Aspen Insurance Holdings Limited (“Aspen”) (NYSE: AHL) reported
results today for the six months ended June 30, 2021.
Mark Cloutier, Group Executive Chairman and Chief Executive
Officer, commented: “I am pleased to report an improved half year
performance for Aspen, driven by a combination of improved
underwriting results and further expense and efficiency gains.
Against the backdrop of a global pandemic, to have delivered the
progress we have is, ultimately, a reflection of the quality of our
people, our platform, and the clarity of our vision.
“We are at heart an underwriting business and I am, therefore,
encouraged that we are continuing on the journey to becoming a more
disciplined, focused and performance driven global specialty
(re)insurer. This is reflected in our underwriting performance,
including an ex-catastrophe combined ratio of 89.9% and an overall
combined ratio of 98.0%, despite the impact of Winter Storm Uri and
an increased COVID-19 provision. Furthermore, we are a simpler
business today than we were twelve months ago, and this is
reflected by our ongoing focus on expense discipline, with our
operating expense ratio improving to 14.8% and our general and
administrative expense ratio seeing a 0.9% year-on-year reduction
from our H1 2020 results.
“GWP of $2,018.5 million is relatively stable compared to our
prior period results, despite a significant repositioning of our
book. Over the past 18 months, we have actively taken the decision
to non-renew circa $800m of business, while at the same time, in
the first half of this year, we have largely delivered double digit
growth in our continuing lines where we are seeing continued
improvement in rate, terms and conditions. That level of growth
illustrates how we are now well positioned to respond to market
opportunities. We believe the reshaping of our portfolio will be
positively reflected in our results with our evolving portfolio
focused in the areas where Aspen is best placed to deliver
sustainable and scalable returns to our shareholders.
“Capital Markets remains an important pillar of our strategy,
reflecting the appetite from third party investors for access to
both our platform and underwriting, and we have seen successful
capital raises for Aspen Capital Markets’ (“ACM”) cat and non-cat
products. In addition, we are well on track to exceed our 2020 fee
income significantly. We also recognized the synergies between ACM
and our Outwards Reinsurance teams – combining the two into Aspen
Capital Partners. This move allows us to further enable our trading
partners to access the full breadth of Aspen’s capabilities,
including risk sourcing, underwriting, modelling, actuarial and
claims.
“In another significant milestone, we refreshed our brand,
aligning our external identity with our collaborative internal
culture and clear vision to transform risk into opportunity for our
clients. Central to this identity is how we aim to support and
engage with our communities, environment and our people. We
actively provided support to help our local communities face the
challenges of the global pandemic. With our people, we have
continued to shape our values based culture and deepened our
commitment to D&I initiatives by hosting global events around
International Woman’s Day (IWD) and Pride Month. We also announced
our partnerships with iCAN, Link and GIN in combination with the
launch of our female employee sponsorship program “Breakthrough”.
At the heart of our ESG journey lies our long-term commitment to
protecting the environment. Amongst several initiatives underway,
we are continuously reviewing our investment portfolio and
underwriting strategies to ensure they are aligned with our focus
on responsibility, the needs of our customers and generating a
sustainable return for our shareholders.
“Looking ahead the ongoing strength of our balance sheet,
affirmed by the recent upgrade to the outlook assigned to our AM
Best rating from ‘negative’ to ‘stable’, and growing momentum in
our core insurance and reinsurance business, alongside our leading
capital markets proposition, gives us confidence as we continue on
our mission to be a top quartile performing specialty
(re)insurer.”
Key strategic and financial highlights
Continued transformation with improved underlying underwriting
performance
- Gross written premiums of $2,018.5 million in the six months
ended June 30, 2021, a decrease of (4.7)% compared to $2,118.6
million in the six months ended June 30, 2020, primarily
attributable to U.S. crop reinsurance business, which was
previously written on a reinsurance basis through a strategic
partnership until disposed of in Q4 2020. This decline was largely
offset by growth in premiums written in casualty reinsurance,
property catastrophe reinsurance and other property reinsurance,
and growth in both casualty and liability lines insurance and
financial and professional lines insurance as a result of improved
market conditions.
- General, administrative and corporate expenses, excluding
non-operating expenses, of $166.9 million in the six months ended
June 30, 2021 down from $186.7 million in the six months ended June
30, 2020 with an operating expense ratio of 14.8% in the six months
ended June 30, 2021 compared with 15.7% in the six months ended
June 30, 2020.
- Investment income of $68.7 million in the six months ended June
30, 2021 compared to $84.9 million in the six months ended June 30,
2020.
- Net income after tax of $87.4 million and an operating income
after tax of $88.9 million in the six months ended June 30, 2021
compared to a net loss after tax of $(172.8) million and an
operating loss after tax of $(49.0) million in the six months ended
June 30, 2020.
- Catastrophe losses of $84.5 million in the six months ended
June 30, 2021 compared to $231.3 million in the six months ended
June 30, 2020. Catastrophe losses in the six months ended June 30,
2020 included losses associated with COVID-19 totaling $187.3
million.
- The combined ratio of 98.0% in the six months ended June 30,
2021, compared to 110.1% in the six months ended June 30, 2020, was
impacted by 5.3 percentage points from legacy business.
- Total comprehensive income after preference dividends and
non-controlling interests of $7.7 million in the six months ended
June 30, 2021 compared with a total comprehensive loss of $(46.3)
million in the six months ended June 30, 2020.
Strong capital and reserve position
- Group capital position remains robust, with capital reserves of
$2,915.6 million as of June 30, 2021, an increase of $326.8 million
compared with $2,588.8 million** as of June 30, 2020, and an
increase of $7.7 million compared with $2,907.9 million** as at
December 31, 2020.
Further significant progress in efforts to strengthen Aspen’s
global platform
- Our capital markets business contributed total fee income of
$30.5 million in the six months ended June 30, 2021. Income from
Aspen Capital Markets’ activities is primarily allocated to the
line of business being ceded and serves to reduce acquisition
expenses for that business. Total capital grew to more than $850
million at June 30, 2021, compared with just over $800 million at
December 31, 2020, a significant increase that reflects our view
that capital markets business and investors are key partners in our
further growth and innovation efforts.
- In another significant milestone we refreshed our brand,
aligning our external identity with our collaborative internal
culture and clear vision to transform risk into opportunity for our
clients.
- Ongoing commitment to building an inclusive and diverse
business for all employees and continued focus on defining and
implementing a comprehensive environmental, social and governance
(“ESG”) strategy, including offsetting our carbon footprint and
working to develop and implement a responsible portfolio review of
business lines and classes. As part of this, our corporate social
responsibility (“CSR”) program provided funding and support to help
and support our communities during COVID-19.
