Unrealised investment losses knock Aspen profit
Bermuda-based Aspen Insurance Holdings saw second quarter net income drop 23% primarily due to mark to market investment losses and an increase in corporate and other expenses .
Aspen, which is privately held, said net income fell from $89.6 million to $69 million as net realised and unrealised investments lost $26.1 million compared to a $9.9 million gain and corporate and other expenses rose to $39 million from $29.4 million.
That offset a 16.7% rise in gross written premiums to $1.25 billion, although underwriting income dropped 6.6% to $80 million. The company’s combined ratio rose to 88.7% from 86.7%.
However, the company’s operating income rose to $97.6 million from $82.9 million.
“Aspen continues on its path of delivering consistently strong performance,” said Mark Cloutier, executive chairman and group chief executive officer. “For the six months ended June 30, we reported top line growth, and a healthy annualised operating return on average equity and combined ratio.
“The results for both the second quarter and first six months demonstrate the robustness of our platform, and are in line with our expectations, given the major industry wide loss events in the period.”
He added: “In the first half of the year, we continued to match interesting business opportunities with our disciplined underwriting approach, which resulted in a 17% growth in our gross written premium to $2.5 billion (HY 2023: $2.1 billion).
“In addition to our underwriting performance, Aspen Capital Markets generated fee income of $68 million, representing a 13% growth, and we reported net investment income of $159 million, an increase of 23% from prior year. This resulted in operating income of $201 million, up by 5%.
“Our adjusted combined operating ratio of 86.5% (HY 2023: 84.8%) reflects the impact of industry event major loss activity year over year, principally in the first quarter of the year compared to the prior year period.”
He said the company’s view on trading conditions remained “generally optimistic”, adding: “We believe there is ample opportunity for continued profitable growth within the construct of our current portfolio and appetite.”
The company’s insurance segment recorded an increase in underwriting income from $32.3 million to $35.5 million as GWP edged up 1.9% to $684 million and total losses and loss expenses decreased from $233.8 million to $231.2 million. The combined ratio fell from 91.3% to 90.6%.
The reinsurance segment saw GWP surge by 41.5% to $566,2 million while total loss and loss expenses increased from $142 million to $189 million, largely due to an increase in catastrophe losses which rose from $15 million to $43.2 million.
It recorded underwriting income of $44.8 million, down from $53.7 million and its combined ratio rose to 86.3% from 80.7%.
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