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Aspen posts net income after tax of US$95.5 million for first quarter of 2017


April 27, 2017   by Canadian Underwriter


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Hamilton, Bermuda-based Aspen Insurance Holdings Limited has reported a net income after tax of US$95.5 million for the first quarter of 2017 ending March 31, down from US$114.4 million in the same quarter of 2016.

The insurer’s operating income after tax for Q1 2017 was US$59.8 million, compared with an operating income of US$89.9 million in Q1 2016, Aspen said in a press release on Wednesday.

Gross written premiums (GWP) totalled US$998 million in the first quarter of 2017, an increase of 2.3% compared with US$975.7 million in the first quarter of 2016. Aspen’s Insurance segment saw GWP of US$432.7 million, a decrease of 5.5% compared with US$458.1 million in the first quarter of 2016, primarily due to decreases in the Property and Casualty, and Marine, Aviation and Energy sub-segments, partially offset by growth in the Financial and Professional lines sub-segment, the company said. Reinsurance GWP were US$565.3 million, an increase of 9.2% from US$517.6 million in Q1 2016, primarily due to growth in the Other Property, Casualty and Specialty sub-segments.

For Q1 2017, the loss ratio of 56.5% compared with 53.9% in Q1 2016. The loss ratio included pre-tax catastrophe losses, net of reinsurance recoveries, of US$29.1 million, or 5 percentage points, in the first quarter of 2017. Pre-tax catastrophe losses, net of reinsurance recoveries, totalled US$18.7 million, or 2.8 percentage points, in the first quarter of 2016.

The Insurance loss ratio of 61% compared with 58.2% in the first quarter of 2016. Pre-tax catastrophe losses, net of reinsurance recoveries, of US$4.5 million, totaled 1.5 percentage points in the first quarter of 2017, primarily related to weather-related events in the United States, Aspen noted in the release. Pre-tax catastrophe losses net of reinsurance recoveries totalled US$8 million, or 2.1 percentage points, in the first quarter of 2016.

The Reinsurance loss ratio of 51.6% compared with 48% in the first quarter of 2016. The loss ratio included pre-tax catastrophe losses, net of reinsurance recoveries, of US$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, totaled US$10.7 million, or 3.8 percentage points, in Q1 2016, the release said.

Net favourable development on prior-year loss reserves benefitted the loss ratio by US$26.2 million, or 4.5 percentage points, in the first quarter of 2017 compared with US$21.6 million, or 3.3 percentage points, in the comparable period last year. For Insurance, prior-year net favourable reserve development of US$5 million, or 1.6 percentage points, compared with US$3.4 million, or 0.9 percentage points, in the first quarter of 2016. Prior-year net favourable development in the first quarter of 2017 included US$17.7 million of adverse development as a result of the Ogden rate change, Aspen noted in the release. For Reinsurance, prior-year net favourable reserve development was US$21.2 million, or 7.6 percentage points, compared with US$18.2 million, or 6.5% percentage points, in Q1 2016. Prior year net favourable development in the first quarter of 2017 included US$12.8 million of adverse development as a result of the Ogden rate change.

“Aspen recorded positive underwriting contributions from both our Insurance and Reinsurance businesses in the first quarter,” Chris O’Kane, Aspen chief executive officer, said in the release. “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.”