*Catastrophe losses in the six months ended June 30, 2021 are
defined as losses associated with Texas winter storms and other
weather-related events. Catastrophe losses in the six months ended
June 30, 2020 were defined as losses associated with COVID-19 and
weather-related events.
**Prior period information for the period ended June 30, 2020
relating to underwriting premiums receivable, retained earnings and
accumulated other comprehensive have been restated downwards by
$90.0 million, $4.8 million and $85.2 million, respectively, due to
an identified deficiency which resulted in previous foreign
exchange revaluation and translation amounts which should have been
matched with an underwriting premium receivable payment being
carried over and were incorrectly included in Aspen U.K.’s
underwriting premiums receivable, thereby overstating the related
asset value. Refer to page 7 of this release for additional
information.
Non-GAAP financial measures are used throughout this release.
For additional information and reconciliation of non-GAAP financial
measures, refer to the end of this press release.
Refer to "Cautionary Statement Regarding Forward-Looking
Statements" at the end of this press release.
Operating highlights for the six months ended June 30,
2021
- Gross written premiums decreased by (4.7)% to $2,018.5
million in the six months ended June 30, 2021, compared with
$2,118.6 million in the six months ended June 30, 2020.
- Net written premiums decreased by (14.0)% to $1,236.1
million in the six months ended June 30, 2021, compared with
$1,436.8 million in 2020. The retention ratio in the six months
ended June 30, 2021 was 61.2% compared with 67.8% in the six months
ended June 30, 2020.
- Loss ratio of 63.2% in the six months ended June 30,
2021 compared with 74.1% in the six months ended June 30, 2020. The
loss ratio for the six months ended June 30, 2021, included $84.5
million, or 7.5 percentage points, of catastrophe losses, net of
reinsurance recoveries, compared with $231.3 million, or 19.4
percentage points, in the six months ended June 30, 2020.
Catastrophe losses of $84.5 million for the six months ended June
30, 2021, included losses associated with Texas winter storms and
other weather-related events. Catastrophe losses of $231.3 million
for the six months ended June 30, 2020, included losses associated
with COVID-19 totaling $187.3 million.
- Net unfavorable development on prior year loss reserves
of $(7.3) million increased the loss ratio by 0.6 percentage points
in the six months ended June 30, 2021, compared with net
unfavorable development of $(0.3) million which had a negligible
effect on the loss ratio in the six months ended June 30,
2020.
- Accident year loss ratio excluding catastrophes of 55.1%
for the six months ended June 30, 2021, compared with 54.7% for the
six months ended June 30, 2020.
- Total expense ratio of 34.8% and total expense ratio
(excluding non-operating expenses) of 33.9% for the six months
ended June 30, 2021, compared with 36.0% and 35.1%, respectively,
for the six months ended June 30, 2020. Non-operating expenses in
the six months ended June 30, 2021, were $10.4 million compared
with $11.6 million in the six months ended June 30, 2020.
Non-operating expenses in the six months ended June 30, 2021,
included expenses related to severance, amortization of intangible
assets and other non-recurring costs.
- Operating income after tax of $88.9 million for the six
months ended June 30, 2021, compared with an operating loss of
$(49.0) million for the six months ended June 30, 2020.
- Net income after tax of $87.4 million for the six months
ended June 30, 2021, compared with a net loss of $(172.8) million
for the six months ended June 30, 2020. The net income included an
underwriting profit, including corporate expenses, of $33.3
million, compared to an underwriting loss of $(108.9) million,
including corporate expenses, for the six months ended June 30,
2020. Investment income was $68.7 million in the six months ended
June 30, 2021, compared with $84.9 million for the six months ended
June 30, 2020, as well as $3.0 million of net realized and
unrealized investment gains, compared with net realized and
unrealized investment losses of $(114.5) million in the six months
ended June 30, 2020. The net income in the six months ended June
30, 2021, also included $7.5 million of net realized and unrealized
foreign exchange gains, including foreign exchange contracts,
compared with $3.0 million of net realized and unrealized foreign
exchange gains in the six months ended June 30, 2020.
Segment highlights for the six months ended June 30,
2021
- Insurance
- Gross written premiums of $1,122.2 million in the six months
ended June 30, 2021, an increase compared with $996.3 million in
the six months ended June 30, 2020, due to growth in both casualty
and liability lines insurance and financial and professional lines
insurance as a result of improved market conditions, partially
offset by reductions in first party and specialty lines insurance
primarily as a result of having previously exited certain lines of
business and products following completion of strategic
reviews.
- Net written premiums of $618.5 million, an increase of 4.1%
compared with $594.0 million in the six months ended June 30, 2020,
primarily due to growth in gross written premiums. The retention
ratio in the six months ended June 30, 2021, was 55.1% compared
with 59.6% in the six months ended June 30, 2020.
- Loss ratio of 66.0% in the six months ended June 30, 2021
compared with 69.0% in the six months ended June 30, 2020. The loss
ratio included catastrophe losses of $25.9 million, or 4.1
percentage points, net of reinsurance recoveries, in the six months
ended June 30, 2021.
- Prior year net unfavorable reserve development of $(37.5)
million increased the loss ratio by 6.0 percentage points in the
six months ended June 30, 2021. Prior year net favorable
development of $0.1 million had a negligible effect on the loss
ratio in the six months ended June 30, 2020. Unfavorable reserve
development in the insurance segment totaling $37.5 million,
primarily driven from reserve strengthening on both first party and
specialty insurance lines and financial and professional insurance
lines.
- Accident year loss ratio excluding catastrophes was 55.9% in
the six months ended June 30, 2021 compared with 57.8% in the six
months ended June 30, 2020. Effective January 1, 2021, the
insurance segment restructured its principal lines of business due
to changes in management structures. Accordingly, the Company’s
Insurance segments principal lines of business have changed, as
shown on the following table:
Insurance Segment
New sub-segment: principal
lines of business
Old sub-segment: principal
lines of business
First party and specialty insurance
Property and casualty insurance
Casualty and liability insurance
Marine, aviation and energy insurance
Financial and professional lines
insurance
Financial and professional lines
insurance
- Reinsurance
- Gross written premiums of $896.3 million, a decrease of (20.1)%
in the six months ended June 30, 2021, compared with $1,122.3
million in the six months ended June 30, 2020, due primarily to
reductions in specialty reinsurance as a result of sale of our U.S.
crop reinsurance business, which was previously written on a
reinsurance basis through our strategic partnership with CGB DS via
Crop Re Services LLC. The reduction in specialty reinsurance gross
written premiums was partially offset by growth in premiums written
in casualty reinsurance, property catastrophe reinsurance and other
property reinsurance.
