Aspen Reports Results for the Quarter and Six Months Ended June 30, 2013

  Aspen Reports Results for the Quarter and Six Months Ended June 30, 2013

Business Wire

HAMILTON, Bermuda -- July 24, 2013

Aspen Insurance Holdings Limited (“Aspen”) (NYSE: AHL) today reported net
income after tax of $40.1 million, or $0.36 diluted net income per share, for
the second quarter of 2013.

Chris O’Kane, Chief Executive Officer commented, “In the second quarter, Aspen
delivered solid operating results in an above average catastrophe quarter,
with our combined ratio excluding catastrophes improving modestly from last
year. We continue to make progress on the three initiatives we outlined
earlier this year to drive increased profitability. We have released $70
million of capital in our U.S. property insurance line and our U.S. operations
overall continue to gain scale and momentum towards sustainable profitability.
We executed over $240 million of share repurchases in the first six months of
the year and continued to carefully reallocate a portion of our investment
portfolio to achieve higher risk-adjusted returns. We remain intensely focused
on executing these initiatives and achieving increased profitability.”

Operating highlights for the quarter ended June 30, 2013

  *Gross written premiums increased overall by 3.1% to $687.3 million in the
    second quarter of 2013 from the second quarter of 2012. Gross written
    premiums in Reinsurance were flat while Insurance grew 6.0%
  *Combined ratio of 97.1% for the second quarter of 2013 compared with a
    combined ratio of 87.3% for the second quarter of 2012. This increase was
    due to $58.7 million or 10.9 percentage points, of pre-tax catastrophe
    losses net of reinsurance recoveries and $5.2 million of reinstatement
    premiums in the second quarter of 2013 compared with no catastrophe losses
    in the second quarter of 2012
  *Net favorable development on prior year loss reserves of $27.4 million, or
    5.0 combined ratio points, for the second quarter of 2013 compared with
    $28.6 million, or 5.6 combined ratio points, for the second quarter of
    2012

Financial highlights for the quarter and six months ended June 30, 2013

  *Annualized net income return on average equity of 4.4% and annualized
    operating return on average equity of 6.4% for the second quarter of 2013
    compared with 10.8% and 13.6%, respectively in the second quarter of
    2012^(1)
  *Annualized net income return on average equity of 8.0% and annualized
    operating return on average equity of 8.6% for the first half of 2013
    compared with 10.6% and 11.4%, respectively in the first half of 2012^(1)
  *Diluted net income per share of $0.36 for the quarter ended June 30, 2013
    compared with diluted net income per share of $1.03 for the second quarter
    of 2012, and diluted net income per share of $1.52 for the six months
    ended June 30, 2013 compared with diluted net income per share of $2.02
    for the six months ended June 30, 2012
  *Diluted operating income per share of $0.63 for the quarter ended June 30,
    2013 compared with diluted operating income per share of $1.32 for the
    second quarter of 2012^(1) and diluted operating income per share of $1.70
    for the six months ended June 30, 2013 compared with diluted net income
    per share of $2.20 for the six months ended June 30, 2012
  *On an after-tax basis, catastrophe losses were $53.7 million, or $0.77 per
    share, for the second quarter of 2013, and $53.7 million, or $0.75 per
    share, for the first six months of 2013
  *Diluted book value per share of $38.87 at June 30, 2013 down 4.4% from
    March 31, 2013^(1) mainly due to the $138.4 ^ million of unrealized losses
    in the investment portfolio as a result of widening credit spreads and
    interest rate movements
  *On April 25, 2013, Aspen issued 11.0 million 5.950% Preference Shares with
    a liquidation preference of $25 for an aggregate amount of $275.0 million
    and net proceeds of approximately $270.4 million from this issuance

Segment highlights

Reinsurance

Operating highlights for Reinsurance for the quarter ended June 30, 2013
include:

  *Gross written premiums of $298.6 million, largely flat compared with
    $299.8 million for the second quarter of 2012
  *Combined ratio of 88.9% compared with 79.0% for the second quarter of 2012
  *Favorable prior year loss reserve development of $24.1 million, or 8.7
    combined ratio points, compared with $14.1 million favorable prior year
    loss reserve development, or 5.0 combined ratio points, for the second
    quarter of 2012

The combined ratio of 88.9% for the second quarter of 2013 included $51.8
million, or 19.4 percentage points, of pre-tax catastrophe losses, net of
reinsurance recoveries and $5.2 million of reinstatement premiums, related to
flooding in Central Europe, Canada and India, and tornadoes and hailstorms in
the U.S. The combined ratio of 79.0% for the second quarter of 2012 included
no natural catastrophe losses.

