Aspen Insurance Holdings Presentation Outlines Strong Progress on Growth Strategy and Path for Continued ROE Expansion Business Wire HAMILTON, Bermuda -- May 20, 2014 Aspen Insurance Holdings Limited (“Aspen”) (NYSE:AHL) issued today an investor presentation detailing the strong progress the Company has made on its growth strategy and path for delivering further growth in operating return on equity and shareholder value. Chris O’Kane, Chief Executive Officer, said: “Aspen is executing on a clear strategy for delivering superior performance, as evidenced by strong results across all parts of our business in the first quarter, with a resulting annualized operating ROE of 14.8%. Aspen is at an inflection point where the significant investments we have made over the past several years are now paying off. As a result, we are well positioned to achieve our 10% operating ROE objective in 2014 and to deliver on our expectation that 2015 operating ROE will increase in the order of 100 basis points from 2014.”^1 Key points in the presentation include the following: *Aspen is a leading, diversified specialty insurer and reinsurer, with $2.7 billion gross written premiums for the twelve months ended March 31, 2014, strong balance sheet and ratings, and keen focus on shareholder value. *The Company has a long-term track record of shareholder value creation. Aspen has generated over $3 billion in capital over the last 10 years while developing an increasingly diverse mix of business. *Aspen is successfully executing on its strategic plan to build shareholder value through optimization of its business portfolio, capital efficiency, and enhancing investment return. *The restructuring of Aspen’s ceded reinsurance and retrocessional programs is expected to deliver an estimated $25 million benefit to net income in 2014 and a further $20 million in 2015.^2 *Aspen is benefitting from its prior investment in building a U.S. Specialty insurance platform. After $150 million of investment since 2009, the platform build-out is largely complete and the U.S. business achieved an underwriting profit in each of the last five quarters. The Company expects to reach $550 million of net earned premiums in 2015, resulting in a forecasted G&A ratio of approximately 16% in the U.S. business, down from 20.6% in 2013.^2 *The Company will continue to benefit from a well-established Lloyds platform with offerings across a diverse range of risks and geographies, and a reinsurance business that is an established leader and positioned for continued profitable growth. *Aspen has a strong record of proactive capital management, including the repurchase of $341 million of ordinary shares from January 1, 2013 through March 31, 2014, and the Company expects to continue to opportunistically repurchase ordinary shares. *In its investment portfolio, the Company is constantly evaluating ways to increase returns within its risk tolerance, including investing a further $200 million in equities in 2013 and $40 million in 1Q 2014. The full investor presentation is available on the investor relations tab of Company’s website at: http://www.aspen.co/Investors-Media/Investor-Relations/Presentations/. ^1 As at April 23, 2014. In 2014, ROE guidance assumes a pre-tax catastrophe load of $185 million, normal loss experience and given the current interest rate and insurance pricing environment. In 2015, ROE guidance assumes a pretax catastrophe load of $200 million, normal loss experience, Aspen’s expectations for rising interest rates, and a less favorable insurance pricing environment. See Safe Harbor disclosure at end of press release. ^2 As at April 23, 2014. See Safe Harbor disclosure at end of press release. 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, 2013, Aspen reported $10.2 billion in total assets, $4.7 billion in gross reserves, $3.3 billion in 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. Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995 This press release contains written or oral "forward-looking statements" within the meaning of the U.S. federal securities laws. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as "expect," "intend," "plan," "believe," "do not believe," "aim," "project," "anticipate," "seek," "will," "likely," "estimate," "may," "continue," "guidance," “outlook,” “trends,” “future,” “could,” “target,” and similar expressions of a future or forward-looking nature. All forward-looking statements rely on a number of assumptions, estimates and data concerning future results and events and are subject to a number of uncertainties and other factors, many of which are outside Aspen’s control that could cause actual results to differ materially from such statements. Forward-looking statements do not reflect the potential impact of any future collaboration, acquisition, merger, disposition, joint venture or investments that Aspen may enter into or make, and the risks, uncertainties and other factors relating to such statements might also relate to the counterparty in any such transaction if entered into or made by Aspen. 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: 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; 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 highly competitive insurance and reinsurance industry; increased competition from existing insurers and reinsurers 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; changes in general economic conditions, 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; evolving issues with respect to interpretation of coverage after major loss events; our ability to adequately model and price the effect of climate cycles and climate change; any intervening legislative or governmental action and changing judicial interpretation and judgements on insurers’ liability to various risks; the effectiveness of our risk management loss limitation methods, including our reinsurance purchasing; 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, acts of war and related legislation; any changes in our reinsurers’ credit quality and the amount and timing of reinsurance recoverables; changes in the availability, cost or quality of reinsurance or retrocessional coverage; the continuing and uncertain impact of the current depressed lower growth 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; 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; changes in accounting principles or policies or in the application of such accounting principles or policies; Aspen or Aspen Bermuda Limited 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 and 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 20, 2014. 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. The guidance in this press release relating to 10% Operating ROE in 2014 and with a further 100 basis point increase over 2014 in 2015 is made as at April 23, 2014. Such guidance assumes for 2014 a pre-tax catastrophe load of $185 million per annum, normal loss experience and given the current interest rate and insurance pricing environment and for 2015 a pre-tax catastrophe load of $200 million, normal loss experience, our expectations for rising interest rates, and a less favorable insurance pricing environment. Aspen has identified and described in the presentation filed today actions and additional underlying assumptions in each of its three operating return on equity levers – optimization of the business portfolio, capital efficiency and enhancing investment returns – to seek to achieve the targeted operating ROE in 2014 and 2015. These forward looking statements are subject to the assumptions, risks and uncertainties, as discussed above and in the following slides, which could cause actual results to differ materially from these statements. 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 then 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 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 amounts. Contact: Please visit www.aspen.co or Investors Aspen Kerry Calaiaro, Senior Vice President, Investor Relations +1 (646) 502 1076 Kerry.Calaiaro@aspen.co or Aspen Kathleen de Guzman, Vice President, Investor Relations +1 (646) 289 4912 email@example.com or Media Aspen Steve Colton, Head of Communications +44 20 7184 8337 Steve.Colton@aspen.co or North America – Sard Verbinnen & Co Paul Scarpetta or Jamie Tully +1 (212) 687 8080 or International – Citigate Dewe Rogerson Patrick Donovan or Caroline Merrell +44 20 7638 9571 firstname.lastname@example.org email@example.com
Aspen Insurance Holdings Presentation Outlines Strong Progress on Growth Strategy and Path for Continued ROE Expansion
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