Aspen profit falls in Q1 on weaker underwriting results
Bermuda-based Aspen Insurance has reported a drop in net income for the first quarter of 2017 as underwriting profitability deteriorates.
After-tax net income for the first quarter of 2017 was $96.5 million, an 18.5 percent fall on the $114.4 million it made in the same period of 2016.
The combined ratio deteriorated to 97.0 percent in the first quarter compared to 91.6 percent in the same period of 2016.
The company recorded a loss ratio of 56.5 percent in the first quarter of 2017 compared with 53.9 percent in the first quarter of 2016. The loss ratio included pre-tax catastrophe losses, net of reinsurance recoveries, of $29.1 million, or 5.0 percentage points, in the first quarter of 2017.
In the insurance operations, the loss ratio was 61.0 percent in the first quarter of 2017 compared with 58.2 percent in the first quarter of 2016. Pre-tax catastrophe losses, net of reinsurance recoveries, of $4.5 million, totalled 1.5 percentage points in the first quarter of 2017 primarily related to weather-related events in the US. Pre-tax catastrophe losses net of reinsurance recoveries totalled $8.0 million, or 2.1 percentage points, in the first quarter of 2016.
In reinsurance, the loss ratio was 51.6 percent compared with 48.0 percent in the first quarter of 2016. The loss ratio included pre-tax catastrophe losses, net of reinsurance recoveries, of $24.6 million, or 8.9 percentage points, in the first quarter of 2017 primarily as a result of a tornado in Mississippi, Cyclone Debbie in Australia, and other weather-related events. Pre-tax catastrophe losses, net of reinsurance recoveries, totalled $10.7 million, or 3.8 percentage points, in the first quarter of 2016.
Operating income after tax also fell, going from $89.9 million in the first quarter of 2016 to $59.8 million in the first three months of 2017.
Gross written premiums for the period increased by 2.3 percent to $998 million over the period.
Aspen CEO Chris O’Kane said: “Aspen recorded positive underwriting contributions from both our Insurance and Reinsurance businesses in the first quarter. At Aspen Insurance, we are focused on areas of expertise where we can provide our clients with the best service and capitalise on opportunities for profitable growth. Aspen Re’s diversified business model, strong client relationships and highly innovative solutions continue to provide a winning combination, resulting once again in strong results for the quarter.”
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