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Aspen presentation outlines strong progress on growth strategy and path for continued ROE expansion

20th May

Today Aspen published an investor presentation detailing the strong progress the company has made on its growth strategy and path for delivering further growth in operating return on equity and shareholder value.

Chris O'Kane, chief executive officer, said: “Aspen is executing on a clear strategy for delivering superior performance, as evidenced by strong results across all parts of our business in the first quarter, with a resulting annualized operating return on equity of 14.8%. Aspen is at an inflection point where the significant investments we have made over the past several years are now paying off. As a result, 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.”

Key points in the presentation include the following:

  • Aspen is a leading, diversified specialty insurer and reinsurer, with $2.7 billion gross written premiums for the twelve months ended March 31, 2014, strong balance sheet and ratings, and keen focus on shareholder value.
  • The Company has a long-term track record of shareholder value creation. Aspen has generated over $3 billion in capital over the last 10 years while developing an increasingly diverse mix of business.
  • Aspen is successfully executing on its strategic plan to build shareholder value through optimization of its business portfolio, capital efficiency, and enhancing investment return.
  • The restructuring of Aspen's ceded reinsurance and retrocessional programs is expected to deliver an estimated $25 million benefit to net income in 2014 and a further $20 million in 2015.
  • Aspen is benefitting from its prior investment in building a U.S. Specialty insurance platform. After $150 million of investment since 2009, the platform build-out is largely complete and the U.S. business achieved an underwriting profit in each of the last five quarters. The company expects to reach $550 million of net earned premiums in 2015, resulting in a forecasted G&A ratio of approximately 16% in the U.S. business, down from 20.6% in 2013.2
  • The company will continue to benefit from a well-established Lloyds platform with offerings across a diverse range of risks and geographies, and a reinsurance business that is an established leader and positioned for continued profitable growth.
  • Aspen has a strong record of proactive capital management, including the repurchase of $341 million of ordinary shares from January 1, 2013 through March 31, 2014, and the company expects to continue to opportunistically repurchase ordinary shares.
  • In its investment portfolio, the company is constantly evaluating ways to increase returns within its risk tolerance, including investing a further $200 million in equities in 2013 and $40 million in 1Q 2014.

The full investor presentation is available on the investor relations tab of company's website at: http://www.aspen.co/Investors-Media/Investor-Relations/Presentations/.

Read the full press release