Insurance

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

  *Gross written premiums of $388.7 million, up 6.0% compared with $366.8
    million for the second quarter of 2012
  *Combined ratio of 99.8% compared with 92.2% for the second quarter of 2012
  *Favorable prior year loss reserve development of $3.3 million, or 1.2
    combined ratio points, compared with $14.5 million, or 6.3 combined ratio
    points, for the second quarter of 2012

The increase in gross written premiums was mainly attributable to growth in
Marine, Energy and Construction Liability, Global Casualty, as well as the
U.S.-based insurance teams specifically in Programs, Professional Liability
and Marine. The combined ratio for the second quarter of 2013 included $6.9
million, or 2.6 percentage points, of pre-tax catastrophe losses net of
reinsurance recoveries and reinstatement premiums related to tornadoes and
hailstorms in the U.S. The combined ratio for the second 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 3.4 years at June 30, 2013,
excluding the impact of interest rate swaps, or 3.0 years including the impact
of interest rate swaps. The total return on the Company’s investment portfolio
was negative 1.2% for the second quarter of 2013, compared to a gain of 1.0%
for the second quarter of 2012. The equity portfolio had a loss of 0.3% for
the quarter and a gain of 8.3% for the first half of 2013.

Net investment income for the second quarter of 2013 was $45.9 million. Book
yield as at June 30, 2013 on the fixed income portfolio was 2.71% compared to
3.19% at June 30, 2012. The decline in the yield primarily reflects the effect
of lower prevailing interest rates.

Net realized and unrealized investment losses including unrealized movements
in the trading portfolio included in net income for the quarter were $6.6
million. Total unrealized gains in the available for sale investment
portfolio, including equity securities, decreased $138.4 million from March
31, 2013 to $199.0 million at June 30, 2013.

Capital

Total shareholders’ equity decreased by $104.7 million in the quarter to $3.2
billion at June 30, 2013.

During the second quarter of 2013, Aspen repurchased 800,042 ordinary shares
in the open market at an average price of $37.38 per share for a total cost of
$29.9 million. Between July 1, 2013 and July 22, 2013, Aspen repurchased
174,202 ordinary shares under its Rule 10b5-1 plan at an average price of
$37.83 per share for a total cost of $6.6 million. Aspen had $287 million
remaining under its current share repurchase authorization at July 22, 2013.

On April 25, 2013 Aspen elected to mandatorily redeem all of its outstanding
5.625% Perpetual Preferred Income Equity Replacement Securities (“Perpetual
PIERS”). Accordingly, the conversion settlement amount for each $50
liquidation preference of Perpetual PIERS was paid in the following forms of
consideration: $50.00 in cash and approximately 0.3991 shares of Aspen
ordinary shares. As a result, Aspen issued a total of 1,835,860 ordinary
shares.

On April 25, 2013 Aspen priced 11,000,000 shares of 5.95% Fixed-to-Floating
Rate Perpetual Non-Cumulative Preference Shares with a liquidation preference
of $25 per share or $275 million in aggregate liquidation preference.

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. While recent
decreases in pricing in certain business lines, if sustained, are expected to
have an adverse effect on operating return on equity, Aspen continues to
identify actions in each of its three operating return on equity levers –
optimization of the business portfolio, capital efficiency and enhancing
investment returns – to help mitigate the impact of pricing declines on
operating return on equity.

See “Forward-looking Statements Safe Harbor” below.

(1) See definition of non-GAAP financial measures on pages 12 and 13

Earnings conference call and web cast

Aspen will host a conference call to discuss the results at 9:00 am (EST) on
Thursday, July 25, 2013.

