Aspen Insurance Holdings Limited Reports Fourth Quarter and Full Year 2003 Financial Results
20 February 2004 - 11:55PM
PR Newswire (US)
Aspen Insurance Holdings Limited Reports Fourth Quarter and Full
Year 2003 Financial Results HAMILTON, Bermuda, February 20
/PRNewswire/ -- - Net Income of US$54.5 Million for Fourth Quarter
2003 and US$152.1 Million For Full Year 2003 - Fourth Quarter 2003
Combined Ratio 79%; Full Year 2003 Combined Ratio 78% HAMILTON,
Bermuda, February 20 /PRNewswire/ -- Aspen Insurance Holdings
Limited (NYSE: AHL) today reported net income of US$54.5 million,
or US$0.88 per diluted share, for the three months ended December
31, 2003 and net income of US$152.1 million, or US$2.56 per diluted
share, for the year ended December 31, 2003. Gross written premiums
were US$145.0 million for the fourth quarter 2003 and US$1.3
billion for the full year 2003. The combined ratio was 79% for the
fourth quarter 2003 and 78% for the full year 2003. Chris O'Kane,
chief executive officer, said, "All of our businesses produced
excellent results in 2003, resulting inan operating return on
equity (1) of 16% for the year and 23% for the quarter. Our strong
performance demonstrates that we are succeeding in establishing
Aspen as a highly focused leader in key reinsurance and insurance
lines. Our financial strength, diverse operating platform and our
sophisticated risk selection criteria position us to achieve
continued growth in 2004." Net investment income was US$12.9
million for the fourth quarter 2003 and US$29.6 million for the
full year 2003. The Company reports separately on its reinsurance
and insurance operations. Gross written premiums for the
reinsurance segment were US$62.3 million for the fourth quarter
2003 and US$1.0 billion for the full year 2003. The reinsurance
operationsreported a combined ratio of 80% for the fourth quarter
2003 and 79% for the full year 2003. Gross written premiums for the
insurance segment were US$82.7 million for the fourth quarter 2003
and US$304.9 million for the full year 2003. The insurance
operations reported a combined ratio of 77% for the fourth quarter
2003 and 77% for the full year 2003. Shareholders' equity increased
from US$878.1 million at December 31, 2002 to US$1.3 billion at
December 31, 2003, including US$246.4 million attributable to the
issue of new shares and US$7.5 million attributable to share-based
compensation. Earnings conference call Aspen will hold a conference
call today to discuss its fourth quarter and full year 2003
financial resultstoday, February 20th at 10:00 AM (EST). Investors
may participate in the live conference call by dialing 800-473-6123
(toll-free domestic) or +1-973-582-2706 (international); passcode:
4524907. Please call to register at least 10 minutes before the
conference call begins. A replay of the call will be available for
two days via the telephone starting approximately two hours
following the call on February 20, 2004, and can be accessed at
877-519-4471 (toll-free domestic) or +1-973-341-3080
(international); passcode: 4524907. In addition, a financial
supplement relating to the Company's financial results for the
fourth quarter and full year 2003 is available in the Investor
Relations section of the Company's website at www.aspen.bm. 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 surplus lines insurance in the United States. 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's reinsurance segment consists of property
reinsurance, casualty reinsurance and specialty reinsurance lines
of business. Aspen's insurance segment consists of commercial
property insurance andcommercial liability insurance lines of
business. Aspen's principal existing shareholders include The
Blackstone Group, Candover Partners Limited, Wellington
Underwriting plc and Credit Suisse First Boston Private Equity. 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 may
contain, and Aspen may from time-to-time make, written or oral
"forward-looking statements" within the meaning of the U.S. federal
securities laws. 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," "project,"
"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 the Company's control that could cause actual results to
differ materially from such statements. Important events that could
cause the actual results to differ include, but are not limited to:
