UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report
Pursuant to Section 13 OR 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 24, 2013
ASPEN INSURANCE HOLDINGS LIMITED
(Exact name of registrant as specified in its charter)
Bermuda | 001-31909 | Not Applicable | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
141 Front Street
Hamilton HM 19
Bermuda
(Address of principal executive offices)
(Zip Code)
Registrants telephone number, including area code: (441) 295-8201
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Section 2 - Financial Information
Item 2.02 - Results of Operations and Financial Condition
On July 24, 2013, Aspen Insurance Holdings Limited (Aspen or the Company) issued a press release announcing results for the quarter and six months ended June 30, 2013, which has been attached as Exhibit 99.1. In addition, a copy of the Aspen Insurance Holdings Limited Earnings Release Supplement for the quarter and six months ended June 30, 2013 is attached hereto as Exhibit 99.2.
Section 5 - Corporate Governance and Management
Item 5.02 - Departure of Directors or Certain Officers; Election of Directors; Compensatory Arrangements of Certain Officers
On July 24, 2013, Aspen announced that Mr. Bret Pearlman has been appointed to its Board of Directors (the Board) as a Class II director.
The attached press release, furnished as Exhibit 99.3 to this Current Report on Form 8-K, provides additional information. Following the appointment of Mr. Pearlman, Aspen will have 12 directors on its Board. Mr. Pearlman will be a member of the Boards Investment and Corporate Governance and Nominating Committees. The Board has determined that Mr. Pearlman is an independent director pursuant to the NYSE Corporate Governance Standards applicable to U.S. domestic issuers.
Under Aspens Bye-Laws, the appointment of Mr. Pearlman will be subject to shareholder vote at Aspens 2014 Annual General Meeting, at which Mr. Pearlman will be standing for election as a Class II Director. As a non-executive director, Mr. Pearlman is entitled to receive the same level of fees and benefits as other Aspen non-executive directors, including for committee appointments. For additional information, please see our Definitive Proxy Statement filed with the Securities and Exchange Commission on March 13, 2013.
Section 7 - Regulation FD
Item 7.01 - Regulation FD Disclosure
On July 24, 2013, Aspen issued a press release announcing results for the quarter and six months ended June 30, 2013 which has been attached as Exhibit 99.1. In addition, a copy of the Aspen Insurance Holdings Limited Earnings Release Supplement for the quarter and six months ended June 30, 2013 is attached hereto as Exhibit 99.2.
On July 24, 2013, Aspen issued a press release announcing the appointment of Mr. Bret Pearlman to the Board, which has been attached as Exhibit 99.3.
Section 9 - Financial Statements and Exhibits
Item 9.01 - Financial Statements and Exhibits
(d) | The following exhibits are furnished under Items 7.01 and 2.02 as part of this report: |
99.1 | Press Release of the Registrant, dated July 24, 2013. |
99.2 | Earnings Release Supplement for the quarter and six months ended June 30, 2013. |
99.3 | Press Release of the Registrant dated July 24, 2013. |
The information furnished under Item 7.01 Regulation FD Disclosure and Item 2.02 Results of Operations and Financial Condition shall not be deemed filed for purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ASPEN INSURANCE HOLDINGS LIMITED (Registrant) | ||||
Dated: July 24, 2013 | By: | /s/ John Worth | ||
Name: | John Worth | |||
Title: | Chief Financial Officer |
3
Exhibit 99.1
Aspen reports results for the quarter and six months ended June 30, 2013
Hamilton, Bermuda, July 24, 2013 Aspen Insurance Holdings Limited (Aspen) (NYSE: AHL) today reported net income after tax of $40.1 million, or $0.36 diluted net income per share, for the second quarter of 2013.
Chris OKane, Chief Executive Officer commented, In the second quarter, Aspen delivered solid operating results in an above average catastrophe quarter, with our combined ratio excluding catastrophes improving modestly from last year. We continue to make progress on the three initiatives we outlined earlier this year to drive increased profitability. We have released $70 million of capital in our U.S. property insurance line and our U.S. operations overall continue to gain scale and momentum towards sustainable profitability. We executed over $240 million of share repurchases in the first six months of the year and continued to carefully reallocate a portion of our investment portfolio to achieve higher risk-adjusted returns. We remain intensely focused on executing these initiatives and achieving increased profitability.
Operating highlights for the quarter ended June 30, 2013
| Gross written premiums increased overall by 3.1% to $687.3 million in the second quarter of 2013 from the second quarter of 2012. Gross written premiums in Reinsurance were flat while Insurance grew 6.0% |
| Combined ratio of 97.1% for the second quarter of 2013 compared with a combined ratio of 87.3% for the second quarter of 2012. This increase was due to $58.7 million or 10.9 percentage points, of pre-tax catastrophe losses net of reinsurance recoveries and $5.2 million of reinstatement premiums in the second quarter of 2013 compared with no catastrophe losses in the second quarter of 2012 |
| Net favorable development on prior year loss reserves of $27.4 million, or 5.0 combined ratio points, for the second quarter of 2013 compared with $28.6 million, or 5.6 combined ratio points, for the second quarter of 2012 |
Financial highlights for the quarter and six months ended June 30, 2013
| Annualized net income return on average equity of 4.4% and annualized operating return on average equity of 6.4% for the second quarter of 2013 compared with 10.8% and 13.6%, respectively in the second quarter of 2012(1) |
| Annualized net income return on average equity of 8.0% and annualized operating return on average equity of 8.6% for the first half of 2013 compared with 10.6% and 11.4%, respectively in the first half of 2012(1) |
| Diluted net income per share of $0.36 for the quarter ended June 30, 2013 compared with diluted net income per share of $1.03 for the second quarter of 2012, and diluted net income per share of $1.52 for the six months ended June 30, 2013 compared with diluted net income per share of $2.02 for the six months ended June 30, 2012 |
| Diluted operating income per share of $0.63 for the quarter ended June 30, 2013 compared with diluted operating income per share of $1.32 for the second quarter of 2012(1) and diluted operating income per share of $1.70 for the six months ended June 30, 2013 compared with diluted net income per share of $2.20 for the six months ended June 30, 2012 |
| On an after-tax basis, catastrophe losses were $53.7 million, or $0.77 per share, for the second quarter of 2013, and $53.7 million, or $0.75 per share, for the first six months of 2013 |
| Diluted book value per share of $38.87 at June 30, 2013 down 4.4% from March 31, 2013(1) mainly due to the $138.4 million of unrealized losses in the investment portfolio as a result of widening credit spreads and interest rate movements |
| On April 25, 2013, Aspen issued 11.0 million 5.950% Preference Shares with a liquidation preference of $25 for an aggregate amount of $275.0 million and net proceeds of approximately $270.4 million from this issuance |
Segment highlights
Reinsurance
Operating highlights for Reinsurance for the quarter ended June 30, 2013 include:
| Gross written premiums of $298.6 million, largely flat compared with $299.8 million for the second quarter of 2012 |
| Combined ratio of 88.9% compared with 79.0% for the second quarter of 2012 |
| Favorable prior year loss reserve development of $24.1 million, or 8.7 combined ratio points, compared with $14.1 million favorable prior year loss reserve development, or 5.0 combined ratio points, for the second quarter of 2012 |
The combined ratio of 88.9% for the second quarter of 2013 included $51.8 million, or 19.4 percentage points, of pre-tax catastrophe losses, net of reinsurance recoveries and $5.2 million of reinstatement premiums, related to flooding in Central Europe, Canada and India, and tornadoes and hailstorms in the U.S. The combined ratio of 79.0% for the second quarter of 2012 included no natural catastrophe losses.
Insurance
Operating highlights for Insurance for the quarter ended June 30, 2013 include:
| Gross written premiums of $388.7 million, up 6.0% compared with $366.8 million for the second quarter of 2012 |
| Combined ratio of 99.8% compared with 92.2% for the second quarter of 2012 |
| Favorable prior year loss reserve development of $3.3 million, or 1.2 combined ratio points, compared with $14.5 million, or 6.3 combined ratio points, for the second quarter of 2012 |
The increase in gross written premiums was mainly attributable to growth in Marine, Energy and Construction Liability, Global Casualty, as well as the U.S.-based insurance teams specifically in Programs, Professional Liability and Marine. The combined ratio for the second quarter of 2013 included $6.9 million, or 2.6 percentage points, of pre-tax catastrophe losses net of reinsurance recoveries and reinstatement premiums related to tornadoes and hailstorms in the U.S. The combined ratio for the second quarter of 2012 included no natural catastrophe losses.
