Aspen warns on profit as underwriting quality declines

Aspen Insurance Holdings has released a preliminary view of its underwriting results ahead of its fourth quarter 2016 results, noting that it might make a loss in the quarter.

Aspen said that the group expects a loss ratio of approximately 63 percent and an expense ratio of approximately 44 percent in the fourth quarter of 2016. If correct, this would take the combined ratio to 107 percent.

Aspen’s reinsurance segment is expected to record underwriting income of approximately $10 million in the fourth quarter of 2016. Results for the quarter reflect an increase of approximately $15 million in catastrophe losses, and an increase of approximately $25 million in energy and property-related losses compared with the fourth quarter of 2015, and one-time commission-related adjustments of approximately $10 million in the fourth quarter of 2016.

The company also pointed out that the financial markets were impacted by movements in the yield curve in the fourth quarter of 2016 and that as a result the adverse mark-to-market impact on Aspen’s investment portfolio was approximately $190 million.