To participate in the July 25 conference call by phone
Please call to register at least 10 minutes before the conference call begins
by dialing:

+1 (888) 459 5609 (US toll free) or
+1 (404) 665 9920 (international)
Conference ID 97869477

To listen live online
Aspen will provide a live webcast on Aspen’s website at www.aspen.co

To download the materials
The earnings press release and a detailed financial supplement will also be
published on Aspen’s website at www.aspen.co.

To listen later
A replay of the call will be available for 14 days via phone and internet,
available two hours after the end of the live call. To listen to the replay by
phone please dial:

+1 (855) 859 2056 (US toll free) or
+1 (404) 537 3406 (international)
Replay ID 97869477

The recording will be also available at www.aspen.co on the Event Calendar
page within the Investor Relations section.

                                                                  
Aspen Insurance Holdings Limited
Summary consolidated balance
sheet (unaudited)
$ in millions, except per share
data
                                                                             
                                            As at           As at

                                            June 30,        December 31,

                                            2013            2012
                                                                             
ASSETS
Total investments                           $6,746.7        $6,692.4
Cash and cash equivalents                   1,188.9         1,463.6
Reinsurance recoverables                    698.3           621.6
Premiums receivable                         1,197.6         1,057.5
Other assets                                522.3           475.5
Total assets                                $10,353.8       $10,310.6
                                                                             
LIABILITIES
Losses and loss adjustment                  $4,734.9        $4,779.7
expenses
Unearned premiums                           1,375.3         1,120.8
Other payables                              509.5           422.6
Long-term debt                              499.2           499.1
Total liabilities                           7,118.9         6,822.2
                                                                             
SHAREHOLDERS’ EQUITY
Total shareholders’ equity                  3,234.9         3,488.4
Total liabilities and                       $10,353.8       $10,310.6
shareholders’ equity
                                                                             
Book value per share                        $39.99          $42.12
Diluted book value per share                $38.87          $40.65
(treasury stock method)
                                                                             

                                                                     
Aspen Insurance Holdings Limited
Summary consolidated statement of
income (unaudited)
$ in millions, except ratios
                                               Three Months Ended       
                                                 June 30,       June 30,
                                                                    
                                                 2013           2012
UNDERWRITING REVENUES                                       
Gross written premiums                           $687.3         $666.6
Premiums ceded                                 (74.6)      (84.7)    
Net written premiums                             612.7          581.9
Change in unearned premiums                    (68.7)      (68.5)    
Net earned premiums                            544.0       513.4     
UNDERWRITING EXPENSES
Losses and loss adjustment expenses              333.4          262.1
Policy acquisition expenses                      107.2          102.0
General, administrative and corporate          87.7        83.5      
expenses
Total underwriting expenses                    528.3       447.6     
Underwriting income including                  15.7        65.8      
corporate expenses
OTHER OPERATING REVENUE
Net investment income                            45.9           52.8
Interest expense                                 (7.8)          (7.7)
Other income                                   0.9         2.9       
Total other operating revenue                  39.0        48.0      
                                                                             
OPERATING INCOME BEFORE TAX                      54.7           113.8
                                                                             
Net realized and unrealized exchange             (13.8)         (13.0)
(losses)
Net realized and unrealized investment         0.2         (10.0)    
gains (losses)
INCOME BEFORE TAX                                41.1           90.8
Income tax expense                             (1.0)       (6.2)     
NET INCOME AFTER TAX                             40.1           84.6
Dividends paid on ordinary shares                (11.9)         (12.2)
Dividends paid on preference shares              (8.0)          (8.3)
Change in redemption value of                    (7.1)          ─
Perpetual PIERS
Proportion due to non-controlling              ─           0.2       
interest
Retained income                                $13.1       $64.3     
Components of net income (after tax)
    Operating income                            $52.2          105.8
     Net realized and unrealized                 (12.0)         (10.9)
     exchange (losses) after tax
     Net realized investment (losses)          (0.1)       (10.3)    
     after tax
NET INCOME AFTER TAX                           $40.1       $84.6     
                                                                             
Loss ratio                                       61.3%          51.1%
Policy acquisition expense ratio                 19.7%          19.9%
General, administrative and corporate            16.1%          16.3%
expense ratio
Expense ratio                                    35.8%          36.2%
Combined ratio                                 97.1%       87.3%     
                                                                             