2
Investment performance
Aspens investment portfolio continues to be comprised primarily of high quality fixed income securities with an average credit quality of AA. The average duration of the fixed income portfolio was 3.4 years at June 30, 2013, excluding the impact of interest rate swaps, or 3.0 years including the impact of interest rate swaps. The total return on the Companys investment portfolio was negative 1.2% for the second quarter of 2013, compared to a gain of 1.0% for the second quarter of 2012. The equity portfolio had a loss of 0.3% for the quarter and a gain of 8.3% for the first half of 2013.
Net investment income for the second quarter of 2013 was $45.9 million. Book yield as at June 30, 2013 on the fixed income portfolio was 2.71% compared to 3.19% at June 30, 2012. The decline in the yield primarily reflects the effect of lower prevailing interest rates.
Net realized and unrealized investment losses including unrealized movements in the trading portfolio included in net income for the quarter were $6.6 million. Total unrealized gains in the available for sale investment portfolio, including equity securities, decreased $138.4 million from March 31, 2013 to $199.0 million at June 30, 2013.
Capital
Total shareholders equity decreased by $104.7 million in the quarter to $3.2 billion at June 30, 2013.
During the second quarter of 2013, Aspen repurchased 800,042 ordinary shares in the open market at an average price of $37.38 per share for a total cost of $29.9 million. Between July 1, 2013 and July 22, 2013, Aspen repurchased 174,202 ordinary shares under its Rule 10b5-1 plan at an average price of $37.83 per share for a total cost of $6.6 million. Aspen had $287 million remaining under its current share repurchase authorization at July 22, 2013.
On April 25, 2013 Aspen elected to mandatorily redeem all of its outstanding 5.625% Perpetual Preferred Income Equity Replacement Securities (Perpetual PIERS). Accordingly, the conversion settlement amount for each $50 liquidation preference of Perpetual PIERS was paid in the following forms of consideration: $50.00 in cash and approximately 0.3991 shares of Aspen ordinary shares. As a result, Aspen issued a total of 1,835,860 ordinary shares.
On April 25, 2013 Aspen priced 11,000,000 shares of 5.95% Fixed-to-Floating Rate Perpetual Non-Cumulative Preference Shares with a liquidation preference of $25 per share or $275 million in aggregate liquidation preference.
Guidance
Aspen continues to expect to achieve an operating return on equity of 10% in 2014, assuming a pre-tax catastrophe load of $190 million per annum and normal loss experience and given the current interest rate environment. While recent decreases in pricing in certain business lines, if sustained, are expected to have an adverse effect on operating return on equity, Aspen continues to identify actions in each of its three operating return on equity levers optimization of the business portfolio, capital efficiency and enhancing investment returns to help mitigate the impact of pricing declines on operating return on equity.
See Forward-looking Statements Safe Harbor below.
(1) | See definition of non-GAAP financial measures on pages 12 and 13 |
3
Earnings conference call and web cast
Aspen will host a conference call to discuss the results at 9:00 am (EST) on Thursday, July 25, 2013.
To participate in the July 25 conference call by phone
Please call to register at least 10 minutes before the conference call begins by dialing:
+1 (888) 459 5609 (US toll free) or
+1 (404) 665 9920 (international)
Conference ID 97869477
To listen live online
Aspen will provide a live webcast on Aspens website at www.aspen.co
To download the materials
The earnings press release and a detailed financial supplement will also be published on Aspens website at www.aspen.co.
To listen later
A replay of the call will be available for 14 days via phone and internet, available two hours after the end of the live call. To listen to the replay by phone please dial:
+1 (855) 859 2056 (US toll free) or
+1 (404) 537 3406 (international)
Replay ID 97869477
The recording will be also available at www.aspen.co on the Event Calendar page within the Investor Relations section.
For further information please contact
Investors
Kerry Calaiaro, Senior Vice President, Investor Relations, Aspen
Kerry.Calaiaro@aspen.co
+1 (646) 502 1076
Media
Steve Colton, Head of Communications, Aspen
Steve.Colton@aspen.co
+44 20 7184 8337
International Citigate Dewe Rogerson
Caroline Merrell or Jos Bieneman
caroline.merrell@citigatedr.co.uk
jos.bieneman@citigatedr.co.uk
+44 20 7638 9571
North America Abernathy MacGregor
Allyson Vento
amv@abmac.com
+1 (212) 371 5999
4
Aspen Insurance Holdings Limited
Summary consolidated balance sheet (unaudited)
$ in millions, except per share data
As at June 30, 2013 |
As
at December 31, 2012 |
|||||||
ASSETS |
||||||||
Total investments |
$ | 6,746.7 | $ | 6,692.4 | ||||
Cash and cash equivalents |
1,188.9 | 1,463.6 | ||||||
Reinsurance recoverables |
698.3 | 621.6 | ||||||
Premiums receivable |
1,197.6 | 1,057.5 | ||||||
Other assets |
522.3 | 475.5 | ||||||
|
|
|
|
|||||
Total assets |
$ | 10,353.8 | $ | 10,310.6 | ||||
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|
|
|
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LIABILITIES |
||||||||
Losses and loss adjustment expenses |
$ | 4,734.9 | $ | 4,779.7 | ||||
Unearned premiums |
1,375.3 | 1,120.8 | ||||||
Other payables |
509.5 | 422.6 | ||||||
Long-term debt |
499.2 | 499.1 | ||||||
|
|
|
|
|||||
Total liabilities |
7,118.9 | 6,822.2 | ||||||
SHAREHOLDERS EQUITY |
||||||||
Total shareholders equity |
3,234.9 | 3,488.4 | ||||||
|
|
|
|
|||||
Total liabilities and shareholders equity |
$ | 10,353.8 | $ | 10,310.6 | ||||
|
|
|
|
|||||
Book value per share |
$ | 39.99 | $ | 42.12 | ||||
Diluted book value per share (treasury stock method) |
$ | 38.87 | $ | 40.65 | ||||
|
|
|
|
5
Aspen Insurance Holdings Limited
Summary consolidated statement of income (unaudited)
$ in millions, except ratios
Three Months Ended | ||||||||
June 30, 2013 |
June 30, 2012 |
|||||||
UNDERWRITING REVENUES |
||||||||
Gross written premiums |
$ | 687.3 | $ | 666.6 | ||||
Premiums ceded |
(74.6 | ) | (84.7 | ) | ||||
|
|
|
|
|||||
Net written premiums |
612.7 | 581.9 | ||||||
Change in unearned premiums |
(68.7 | ) | (68.5 | ) | ||||
|
|
|
|
|||||
Net earned premiums |
544.0 | 513.4 | ||||||
|
|
|
|
|||||
UNDERWRITING EXPENSES |
||||||||
Losses and loss adjustment expenses |
333.4 | 262.1 | ||||||
Policy acquisition expenses |
107.2 | 102.0 | ||||||
General, administrative and corporate expenses |
87.7 | 83.5 | ||||||
|
|
|
|
|||||
Total underwriting expenses |
528.3 | 447.6 | ||||||
|
|
|
|
|||||
Underwriting income including corporate expenses |
15.7 | 65.8 | ||||||
|
|
|
|
|||||
OTHER OPERATING REVENUE |
||||||||
Net investment income |
45.9 | 52.8 | ||||||
Interest expense |
(7.8 | ) | (7.7 | ) | ||||
Other income |
0.9 | 2.9 | ||||||
|
|
|
|
|||||
Total other operating revenue |
39.0 | 48.0 | ||||||
|
|
|
|
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OPERATING INCOME BEFORE TAX |
54.7 | 113.8 | ||||||
Net realized and unrealized exchange (losses) |
(13.8 | ) | (13.0 | ) | ||||
Net realized and unrealized investment gains (losses) |
0.2 | (10.0 | ) | |||||
|
|
|
|
|||||
INCOME BEFORE TAX |
41.1 | 90.8 | ||||||
Income tax expense |
(1.0 | ) | (6.2 | ) | ||||
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|
|
|||||
NET INCOME AFTER TAX |
40.1 | 84.6 | ||||||
Dividends paid on ordinary shares |
(11.9 | ) | (12.2 | ) | ||||
Dividends paid on preference shares |
(8.0 | ) | (8.3 | ) | ||||
Change in redemption value of Perpetual PIERS |
(7.1 | ) | | |||||
Proportion due to non-controlling interest |
| 0.2 | ||||||
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|
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Retained income |
$ | 13.1 | $ | 64.3 | ||||
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Components of net income (after tax) |
||||||||
Operating income |
$ | 52.2 | 105.8 | |||||
Net realized and unrealized exchange (losses) after tax |
(12.0 | ) | (10.9 | ) | ||||
Net realized investment (losses) after tax |
(0.1 | ) | (10.3 | ) | ||||
