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Aspen Reports Q3 2013 Results (Excerpt)

31 October 2013

Hamilton, Bermuda – 31 October, 2013 – Aspen Insurance Holdings Limited (“Aspen” or the “Company”; Ticker: NYSE:AHL; BSX: AHL.BH) has 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.

The combined ratio of 80.5% for the third quarter of 2013 included $11.3 million, or 4.5 percentage points, of catastrophe losses, pre-tax net of reinsurance recoveries and $1.4 million of reinstatement premiums. In addition, there were $17.1 million of significant non-catastrophe losses in Reinsurance in the third quarter including a container ship loss and a chemical factory fire loss. The combined ratio of 73.8% for the third quarter of 2012 included minimal catastrophe losses and no significant non-catastrophe losses.

Insurance

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

· Gross written premiums of $362.1 million, increased 21.1% compared with $298.9 million for the third quarter of 2012

· Combined ratio of 96.7% compared with 96.4% for the third quarter of 2012

· Favorable prior year loss reserve development of $1.3 million, or 0.5 combined ratio points, compared with $7.8 million, or 3.3 combined ratio points, for the third quarter of 2012

The increase in gross written premiums was mainly attributable to growth in Casualty and Financial and Professional lines sub-segments.

The combined ratio for the third quarter of 2013 included $2.9 million, or 1.0 percentage points, of net catastrophe losses, pre-tax net of reinsurance recoveries, while the comparative quarter of 2012 included no natural catastrophe losses.

Investment performance

Aspen’s investment portfolio continues to be comprised primarily of high quality fixed income securities with an average credit quality of “AA-”. The average duration of the fixed income portfolio was 3.5 years at September 30, 2013, excluding the impact of interest rate swaps, or 3.1 years including the impact of interest rate swaps. The total return on the Company’s investment portfolio was 0.8% for the third quarter of 2013, compared to 1.0% for the third quarter of 2012. The equity portfolio had a gain of 6.5% for the quarter and a gain of 15.3% for the first nine months of 2013.

Net investment income for the third quarter of 2013 was $45.0 million compared with $48.6 million a year ago. Book yield as at September 30, 2013 on the fixed income portfolio was 2.82% compared to 2.71% at June 30, 2013 and 3.04% at September 30, 2012.

Net realized and unrealized investment gains included in net income for the quarter were $17.7 million. Other comprehensive income decreased by $9.7 million from June 30, 2013 to $189.2 million at September 30, 2013. Included in this change was the change in total unrealized gains in the available for sale investment portfolio, which includes equity securities and foreign exchange movements.

Capital

Total shareholders’ equity increased by $36.2 million in the quarter to $3.3 billion at September 30, 2013.

On August 29, 2013, the $150.0 million accelerated share repurchase program (“ASR”) previously announced on February 26, 2013 was terminated and an additional 705,062 ordinary shares were delivered to Aspen, bringing the total number of ordinary shares received under the ASR to 4,053,276 at an average price of $37.01. During the third quarter of 2013, Aspen repurchased 1,498,451 ordinary shares in the open market at an average price of $36.59 per share for a total cost of $54.8 million. Between September 30, 2013 and October 30, 2013, Aspen repurchased 77,723 ordinary shares under its open market repurchase program at an average price of $36.46 per share for a total cost of $2.8 million. Through October 30, 2013, Aspen has repurchased a total of 8,110,825 ordinary shares at an average price of $36.47 per share for a total cost of $295.8 million under its share repurchase program. Aspen had $236.0 million remaining under its current share repurchase authorization as at October 30, 2013.

Guidance

Aspen continues to expect to achieve an operating return on equity of 10% in 2014, assuming a pre-tax catastrophe load of $190 million per annum and normal loss experience and given the current interest rate environment.

The the full text of this release can be found on the Company's web-site at www.aspen.co

For further information please contact

Investors

Kerry Calaiaro, Senior Vice President, Investor Relations, Aspen

Kerry.Calaiaro@aspen.co

+1 (646) 502 1076

Kathleen de Guzman, Vice President, Investor Relations, Aspen

Kathleen.deGuzman@aspen.co

+1 (646) 289 4912

Media

Steve Colton, Head of Communications, Aspen

Steve.Colton@aspen.co