Aspen Insurance Holdings Presentation Outlines Strong Progress on Growth Strategy and Path for Continued ROE Expansion

  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
kathleen.deguzman@aspen.co
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
patrick.donovan@citigatedr.co.uk
caroline.merrell@citigatedr.co.uk
 
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