the impact of acts of terrorism and acts of war and related
legislations; the possibility of greater frequency or severity of
or unanticipated losses from natural or man-made catastrophes; the
effectiveness of the Company's loss limitation methods; changes in
the availability, cost or quality of reinsurance or retrocessional
coverage; the loss of key personnel; a decline in the operating
subsidiaries' ratings with Standard & Poor's, A.M. Best or
Moody's; changes in general economic conditions; increased
competition on the basis of pricing, capacity, coverage terms or
other factors; decrease in demand for the Company's insurance or
reinsurance products and cyclical downturn of the industry; and
changes in governmental regulation or tax laws in the jurisdictions
where the Company conducts business. For a more detailed
description of these uncertainties and other factors, please see
the "Risk Factors" section in Aspen's registration statement on
Form F-1, filed with the U.S. Securities and Exchange Commission in
connection with the Company's initial public offering. Aspen
undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. Readers are cautioned not to place
undue reliance on these forward-looking statements, whichspeak only
as of the dates on which they are made. Summary of Results -
Consolidated Income Statement (in US$ millions) Three Months Ended
Twelve Period Months Ended Ended December 31 December 31 2003 2002
2003 2002 UNDERWRITING REVENUES Gross premiums written 145.0 77.0
1,306.8 374.8 Premiums ceded (13.3) 2.6 (214.0) (62.2) Net premiums
written 131.7 79.6 1,092.8 312.6 Change in unearned premiums 141.6
(11.0) (280.5) (192.3) Net premiums earned 273.3 68.6 812.3 120.3
UNDERWRITING EXPENSES Losses and loss expenses (152.0) (41.4)
(428.4) (76.9) Acquisition expenses (40.0) (13.3) (152.3) (21.1)
General and administrative expenses (24.8) (6.6) (53.3) (8.7) Total
Underwriting Expenses (216.8) (61.3) (634.0) (106.7) Underwriting
Income 56.5 7.3 178.3 13.6 OTHER OPERATING REVENUE Net investment
income 12.9 5.3 29.6 8.5 Interest expense (0.4) 0.0 (0.4) 0.0 Other
income (expense) (0.1) 0.4 0.0 0.4 Total other operating revenue
12.4 5.7 29.2 8.9 OPERATING INCOME BEFORE TAX (2) 68.9 13.0 207.5
22.5 OTHER Netexchange gains (losses) 1.5 (0.2) 1.5 12.7 Net
realized investment gains (losses) (0.6) 0.1 (2.4) (0.1) INCOME
BEFORE INCOME TAX 69.8 12.9 206.6 35.1 Income taxes / credits
(15.3) 0.2 (54.5) (6.5) NET INCOME AFTER TAX 54.5 13.1 152.1 28.6
Components of Net Income (after tax) Operating income (2) 53.8 9.4
152.7 16.0 Net realized investment gains (losses) (0.4) 0.0 (1.7)
(0.1) Net realized exchange gains 1.1 3.7 1.1 12.7 NET INCOME AFTER
TAX 54.5 13.1 152.1 28.6 PER SHARE AND SHARES (in US$) DATA Basic
earnings per share Net income (as reported) 0.90 0.34 2.63 0.89
Operating income (as reported) (2) 0.89 0.24 2.64 0.50 Diluted
earnings per share Net income (as reported) 0.88 0.34 2.56 0.89
Operating income (as reported) (2) 0.87 0.24 2.57 0.50 Weighted
average common shares outstanding 60.4 38.9 57.8 32.0 Weighted
average common shares 62.1 38.9 59.5 32.0 outstanding and dilutive
potential common shares Consolidated Balance Sheet (in US$
millions) December 31, December 31, 2003 2002 ASSETS Investments
Fixed Maturities 1,048.1 87.3 Short term investments 568.2 835.1
Total Investments 1,616.3 922.4 Cash and cash equivalents 230.8 9.6
Reinsurance Recoverables Unpaid losses 43.6 12.5 Ceded unearned
premiums 48.9 18.9 Receivables Underwriting premiums 496.5 214.5
Other 40.8 0.8 Deferred policy acquisition costs 94.6 31.0 Office
properties and equipment 0.4 0.1 Intangible assets 6.6 2.0 Total
Assets 2,578.5 1,211.8 LIABILITIES Insurance Reserves Losses and
loss adjustment expenses 525.8 93.9 Unearned premiums 572.4 215.7
Total insurance reserves 1,098.2 309.6 Payables Reinsurance
premiums 59.9 2.1 Accrued expenses and other payables 81.7 22.0
Bank debt 40.0 - Total Liabilities 1,279.8 333.7 SHAREHOLDERS'
EQUITY Ordinary shares 1,090.8 836.9 Retained earnings 180.7 28.6
Accumulated other comprehensive 27.2 12.6 income, net of taxes
Total shareholders' equity 1,298.7 878.1 Total Liabilities and
Shareholders' Equity 2,578.5 1,211.8 Book value per share 18.7 15.4
Diluted book value per share (treasury 18.3 15.4 stock method) (3)
Summarized Cash Flow (in US$ millions) Year ended Period from
December 31, incorporation 2003 on May 23, 2002 to December 31,