- Net written premiums of $617.6 million, a decrease of (26.7)%
compared with $842.8 million in the six months ended June 30, 2020.
The retention ratio in the six months ended June 30, 2021, was
68.9% compared with 75.1% in the six months ended June 30,
2020.
- Loss ratio of 59.6% in the six months ended June 30, 2021,
compared with 79.7% in the six months ended June 30, 2020. The loss
ratio included catastrophe losses of $58.6 million, or 11.7
percentage points, net of reinsurance recoveries, in the six months
ended June 30, 2021.
- Prior year net favorable reserve development of $30.2 million
reduced the loss ratio by 6.0% percentage points in the six months
ended June 30, 2021. Prior year net unfavorable reserve development
of $(0.4) million increased the loss ratio by 0.1 percentage points
in the six months ended June 30, 2020. Reserve releases in the
reinsurance segment totaling $30.2 million, arose primarily from
casualty reinsurance and specialty reinsurance partially offset by
unfavorable development on property catastrophe reinsurance and
other property reinsurance lines.
- Accident year loss ratio excluding catastrophes was 53.9% in
the six months ended June 30, 2021, compared with 51.1% in the six
months ended June 30, 2020, the increase due to large
non-catastrophe losses incurred in the first half of 2021.
Investment performance
- Investment income of $68.7 million for the six months ended
June 30, 2021, compared with $84.9 million for the six months ended
June 30, 2020.
- Net realized and unrealized investment gains reported in the
statement of income of $3.0 million for the six months ended June
30, 2021. In addition, $74.0 million of unrealized investment
losses before tax were recognized through other comprehensive
income in the six months ended June 30, 2021.
- The total return on Aspen’s managed investment portfolio was
0.1% for the six months ended June 30, 2021, and reflects net
investment income and net realized and unrealized gains and losses
mainly in the fixed income portfolio.
- Aspen’s investment portfolio as at June 30, 2021, consisted
primarily of high quality fixed income securities with an average
credit quality of “AA-”. The average duration of the fixed income
portfolio was 3.17 years as at June 30, 2021.
- Book yield on the fixed income portfolio as at June 30, 2021,
was 2.22% compared with 2.34% as at December 31, 2020.
Capital and Debt
- Total shareholders’ equity was $2,915.6 million as at June 30,
2021, an increase of $326.8 million compared with $2,588.8 million*
as at June 30, 2020, and an increase of $7.7 million compared with
$2,907.9 million* as at December 31, 2020. * During the second
quarter of 2021, the Company identified a control deficiency
regarding incorrect treatment of foreign exchange gains and losses
arising as a result of currency matching issues within Aspen U.K.’s
underwriting premiums receivable. The deficiency resulted in
previous foreign exchange revaluation and translation amounts,
which should have been matched with an underwriting premium
receivable payment being carried over, and were incorrectly
included in Aspen U.K.’s underwriting premiums receivable, thereby
overstating the related asset value. The Company has concluded that
this error is immaterial to the prior period financial statements
of Aspen Holdings and that correcting the error in the current
period would likely materially misstate the current period
financial statements. In accordance with U.S. GAAP, we have,
therefore, corrected the error in the comparatives of the 2021
financial statements of Aspen Holdings by adjusting the prior
period information and adding disclosure of the error. The Company,
with the assistance of outside forensic accountants, has analyzed
the expected impact of this deficiency on the accounts of both
Aspen U.K. and Aspen Holdings and has concluded that the error
results in underwriting premiums receivable, retained earnings and
accumulated other comprehensive income being revised downward by
$89.7 million, $2.1 million and $87.6 million, respectively as at
December 31, 2020. Accordingly, the June 30, 2020, prior period
information relating to underwriting premiums receivable, retained
earnings and accumulated other comprehensive have been restated
downwards by $90.0 million, $4.8 million and $85.2 million,
respectively. The Company has further concluded that this control
deficiency will constitute a material weakness when management
performs its assessment of the effectiveness of the Company’s
internal control over financial reporting as of December 31, 2021.
The Company, therefore, believes that its internal controls over
financial reporting would, at that time, be assessed to be
ineffective. Management has, however, developed a remediation plan
to address this issue which it intends to implement by the end of
Q4 2021. There can be no assurances that the intended remediation
plan will be successful in remediating the material weakness, or if
successful, when such remediation will be completed.
Earnings materials
The earnings press release for the six months ended June 30,
2021 will be published on Aspen’s website at www.aspen.co.
Aspen Insurance Holdings
Limited
Summary consolidated balance sheet
(unaudited)
$ in millions
As at June 30, 2021
As at December 31,
2020
ASSETS
Total investments
$
6,327.8
$
5,755.3
Cash and cash equivalents
1,330.4
1,747.3
Reinsurance recoverables
3,886.0
3,648.9
Premiums receivable (1)
1,438.0
1,190.1
Other assets
751.0
754.1
Total assets
$
13,733.2
$
13,095.7
LIABILITIES
Losses and loss adjustment expenses
$
7,294.0
$
7,165.3
Unearned premiums
2,124.8
1,817.4
Other payables
1,098.9
905.2
Long-term debt
299.9
299.9
Total liabilities
$
10,817.6
$
10,187.8
SHAREHOLDERS’ EQUITY
Total shareholders’ equity (1)
2,915.6
2,907.9
Total liabilities and shareholders’
equity
$
13,733.2
$
13,095.7
(1) Underwriting premiums receivable, retained earnings and
accumulated other comprehensive income and have been restated by to
account for the correction of foreign exchange movements which had
occurred due to currency mismatching for periods 2020 and prior, as
follows:
- Underwriting premiums receivable has been restated by $(89.7)
million as at December 31, 2020; and
- Total shareholders’ equity has been restated by $89.7 million
as at December 31, 2020, split between retained earnings and
accumulated other comprehensive income totaling $2.1 million and
$87.6 million, respectively.
