Aspen has reported strong results across the board for the first quarter of 2014, reflecting the successful execution and growing impact of its strategic levers, in what is likely to be a compelling rebuttal to Endurance's overtures.
The firm has experienced its highest quarterly ROE since making significant investments in its US insurance lines business in 2010, with an annualised operating return on average equity of 14.8 percent.
Chris O’Kane, chief executive officer, comments, “We are very pleased with our strong results this quarter, the US insurance teams continued their trajectory of profitable growth and international insurance achieved a solid quarter.”
He adds, “Our reinsurance business had yet another strong quarter and remains a preferred trading partner for our clients.”
Net income after tax was reported at $120.4 million for the quarter, or $1.66 diluted net income per share.
The reinsurer increased gross written premiums by 7.4 percent to $472.2 million during the quarter, compared with the first quarter of 2013.
Aspen expects return on equity to increase in 2015 and 2016, and remains confident that the acceleration of ROE is due to the restructuring of its reinsurance and retrocession program, combined with rising interest rates and better capital management.
O’Kane believes these factors have proved a positive contributor to operating income, “We continue to execute on targeted growth opportunities building off of our prior investments and the strength of our teams. Historically, we invested in both Insurance and Reinsurance to position our businesses for profitable growth. Those investments are paying dividends and driving meaningful improvements in our results.”
Aspen’s US reinsurance teams reported a combined ratio of 72.6 percent compared with 78.5 percent for the first quarter of 2013, suggesting continued momentum.
“We expect the benefits garnered from those investments to continue to increase in the coming years and to drive premium growth faster than both expenses and allocated risk capital, which will result in continued improvement in ROE.”
Aspen, Q1, results