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|
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NET INCOME AFTER TAX |
$ | 40.1 | $ | 84.6 | ||||
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Loss ratio |
61.3 | % | 51.1 | % | ||||
Policy acquisition expense ratio |
19.7 | % | 19.9 | % | ||||
General, administrative and corporate expense ratio |
16.1 | % | 16.3 | % | ||||
Expense ratio |
35.8 | % | 36.2 | % | ||||
Combined ratio |
97.1 | % | 87.3 | % | ||||
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|
6
Aspen Insurance Holdings Limited
Summary consolidated statement of income (unaudited)
$ in millions, except ratios
Six Months Ended | ||||||||
June 30, 2013 |
June 30, 2012 |
|||||||
UNDERWRITING REVENUES |
||||||||
Gross written premiums |
$ | 1,460.7 | $ | 1,448.7 | ||||
Premiums ceded |
(251.0 | ) | (233.3 | ) | ||||
|
|
|
|
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Net written premiums |
1,209.7 | 1,215.4 | ||||||
Change in unearned premiums |
(154.8 | ) | (206.6 | ) | ||||
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|
|||||
Net earned premiums |
1,054.9 | 1,008.8 | ||||||
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|
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UNDERWRITING EXPENSES |
||||||||
Losses and loss adjustment expenses |
602.1 | 546.1 | ||||||
Policy acquisition expenses |
211.8 | 198.1 | ||||||
General, administrative and corporate expenses |
174.3 | 168.3 | ||||||
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|
|
|
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Total underwriting expenses |
988.2 | 912.5 | ||||||
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Underwriting income including corporate expenses |
66.7 | 96.3 | ||||||
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OTHER OPERATING REVENUE |
||||||||
Net investment income |
94.2 | 105.2 | ||||||
Interest expense |
(15.5 | ) | (15.4 | ) | ||||
Other income |
1.4 | 2.6 | ||||||
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|
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Total other operating revenue |
80.1 | 92.4 | ||||||
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|
|||||
OPERATING INCOME BEFORE TAX |
146.8 | 188.7 | ||||||
Net realized and unrealized exchange (losses) |
(24.0 | ) | (9.3 | ) | ||||
Net realized and unrealized investment gains (losses) |
16.0 | (4.5 | ) | |||||
|
|
|
|
|||||
INCOME BEFORE TAX |
138.8 | 174.9 | ||||||
Income tax expense |
(6.9 | ) | (11.6 | ) | ||||
|
|
|
|
|||||
NET INCOME AFTER TAX |
131.9 | 163.3 | ||||||
Dividends paid on ordinary shares |
(23.8 | ) | (22.8 | ) | ||||
Dividends paid on preference shares |
(16.6 | ) | (14.0 | ) | ||||
Change in redemption value of Perpetual PIERS |
(7.1 | ) | | |||||
Proportion due to non-controlling interest |
| 0.3 | ||||||
|
|
|
|
|||||
Retained income |
$ | 84.4 | $ | 126.8 | ||||
|
|
|
|
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Components of net income (after tax) |
||||||||
Operating income |
$ | 137.9 | 176.3 | |||||
Net realized and unrealized exchange (losses) after tax |
(21.5 | ) | (7.9 | ) | ||||
Net realized investment gains (losses) after tax |
15.5 | (5.1 | ) | |||||
|
|
|
|
|||||
NET INCOME AFTER TAX |
$ | 131.9 | $ | 163.3 | ||||
|
|
|
|
|||||
Loss ratio |
57.1 | % | 54.1 | % | ||||
Policy acquisition expense ratio |
20.1 | % | 19.6 | % | ||||
General, administrative and corporate expense ratio |
16.5 | % | 16.7 | % | ||||
Expense ratio |
36.6 | % | 36.3 | % | ||||
Combined ratio |
93.7 | % | 90.4 | % | ||||
|
|
|
|
7
Aspen Insurance Holdings Limited
Summary consolidated financial data (unaudited)
$ in millions, except number of shares
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, 2013 |
June 30, 2012 |
June 30, 2013 |
June 30, 2012 |
|||||||||||||
Basic earnings per ordinary share |
||||||||||||||||
Net income adjusted for preference share dividend |
$ | 0.38 | $ | 1.07 | $ | 1.60 | $ | 2.10 | ||||||||
Operating income adjusted for preference dividend |
$ | 0.67 | $ | 1.36 | $ | 1.80 | $ | 2.28 | ||||||||
Diluted earnings per ordinary share |
||||||||||||||||
Net income adjusted for preference share dividend |
$ | 0.36 | $ | 1.03 | $ | 1.52 | $ | 2.02 | ||||||||
Operating income adjusted for preference dividend |
$ | 0.63 | $ | 1.32 | $ | 1.70 | $ | 2.20 | ||||||||
Weighted average number of ordinary shares outstanding (in millions) |
66.191 | 71.304 | 67.601 | 71.124 | ||||||||||||
Weighted average number of ordinary shares outstanding and dilutive potential ordinary shares (in millions) |
69.291 | 73.846 | 71.087 | 73.844 | ||||||||||||
Book value per ordinary share |
$ | 39.99 | $ | 41.41 | ||||||||||||
Diluted book value (treasury stock method) |
$ | 38.87 | $ | 40.01 | ||||||||||||
Ordinary shares outstanding at end of the period (in millions) |
67.003 | 70.687 | ||||||||||||||
Ordinary shares outstanding and dilutive potential ordinary shares at end of the period (treasury stock method) (in millions) |
68.934 | 73.161 |
8
Aspen Insurance Holdings Limited
Summary consolidated segment information (unaudited)
$ in millions, except ratios
Three Months Ended June 30, 2013 | Three Months Ended June 30, 2012 | |||||||||||||||||||||||
Reinsurance | Insurance | Total | Reinsurance | Insurance | Total | |||||||||||||||||||
Gross written premiums |
$ | 298.6 | $ | 388.7 | $ | 687.3 | $ | 299.8 | $ | 366.8 | $ | 666.6 | ||||||||||||
Net written premiums |
288.6 | 324.1 | 612.7 | 276.8 | 305.1 | 581.9 | ||||||||||||||||||
Gross earned premiums |
288.4 | 331.3 | 619.7 | 300.8 | 279.9 | 580.7 | ||||||||||||||||||
Net earned premiums |
275.8 | 268.2 | 544.0 | 282.0 | 231.4 | 513.4 | ||||||||||||||||||
Losses and loss adjustment expenses |
158.4 | 175.0 | 333.4 | 133.7 | 128.4 | 262.1 | ||||||||||||||||||
Policy acquisition expenses |
56.6 | 50.6 | 107.2 | 59.3 | 42.7 | 102.0 | ||||||||||||||||||
General and administrative expenses |
30.4 | 42.1 | 72.5 | 30.0 | 42.1 | 72.1 | ||||||||||||||||||
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Underwriting income |
$ | 30.4 | $ | 0.5 | $ | 30.9 | $ | 59.0 | $ | 18.2 | $ | 77.2 | ||||||||||||
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|||||||||||||||||
Net investment income |
45.9 | 52.8 | ||||||||||||||||||||||
Net realized and unrealized investment gains (losses) (1) |
0.2 | (10.0 | ) | |||||||||||||||||||||
Corporate expenses |
(15.2 | ) | (11.4 | ) | ||||||||||||||||||||
Other income |
0.9 | 2.9 | ||||||||||||||||||||||
Interest expenses |
(7.8 | ) | (7.7 | ) | ||||||||||||||||||||
Net realized and unrealized foreign exchange (losses) (2) |
(13.8 | ) | (13.0 | ) | ||||||||||||||||||||
|
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|
|||||||||||||||||||||
Income before tax |
41.1 | 90.8 | ||||||||||||||||||||||
Income tax expense |
(1.0 | ) | (6.2 | ) | ||||||||||||||||||||
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|
|||||||||||||||||||||
Net income |
$ | 40.1 | $ | 84.6 | ||||||||||||||||||||
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Ratios |
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Loss ratio |
57.4 | % | 65.2 | % | 61.3 | % | 47.4 | % | 55.5 | % | 51.1 | % | ||||||||||||
Policy acquisition expense ratio |
20.5 | % | 18.9 | % | 19.7 | % | 21.0 | % | 18.5 | % | 19.9 | % | ||||||||||||
General and administrative expense ratio (3) |
11.0 | % | 15.7 | % | 16.1 | % | 10.6 | % | 18.2 | % | 16.3 | % | ||||||||||||
Expense ratio |
31.5 | % | 34.6 | % | 35.8 | % | 31.6 | % | 36.7 | % | 36.2 | % | ||||||||||||
Combined ratio |
88.9 | % | 99.8 | % | 97.1 | % | 79.0 | % | 92.2 | % | 87.3 | % | ||||||||||||
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(1) | Includes realized and unrealized capital gains and losses and realized and unrealized gains and losses on interest rate swaps |
(2) | Includes realized and unrealized foreign exchange gains and losses and realized and unrealized gains and losses on foreign exchange contracts |
(3) | The total group general and administrative expense ratio includes the impact from corporate expenses |
9
Aspen Insurance Holdings Limited
Summary consolidated segment information (unaudited)
$ in millions, except ratios
Six Months Ended June 30, 2013 | Six Months Ended June 30, 2012 | |||||||||||||||||||||||
