2017 nat cat losses prompt Aspen to shut Bermuda unit
Aspen Insurance has closed its Bermuda-based US property insurance unit following high natural catastrophe losses in 2017 that included the recent wildfires in California.
The re/insurer has reported a net loss after tax of $184.9 million and an operating loss after tax of $178.1 million for the fourth quarter of 2017.
“We are looking to reduce volatility in our global insurance business. In keeping with this focus, we have decided to cease underwriting property insurance on the Aspen Bermuda platform with immediate effect," a spokesperson for the company confirmed Intelligent Insurer's sister publication Bermuda:Re+ILS.
"This action stems from the catastrophe loss activity we saw during 2017," the spokesperson said. "The Bermuda book of business forms only a small part of our US property insurance book which is unaffected by this announcement."
The announcement comes shortly after Aspen Insurance's chief executive officer Stephen Postlewhite left the business with immediate effect on Jan. 26 following the company's Q4 results, which its group CEO Chris O’Kane described as being "well below acceptable levels".
“We are deeply disappointed with our financial performance in 2017,” O’Kane had commented on the results. “We have taken a number of actions to improve our underwriting performance and expect to see the impact of these reflected in our 2018 underwriting year results and beyond. We believe our capital position is appropriate to support our ongoing business and underpins our financial strength ratings.”
"While some of the losses we reported arose from abnormally high natural catastrophe activity, we recognise that despite prior actions to strengthen our Insurance book, we need to take further actions to deliver substantially better results," O’Kane said in a Feb. 07 press release.
"We are redoubling our efforts to reduce volatility and improve Aspen’s profitability. Most of our non-natural catastrophe losses were concentrated in a limited number of lines within Aspen Insurance. We are actively reviewing these lines, and our focus is on taking all actions necessary to mitigate our residual exposure and deliver value to our shareholders. Our loss reserves are strong, and we continue to focus on achieving appropriate loss ratios and realising the benefits to our expense ratio from the successful implementation of our operational effectiveness and efficiency programme."
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