2002 Net cash from operating activities 636.6 78.1 Net cash from
investing activities (703.3) (917.4) Net cash from financing
activities 286.4 836.9 Effect of exchangerate movements on cash and
cash equivalents 1.5 12.0 Increase in cash and cash equivalents:
Cash at beginning of the period 9.6 Cash at end of the period 230.8
9.6 HAMILTON, Bermuda, February 20 /PRNewswire/ -- Non-GAAP
Financial Measures In presenting the Company'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 the Company's results of operations in a
manner that allows for a more complete understanding of the
underlyingtrends in the Company'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
the financial supplement, which can be obtained from Aspen's
website at www.aspen.bm. (1) Annualised Operating Return on Average
Equity (ROAE) is a non-GAAP financial measure. Annualized Operating
Return on Average Equity is calculated using 1) operating income,
as defined and reconciled below and 2) excludes from average
equity, the average after tax unrealised appreciation or
depreciation on investments and the average after tax unrealised
foreign exchange gains or losses. Unrealised appreciation
(depreciation) on investments is primarily the result of interest
rate movements and the resultant impact on fixed income securities,
and unrealised appreciation (depreciation) isthe result of exchange
rate movements between the US dollar and the British pound. Such
appreciation (depreciation) is not related to management actions or
operational performance, nor is it likely to be realised. Therefore
the Company believes that excluding this unrealised appreciation
(depreciation) provides a more consistent and useful measurement of
operating performance, which supplements GAAP information. Average
equity is calculated as the arithmetic average on a monthly basis
for the stated periods. The Company presents ROAE as a measure that
it is commonly recognised as a standard of performance by
investors, analysts, rating agencies and other users of its
financial information. (2) Operating income is a non-GAAP financial
measure. Operating income is an internal performance measure used
by the Company in the management of its operations and represents
after-tax operational results excluding, as applicable, after-tax
net realised capital gains or losses and after-tax net foreign
exchange gains or losses. The Company excludes after tax net
realised capital gains or losses and after-tax net foreign exchange
gains or losses 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. The Company believes these amounts are largely
independent of its business and underwriting process and including
them distorts the analysis of trends in its operations. In addition
to presenting net income determined in accordance with GAAP, the
Company believes that showing operating income enables investors,
analysts, rating agencies and other users of its financial
information to more easily analyse the Company's results of
operations in a manner similar to how management analyses the
Company's underlying business performance. Operating income should
not be viewed as a substitute for GAAP net income. Please see page
21 of the company's financial supplement for a reconciliation of
operating income to net income. The company's financial supplement
can be obtained from Aspen's website at www.aspen.bm. (3) Diluted
book value per share is a non-GAAP financial measure. The Company
has included diluted book value per share because it takes into
account the effect of dilutive securities; therefore, the Company
believes it is a better measure of calculating shareholder returns
than book value per share. Please see page 21 of the company's
financial supplement for a reconciliation of diluted book value per
share to basic book value per share. The company's financial
supplement can be obtained from Aspen's website at www.aspen.bm.
Web site: http://www.aspen.bm DATASOURCE: Aspen Insurance Holdings
Limited CONTACT: U.S. - Carina Thate or Jason Thompson, both of The
Abernathy MacGregor Group, +1-212-371-5999; or U.K. - Brian
Hudspith of The Maitland Consultancy, +44-20-7379-5151, all for
Aspen Insurance Holdings Limited; or Investors - Julian Cusack,
Chief Financial Officer of Aspen Insurance Holdings Limited,
+1-441-295-8201
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