Aspen Insurance Holdings
Limited
Summary consolidated statement of
income (unaudited)
$ in millions, except ratios
Six Months Ended
June 30, 2021
June 30, 2020
UNDERWRITING REVENUES
Gross written premiums
$
2,018.5
$
2,118.6
Premiums ceded
(782.4
)
(681.8
)
Net written premiums
1,236.1
1,436.8
Change in unearned premiums
(104.7
)
(245.1
)
Net earned premiums
1,131.4
1,191.7
UNDERWRITING EXPENSES
Losses and loss adjustment expenses
715.0
883.0
Amortization of deferred policy
acquisition costs
216.2
230.9
General, administrative and corporate
expenses
166.9
186.7
Total underwriting expenses
1,098.1
1,300.6
Underwriting income/(loss) including
corporate expenses
33.3
(108.9
)
Net investment income
68.7
84.9
Interest expense (1)
(7.1
)
(21.7
)
Other income (2)
7.6
0.1
Total other revenue
69.2
63.3
Non-operating expenses (3)
(10.4
)
(11.6
)
Net realized and unrealized exchange gains
(4)(5)
7.5
3.0
Net realized and unrealized investment
gains/(losses)
3.0
(114.5
)
INCOME/(LOSS) BEFORE TAX (5)
102.6
(168.7
)
Income tax (expense)
(15.2
)
(4.1
)
NET INCOME/(LOSS) AFTER TAX (5)
87.4
(172.8
)
Dividends paid on preference shares
(22.2
)
(22.2
)
Retained income/(loss) (5)
$
65.2
$
(195.0
)
Loss ratio
63.2
%
74.1%
Policy acquisition expense ratio
19.1
%
19.4%
General, administrative and corporate
expense ratio
15.7
%
16.6%
General, administrative and corporate
expense ratio (excluding non-operating expenses) / Operating
expense ratio
14.8
%
15.7%
Expense ratio
34.8
%
36.0%
Expense ratio (excluding non-operating
expenses)
33.9
%
35.1%
Combined ratio
98.0
%
110.1%
Combined ratio (excluding non-operating
expenses)
97.1
%
109.2%
(1)
Interest expense charge for the six months
ended June 30, 2020 includes interest on deferred premium payments
for an adverse development cover.
(2)
Other income includes a $9.7 million gain
contingency recognised in 2021 in relation to the prior year’s sale
of our Surety business, based upon having met certain premium
production levels prescribed in the sale agreement.
(3)
Non-operating expenses includes expenses
in relation to severance, amortization of intangible assets and
other non-recurring costs.
(4)
Includes the net realized and unrealized
gains/(losses) from foreign exchange contracts.
(5)
Net realized and unrealized exchange
gains/(losses) have been restated to account for the correction of
foreign exchange movements which had occurred due to currency
mismatching for periods 2020 and prior, totaling a $4.1 million
loss for the six months ended June 20, 2020. Income/(loss) before
and after tax and retained (loss)/income figures have been restated
as a result of the correction to net realized and unrealized
exchange gains and losses for the periods mentioned.
Aspen Insurance Holdings
Limited
Summary consolidated segment
information (unaudited)
$ in millions, except ratios
Six Months Ended June 30,
2021
Reinsurance
Insurance
Total
Gross written premiums
$
896.3
$
1,122.2
$
2,018.5
Net written premiums
617.6
618.5
1,236.1
Gross earned premiums
662.0
1,037.6
1,699.6
Net earned premiums
501.6
629.8
1,131.4
Losses and loss adjustment expenses
299.2
415.8
715.0
Amortization of deferred policy
acquisition expenses
110.0
106.2
216.2
General and administrative expenses
49.1
91.7
140.8
Underwriting income
$
43.3
$
16.1
$
59.4
Net investment income
68.7
Net realized and unrealized investment
gains (1)
3.0
Corporate expenses
(26.1
)
Non-operating expenses (2)
(10.4
)
Other income (3)
7.6
Interest expense
(7.1
)
Net realized and unrealized foreign
exchange gains (4)
7.5
Income before tax
$
102.6
Income tax (expense)
(15.2
)
Net income
$
87.4
Ratios
Loss ratio
59.6
%
66.0
%
63.2
%
Policy acquisition expense ratio
21.9
%
16.9
%
19.1
%
General and administrative expense ratio
(5)
9.8
%
14.6
%
15.7
%
General and administrative expense ratio
(excluding non-operating expenses) / Operating expense ratio
(6)
9.8
%
14.6
%
14.8
%
Expense ratio
31.7
%
31.5
%
34.8
%
Expense ratio (excluding non-operating
expenses)
31.7
%
31.5
%
33.9
%
Combined ratio
91.3
%
97.5
%
98.0
%
Combined ratio (excluding non-operating
expenses)
91.3
%
97.5
%
97.1
%
Accident Year Ex-cat Loss Ratio
Loss ratio
59.6
%
66.0
%
63.2
%
Prior year loss development
6.0
%
(6.0
)%
(0.6
)%
Catastrophe losses
(11.7
)%
(4.1
)%
(7.5
)%
Accident year ex-cat loss ratio
53.9
%
55.9
%
55.1
%
(1)
Includes the net realized and unrealized
gains/(losses) from interest rate swaps.
(2)
Non-operating expenses includes expenses
in relation to severance, retention awards, amortization of
intangible assets and other non-recurring costs.
(3)
Other income includes a $9.7 million gain
contingency recognised in 2021 in relation to the prior year’s sale
of our Surety business, based upon having met certain premium
production levels prescribed in the sale agreement.
(4)
Includes the net realized and unrealized
gains/(losses) from foreign exchange contracts.
(5)
The total group general and administrative
expense ratio includes the impact from corporate expenses, and
non-operating expenses.
(6)
The total group general and administrative
expense ratio includes the impact from corporate expenses.
Aspen Insurance Holdings
Limited
Summary consolidated segment
information (unaudited)
$ in millions, except ratios
Six Months Ended June 30,
2020
Reinsurance
Insurance
Total
Gross written premiums
$
1,122.3
$
996.3
$
2,118.6
Net written premiums
842.8
594.0
1,436.8
Gross earned premiums
685.1
1,008.2
1,693.3
Net earned premiums
564.1
627.6
1,191.7
Losses and loss adjustment expenses
449.8
433.2
883.0
Amortization of deferred policy
acquisition expenses
114.7
116.2
230.9
General and administrative expenses
53.6
102.9
156.5
Underwriting (loss)
$
(54.0
)
$
(24.7
)
$
(78.7
)
Net investment income
84.9
Net realized and unrealized investment
(losses) (1)
(114.5
)
Corporate expenses
(30.2
)
Non-operating expenses (2)
(11.6
)
Other income
0.1
Interest expense (3)
(21.7
)
Net realized and unrealized foreign
exchange gains (4) (5)
3.0
(Loss) before tax (5)
$
(168.7
)
Income tax (expense)
(4.1
)
Net (loss) (5)
$
(172.8
)
Ratios
Loss ratio
79.7
%
69.0
%
74.1
%
Policy acquisition expense ratio
20.3
%
18.5
%
19.4
%
General and administrative expense ratio
(6)
9.5
%
16.4
%
16.6
%
General and administrative expense ratio
(excluding non-operating expenses) / Operating expense ratio
(7)
9.5
%
16.4
%
15.7
%
Expense ratio
29.8
%
34.9
%
36.0
%
Expense ratio (excluding non-operating
expenses)
29.8
%
34.9
%
35.1
%
Combined ratio
109.5
%
103.9
%
110.1
%
Combined ratio (excluding non-operating
expenses)
109.5
%
103.9
%
109.2
%
Accident Year Ex-cat Loss Ratio
Loss ratio
79.7
%
69.0
%
74.1
%
Prior year loss development
(0.1
)%
—
%
—
%
Catastrophe losses
(28.5
)%
(11.2
)%
(19.4
)%
Accident year ex-cat loss ratio
51.1
%
57.8
%
54.7
%
(1)
Includes the net realized and unrealized
gains/(losses) from interest rate swaps.
