Aspen suffers drop in net income
Aspen Insurance, which has filed to hold an initial public offering, saw it first quarter profit drop to $98 million from $118 million as claims rose by more than $40 million.
The Bermuda-based re/insurer said gross written premiums rose from $1.05 billion to $1.23 billion and net earned premiums rose to $666 million from $641 million.
However, claims losses and loss expenses rose from $341 million to $384 million while its underwriting income fell from $122.4 million to $89.5 million. The combined ratio deteriorated from 82.7% to 86.2%.
Despite the drop in net income, chief executive Mark Cloutier said he was pleased wit the results.
“Aspen produced a strong set of results for the first quarter of 2024 delivering $103 million of operating income driven by an 86.3% adjusted combined ratio, that resulted in an annualised operating return on equity of 19% for the period,” he said.
“We benefited from continuing favourable trading conditions in many of our classes of business achieving 17% growth in year over year gross written premium. In addition, we achieved risk adjusted rate change and adequacy metrics on the aggregate portfolio that were better than planned.”
He added: “The results for the quarter include a provision within catastrophe losses for our exposure to the tragic Francis Scott Key Bridge event, which was within expectations given the size of this industry event. The current accident year losses also include a modest provision for losses on certain policies exposed to credit risk.
“The strong performance for the quarter aligns well with our expectations of producing mid to high teen returns across industry cycles and loss event sets.”
Net investment income rose to $77 million from $60 million while Aspen Capital Markets fee income increased to $34 million from $31 million.
The loss cost included $32.4 million in cat losses, highlighted by unspecified hit from the Baltimore Bridge incident. A 2.5% increase in Q1 cat losses left the cat loss ratio flat at 4.9%.
The decline in margin came chiefly on prior year development. Excluding the impact of an LPT deal designed to neutralise the era pre-2020, PYD turned neutral versus mild favourable development in Q1 2023. Management cited “a modest provision” for losses on policies exposed to credit risk.
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