Aspen Insurance Holdings Board of Directors Rejects Revised Proposal from Endurance

  Aspen Insurance Holdings Board of Directors Rejects Revised Proposal from

  Revised Proposal Represents an Even Lower Multiple of Book Value Per Share
                            than Initial Proposal;

            Fails to Address Fundamental Flaws in Initial Proposal

Business Wire

HAMILTON, Bermuda -- June 2, 2014

Aspen Insurance Holdings Limited (“Aspen”) (NYSE:AHL) announced today that its
directors unanimously rejected a revised unsolicited proposal from Endurance
Specialty Holdings Ltd. (“Endurance”) (NYSE:ENH) to acquire Aspen for a
combination of Endurance common stock and cash. The directors rejected a
proposal made privately by Endurance in May on substantially the same terms as
are contained in the proposal publicly announced today.

Glyn Jones, Chairman of the Board of Directors, said: “Endurance’s revised
proposal represents a backwards step in their efforts to pursue what has
always been an ill-conceived transaction. Given Aspen’s strong 4.4% book value
growth in the first quarter, Endurance’s new proposal represents an even lower
multiple of book value per share than its initial proposal, and the stock
portion of the proposal lags even further behind given the decline in
Endurance’s stock price since its initial proposal. Despite Endurance touting
its headline price of $49.50 per share, based on the proposed exchange ratio,
the 60% of the consideration that would consist of stock had a value of $47.57
per share on May 30.

“In addition to grossly undervaluing Aspen, the proposal represents a
strategic mismatch and, based on our conversations with major clients and
brokers, would result in significantly greater dis-synergies than Endurance
claims. Moreover, the revised proposal does nothing to address additional
serious concerns we raised with respect to Endurance’s prior proposal,
including a stock consideration that is highly unappealing and financing terms
that remain unclear and lack certainty.

“We are confident that Aspen can achieve more value for its shareholders – and
without the risks that are inherent in a merger with Endurance – by continuing
to execute its standalone plan. As demonstrated by our strong first quarter
results, we are delivering on that plan. Aspen generated strong results across
all parts of our business in the first quarter, with a resulting annualized
operating ROE of 14.8%. 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

Regarding Endurance’s proposed tactics to pursue its transaction, Glyn Jones
said: “Rather than offer a transaction that provides our shareholders with
superior value, Endurance is offering coercive legal tactics in a desperate
attempt to continue to advance an unattractive proposal that neither our Board
nor our shareholders support. Endurance’s potential plan to seek a court
petition for an involuntary scheme has never been used successfully in Bermuda
to attempt to effect a hostile acquisition. In fact, other hostile bidders
have tried in vain to convince the Bermuda Supreme Court to impose an
involuntary scheme of arrangement. In its most recent consideration of this
issue, the Bermuda Supreme Court described this stratagem as an ‘unprecedented
course to embark upon a hostile bid by way of a scheme in the teeth of the
board’s opposition.’

“Moreover, Endurance’s plan to attempt to call a special meeting of
shareholders to try to increase the size of Aspen’s Board from 12 to 19
members and then, approximately one year from now at Aspen’s 2015 annual
meeting, potentially nominate its own slate of directors is a similarly
desperate attempt to force through a proposal that is not in the best
interests of Aspen or its shareholders. As illustrated by these desperate and
unusual legal tactics of Endurance, Aspen continues to believe that Endurance
simply has no clear or compelling path to force its unattractive proposal on
our Board and our shareholders. We intend to defend vigorously against these
latest coercive tactics by Endurance.”