(2)
Non-operating expenses includes $11.6
million of expenses in relation to severance, retention awards,
amortization of intangible assets and other non-recurring
costs.
(3)
Interest expense includes interest on
deferred premium payments for an adverse development cover.
(4)
Includes the net realized and unrealized
gains/(losses) from foreign exchange contracts.
(5)
2020 net realized and unrealized exchange
gains/(losses) have been restated to account for the correction of
foreign exchange movements which had occurred due to currency
mismatching for periods 2020 and prior, totaling a $4.1 million
loss in the six months ended June 30, 2020. Income/(loss) before
and after tax figures have been restated as a result of the
correction to net realized and unrealized exchange gains and losses
for the periods mentioned.
(6)
The total group general and administrative
expense ratio includes the impact from corporate expenses, and
non-operating expenses.
(7)
The total group general and administrative
expense ratio includes the impact from corporate expenses.
Aspen Insurance Holdings Limited Non-GAAP supplementary
summary consolidated segment information (unaudited) $ in
millions, except ratios
The following tables present supplementary
financial information regarding our two reporting segments,
Reinsurance and Insurance, as at June 30, 2021 and June 30, 2020,
to show the impact on our financial performance from the business
which we have ceased underwriting and has been classified as
“Legacy”. “Legacy” business in the 2020 table has been represented
on a like for like basis, meaning all the same lines of business
have been included as Legacy in both the 2021 and 2020 tables,
notwithstanding that certain lines of business were not yet
classified as Legacy as at June 30, 2020 (e.g. Surety Insurance,
U.S. food and beverage product recall business and certain U.S.
Crop and Agricultural Reinsurance Business). We believe this
presentation provides for a more complete understanding of the
impact that these lines of business have had on our underlying
performance.
Six Months Ended June 30,
2021
Reinsurance
Insurance
Ongoing
Legacy (1)
Reinsurance
Total
Ongoing
Legacy (2)
Insurance Total
Group Total
Net earned premiums
481.0
20.6
501.6
608.3
21.5
629.8
1,131.4
Losses and loss adjustment expenses
291.1
8.1
299.2
350.1
65.7
415.8
715.0
Amortization of deferred policy
acquisition expenses
96.6
13.4
110.0
93.0
13.2
106.2
216.2
General and administrative expenses
48.1
1.0
49.1
90.9
0.8
91.7
140.8
Underwriting gain/(loss)
$
45.2
$
(1.9
)
$
43.3
$
74.3
$
(58.2
)
$
16.1
$
59.4
Net investment income
68.7
Net realized and unrealized investment
gains
3.0
Corporate expenses
(26.1
)
Amortization and non-recurring
expenses
(10.4
)
Other income
7.6
Interest expense
(7.1
)
Net realized and unrealized foreign
exchange gains
7.5
Income before tax
$
102.6
Income tax charge
(15.2
)
Net income
$
87.4
Ratios
Loss ratio
60.5
%
39.3
%
59.6
%
57.6
%
305.6
%
66.0
%
63.2
%
Policy acquisition expense ratio
20.1
%
65.0
%
21.9
%
15.3
%
61.4
%
16.9
%
19.1
%
General and administrative expense
ratio
10.0
%
4.9
%
9.8
%
14.9
%
3.7
%
14.6
%
15.7
%
Expense ratio
30.1
%
69.9
%
31.7
%
30.2
%
65.1
%
31.5
%
34.8
%
Combined ratio
90.6
%
109.2
%
91.3
%
87.8
%
370.7
%
97.5
%
98.0
%
Accident Year Ex-cat Loss Ratio
Loss ratio
60.5
%
39.3
%
59.6
%
57.6
%
305.6
%
66.0
%
63.2
%
Prior year loss development
5.8
%
10.2
%
6.0
%
2.7
%
(250.7
)%
(6.0
)%
(0.6
)%
Current year adjustments
Catastrophe losses
(12.2
)%
—
%
(11.7
)%
(4.3
)%
—
%
(4.1
)%
(7.5
)%
Accident year ex-cat loss ratio
54.1
%
49.5
%
53.9
%
56.0
%
54.9
%
55.9
%
55.1
%
_______________
Legacy reflects business we have elected
to cease underwriting following a series of strategic underwriting
reviews.
(1) Legacy (reinsurance) represents:
(i) U.S. crop insurance business which was
previously written on a reinsurance basis through a strategic
partnership until disposed of in Q4 2020;
(ii) our global credit and surety
reinsurance business that we ceased underwriting during Q3 2019;
and
(iii) and our U.S. Agricultural business
written via AgriLogic which was sold in December 2017.
(2) Legacy (insurance) represents:
(i) U.S. food and beverage product recall
business, the renewal rights to which was sold to a third party in
December 2020;
(ii) U.S. surety business, which in July
2020 was subject to a renewal rights transaction;
(iii) includes international marine and
energy liability products, and our global accident and health line
of business, which, following a strategic review of our
underwriting portfolio that began in December 2019, we determined
to cease underwriting and started to wind down in February 2020 and
March 2020, respectively;
(iv) professional liability and property
and casualty coverages for small to medium sized U.K.-based
businesses that was bound through our managing general agent, Aspen
Risk Management Limited that we placed into runoff during Q3
2019;
(v) international cargo insurance that we
ceased underwriting during Q4 2018;
(vi) our aviation line of business, which
we decided to cease underwriting during Q3 2018;
(vii) marine hull insurance written
through the Lloyd’s platform that we ceased underwriting during Q3
2018;
(viii) international property insurance
previously written via a joint underwriting initiative that we
ceased underwriting during Q1 2017; and
(ix) employers and public liability lines
previously written that we ceased underwriting during Q4 2015.