                                                                       
Aspen Insurance Holdings Limited
Summary consolidated statement of income
(unaudited)
$ in millions, except ratios
                                                Six Months Ended        
                                                 June 30,       June 30,
                                                                    
                                                 2013           2012
UNDERWRITING REVENUES                                       
Gross written premiums                           $1,460.7       $1,448.7
Premiums ceded                                  (251.0)     (233.3)  
Net written premiums                             1,209.7        1,215.4
Change in unearned premiums                     (154.8)     (206.6)  
Net earned premiums                             1,054.9     1,008.8  
UNDERWRITING EXPENSES
Losses and loss adjustment expenses              602.1          546.1
Policy acquisition expenses                      211.8          198.1
General, administrative and corporate           174.3       168.3    
expenses
Total underwriting expenses                     988.2       912.5    
Underwriting income including corporate         66.7        96.3     
expenses
OTHER OPERATING REVENUE
Net investment income                            94.2           105.2
Interest expense                                 (15.5)         (15.4)
Other income                                    1.4         2.6      
Total other operating revenue                   80.1        92.4     
                                                                             
OPERATING INCOME BEFORE TAX                      146.8          188.7
                                                                             
Net realized and unrealized exchange             (24.0)         (9.3)
(losses)
Net realized and unrealized investment          16.0        (4.5)    
gains (losses)
INCOME BEFORE TAX                                138.8          174.9
Income tax expense                              (6.9)       (11.6)   
NET INCOME AFTER TAX                             131.9          163.3
Dividends paid on ordinary shares                (23.8)         (22.8)
Dividends paid on preference shares              (16.6)         (14.0)
Change in redemption value of Perpetual          (7.1)          ─
PIERS
Proportion due to non-controlling interest      ─           0.3      
Retained income                                 $84.4       $126.8   
Components of net income (after tax)
   Operating income                             $137.9         176.3
    Net realized and unrealized exchange         (21.5)         (7.9)
    (losses) after tax
    Net realized investment gains (losses)      15.5        (5.1)    
    after tax
NET INCOME AFTER TAX                            $131.9      $163.3   
                                                                             
Loss ratio                                       57.1%          54.1%
Policy acquisition expense ratio                 20.1%          19.6%
General, administrative and corporate            16.5%          16.7%
expense ratio
Expense ratio                                    36.6%          36.3%
Combined ratio                                  93.7%       90.4%    
                                                                             

                                                                             
Aspen Insurance Holdings Limited
Summary consolidated financial data (unaudited)
$ in millions, except number of shares
                                                
                           Three Months Ended          Six Months Ended
                           June          June          June          June
                           30,        30,           30,        30,
                           2013          2012          2013          2012
                                                                             
Basic earnings per
ordinary share
     Net income
    adjusted for          $0.38         $1.07         $1.60         $2.10
     preference share
     dividend
     Operating income
     adjusted for          $0.67         $1.36         $1.80         $2.28
     preference
     dividend
Diluted earnings per
ordinary share
     Net income
     adjusted for          $0.36         $1.03         $1.52         $2.02
     preference share
     dividend
     Operating income
     adjusted for          $0.63         $1.32         $1.70         $2.20
     preference
     dividend
                                                                             
Weighted average
number of ordinary         66.191        71.304        67.601        71.124
shares outstanding (in
millions)
Weighted average
number of ordinary
shares outstanding and
dilutive potential
ordinary shares (in        69.291        73.846        71.087        73.844
millions)
                                                                             
Book value per                                         $39.99        $41.41
ordinary share
Diluted book value
(treasury stock                                        $38.87        $40.01
method)
                                                                             
Ordinary shares
outstanding at end of                                  67.003        70.687
the period (in
millions)
Ordinary shares
outstanding and
dilutive potential
ordinary shares at end
of the period                                          68.934        73.161
(treasury stock
method) (in millions)
                                                                             

                                                                                                 
Aspen Insurance
Holdings Limited
Summary
consolidated
segment
information
(unaudited)
$ in millions,
except ratios
                     Three Months Ended June 30, 2013             Three Months Ended June 30, 2012
                     Reinsurance   Insurance   Total          Reinsurance   Insurance   Total
                                                                                       