Reinsurance | Insurance | Total | Reinsurance | Insurance | Total | |||||||||||||||||||
Gross written premiums |
$ | 738.2 | $ | 722.5 | $ | 1,460.7 | $ | 774.0 | $ | 674.7 | $ | 1,448.7 | ||||||||||||
Net written premiums |
689.1 | 520.6 | 1,209.7 | 706.3 | 509.1 | 1,215.4 | ||||||||||||||||||
Gross earned premiums |
560.3 | 644.2 | 1,204.5 | 591.0 | 546.8 | 1,137.8 | ||||||||||||||||||
Net earned premiums |
532.5 | 522.4 | 1,054.9 | 553.0 | 455.8 | 1,008.8 | ||||||||||||||||||
Losses and loss adjustment expenses |
272.7 | 329.4 | 602.1 | 269.3 | 276.8 | 546.1 | ||||||||||||||||||
Policy acquisition expenses |
111.9 | 99.9 | 211.8 | 111.1 | 87.0 | 198.1 | ||||||||||||||||||
General and administrative expenses |
62.6 | 84.5 | 147.1 | 59.0 | 83.5 | 142.5 | ||||||||||||||||||
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Underwriting income |
$ | 85.3 | $ | 8.6 | $ | 93.9 | $ | 113.6 | $ | 8.5 | $ | 122.1 | ||||||||||||
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Net investment income |
94.2 | 105.2 | ||||||||||||||||||||||
Net realized and unrealized investment gains (losses) (1) |
16.0 | (4.5 | ) | |||||||||||||||||||||
Corporate expenses |
(27.2 | ) | (25.8 | ) | ||||||||||||||||||||
Other income |
1.4 | 2.6 | ||||||||||||||||||||||
Interest expenses |
(15.5 | ) | (15.4 | ) | ||||||||||||||||||||
Net realized and unrealized foreign exchange (losses) (2) |
(24.0 | ) | (9.3 | ) | ||||||||||||||||||||
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Income before tax |
138.8 | 174.9 | ||||||||||||||||||||||
Income tax expense |
(6.9 | ) | (11.6 | ) | ||||||||||||||||||||
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Net income |
$ | 131.9 | $ | 163.3 | ||||||||||||||||||||
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Ratios |
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Loss ratio |
51.2 | % | 63.1 | % | 57.1 | % | 48.7 | % | 60.7 | % | 54.1 | % | ||||||||||||
Policy acquisition expense ratio |
21.0 | % | 19.1 | % | 20.1 | % | 20.1 | % | 19.1 | % | 19.6 | % | ||||||||||||
General and administrative expense ratio (3) |
11.8 | % | 16.2 | % | 16.5 | % | 10.7 | % | 18.3 | % | 16.7 | % | ||||||||||||
Expense ratio |
32.8 | % | 35.3 | % | 36.6 | % | 30.8 | % | 37.4 | % | 36.3 | % | ||||||||||||
Combined ratio |
84.0 | % | 98.4 | % | 93.7 | % | 79.5 | % | 98.1 | % | 90.4 | % | ||||||||||||
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(1) | Includes realized and unrealized capital gains and losses and realized and unrealized gains and losses on interest rate swaps |
(2) | Includes realized and unrealized foreign exchange gains and losses and realized and unrealized gains and losses on foreign exchange contracts |
(3) | The total group general and administrative expense ratio includes the impact from corporate expenses |
10
About Aspen Insurance Holdings Limited
Aspen provides reinsurance and insurance coverage to clients in various domestic and global markets through wholly-owned subsidiaries and offices in Bermuda, France, Germany, Ireland, Singapore, Switzerland, the United Kingdom and the United States. For the year ended December 31, 2012, Aspen reported $10.3 billion in total assets, $4.8 billion in gross reserves, $3.5 billion in total shareholders equity and $2.6 billion in gross written premiums. Its operating subsidiaries have been assigned a rating of A (Strong) by Standard & Poors, an A (Excellent) by A.M. Best and an A2 (Good) by Moodys Investors Service.
For more information about Aspen, please visit www.aspen.co.
Forward-looking Statements Safe Harbor
This press release contains, and Aspens earnings conference call will contain, written or oral forward-looking statements within the meaning of the US federal securities laws. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as expect, intend, plan, believe, do not believe, aim, project, anticipate, seek, will, likely, estimate, may, continue, guidance, and similar expressions of a future or forward-looking nature.
All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in these statements. Aspen believes these factors include, but are not limited to: the possibility of greater frequency or severity of claims and loss activity, including as a result of natural or man-made (including economic and political risks) catastrophic or material loss events, than our underwriting, reserving, reinsurance purchasing or investment practices have anticipated; the reliability of, and changes in assumptions to, natural and man-made catastrophe pricing, accumulation and estimated loss models; decreased demand for our insurance or reinsurance products and cyclical changes in the insurance and reinsurance sectors; changes in insurance and reinsurance market conditions; increased competition on the basis of pricing, capacity, coverage terms, new capital, binding authorities to brokers or other factors and the related demand and supply dynamics as contracts come up for renewal; cost or quality of reinsurance or retrocessional coverage; changes in general economic conditions, including inflation, foreign currency exchange rates, interest rates and other factors that could affect our financial results; the risk of a material decline in the value or liquidity of all or parts of our investment portfolio; evolving issues with respect to interpretation of coverage after major loss events and any intervening legislative or governmental action; the effectiveness of our loss limitation methods; changes in the total industry losses, or our share of total industry losses, resulting from past events and, with respect to such events, our reliance on loss reports received from cedants and loss adjustors, our reliance on industry loss estimates and those generated by modeling techniques, changes in rulings on flood damage or other exclusions as a result of prevailing lawsuits and case law; the impact of one or more large losses from events other than natural catastrophes or by an unexpected accumulation of attritional losses; the impact of acts of terrorism and related legislation and acts of war; any changes in our reinsurers credit quality and the amount and timing of reinsurance recoverables; changes in the availability, the continuing and uncertain impact of the current depressed economic environment in many of the countries in which we operate; the level of inflation in repair costs due to limited availability of labor and materials after catastrophes; a decline in our operating subsidiaries ratings with S&P, A.M. Best or Moodys; the failure of our reinsurers, policyholders, brokers or other intermediaries to honor their payment obligations; our ability to execute our business plan to enter new markets, introduce new products and develop new distribution channels, including their integration into our existing operations; our reliance on the assessment and pricing of individual risks by third parties; our dependence on a few brokers for a large portion of our revenues; the persistence of heightened financial risks, including excess sovereign debt, the banking system and the Eurozone debt crisis; our ability to successfully implement steps to further optimize the business portfolio ensure capital efficiency and enhance investment returns; changes in our ability to exercise capital management initiatives (including our share repurchase program) or to arrange banking
11
facilities as a result of prevailing market changes or changes in our financial position; changes in government regulations or tax laws in jurisdictions where we conduct business; Aspen Holdings or Aspen Bermuda becoming subject to income taxes in the United States or the United Kingdom; loss of one or more of our senior underwriters or key personnel; our reliance on information technology and third party service providers for our operations and systems; and increased counterparty risk due to the credit impairment of financial institutions. For a more detailed description of these uncertainties and other factors, please see the Risk Factors section in Aspens Annual Report on Form 10-K as filed with the U.S. Securities and Exchange Commission on February 26, 2013. Aspen undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.
