Battling Aspen enjoys strong Q1 results
Against a backdrop of its increasingly public battle for control of the company with Endurance Speciality, Aspen Insurance posted solid results for the first quarter of 2014. The company saw growth of more than 10 percent and an increase in its profits, driven partly by increased traction in its US insurance business.
Two weeks ago, Endurance made an unsolicited $3.2 billion bid for the company which the Aspen board rejected. Since then, the two companies have exchanged an increasingly bitter war of words as both try to convince Aspen’s shareholders of the merits of their conflicting views on the best path forward for the business.
Aspen enjoyed over growth of 10.6 percent in its gross written premiums for the first quarter as they hit $855.5 million. This growth was achieved through a 7.4 percent increase in its reinsurance book and a 14.8 percent increase in the premiums written on the insurance side.
The company made a net profit of $120.4 million for the quarter, an increase on the $91.8 million it made in the same period the year before. Its chief executive also highlighted the company’s annualised operating return on average equity, which was 14.8 percent, a figure he said was the highest return since it committed to substantial investments in its US insurance lines in 2010.
The company’s combined ratio for the quarter was 87.6 percent compared with 90.1 percent for the first quarter of 2013. It said there were $10.6 million, or 1.9 combined ratio points, of catastrophe losses pre-tax net of reinsurance recoveries and reinstatement premiums in the first quarter of 2014 compared with no catastrophe losses in the first quarter of 2013.
“We are very pleased with our strong results this quarter, which reflect the successful execution and growing impact of our three strategic levers: capital management, enhanced investment returns and optimization of our business portfolio,” said Chris O'Kane, chief executive of Aspen.
“The US Insurance teams continued their trajectory of profitable growth and international insurance achieved a solid quarter. Our reinsurance business had yet another strong quarter and remains a preferred trading partner for our clients.
“We continue to execute on targeted growth opportunities building off of our prior investments and the strength of our teams. Historically, we invested in both insurance and reinsurance to position our businesses for profitable growth. Those investments are paying dividends and driving meaningful improvements in our results. We expect the benefits garnered from those investments to continue to increase in the coming years and to drive premium growth faster than both expenses and allocated risk capital, which will result in continued improvement in ROE.”