Gross written        $298.6          $388.7        $687.3         $299.8          $366.8        $666.6
premiums
Net written          288.6           324.1         612.7          276.8           305.1         581.9
premiums
Gross earned         288.4           331.3         619.7          300.8           279.9         580.7
premiums
Net earned           275.8           268.2         544.0          282.0           231.4         513.4
premiums
Losses and loss
adjustment           158.4           175.0         333.4          133.7           128.4         262.1
expenses
Policy
acquisition          56.6            50.6          107.2          59.3            42.7          102.0
expenses
General and
administrative       30.4          42.1        72.5           30.0            42.1          72.1
expenses
Underwriting         $30.4         $0.5          $30.9          $59.0         $18.2         $77.2
income
                                                                                                         
Net investment                                     45.9                                         52.8
income
Net realized and
unrealized                                         0.2                                          (10.0)
investment gains
(losses) ^(1)
Corporate                                          (15.2)                                       (11.4)
expenses
Other income                                       0.9                                          2.9
Interest                                           (7.8)                                        (7.7)
expenses
Net realized and
unrealized                                         (13.8)                                       (13.0)
foreign exchange
(losses) ^(2)
Income before                                      41.1                                         90.8
tax
Income tax                                         (1.0)                                        (6.2)
expense
Net income                                         $40.1                                        $84.6
                                                                                                         
Ratios
Loss ratio           57.4%           65.2%         61.3%          47.4%           55.5%         51.1%
  Policy
 acquisition        20.5%           18.9%         19.7%          21.0%           18.5%         19.9%
  expense ratio
  General and
  administrative     11.0%           15.7%         16.1%          10.6%           18.2%         16.3%
  expense ratio
  ^(3)
Expense ratio        31.5%           34.6%         35.8%          31.6%           36.7%         36.2%
Combined ratio       88.9%         99.8%       97.1%      79.0%         92.2%       87.3%
                                                                                                         

^(1)  Includes realized and unrealized capital gains and losses and realized
       and unrealized gains and losses on interest rate swaps
^(2)   Includes realized and unrealized foreign exchange gains and losses and
       realized and unrealized gains and losses on foreign exchange contracts
^(3)   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, 2013                           Six Months Ended June 30, 2012
                       Reinsurance    Insurance    Total                  Reinsurance    Insurance    Total
Gross written          $738.2         $722.5       $1,460.7               $774.0         $674.7       $1,448.7
premiums
Net written            689.1             520.6           1,209.7                706.3             509.1           1,215.4
premiums
Gross earned           560.3             644.2           1,204.5                591.0             546.8           1,137.8
premiums
Net earned             532.5             522.4           1,054.9                553.0             455.8           1,008.8
premiums
Losses and loss
adjustment             272.7             329.4           602.1                  269.3             276.8           546.1
expenses
Policy
acquisition            111.9             99.9            211.8                  111.1             87.0            198.1
expenses
General and
administrative         62.6           84.5         147.1                  59.0           83.5         142.5
expenses
Underwriting           $85.3          $8.6            $93.9                  $113.6         $8.5            $122.1
income
Net investment                                           94.2                                                     105.2
income
Net realized and
unrealized                                               16.0                                                     (4.5)
investment gains
(losses) ^(1)
Corporate                                                (27.2)                                                   (25.8)
expenses
Other income                                             1.4                                                      2.6
Interest                                                 (15.5)                                                   (15.4)
expenses
Net realized and
unrealized                                               (24.0)                                                   (9.3)
foreign exchange
(losses) ^(2)
Income before                                            138.8                                                    174.9
tax
Income tax                                               (6.9)                                                    (11.6)
expense
Net income                                               $131.9                                                   $163.3
                                                                                                                               
Ratios
Loss ratio             51.2%             63.1%           57.1%                  48.7%             60.7%           54.1%
  Policy
 acquisition          21.0%             19.1%           20.1%                  20.1%             19.1%           19.6%
  expense ratio
  General and
  administrative       11.8%             16.2%           16.5%                  10.7%             18.3%           16.7%
  expense ratio
  ^(3)
Expense ratio          32.8%             35.3%           36.6%                  30.8%             37.4%           36.3%
Combined ratio         84.0%          98.4%        93.7%           79.5%          98.1%        90.4%
                                                                                                                               

