.4
Net realized
investment
losses
(after tax) (1.2) (1.0) (9.5) (5.3)
------------- ------------- ------------- -------------
NET INCOME
AFTER TAX 117.2 95.0 353.8 258.6
------------- ------------- ------------- -------------
Aspen Insurance Holdings Limited
Summary Consolidated Financial Data
($ in millions, except share, per share data and ratios)
(Unaudited)
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
2007 2006 2007 2006
Basic earnings
per ordinary
share
Net income
adjusted
for
preference
share
dividend 1.24 0.96 3.77 2.61
Operating
income
adjusted
for
preference
dividend 1.15 0.95 3.62 2.55
Diluted
earnings per
ordinary
share
Net income
adjusted
for
preference
share
dividend 1.21 0.94 3.67 2.55
Operating
income
adjusted
for
preference
dividend 1.12 0.93 3.52 2.50
Combined ratio 84.5% 81.0% 84.1% 84.2%
Aspen Insurance Holdings Limited
Summary Consolidated Segment Information
($ in millions)
(Unaudited)
As a result of a shift in the Company's operating structure and the
implementation of a number of strategic initiatives in 2007, Aspen
changed the composition of our business segments to reflect the
manner in which the business is managed. The new segments are
property reinsurance, casualty reinsurance, international insurance,
and U.S. insurance. See the financial supplement for further details.
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
2007 2006 2007 2006
------------- ------------- ------------- -------------
Gross written
premiums
Property
Reinsurance 139.5 201.7 521.9 565.1
Casualty
Reinsurance 77.5 96.6 380.2 435.8
International
Insurance 129.0 123.5 513.2 538.6
U.S.
Insurance 27.5 35.7 98.2 119.1
------------- ------------- ------------- -------------
Total 373.5 457.5 1,513.5 1,658.6
Premiums ceded
Property
Reinsurance 8.0 7.2 97.7 141.3
Casualty
Reinsurance 0.4 0.4 8.4 16.5
International
Insurance 10.9 11.2 58.3 76.5
U.S.
Insurance 5.4 5.2 26.7 38.8
------------- ------------- ------------- -------------
Total 24.7 24.0 191.1 273.1
Net written
premiums
Property
Reinsurance 131.5 194.5 424.2 423.8
Casualty
Reinsurance 77.1 96.2 371.8 419.3
International
Insurance 118.1 112.3 454.9 462.1
U.S.
Insurance 22.1 30.5 71.5 80.3
------------- ------------- ------------- -------------
Total 348.8 433.5 1,322.4 1,385.5
Net earned
premiums
Property
Reinsurance 125.3 128.7 423.0 378.4
Casualty
Reinsurance 123.7 128.3 355.8 364.8
International
Insurance 146.7 145.2 449.5 439.3
U.S.
Insurance 24.0 27.1 81.6 78.4
------------- ------------- ------------- -------------
Total 419.7 429.3 1,309.9 1,260.9
Underwriting
profit
Property
Reinsurance 38.7 28.5 118.8 79.9
Casualty
Reinsurance (2.1) 18.7 21.0 63.1
International
Insurance 27.8 45.4 71.9 67.4
U.S.
Insurance 0.7 (11.0) (3.7) (11.1)
------------- ------------- ------------- -------------
Total 65.1 81.6 208.0 199.3
Combined ratio
Property
Reinsurance 69.1% 77.8% 71.9% 79.0%
Casualty
Reinsurance 101.7% 85.4% 94.0% 82.6%
International
Insurance 81.0% 68.7% 84.0% 84.7%
U.S.
Insurance 97.3% 140.6% 104.6% 114.1%
Total 84.5% 81.0% 84.1% 84.3%