In addition, any estimates relating to loss events involve the exercise of considerable judgment and reflect a combination of ground-up evaluations, information available to date from brokers and cedants, market intelligence, initial tentative loss reports and other sources. Due to the complexity of factors contributing to the losses and the preliminary nature of the information used to prepare these estimates, there can be no assurance that Aspens ultimate losses will remain within the stated amount.
Non-GAAP Financial Measures
In presenting Aspens results, management has included and discussed certain non-GAAP financial measures as such term is defined in Regulation G. Management believes that these non-GAAP financial measures, which may be defined differently by other companies, better explain Aspens results of operations in a manner that allows for a more complete understanding of the underlying trends in Aspens business. However, these measures should not be viewed as a substitute for those determined in accordance with GAAP. The reconciliation of such non-GAAP financial measures to their respective most directly comparable GAAP financial measures in accordance with Regulation G is included in the financial supplement, which can be obtained from the Investor Relations section of Aspens website at www.aspen.co.
(1) Annualized Operating Return on Average Equity (Operating ROE) is a non-GAAP financial measure. Annualized Operating Return on Average Equity is calculated using operating income, as defined below and average equity is calculated as the arithmetic average on a monthly basis for the stated periods of shareholders equity excluding the aggregate value of the liquidation preferences of our preference shares net of issuance costs.
Aspen presents Operating ROE as a measure that is commonly recognized as a standard of performance by investors, analysts, rating agencies and other users of its financial information.
See page 24 of Aspens financial supplement for a reconciliation of operating income to net income and page 8 for a reconciliation of average ordinary shareholders equity to average shareholders equity.
(2) Operating Income is a non-GAAP financial measure. Operating income is an internal performance measure used by Aspen in the management of its operations and represents after-tax operational results excluding, as applicable, after-tax net realized and unrealized capital gains or losses, including net realized and unrealized gains or losses on interest rate swaps, after-tax net foreign exchange gains or losses, including net realized and unrealized gains and losses from foreign exchange contracts, and issue costs associated with equity instruments that were redeemed.
Aspen excludes these items from its calculation of operating income because the amount of these gains or losses is heavily influenced by, and fluctuates in part, according to the availability of market opportunities. Aspen believes these amounts are largely independent of its business and underwriting process and including them would distort the analysis of trends in its operations. In addition to presenting net income determined in accordance with GAAP, Aspen believes that showing operating income enables investors, analysts, rating agencies and other users of its
12
financial information to more easily analyze Aspens results of operations in a manner similar to how management analyzes Aspens underlying business performance. Operating income should not be viewed as a substitute for GAAP net income. Please see above and page 24 of Aspens financial supplement for a reconciliation of operating income to net income. Aspens financial supplement can be obtained from the Investor Relations section of Aspens website at www.aspen.co.
(3) Diluted Book Value per Ordinary Share is not a non-GAAP financial measure. Aspen has included diluted book value per ordinary share as it illustrates the effect on basic book value per share of dilutive securities thereby providing a better benchmark for comparison with other companies. Diluted book value per share is calculated using the treasury stock method, defined on page 23 of Aspens financial supplement, which can be obtained from the Investor Relations section of Aspens website at www.aspen.co.
(4) Diluted Operating Earnings per Share and Basic Operating Earnings per Share are non-GAAP financial measures. Aspen believes that the presentation of diluted operating earnings per share and basic operating earnings per share supports meaningful comparison from period to period and the analysis of normal business operations. Diluted operating earnings per share and basic operating earnings per share are calculated by dividing operating income by the diluted or basic weighted average number of shares outstanding for the period. See page 24 for a reconciliation of diluted and basic operating earnings per share to basic earnings per share. Aspens financial supplement can be obtained from the Investor Relations section of Aspens website at www.aspen.co.
(5) Combined Ratio Excluding Catastrophes is a non-GAAP financial measure. Aspen believes that the presentation of combined ratio excluding catastrophes supports meaningful comparison from period to period of the underlying performance of the business. Combined ratio excluding catastrophes is calculated by dividing net losses excluding catastrophe losses and net expenses by net earned premiums excluding catastrophe related reinstatement premiums. We have defined catastrophe losses in the current period as losses associated with floods in Central Europe, Canada and India as well as tornadoes and hailstorms in the United States. We have defined catastrophe losses in the comparative period as losses associated with the severe weather in the U.S. in February and March 2012.
Other
(1) Catastrophe Load included in our guidance is an estimate of the average annual aggregate loss before reinsurance and tax from natural catastrophe events based on 50,000 simulations of our internal capital model which, in relation to its catastrophe modeling components, is based on a combination of catastrophe models selected by Aspen to best fit its current understanding of the worldwide natural catastrophe perils to which Aspen has known exposures. It does not include losses from non-natural catastrophe events such as terrorism or industrial accidents.
This load is attributed and then released quarter by quarter based on historic claims patterns. For example, there is a higher proportion allocated to the third quarter due to the historical frequency of U.S. Wind events in this period. As an organization, Aspen monitors its current catastrophe losses to date against expected losses and updates the projected numbers accordingly based on this experience.
Actual catastrophe loss experience may materially differ from the catastrophe load in any one year for reasons which include natural variability in the frequency and severity of catastrophe events, and limitations in one or more of the models or uncertainties in the application of policy terms and limits.
13
Exhibit 99.2
FINANCIAL SUPPLEMENT As of June 30, 2013 |
Aspen Insurance Holdings Limited | ||||
This financial supplement is for information purposes only. It should be read in conjunction with other documents filed or to be filed by Aspen Insurance Holdings Limited with the United States Securities and Exchange Commission.
www.aspen.co
Investor Contact: Aspen Insurance Holdings Limited Kerry Calaiaro, Senior Vice President, T: +1 646-502-1076 email: kerry.calaiaro@aspen.co |
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AHL: NYSE |
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ASPEN INSURANCE HOLDINGS LIMITED | |
Table Of Contents |
Page | ||||
1 | ||||
3 | ||||
4 | ||||
Consolidated Statements of Operations - Year to Date Results |
5 | |||
6 | ||||
7 | ||||
8 | ||||
9-10 | ||||
11-12 | ||||
13 | ||||
14 | ||||
15 | ||||
16 | ||||
17 | ||||
18 | ||||
19 | ||||
20 | ||||
21 | ||||
22 | ||||
23 | ||||
24 |
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ASPEN INSURANCE HOLDINGS LIMITED | |
Basis of Presentation |
Definitions and presentation: All financial information contained herein is unaudited except for information for the fiscal years ended December 31, 2012 and December 31, 2011. Unless otherwise noted, all data is in U.S. dollars millions, except for per share amounts, percentages and ratio information.
In presenting Aspens results, management has included and discussed certain non-GAAP financial measures, as such term is defined in Regulation G. Management believes that these non-GAAP measures, which may be defined differently by other companies, better explain Aspens results of operations in a manner that allows for a more complete understanding of the underlying trends in Aspens business. However, these measures should not be viewed as a substitute for those determined in accordance with GAAP. The reconciliation of such non-GAAP financial measures to their respective most directly comparable GAAP financial measures in accordance with Regulation G is included in this financial supplement.
Operating income (a non-GAAP financial measure): Operating income is an internal performance measure used by Aspen in the management of its operations and represents after-tax operational results excluding, as applicable, after-tax net realized and unrealized capital gains or losses, including net realized and unrealized gains and losses on interest rate swaps, after-tax net foreign exchange gains or losses, including net realized and unrealized gains and losses on foreign exchange contracts and issue costs associated with equity instruments that were redeemed.
Aspen excludes these items from its calculation of operating income because the amount of these gains or losses is heavily influenced by, and fluctuates in part, according to the availability of market opportunities. Aspen believes these amounts are largely independent of its business and underwriting process and including them would distort the analysis of trends in its operations. In addition to presenting net income in accordance with GAAP, Aspen believes that showing operating income enables investors, analysts, rating agencies and other users of its financial information to more easily analyze Aspens results of operations in a manner similar to how management analyzes Aspens underlying business performance. Operating income should not be viewed as a substitute for GAAP net income. Please see page 24 for a reconciliation of operating income to net income.
Annualized operating return on average equity (Operating ROE) (a non-GAAP financial measure): Annualized operating return on average equity is calculated using operating income, as defined above, and average equity is calculated as the arithmetic average on a monthly basis for the stated periods of shareholders equity excluding the aggregate value of the liquidation preferences of our preference shares net of issuance costs.