^(1)  Includes realized and unrealized capital gains and losses and realized
       and unrealized gains and losses on interest rate swaps
^(2)   Includes realized and unrealized foreign exchange gains and losses and
       realized and unrealized gains and losses on foreign exchange contracts
^(3)   The total group general and administrative expense ratio includes the
       impact from corporate expenses
       

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
Bermuda, France, Germany, Ireland, Singapore, Switzerland, the United Kingdom
and the United States. For the year ended December 31, 2012, Aspen reported
$10.3 billion in total assets, $4.8 billion in gross reserves, $3.5 billion in
total shareholders’ equity and $2.6 billion in gross written premiums. Its
operating subsidiaries have been assigned a rating of “A” (“Strong”) by
Standard & Poor’s, an “A” (“Excellent”) by A.M. Best and an “A2” (“Good”) by
Moody’s Investors Service.

For more information about Aspen, please visit www.aspen.co.

Forward-looking Statements Safe Harbor

This press release contains, and Aspen's earnings conference call will
contain, written or oral "forward-looking statements" within the meaning of
the US 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," "do not believe," "aim," "project,"
"anticipate," "seek," "will," “likely,” "estimate," "may," "continue,"
“guidance,” and similar expressions of a future or forward-looking nature.

All forward-looking statements address matters that involve risks and
uncertainties. Accordingly, there are or will be important factors that could
cause actual results to differ materially from those indicated in these
statements. Aspen believes these factors include, but are not limited to: 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
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 and cyclical changes in the
insurance and reinsurance sectors; changes in insurance and reinsurance market
conditions; increased competition 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; cost or
quality of reinsurance or retrocessional coverage; changes in general economic
conditions, including inflation, 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; evolving issues with respect to interpretation of coverage after
major loss events and any intervening legislative or governmental action; the
effectiveness of our loss limitation methods; changes in the total industry
losses, or our share of total industry losses, resulting from past events and,
with respect to such events, our reliance on loss reports received from
cedants and loss adjustors, 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 natural catastrophes or by an
unexpected accumulation of attritional losses; the impact of acts of terrorism
and related legislation and acts of war; any changes in our reinsurers’ credit
quality and the amount and timing of reinsurance recoverables; changes in the
availability, the continuing and uncertain impact of the current depressed
economic environment in many of the countries in which we operate; the level
of inflation in repair costs due to limited availability of labor and
materials after catastrophes; a decline in our operating subsidiaries’ ratings
with S&P, A.M. Best or Moody’s; the failure of our reinsurers, policyholders,
brokers or other intermediaries to honor their payment obligations; our
ability to execute our business plan to enter new markets, introduce new
products and develop new distribution channels, including their integration
into our existing operations; 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; the persistence of heightened financial risks,
including excess sovereign debt, the banking system and the Eurozone debt
crisis; our ability to successfully implement steps to further optimize the
business portfolio ensure capital efficiency and enhance investment returns;
changes in our ability to exercise capital management initiatives (including
our share repurchase program) or to arrange banking facilities as a result of
prevailing market changes or changes in our financial position; changes in
government regulations or tax laws in jurisdictions where we conduct business;
Aspen Holdings or Aspen Bermuda becoming subject to income taxes in the United
States or the United Kingdom; loss of one or more of our senior underwriters
or key personnel; our reliance on information technology and third party
service providers for our operations and systems; and increased counterparty
risk due to the credit impairment of financial institutions. For a more
detailed description of these uncertainties and other factors, please see the
"Risk Factors" section in Aspen's Annual Report on Form 10-K as filed with the
U.S. Securities and Exchange Commission on February 26, 2013. 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,
which speak only as of the dates on which they are made.

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. Due to the complexity of
factors contributing to the losses and the preliminary nature of the
information used to prepare these estimates, there can be no assurance that
Aspen's ultimate losses will remain within the stated amount.

Non-GAAP Financial Measures

In presenting Aspen'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 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. 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 the Investor
Relations section of Aspen's website at www.aspen.co.

(1) Annualized Operating Return on Average Equity (“Operating ROE”) is a
non-GAAP financial measure. Annualized Operating Return on Average Equity is
calculated using operating income, as defined below and average equity is
calculated as the arithmetic average on a monthly basis for the stated periods
of shareholders’ equity excluding the aggregate value of the liquidation
preferences of our preference shares net of issuance costs.

