Aspen reports first half 2019 loss
Aspen Insurance Holdings has reported a net loss of $37.3 million for the first half of 2019, down from the net income of $16.1 million for same period of 2018.
The company said that the net loss includes $99.2 million of investment income, compared with $97.7 million for the first half of 2018, which was offset by underwriting and expense movements, as well as $58.2 million of net realised and unrealised investment losses largely attributable to net realised and unrealised gains and losses from interest rate swaps entered into in 2019, compared with net realised and unrealised investment losses of $58.4 million in the first half of 2018.
The net loss in the first half of 2019 also included $27.0 million of net realised and unrealised foreign exchange losses compared with $22.1 million of net realised and unrealised foreign exchange losses in the first half of 2018.
Operating income after tax was $101.8 million for the six months ended June 30, 2019 compared with an operating income of $119.3 million for the six months ended June 30, 2018.
Mark Cloutier, CEO, commented: “We continue to see improvement in our underwriting performance as a result of our focus on underwriting discipline and active management of the underwriting portfolio, which have been underpinned by improving market conditions. We have seen good results across both our insurance and reinsurance businesses and we are particularly encouraged by the strong improvement in the ex-cat accident year loss ratio from our continuing insurance lines at 55.4 percent compared to 64.5 percent from our total insurance book during the six months ended June 30, 2018.
“While we are seeing rate and terms improving in some classes, particularly where there has been substantial withdrawal of capacity, we will continue to approach a number of the specialty classes cautiously as evidenced in the 5.9 percent reduction in gross written premium year on year.
“In my short period of time with Aspen I have come to appreciate the depth of talent and experience in the group and firmly believe we can show the right combination of entrepreneurialism and discipline the current market conditions and trends demand of us in order to build a successful business into the future.”
Gross written premiums decreased by 5.9 percent to $1.85 billion in the first half of 2019 compared with $1.97 billion in the first half of 2018.
Net written premiums increased by 7.6 percent to $1.2 billion in the first half of 2019 compared with $1.12 billion in the first half of 2018. The retention ratio in the first half of 2019 was 65.1 percent compared with 56.9 percent in the first half of 2018.
Loss ratio of 60.7 percent for the first half of 2019 compared with 58.9 percent for the first half of 2018. The loss ratio for the first half of 2019 included $29.7 million, or 2.9 percentage points, of pre-tax catastrophe losses, net of reinsurance recoveries, compared with $42.4 million or 4.0 percentage points in the first half of 2018.
Net favourable development on prior year loss reserves of $9.1 million benefited the loss ratio by 0.9 percentage points in the first half of 2019, compared with net favourable development of $80.2 million which benefited the loss ratio by 7.6 percentage points in the first half of 2018.
Accident year loss ratio excluding catastrophes of 58.7 percent for the first half of 2019 compared with 62.5 percent for the first half of 2018.
Total expense ratio of 43.7 percent and total expense ratio (excluding non-operating expenses) of 37.7 percent for the first half of 2019 compared with 38.8 percent and 36.7 percent, respectively, for the first half of 2018. Non-operating expenses in the first half of 2019 were $61.9 million compared with $21.2 million in the first half of 2018. Non-operating expenses in the first half of 2019 included $43.9 million of expenses related to or triggered by the transaction with affiliates of certain investment funds affiliated with Apollo Global Management, $6.0 million of expenses related to the operational effectiveness and efficiency program and $12.0 million of expenses in relation to severance, amortisation and other non-recurring costs.