Six Months Ended June 30,
2020
Reinsurance
Insurance
Ongoing
Legacy (1)
Reinsurance Total
Ongoing
Legacy (2)
Insurance Total
Group Total
Net earned premiums
469.0
95.1
564.1
513.8
113.8
627.6
1,191.7
Losses and loss adjustment expenses
384.9
64.9
449.8
343.0
90.2
433.2
883.0
Amortization of deferred policy
acquisition expenses
97.8
16.9
114.7
83.5
32.7
116.2
230.9
General and administrative expenses
51.7
1.9
53.6
87.9
15.0
102.9
156.5
Underwriting (loss)/gain
$
(65.4
)
$
11.4
$
(54.0
)
$
(0.6
)
$
(24.1
)
$
(24.7
)
$
(78.7
)
Net investment income
84.9
Net realized and unrealized investment
(losses)
(114.5
)
Corporate expenses
(30.2
)
Amortization and non-recurring
expenses
(11.6
)
Other income
0.1
Interest expense
(21.7
)
Net realized and unrealized foreign
exchange gains
3.0
(Loss) before tax
(168.7
)
Income tax charge
(4.1
)
Net (loss)
(172.8
)
Ratios
Loss ratio
82.1
%
68.2
%
79.7
%
66.8
%
79.3
%
69.0
%
74.1
%
Policy acquisition expense ratio
20.9
%
17.8
%
20.3
%
16.3
%
28.7
%
18.5
%
19.4
%
General and administrative expense
ratio
11.0
%
2.0
%
9.5
%
17.1
%
13.2
%
16.4
%
16.6
%
Expense ratio
31.9
%
19.8
%
29.8
%
33.4
%
41.9
%
34.9
%
36.0
%
Combined ratio
114.0
%
88.0
%
109.5
%
100.2
%
121.2
%
103.9
%
110.1
%
Accident Year Ex-cat Loss Ratio
Loss ratio
82.1
%
68.2
%
79.7
%
66.8
%
79.3
%
69.0
%
74.1
%
Prior year loss development
(1.2
)%
5.6
%
(0.1
)%
3.0
%
(13.3
)%
—
%
—
%
Catastrophe losses
(30.9
)%
—
%
(28.5
)%
(11.1
)%
(9.4
)%
(11.2
)%
(19.4
)%
Accident year ex-cat loss ratio
50.0
%
73.8
%
51.1
%
58.7
%
56.6
%
57.8
%
54.7
%
_______________
Legacy reflects business we have elected
to cease underwriting following a series of strategic underwriting
reviews.
(1) Legacy (reinsurance) represents:
(i) U.S. crop insurance business which was
previously written on a reinsurance basis through a strategic
partnership until disposed of in Q4 2020;
(ii) our global credit and surety
reinsurance business that we ceased underwriting during Q3 2019;
and
(iii) and our U.S. Agricultural business
written via AgriLogic which was sold in December 2017.
(2) Legacy (insurance) represents:
(i) U.S. food and beverage product recall
business, the renewal rights to which was sold to a third party in
December 2020;
(ii) U.S. surety business, which in July
2020 was subject to a renewal rights transaction;
(iii) includes international marine and
energy liability products, and our global accident and health line
of business, which, following a strategic review of our
underwriting portfolio that began in December 2019, we determined
to cease underwriting and started to wind down in February 2020 and
March 2020, respectively;
(iv) professional liability and property
and casualty coverages for small to medium sized U.K.-based
businesses that was bound through our managing general agent, Aspen
Risk Management Limited that we placed into runoff during Q3
2019;
(v) international cargo insurance that we
ceased underwriting during Q4 2018;
(vi) our aviation line of business, which
we decided to cease underwriting during Q3 2018;
(vii) marine hull insurance written
through the Lloyd’s platform that we ceased underwriting during Q3
2018;
(viii) international property insurance
previously written via a joint underwriting initiative that we
ceased underwriting during Q1 2017; and
(ix) employers and public liability lines
previously written that we ceased underwriting during Q4 2015.
About Aspen Insurance Holdings Limited
Aspen provides reinsurance and insurance coverage to clients in
various domestic and global markets through wholly-owned
subsidiaries and offices in Australia, Bermuda, Canada, Singapore,
Switzerland, the United Kingdom and the United States. For the year
ended December 31, 2020, Aspen reported $13.1 billion* in total
assets, $7.2 billion in gross reserves, $2.9 billion* in total
shareholders’ equity and $3.7 billion in gross written premiums.
Aspen's operating subsidiaries have been assigned a rating of “A-”
by Standard & Poor’s Financial Services LLC and an “A”
(“Excellent”) by A.M. Best Company Inc.
*Prior period information for the period ended June 30, 2020
relating to underwriting premiums receivable, retained earnings and
accumulated other comprehensive have been restated downwards by
$90.0 million, $4.8 million and $85.2 million, respectively, due to
an identified deficiency which resulted in previous foreign
exchange revaluation and translation amounts which should have been
matched with a underwriting premium receivable payment being
carried over and were incorrectly included in Aspen U.K.’s
underwriting premiums receivable, thereby overstating the related
asset value. Refer to page 7 of this release for additional
information.
For more information about Aspen, please visit www.aspen.co.
(1) Cautionary Statement Regarding Forward-Looking
Statements
This press release may contain written “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, that 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. In particular,
statements using the words such as “expect,” “intend,” “plan,”
“believe,” “aim,” “project,” “anticipate,” “seek,” “will,”
“likely,” “assume,” “estimate,” “may,” “continue,” “guidance,”
“objective,” “outlook,” “trends,” “future,” “could,” “would,”
“should,” “target,” “predict,” “potential,” “on track” or their
negatives or variations and similar terminology and words of
similar import generally involve forward-looking statements.