Aspen presents Operating ROE as a measure that is commonly recognized as a
standard of performance by investors, analysts, rating agencies and other
users of its financial information. See page 24 of Aspen's financial
supplement for a reconciliation of operating income to net income and page 8
for a reconciliation of average ordinary shareholders’ equity to average
shareholders’ equity.

(2) 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 capital gains or losses, including net
realized and unrealized gains or losses on interest rate swaps, after-tax net
foreign exchange gains or losses, includingnet realized and unrealized gains
and losses from foreign exchange contracts, and issue costs associated with
equity instruments that were redeemed.

Aspen excludes these items 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. 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. Please see above and page 24 of Aspen's
financial supplement for a reconciliation of operating income to net income.
Aspen’s financial supplement can be obtained from the Investor Relations
section of Aspen's website at www.aspen.co.

(3) Diluted Book Value per Ordinary Share is not a non-GAAP financial measure.
Aspen has included diluted book value per ordinary share as it illustrates the
effect on basic book value per share of dilutive securities thereby providing
a better benchmark for comparison with other companies. Diluted book value per
share is calculated using the treasury stock method, defined on page 23 of
Aspen’s financial supplement, which can be obtained from the Investor
Relations section of Aspen’s website at www.aspen.co.

(4) Diluted Operating Earnings per Share and Basic Operating Earnings per
Share are non-GAAP financial measures. Aspen believes that the presentation of
diluted operating earnings per share and basic operating earnings per share
supports meaningful comparison from period to period and the analysis of
normal business operations. Diluted operating earnings per share and basic
operating earnings per share are calculated by dividing operating income by
the diluted or basic weighted average number of shares outstanding for the
period. See page 24 for a reconciliation of diluted and basic operating
earnings per share to basic earnings per share. Aspen’s financial supplement
can be obtained from the Investor Relations section of Aspen’s website at
www.aspen.co.

(5) Combined Ratio Excluding Catastrophes is a non-GAAP financial measure.
Aspen believes that the presentation of combined ratio excluding catastrophes
supports meaningful comparison from period to period of the underlying
performance of the business. Combined ratio excluding catastrophes is
calculated by dividing net losses excluding catastrophe losses and net
expenses by net earned premiums excluding catastrophe related reinstatement
premiums. We have defined catastrophe losses in the current period as losses
associated with floods in Central Europe, Canada and India as well as
tornadoes and hailstorms in the United States. We have defined catastrophe
losses in the comparative period as losses associated with the severe weather
in the U.S. in February and March 2012.

Other

(1) Catastrophe Load included in our guidance is an estimate of the average
annual aggregate loss before reinsurance and tax from natural catastrophe
events based on 50,000 simulations of our internal capital model which, in
relation to its catastrophe modeling components, is based on a combination of
catastrophe models selected by Aspen to best fit its current understanding of
the worldwide natural catastrophe perils to which Aspen has known exposures.
It does not include losses from non-natural catastrophe events such as
terrorism or industrial accidents.

This load is attributed and then released quarter by quarter based on historic
claims patterns. For example, there is a higher proportion allocated to the
third quarter due to the historical frequency of U.S. Wind events in this
period. As an organization, Aspen monitors its current catastrophe losses to
date against expected losses and updates the projected numbers accordingly
based on this experience.

Actual catastrophe loss experience may materially differ from the catastrophe
load in any one year for reasons which include natural variability in the
frequency and severity of catastrophe events, and limitations in one or more
of the models or uncertainties in the application of policy terms and limits.

Contact:

Investors
Aspen
Kerry Calaiaro, +1-646-502-1076
Senior Vice President, Investor Relations
Kerry.Calaiaro@aspen.co
or
Media
Aspen
Steve Colton, +44-20-7184-8337
Head of Communications
Steve.Colton@aspen.co
or
International
Citigate Dewe Rogerson
Caroline Merrell, +44-20-7638-9571
caroline.merrell@citigatedr.co.uk
or
Jos Bieneman, +44-20-7638-9571
jos.bieneman@citigatedr.co.uk
or
North America
Abernathy MacGregor
Allyson Vento, +1-212-371-5999
amv@abmac.com
 
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