Aspen’s defence impacts Q3 results

The Bermudian re/insurer that defended itself from a hostile takeover bid by Endurance earlier this year has seen profits plummet in the third quarter of 2014 – partly as a result of costs associated with that battle.

Aspen insurance saw net income after tax fell to $37.4 million in the quarter, compared with $107.4 million in the third quarter of 2013, as defence costs related to the battle with Endurance for control of the company took their toll.

However, its gross written premiums (GWP) increased 12.2 percent to $652.5 million in the third quarter of 2014 from $581.6 million in the third quarter of 2013, with growth from both its insurance and reinsurance segments.

In Aspen’s reinsurance segment, GWP hit $256.9 million, an increase of 17 percent from $219.5 million in the third quarter of 2013. The growth primarily driven by increased production and new business in other property.

Aspen’s insurance segment saw GWP of $395.6 million, an increase of 9.3 percent from $362.1 million in the third quarter of 2013. The increase was attributable to property and casualty and financial and professional lines, primarily resulting from the continued growth from the US teams.

Aspen’s combined ratio deteriorated to 94.6 percent for the third quarter of 2014 compared with 91.8 percent for the same period of the prior year.

Chris O’Kane, chief executive officer, said: “During the third quarter we continued to execute our strategy to increase ROE and shareholder value with good operating results, opportunistic share repurchases and further rebalancing of our investment portfolio. Reinsurance had another very strong quarter and continues to successfully navigate a dynamic market.

“Insurance continued to evidence momentum, with our US insurance teams continuing to make strong progress in building out the platform through profitable growth. As we enter the final quarter of 2014 we are well positioned to comfortably exceed our 10 percent ROE target for the year. We will continue to focus on ROE improvement in 2015 and beyond.”