Aspen presents Operating ROE as a measure that is commonly recognized as a standard of performance by investors, analysts, rating agencies and other users of its financial information. See page 24 for a reconciliation of operating income to net income and page 8 for a reconciliation of average ordinary shareholders equity to average shareholders equity.
Diluted operating earnings per share and basic operating earnings per share (non-GAAP financial measures): Aspen believes that the presentation of diluted operating earnings per share and basic operating earnings per share supports meaningful comparison from period to period and the analysis of normal business operations. Diluted operating earnings per share and basic operating earnings per share are calculated by dividing operating income by the diluted or basic weighted average number of shares outstanding for the period. See page 24 for a reconciliation of diluted and basic operating earnings per share to basic earnings per share.
Diluted book value per ordinary share (is not a non-GAAP financial measure): Aspen has included diluted book value per ordinary share as it illustrates the effect on basic book value per share of dilutive securities thereby providing a better benchmark for comparison with other companies. Diluted book value per share is calculated using the treasury stock method as defined on page 23.
Growth in diluted book value per ordinary share (Adjusted BVPS) (is not a non-GAAP financial measure): The growth in Adjusted BVPS is defined as the annual change in diluted book value per share after adding back dividends paid to ordinary shareholders during the year.
1
Underwriting ratios (GAAP financial measures): Aspen, along with others in the industry, uses underwriting ratios as measures of performance. The loss ratio is the ratio of net claims and claims adjustment expenses to net premiums earned. The acquisition expense ratio is the ratio of underwriting expenses (commissions, premium taxes, licenses and fees, as well as other underwriting expenses) to net premiums earned. The general and administrative expense ratio is the ratio of general and administrative expenses to net premiums earned. The combined ratio is the sum of the loss ratio, the acquisition expense ratio and the general and administrative expense ratio. These ratios are relative measurements that describe for every $100 of net premiums earned, the cost of losses and expenses, respectively. The combined ratio presents the total cost per $100 of earned premium. A combined ratio below 100% demonstrates underwriting profit; a combined ratio above 100% demonstrates underwriting loss.
GAAP combined ratios differ from U.S. statutory combined ratios primarily due to the deferral of certain third-party acquisition expenses for GAAP reporting purposes and the use of net premiums earned rather than net premiums written in the denominator when calculating the acquisition expense and the general and administrative expense ratios.
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ASPEN INSURANCE HOLDINGS LIMITED | |
Financial Highlights |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||
(in US$ millions except for percentages, share and per share amounts) | 2013 | 2012 | Change | 2013 | 2012 | Change | ||||||||||||||||||
Gross written premium |
$ | 687.3 | $ | 666.6 | 3.1 | % | $ | 1,460.7 | $ | 1,448.7 | 0.8 | % | ||||||||||||
Net written premium |
$ | 612.7 | $ | 581.9 | 5.3 | % | $ | 1,209.7 | $ | 1,215.4 | (0.5 | %) | ||||||||||||
Net earned premium |
$ | 544.0 | $ | 513.4 | 6.0 | % | $ | 1,054.9 | $ | 1,008.8 | 4.6 | % | ||||||||||||
Net income after tax |
$ | 40.1 | $ | 84.6 | (52.6 | %) | $ | 131.9 | $ | 163.3 | (19.2 | %) | ||||||||||||
Operating income after tax |
$ | 52.2 | $ | 105.8 | (50.7 | %) | $ | 137.9 | $ | 176.3 | (21.8 | %) | ||||||||||||
Net investment income |
$ | 45.9 | $ | 52.8 | (13.1 | %) | $ | 94.2 | $ | 105.2 | (10.5 | %) | ||||||||||||
Underwriting income |
$ | 15.7 | $ | 65.8 | (76.1 | %) | $ | 66.7 | $ | 96.3 | (30.7 | %) | ||||||||||||
Earnings Per Share and Book Value Per Share |
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Basic earnings per ordinary share |
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Net income adjusted for preference share dividend |
$ | 0.38 | $ | 1.07 | (64.5 | %) | $ | 1.60 | $ | 2.10 | (23.8 | %) | ||||||||||||
Operating income adjusted for preference share dividend |
$ | 0.67 | $ | 1.36 | (50.7 | %) | $ | 1.80 | $ | 2.28 | (21.7 | %) | ||||||||||||
Diluted earnings per ordinary share |
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Net income adjusted for preference share dividend |
$ | 0.36 | $ | 1.03 | (65.0 | %) | $ | 1.52 | $ | 2.02 | (25.0 | %) | ||||||||||||
Operating income adjusted for preference share dividend |
$ | 0.63 | $ | 1.32 | (52.3 | %) | $ | 1.70 | $ | 2.20 | (22.7 | %) | ||||||||||||
Weighted average number of ordinary shares outstanding (in millions of shares) |
66.191 | 71.304 | (7.2 | %) | 67.601 | 71.124 | (5.0 | %) | ||||||||||||||||
Diluted weighted average number of ordinary shares outstanding (in millions of shares) |
69.291 | 73.846 | (6.2 | %) | 71.087 | 73.844 | (3.7 | %) | ||||||||||||||||
Book value per ordinary share |
$ | 39.99 | $ | 41.41 | (3.4 | %) | $ | 39.99 | $ | 41.41 | (3.4 | %) | ||||||||||||
Diluted book value per ordinary share |
$ | 38.87 | $ | 40.01 | (2.8 | %) | $ | 38.87 | $ | 40.01 | (2.8 | %) | ||||||||||||
Ordinary shares outstanding at June 30, 2013 and June 30, 2012 (in millions of shares) |
67.003 | 70.687 | ||||||||||||||||||||||
Diluted ordinary shares outstanding at June 30, 2013 and June 30, 2012 (in millions of shares) |
68.934 | 73.161 | ||||||||||||||||||||||
Underwriting Ratios |
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Loss ratio |
61.3 | % | 51.1 | % | 57.1 | % | 54.1 | % | ||||||||||||||||
Policy acquisition expense ratio |
19.7 | % | 19.9 | % | 20.1 | % | 19.6 | % | ||||||||||||||||
General, administrative and corporate expense ratio |
16.1 | % | 16.3 | % | 16.5 | % | 16.7 | % | ||||||||||||||||
Expense ratio |
35.8 | % | 36.2 | % | 36.6 | % | 36.3 | % | ||||||||||||||||
Combined ratio |
97.1 | % | 87.3 | % | 93.7 | % | 90.4 | % | ||||||||||||||||
Return On Equity |
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Average equity (1) |
$ | 2,795.9 | $ | 2,849.4 | $ | 2,853.6 | $ | 2,837.1 | ||||||||||||||||
Return on average equity |
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Net income adjusted for preference share dividend |
1.1 | % | 2.7 | % | 4.0 | % | 5.3 | % | ||||||||||||||||
Operating income adjusted for preference share dividend |
1.6 | % | 3.4 | % | 4.3 | % | 5.7 | % | ||||||||||||||||
Annualized return on average equity |
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Net income |
4.4 | % | 10.8 | % | 8.0 | % | 10.6 | % | ||||||||||||||||
Operating income |
6.4 | % | 13.6 | % | 8.6 | % | 11.4 | % | ||||||||||||||||
See pages 8 and 24 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.
(1) Average equity excludes preference shares.
