Endurance offer less attractive in light of Aspen growth


Aspen has responded to Endurance’s latest letter to its shareholders, arguing that strong preliminary results for 1H 2014 and a mischaracterisation of the company’s position are reason enough for Aspen investors to reject Endurance’s continued hostile advances.

Aspen has released preliminary results for the quarter that indicate the company achieved second quarter book value growth to the tune of 4.4 to 4.9 percent and an annualised net income ROE of 16 to 16.8 percent.

Addressing Aspen’s performance, Chris O’Kane, CEO of Aspen says: "Our results this quarter reinforce the strong momentum evidenced by Aspen in the first quarter. The continued excellent performance across our businesses gives us confidence in the diversity, growth, quality and profitability of our platforms.”

“We remain intensely focused on the achievement of our strategic and financial objectives for 2014 and beyond and are excited about seeing our shareholders benefit from the investments we have made in our business.”

Aspen also presented a strong rebuttal of Endurance’s recent letter to its shareholders, Aspen arguing that Endurance’s offer has become less attractive with time, particularly in the light of Aspen’s strong performance.

Aspen said that it had outperformed Endurance in terms of accident year combined ratio between 2009 and 2014 and that claims by Endurance to the contrary were a wilful mischaracterisation.

It also attacked Endurance’s “erroneous claims” regarding Aspen. Aspen said that its increased catastrophe reinsurance exposure reflected its pursuit of opportunities in the third party space, adding that “Aspen Re was able to increase its share on some of the most desirable risks in the catastrophe reinsurance market.”

Aspen characterised its involvement in the convergence space as a significant opportunity for future growth and diversity of earnings. It is interesting to note that Endurance is almost alone in its willingness to stay out of the third party space.

Aspen also defended its US business, arguing that it is “economically beneficial to participate on a program basis” in the US. The company added that the business is profitable and represents around 6 percent of its book of business.

Finally, Aspen defended its reserving position, which it characterised as “robust”, despite Endurance’s suggestions to the contrary.

It is apparent that the ongoing fight is not going to die down any time soon. 

Aspen, Endurance, M&A

Bermuda Re