All forward-looking statements rely on a number of assumptions,
estimates and data concerning future results and events and that
are subject to a number of uncertainties, assumptions and other
factors, many of which are outside Aspen’s control that could cause
actual results to differ materially from such forward-looking
statements. Aspen believes these factors include, but are not
limited to: the actual development of losses and expenses impacting
estimates for the COVID-19 pandemic; operating costs, customer loss
and business disruption (including, without limitation,
difficulties in maintaining relationships with employees,
customers, reinsurers or suppliers) related to the COVID-19
pandemic may be greater than expected; Aspen's controlling
shareholder owns all of its ordinary shares and has the power to
determine the affairs of Aspen; the impact on our operating results
from our exit or discontinuation of particular Legacy business; the
impact on our operating results and financial condition from our
entry into an adverse development cover reinsuring losses incurred
on or prior to December 31, 2019; the actual development of losses
and expenses impacting estimates for catastrophe events and other
weather-related losses; the impact of complex and unique causation
and coverage issues associated with the attribution of losses to
wind or flood damage or other perils such as fire or business
interruption relating to such events; potential uncertainties
relating to reinsurance recoveries, reinstatement premiums and
other factors inherent in loss estimation; our ability to
successfully implement steps to further optimize the business
portfolio, ensure capital efficiency and enhance investment
returns; the possibility of greater frequency or severity of claims
and loss activity, including as a result of natural or man-made
(including economic and political risks) catastrophic or material
loss events, than our underwriting, reserving, reinsurance
purchasing or investment practices have anticipated; the
assumptions and uncertainties underlying reserve levels that may be
impacted by future payments for settlements of claims and expenses
or by other factors causing adverse or favorable development,
including our assumptions on inflation costs associated with
long-tail casualty business which could differ materially from
actual experience; the United Kingdom’s withdrawal from the
European Union; a decline in our operating subsidiaries’ ratings
with S&P or A.M. Best; the reliability of, and changes in
assumptions to, natural and man-made catastrophe pricing,
accumulation and estimated loss models; decreased demand for our
insurance or reinsurance products; cyclical changes in the
insurance and reinsurance industry; the models we use to assess our
exposure to losses from future catastrophes contain inherent
uncertainties and our actual losses may differ significantly from
expectations; our capital models may provide materially different
indications than actual results; increased competition from
existing (re)insurers and from alternative capital providers and
insurance-linked funds and collateralized special purpose insurers
on the basis of pricing, capacity, coverage terms, new capital,
binding authorities to brokers or other factors and the related
demand and supply dynamics as contracts come up for renewal; our
ability to execute our business plan to enter new markets,
introduce new products and teams and develop new distribution
channels, including their integration into our existing operations;
our acquisition strategy; the recent consolidation in the
(re)insurance industry; loss of one or more of our senior
underwriters or key personnel; our ability to exercise capital
management initiatives, including the availability of capital to
declare dividends, or to arrange banking facilities as a result of
prevailing market conditions, the level of catastrophes or other
losses or changes in our financial results; changes in general
economic conditions including the effects of the COVID-19 pandemic,
including inflation, deflation, foreign currency exchange rates,
interest rates and other factors that could affect our financial
results; the risk of a material decline in the value or liquidity
of all or parts of our investment portfolio; the risks associated
with the management of capital on behalf of investors; a failure in
our operational systems or infrastructure or those of third
parties, including those caused by security breaches or
cyber-attacks, or data protection failures; evolving issues with
respect to interpretation of coverage after major loss events; our
ability to adequately model and price the effects of climate cycles
and climate change; any intervening legislative or governmental
action and changing judicial interpretation and judgments on
insurers’ liability to various risks; the risks related to
litigation; the effectiveness of our risk management loss
limitation methods, including our reinsurance purchasing; changes
in the availability, cost or quality of reinsurance or
retrocessional coverage; changes in the total industry losses or
our share of total industry losses resulting from events, such as
catastrophes, that have occurred in prior years or may occur and,
with respect to such events, our reliance on loss reports received
from cedants and loss adjusters, our reliance on industry loss
estimates and those generated by modeling techniques, changes in
rulings on flood damage or other exclusions as a result of
prevailing lawsuits and case law; the impact of one or more large
losses from events other than catastrophes or by an unexpected
accumulation of attritional losses and deterioration in loss
estimates; the impact of acts of terrorism, acts of war and related
legislation; any changes in our reinsurers’ credit quality and the
amount and timing of reinsurance recoverables; the continuing and
uncertain impact of the current depressed lower growth economic
environment in many of the countries in which we operate; our
reliance on information and technology and third-party service
providers for our operations and systems; the level of inflation in
repair costs due to limited availability of labor and materials
after catastrophes; the failure of our reinsurers, policyholders,
brokers or other intermediaries to honor their payment obligations;
our reliance on the assessment and pricing of individual risks by
third parties; our dependence on a few brokers for a large portion
of our revenues; changes in the U.S. federal income tax laws or
regulations applicable to insurance companies and the manner in
which such laws and regulations are interpreted; the impact of U.S.
tax reform on Aspen’s business, investments, results and assets,
including (i) changes to the valuation of deferred tax assets and
liabilities, (ii) the impact on intra-group reinsurance
transactions, (iii) that the costs associated with U.S. tax reform
may be greater than initially expected, and (iv) the risk that
technical corrections, regulations and supplemental legislation and
future interpretations or applications thereof or other changes may
be issued in the future, including the rules affecting the
valuation of deferred tax assets; changes in government regulations
or tax laws in jurisdictions where we conduct business; changes in
accounting principles or policies or in the application of such
accounting principles or policies; central bank intervention in the
financial markets, trade wars or other protectionist measures
relating to international trade arrangements, adverse geopolitical
events, domestic political upheavals or other developments that
adversely impact global economic conditions; failure of our hedging
arrangements to be effective; increased counterparty risk due to
the credit impairment of financial institutions; our ability to
realize amounts on sales of securities on our balance sheet
equivalent to their values recorded for accounting purposes;
heightened volatility and/or disruption in global capital and
credit markets; and Aspen or Aspen Bermuda Limited becoming subject
to income taxes in the United States or the United Kingdom. For a
more detailed description of these uncertainties and other factors
that could impact the forward-looking statements in this press
release, please see the “Risk Factors” section in Aspen’s Annual
Report on Form 20-F for the twelve months ended December 31, 2020,
filed with the SEC.
The inclusion of forward-looking statements in this press
release or any other communication should not be considered as a
representation by Aspen that current plans or expectations will be
achieved. Forward-looking statements speak only as of the date on
which they are made and Aspen undertakes no obligation to publicly
update or revise any forward-looking statement, whether as a result
of new information, future developments or otherwise, except as
required by law.
In addition, any estimates relating to loss events involve the
exercise of considerable judgment and reflect a combination of
ground-up evaluations, information available to date from brokers
and cedants, market intelligence, initial tentative loss reports
and other sources. The actuarial range of reserves and management’s
best estimate represents a distribution from our internal capital
model for reserving risk based on our current state of knowledge
and explicit and implicit assumptions relating to the incurred
pattern of claims, the expected ultimate settlement amount,
inflation and dependencies between lines of business. Due to the
complexity of factors contributing to losses and the preliminary
nature of the information used to prepare estimates, there can be
no assurance that Aspen’s ultimate losses will remain within the
stated amounts.
Basis of Preparation
Aspen has prepared the financial information contained within
this financial results press release in accordance with the
principles of U.S. Generally Accepted Accounting Principles
(“GAAP”).
Non-GAAP Financial Measures
In presenting Aspen’s results, management has included and
discussed certain “non-GAAP financial measures.” Management
believes these non-GAAP financial measures, which may be defined
differently by other companies, better explain Aspen’s results of
operations in a manner that allows for a more complete
understanding of the underlying trends in Aspen’s business.
However, these measures should not be viewed as a substitute for
those determined in accordance with GAAP.