3
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ASPEN INSURANCE HOLDINGS LIMITED | |
Consolidated Statements of Operations - Quarterly Results |
(in US$ millions except for percentages and per share amounts) | Q2 2013 | Q1 2013 | Q4 2012 | Q3 2012 | Q2 2012 | Q1 2012 | ||||||||||||||||||
UNDERWRITING REVENUES |
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Gross written premiums |
$ | 687.3 | $ | 773.4 | $ | 576.2 | $ | 558.4 | $ | 666.6 | $ | 782.1 | ||||||||||||
Premiums ceded |
(74.6) | (176.4) | (51.8) | (51.3) | (84.7) | (148.6) | ||||||||||||||||||
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Net written premiums |
612.7 | 597.0 | 524.4 | 507.1 | 581.9 | 633.5 | ||||||||||||||||||
Change in unearned premiums |
(68.7) | (86.1) | 34.1 | 9.1 | (68.5) | (138.1) | ||||||||||||||||||
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Net earned premiums |
544.0 | 510.9 | 558.5 | 516.2 | 513.4 | 495.4 | ||||||||||||||||||
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UNDERWRITING EXPENSES |
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Losses and loss adjustment expenses |
333.4 | 268.7 | 437.4 | 255.0 | 262.1 | 284.0 | ||||||||||||||||||
Policy acquisition expenses |
107.2 | 104.6 | 80.0 | 103.1 | 102.0 | 96.1 | ||||||||||||||||||
General, administrative and corporate expenses |
87.7 | 86.6 | 86.1 | 90.7 | 83.5 | 84.8 | ||||||||||||||||||
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Total underwriting expenses |
528.3 | 459.9 | 603.5 | 448.8 | 447.6 | 464.9 | ||||||||||||||||||
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Underwriting income/(loss) including corporate expenses |
15.7 | 51.0 | (45.0) | 67.4 | 65.8 | 30.5 | ||||||||||||||||||
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OTHER OPERATING REVENUE AND EXPENSES |
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Net investment income |
45.9 | 48.3 | 51.1 | 48.6 | 52.8 | 52.4 | ||||||||||||||||||
Interest expense |
(7.8) | (7.7) | (7.7) | (7.8) | (7.7) | (7.7) | ||||||||||||||||||
Other income/(expense) |
0.9 | 0.5 | (6.2) | 4.5 | 2.9 | (0.3) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total other operating revenue |
39.0 | 41.1 | 37.2 | 45.3 | 48.0 | 44.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
OPERATING INCOME/(LOSS) BEFORE TAX |
54.7 | 92.1 | (7.8) | 112.7 | 113.8 | 74.9 | ||||||||||||||||||
Net realized and unrealized exchange (losses)/gains (1) |
(13.8) | (10.2) | (0.4) | 7.7 | (13.0) | 3.7 | ||||||||||||||||||
Net realized and unrealized investment gains/(losses) (2) |
0.2 | 15.8 | 5.6 | 2.7 | (10.0) | 5.5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
INCOME/(LOSS) BEFORE TAX |
41.1 | 97.7 | (2.6) | 123.1 | 90.8 | 84.1 | ||||||||||||||||||
Income tax (expense)/recovery |
(1.0) | (5.9) | 4.6 | (8.0) | (6.2) | (5.4) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NET INCOME AFTER TAX |
40.1 | 91.8 | 2.0 | 115.1 | 84.6 | 78.7 | ||||||||||||||||||
Dividends paid on ordinary shares |
(11.9) | (11.9) | (12.0) | (12.2) | (12.2) | (10.6) | ||||||||||||||||||
Dividends paid on preference shares |
(8.0) | (8.6) | (8.5) | (8.6) | (8.3) | (5.7) | ||||||||||||||||||
Dividends paid to non-controlling interest |
- | - | - | (0.1) | - | - | ||||||||||||||||||
Change in redemption value of the PIERS (3) |
(7.1) | - | - | - | - | - | ||||||||||||||||||
Proportion due to non-controlling interest |
- | - | (0.1) | - | 0.2 | 0.1 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Retained income/(loss) |
$ | 13.1 | $ | 71.3 | $ | (18.6) | $ | 94.2 | $ | 64.3 | $ | 62.5 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Components of net income/(loss) after tax |
||||||||||||||||||||||||
Operating income/(loss) |
$ | 52.2 | $ | 85.7 | $ | (2.9) | $ | 106.5 | $ | 105.8 | $ | 70.5 | ||||||||||||
Net realized and unrealized exchange (losses)/gains after tax (1) |
(12.0) | (9.5) | (0.4) | 6.1 | (10.9) | 3.0 | ||||||||||||||||||
Net realized and unrealized investment (losses)/gains after tax (2) |
(0.1) | 15.6 | 5.3 | 2.5 | (10.3) | 5.2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
NET INCOME/(LOSS) AFTER TAX |
$ | 40.1 | $ | 91.8 | $ | 2.0 | $ | 115.1 | $ | 84.6 | $ | 78.7 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss ratio |
61.3% | 52.6% | 78.3% | 49.4% | 51.1% | 57.3% | ||||||||||||||||||
Policy acquisition expense ratio |
19.7% | 20.5% | 14.3% | 20.0% | 19.9% | 19.4% | ||||||||||||||||||
General, administrative and corporate expense ratio |
16.1% | 17.0% | 15.4% | 17.6% | 16.3% | 17.1% | ||||||||||||||||||
Expense ratio |
35.8% | 37.5% | 29.7% | 37.6% | 36.2% | 36.5% | ||||||||||||||||||
Combined ratio |
97.1% | 90.1% | 108.0% | 87.0% | 87.3% | 93.8% | ||||||||||||||||||
Basic earnings/(losses) per share (4) |
$ | 0.38 | $ | 1.21 | $ | (0.09) | $ | 1.50 | $ | 1.07 | $ | 1.03 | ||||||||||||
Diluted earnings/(losses) per share (4) |
$ | 0.36 | $ | 1.15 | $ | (0.09) | $ | 1.45 | $ | 1.03 | $ | 0.99 | ||||||||||||
Annualized return on average equity |
||||||||||||||||||||||||
Net income/(loss) |
4.4% | 11.6% | (0.8%) | 14.4% | 10.8% | 10.4% | ||||||||||||||||||
Operating income/(loss) |
6.4% | 10.8% | (1.6%) | 13.2% | 13.6% | 9.2% |
See pages 8 and 24 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.
(1) Includes the net realized and unrealized gains/(losses) from foreign exchange contracts.
(2) Includes the net realized and unrealized gains/(losses) from interest rate swaps.
(3) Preferred Income Equity Redemption Securities (PIERS).
(4) Adjusted for preference share dividends.
4
![]() |
ASPEN INSURANCE HOLDINGS LIMITED | |
Consolidated Statements of Operations - Year To Date Results |
Six Months Ended June 30, | ||||||||||||
(in US$ millions except for percentages) | 2013 | 2012 | 2011 | |||||||||
UNDERWRITING REVENUES |
||||||||||||
Gross written premiums |
$ | 1,460.7 | $ | 1,448.7 | $ | 1,253.5 | ||||||
Premiums ceded |
(251.0 | ) | (233.3 | ) | (218.2 | ) | ||||||
|
|
|
|
|
|
|||||||
Net written premiums |
1,209.7 | 1,215.4 | 1,035.3 | |||||||||
Change in unearned premiums |
(154.8 | ) | (206.6 | ) | (123.1 | ) | ||||||
|
|
|
|
|
|
|||||||
Net earned premiums |
1,054.9 | 1,008.8 | 912.2 | |||||||||
|
|
|
|
|
|
|||||||
UNDERWRITING EXPENSES |
||||||||||||
Losses and loss adjustment expenses |
602.1 | 546.1 | 855.3 | |||||||||
Policy acquisition expenses |
211.8 | 198.1 | 168.1 | |||||||||
General, administrative and corporate expenses (1) |
174.3 | 168.3 | 133.2 | |||||||||
|
|
|
|
|
|
|||||||
Total underwriting expenses |
988.2 | 912.5 | 1,156.6 | |||||||||
|
|
|
|
|
|
|||||||
Underwriting income/(loss) including corporate expenses |
66.7 | 96.3 | (244.4 | ) | ||||||||
|
|
|
|
|
|
|||||||
OTHER OPERATING REVENUE AND EXPENSES |
||||||||||||
Net investment income |
94.2 | 105.2 | 114.1 | |||||||||
Interest expense |
(15.5 | ) | (15.4 | ) | (15.4 | ) | ||||||
Other income/(expense) |
1.4 | 2.6 | (1.3 | ) | ||||||||
|
|
|
|
|
|
|||||||
Total other operating revenue |
80.1 | 92.4 | 97.4 | |||||||||
|
|
|
|
|
|
|||||||
OPERATING INCOME/(LOSS) BEFORE TAX |
146.8 | 188.7 | (147.0 | ) | ||||||||
Net realized and unrealized exchange (losses) (2) |
(24.0 | ) | (9.3 | ) | (4.8 | ) | ||||||
Net realized and unrealized investment gains/(losses) (3) |
16.0 | (4.5 | ) | (7.2 | ) | |||||||
|
|
|
|
|
|
|||||||
INCOME/(LOSS) BEFORE TAX |
138.8 | 174.9 | (159.0 | ) | ||||||||
Income tax (expense)/recovery |
(6.9 | ) | (11.6 | ) | 15.3 | |||||||
|
|
|
|
|
|
|||||||
NET INCOME/(LOSS) AFTER TAX |
131.9 | 163.3 | (143.7 | ) | ||||||||
Dividends paid on ordinary shares |
(23.8 | ) | (22.8 | ) | (21.2 | ) | ||||||
Dividends paid on preference shares |
(16.6 | ) | (14.0 | ) | (11.4 | ) | ||||||
Change in redemption value of the PIERS (4) |
(7.1 | ) | - | - | ||||||||
Proportion due to non-controlling interest |
- | 0.3 | 0.4 | |||||||||
|
|
|
|
|
|
|||||||
Retained income/(loss) |
$ | 84.4 | $ | 126.8 | $ | (175.9 | ) | |||||
|
|
|
|
|
|
|||||||
Components of net income/(loss) after tax |
||||||||||||
Operating income/(loss) |
$ | 137.9 | $ | 176.3 | $ | (130.9 | ) | |||||
Net realized and unrealized exchange (losses) after tax (2) |
(21.5 | ) | (7.9 | ) | (3.0 | ) | ||||||
Net realized and unrealized investment gains/(losses) after tax (3) |
15.5 | (5.1 | ) | (9.8 | ) | |||||||
|
|
|
|
|
|
|||||||
NET INCOME/(LOSS) AFTER TAX |
$ | 131.9 | $ | 163.3 | $ | (143.7 | ) | |||||
|
|
|
|
|
|
|||||||
Loss ratio |
57.1 | % | 54.1 | % | 93.8 | % | ||||||
Policy acquisition expense ratio |
20.1 | % | 19.6 | % | 18.4 | % | ||||||
General, administrative and corporate expense ratio (1) |
16.5 | % | 16.7 | % | 14.6 | % | ||||||
Expense ratio |
36.6 | % | 36.3 | % | 33.0 | % | ||||||
Combined ratio |
93.7 | % | 90.4 | % | 126.8 | % |
See pages 8 and 24 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.
