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Aspen Insurance reports a combined ratio of 93.8% for the third quarter of 2016


October 27, 2016   by Canadian Underwriter


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Hamilton, Bermuda-based Aspen Insurance Holdings Limited has reported a combined ratio of 93.8% for the third quarter of 2016, up slightly from 93.4% in the third quarter of 2015.Latest results

Aspen Insurance released its financial results on Wednesday, reporting a net income after tax of US$95.6 million and operating income after tax of US$69.3 million for the most recent quarter ending Sept. 30, 2016.

Overall, gross written premiums (GWP) increased by 6% to US$763.5 million in Q3 2016, compared with US$720.5 million in Q3 2015, Aspen Insurance said in a press release. For the first nine months of 2016, GWP increased by 7.6% to US$2.541 billion from US$2.363 billion in the prior-year period. The combined ratio for 9M 2016 was 95.4%, compared with 92% for 9M 2015.

For the Insurance segment specifically, GWP of US$397.6 million decreased 1.6% in the most recent quarter compared with US$403.9 million in Q3 2015, primarily due to a decrease in the Property and Casualty sub-segment, offset by growth in the Financial and Professional lines and Marine, Aviation and Energy sub-segments. The combined ratio of 95% compared with 88.3% for Q3 2015. The combined ratio for the third quarter of 2016 included US$10.1 million, or 2.8 percentage points, of pre-tax catastrophe losses, net of reinsurance recoveries, from weather-related events in the United States, Aspen Insurance said in the release. The loss ratio of 57.7% compared with 55% in Q3 2015.

The Reinsurance segment saw GWP of US$365.9 million in Q3 2016, an increase of 15.6% from US$316.6 million in Q3 2015, with premium growth primarily in the Specialty sub-segment, including US$103.3 million in premiums from AG Logic Holdings (AgriLogic). The combined ratio of 88.3% improved from 94.7% for the third quarter of 2015. The combined ratio for the third quarter of 2016 included US$14.8 million, or 4.7 percentage points, of pre-tax catastrophe losses, net of reinsurance recoveries, primarily as a result of weather-related events in the U.S. and a hailstorm in the Netherlands, Aspen Insurance said. The loss ratio of 56.5% compared with 59.7% in the third quarter of last year.

The release also noted that net favourable development on prior-year loss reserves for Q3 2016 was US$35.4 million, or 52.3 combined ratio points, compared with US$39 million, or 6.1 combined ratio points, in the comparable period. For 9M 2016, net favourable development on prior-year loss reserves was US$78.2 million, or 3.9 combined ratio points, for the first nine months of 2016 compared with US$97.6 million, or 5.3 combined ratio points, for the first nine months of 2015.

“Aspen’s results this quarter reflect good underwriting profitability across our business,” said the company’s CEO Chris O’Kane, in the release. “This was demonstrated by our 93.8% combined ratio and the improved accident year ex-cat loss ratios achieved by both business segments. At Aspen Insurance, we continued our efforts to reduce volatility, while also delivering growth in targeted areas such as in our Financial and Professional lines portfolio,” he said, adding that the company remains “very disciplined” in its selection of risk and continues to enhance its range of products.

Aspen Insurance provides reinsurance and insurance coverage to clients in various domestic and global markets through wholly-owned subsidiaries and offices in Australia, Bermuda, Canada, France, Germany, Ireland, Singapore, Switzerland, the United Arab Emirates, the United Kingdom and the United States. For the year ending Dec. 31, 2015, Aspen Insurance reported US$11 billion in total assets, US$4.9 billion in gross reserves and US$3 billion in gross written premiums.