Operating Income is a non-GAAP financial measure.
Operating income is an internal performance measure used by Aspen
in the management of its operations and represents after-tax
operational results excluding, as applicable, after-tax net
realized and unrealized gains or losses, after-tax net foreign
exchange gains or losses, including net realized and unrealized
gains and losses from foreign exchange contracts, net realized
gains or losses on investments, amortization of intangible assets
and certain non-recurring income and expenses, including expenses
associated with Aspen's operational effectiveness and efficiency
program.
Aspen excludes the items above from its calculation of operating
income because they are either not expected to recur and therefore
are not reflective of underlying performance or the amount of these
gains or losses is heavily influenced by, and fluctuates in part,
according to the availability of market opportunities. Aspen
believes these amounts are largely independent of its business and
underwriting process and including them would distort the analysis
of trends in its operations. In addition to presenting net income
determined in accordance with GAAP, Aspen believes that showing
operating income enables investors, analysts, rating agencies and
other users of its financial information to more easily analyze
Aspen’s results of operations in a manner similar to how management
analyzes Aspen’s underlying business performance. Operating income
should not be viewed as a substitute for GAAP net income.
Six Months Ended
(in US$ millions except where
stated)
June 30, 2021
June 30, 2020
Net income/(loss) after tax as
reported*
87.4
(172.8
)
Preference share dividends
(22.2
)
(22.2
)
Net income/(loss) available to ordinary
shareholders
65.2
(195.0
)
Add (deduct) after tax items
Net foreign exchange (gains)*
(5.7
)
(3.7
)
Net realized (gains)/ losses on
investments
(3.1
)
116.5
Non-operating expenses
10.3
11.0
Operating income/(loss) after tax
available to ordinary shareholders
$
66.7
$
(71.2
)
Tax expense on operating income
13.6
3.4
Operating income/(loss) before tax
available to ordinary shareholders
$
80.3
$
(67.8
)
Operating income/(loss) after tax
available to ordinary shareholders
$
66.7
$
(71.2
)
Add back: Preference share dividends
$
22.2
$
22.2
Operating income/(loss) after tax
$
88.9
$
(49.0
)
*Net loss after tax for the six months ended June 30, 2020 has
been restated by $4.1 million to account for the correction of
foreign exchange movements described on page 13. The after tax
impact of this correction is $3.7 million.
Retention ratio is a non-GAAP financial measure and is
calculated by dividing net written premiums by gross written
premiums.
Accident Year Loss Ratio Excluding Catastrophes is a
non-GAAP financial measure. Aspen believes that the presentation of
loss ratios excluding catastrophes and prior year reserve movements
supports meaningful comparison from period to period of the
underlying performance of the business. Accident year loss ratios
excluding catastrophes are calculated by dividing net losses
excluding catastrophe losses and prior year reserve movements by
net earned premiums excluding catastrophe-related reinstatement
premiums. Aspen has defined catastrophe losses in the six months
ended June 30, 2021 as losses associated with Texas winter storms
and other weather-related events. Catastrophe losses in the six
months ended June 30, 2020 were defined as losses associated with
COVID-19 and various weather-related events.
Six Months Ended June 30,
2021
Accident year ex
CAT loss ratio
Reinsurance
Insurance
Total
($ in millions)
Net earned premium
$
501.6
$
629.8
$
1,131.4
Losses and loss adjustment expenses
299.2
415.8
715.0
Prior year reserve movements
30.2
(37.5
)
(7.3
)
Catastrophe losses
(58.6
)
(25.9
)
(84.5
)
Losses excluding catastrophes and prior
year reserve movements
270.8
352.4
623.2
Accident year ex CAT loss ratio
53.9
%
55.9
%
55.1
%
Six Months Ended June 30,
2020
Accident year ex
CAT loss ratio
Reinsurance
Insurance
Total
($ in millions)
Net earned premium
$
564.1
$
627.6
$
1,191.7
Losses and loss adjustment expenses
449.8
433.2
883.0
Prior year reserve movements
(0.4
)
0.1
(0.3
)
Catastrophe losses (including COVID-19
losses)
(160.9
)
(70.4
)
(231.3
)
Losses excluding catastrophes and prior
year reserve movements
288.5
362.9
651.4
Accident year ex CAT loss ratio
51.1
%
57.8
%
54.7
%
Ex-Catastrophe Combined Ratio is a non-GAAP financial
measure and is calculated as the sum of the Accident year ex CAT
loss ratio and the expenses ratio.
Six Months Ended June 30,
2021
Six Months Ended June 30,
2020
($ in millions)
Accident year ex CAT loss ratio
55.1
%
54.7
%
Expense ratio (excluding non-operating
expenses)
34.8
%
36.0
%
Ex-Catastrophe Combined Ratio
89.9
%
90.7
%
Combined Ratio Excluding Non-Operating Expenses is a
non-GAAP financial measure and is calculated as the sum of the loss
ratio and the expenses ratio excluding non-operating expenses. The
loss ratio is calculated by dividing losses and loss adjustment
expenses by net premiums earned. The expense ratio (excluding
non-operating expenses) is calculated by dividing the sum of
amortization and deferred policy acquisition costs and operating
expenses, by net premiums earned.
Combined Ratio (excluding non-operating
expenses)
Six Months Ended
(in US$ millions except where stated)
June 30, 2021
June 30, 2020
Numerator: Sum of:
Losses and loss adjustment expenses
715.0
883.0
Amortization of deferred policy
acquisition costs
216.2
230.9
General, administrative and corporate
expenses
166.9
186.7
Non-operating expenses
10.4
11.6
Numerator total
1,108.5
1,312.2
Denominator: Net earned premiums
1,131.4
1,191.7
Combined ratio
98.0
%
110.1
%
Adjustments to numerator:
Exclude non-operating expenses
(10.4
)
(11.6
)
Numerator total - excluding non-operating
expenses
1,098.1
1,300.6
Combined ratio (excluding non-operating
expenses)
97.1
%
109.2
%
Comprehensive Income excluding preference dividends is
calculated by taking the net income/(loss) after tax, less
dividends paid on preference shares and other comprehensive
income.
Six Months Ended June 30,
2021
Six Months Ended June 30,
2020
($ in millions)
Net income/(loss) after tax as
reported
$
87.4
$
(172.8
)
Dividends paid on preference shares
(22.2
)
(22.2
)
Other comprehensive (loss)/income
(57.5
)
$
148.7
Total comprehensive income/(loss), less
preference dividends
$
7.7
$
(46.3
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210907005245/en/
Helen Rose, Chief Accounting Officer, Aspen Helen.Rose@Aspen.co
+44 20 7184 8953
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