Aspen noted that the problems the Company identified with respect to
Endurance’s prior proposal remain unaddressed in Endurance’s revised proposal.
Among other things:

  *Endurance stock as consideration is unappealing. Endurance’s business mix
    is unattractive, with an overreliance on the volatile and challenged crop
    insurance business and an ongoing dependency on reserve releases to fuel
    earnings. Excluding further significant reserve releases, Endurance’s
    Insurance segment would have had another underwriting loss in the first
  *The availability and terms of the cash consideration remains highly
    uncertain. Endurance disclosed that CVC is no longer standing by its
    commitment to provide financing for Endurance’s proposal. This is now the
    second firm noted by Endurance as a financing source that apparently has
    backed away from funding a transaction, providing further validation for
    the concerns Aspen has consistently expressed with Endurance’s ability to
    finance the cash portion of its proposal. Endurance is now relying on an
    affiliate of its financial advisor to provide a short-term loan, and has
    granted equity options to CVC on undisclosed terms. Endurance still has no
    commitment for long-term financing for a transaction, the details of which
    could have a significant negative effect on shareholder value.
  *Aspen would expect significant dis-synergies from a combination. Given the
    overlap between the two companies, a combination would result in
    significant loss of existing attractive business. As a result of the
    cultural mismatch between Endurance’s top-down management style and
    Aspen’s collegial, teamwork-oriented culture, the possibility of losing
    key personnel, including some of our underwriters, is a serious and real
    risk. Indeed, feedback from employees, customers and brokers indicates
    that significant dis-synergies are likely.

Aspen also notes that over 60% of shareholders who voted at Endurance’s May 21
annual meeting rejected Endurance’s existing compensation arrangement for top
executives, including the compensation package and terms of Chairman and CEO
John Charman. This is a major and highly unusual rejection of a “Say-on-Pay”
referendum by shareholders, and raises serious concerns about Endurance’s
ability to win approval for the transaction from its own shareholders, which
would be required to complete a transaction. It also raises questions about
the behavior of Endurance’s management team and Board, which enacted the
compensation plan either oblivious to, or not caring about, the concerns of
its own shareholders.

Goldman, Sachs & Co. is acting as financial advisor and Wachtell, Lipton,
Rosen & Katz and Willkie Farr & Gallagher LLP are acting as legal advisors to

       Guidance 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
^1     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

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, and Aspen may make related 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 and in Aspen’s Quarterly Report on Form 10-Q as filed with
the U.S. Securities and Exchange Commission on May 1, 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 was and 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 dated May 2014, in the
investor relations section of its website 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.

Additional Information

This communication does not constitute an offer to buy or solicitation of an
offer to sell any securities or a solicitation of any vote or approval. This
communication is for informational purposes only and is not a substitute for
any relevant documents that Aspen may file with the SEC.

Endurance Specialty Holdings Ltd. has indicated its intention to commence an
exchange offer for the outstanding shares of Aspen (together with associated
preferred share purchase rights).Such exchange offer has not yet been
commenced. If and when such exchange offer is commenced, Aspen will file a
solicitation/recommendation statement on Schedule 14D-9 with the U.S.
Securities and Exchange Commission (“SEC”).

security holders will be able to obtain free copies of these documents (when
available) and other documents filed with the SEC by Aspen through the web
site maintained by the SEC at These documents will also be
available on Aspen’s website at

Certain Information Regarding Participants

Aspen and certain of its respective directors and executive officers may be
deemed to be participants under the rules of the SEC. Security holders may
obtain information regarding the names, affiliations and interests of Aspen’s
directors and executive officers in Aspen’s Annual Report on Form 10-K for the
year ended December 31, 2013, which was filed with the SEC on February 20,
2014, and its proxy statement for the 2014 Annual Meeting, which was filed
with the SEC on March 12, 2014. These documents can be obtained free of charge
from the sources indicated above.


Please visit
Kerry Calaiaro, Senior Vice President, Investor Relations
+1 (646) 502 1076
Kathleen de Guzman, Vice President, Investor Relations
+1 (646) 289 4912
Steve Colton, Head of Communications
+44 20 7184 8337
North America – Sard Verbinnen & Co
Paul Scarpetta or Jamie Tully
+1 (212) 687 8080
International – Citigate Dewe Rogerson
Patrick Donovan or Caroline Merrell
+44 20 7638 9571
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