(1) In 2012, the Company adopted the provision of ASU 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts. Under the standard, the Company is required to expense the proportion of its general and administrative deferred acquisition costs not directly related to successful business acquisition. The application of this standard has resulted in a net $16.0 million write down of deferred acquisition costs through retained earnings brought forward and the restatement of our quarterly balance sheets from December 31, 2010 to December 31, 2011.
(2) Includes the net realized and unrealized gains/(losses) from foreign exchange contracts.
(3) Includes the net realized and unrealized gains/(losses) from interest rate swaps.
(4) Preferred Income Equity Redemption Securities.
5
![]() |
ASPEN INSURANCE HOLDINGS LIMITED | |
Consolidated Balance Sheets |
(in US$ millions except for per share amounts) | June 30, 2013 |
March 31, 2013 |
December 31, 2012 |
September 30, 2012 |
June 30, 2012 |
March 31, 2012 |
December 31, 2011 |
|||||||||||||||||||||
ASSETS |
||||||||||||||||||||||||||||
Investments |
||||||||||||||||||||||||||||
Fixed income maturities |
$6,046.4 | $5,961.9 | $6,013.4 | $5,983.1 | $5,791.2 | $5,842.1 | $5,820.2 | |||||||||||||||||||||
Equity securities |
413.1 | 414.1 | 200.1 | 197.1 | 187.4 | 188.1 | 179.5 | |||||||||||||||||||||
Other investments |
44.9 | 45.0 | 45.0 | 34.8 | 33.1 | 33.1 | 33.1 | |||||||||||||||||||||
Short-term investments |
242.3 | 353.1 | 433.9 | 505.3 | 503.6 | 433.8 | 302.3 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total investments |
6,746.7 | 6,774.1 | 6,692.4 | 6,720.3 | 6,515.3 | 6,497.1 | 6,335.1 | |||||||||||||||||||||
Cash and cash equivalents |
1,188.9 | 1,212.7 | 1,463.6 | 1,374.2 | 1,309.0 | 1,173.3 | 1,239.1 | |||||||||||||||||||||
Reinsurance recoverables |
||||||||||||||||||||||||||||
Unpaid losses |
472.3 | 479.2 | 499.0 | 461.6 | 457.4 | 455.4 | 426.6 | |||||||||||||||||||||
Ceded unearned premiums |
226.0 | 217.4 | 122.6 | 151.3 | 190.8 | 175.3 | 87.8 | |||||||||||||||||||||
Receivables |
||||||||||||||||||||||||||||
Underwriting premiums |
1,197.6 | 1,149.7 | 1,057.5 | 993.4 | 1,063.3 | 1,061.2 | 894.4 | |||||||||||||||||||||
Other |
71.8 | 66.0 | 68.5 | 76.4 | 75.1 | 70.2 | 69.7 | |||||||||||||||||||||
Funds withheld |
81.5 | 85.0 | 84.3 | 79.5 | 91.0 | 86.9 | 90.7 | |||||||||||||||||||||
Deferred policy acquisition costs (1) |
264.4 | 238.5 | 223.0 | 232.0 | 233.2 | 215.3 | 184.5 | |||||||||||||||||||||
Derivatives at fair value |
2.0 | 2.0 | 2.0 | 5.8 | 3.3 | 0.9 | 1.3 | |||||||||||||||||||||
Receivable for securities sold |
5.8 | 20.7 | 0.2 | 14.6 | 9.5 | 2.0 | 1.1 | |||||||||||||||||||||
Office properties and equipment |
57.2 | 55.2 | 57.9 | 59.1 | 56.9 | 58.5 | 53.9 | |||||||||||||||||||||
Income tax receivable |
- | - | 2.4 | 12.3 | 15.7 | 20.3 | 19.5 | |||||||||||||||||||||
Other assets |
20.9 | 17.0 | 18.2 | 38.1 | 39.3 | 31.1 | 36.8 | |||||||||||||||||||||
Intangible assets |
18.7 | 18.8 | 19.0 | 19.2 | 19.5 | 19.7 | 20.0 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total assets |
$10,353.8 | $10,336.3 | $10,310.6 | $10,237.8 | $10,079.3 | $9,867.2 | $9,460.5 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
LIABILITIES |
||||||||||||||||||||||||||||
Insurance reserves |
||||||||||||||||||||||||||||
Losses and loss adjustment expenses |
$4,734.9 | $4,683.8 | $4,779.7 | $4,639.6 | $4,556.4 | $4,585.7 | $4,525.2 | |||||||||||||||||||||
Unearned premiums |
1,375.3 | 1,295.7 | 1,120.8 | 1,184.0 | 1,223.8 | 1,146.3 | 916.1 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total insurance reserves |
6,110.2 | 5,979.5 | 5,900.5 | 5,823.6 | 5,780.2 | 5,732.0 | 5,441.3 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Payables |
||||||||||||||||||||||||||||
Reinsurance premiums |
224.8 | 209.7 | 154.1 | 71.1 | 109.5 | 192.2 | 155.8 | |||||||||||||||||||||
Taxation |
16.4 | 14.7 | 11.8 | 23.7 | 22.5 | 22.9 | 18.5 | |||||||||||||||||||||
Accrued expenses and other payables |
258.7 | 285.6 | 249.3 | 261.4 | 230.3 | 208.9 | 187.8 | |||||||||||||||||||||
Liabilities under derivative contracts |
9.6 | 8.0 | 7.4 | 4.7 | 2.7 | 1.3 | 2.1 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total payables |
509.5 | 518.0 | 422.6 | 360.9 | 365.0 | 425.3 | 364.2 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Long-term debt |
499.2 | 499.2 | 499.1 | 499.1 | 499.0 | 499.0 | 499.0 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities |
7,118.9 | 6,996.7 | 6,822.2 | 6,683.6 | 6,644.2 | 6,656.3 | 6,304.5 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
SHAREHOLDERS EQUITY |
||||||||||||||||||||||||||||
Ordinary shares |
0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 | |||||||||||||||||||||
Non-controlling interest |
0.2 | 0.2 | 0.2 | (0.1) | 0.1 | 0.3 | 0.4 | |||||||||||||||||||||
Preference shares |
- | - | - | - | - | - | - | |||||||||||||||||||||
Additional paid-in capital |
1,346.7 | 1,318.2 | 1,516.7 | 1,521.9 | 1,523.2 | 1,390.8 | 1,385.0 | |||||||||||||||||||||
Retained earnings (1) |
1,628.4 | 1,615.3 | 1,544.0 | 1,562.6 | 1,468.4 | 1,404.1 | 1,341.6 | |||||||||||||||||||||
Accumulated other comprehensive income, net of taxes |
259.5 | 405.8 | 427.4 | 469.7 | 443.3 | 415.6 | 428.9 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total shareholders equity |
3,234.9 | 3,339.6 | 3,488.4 | 3,554.2 | 3,435.1 | 3,210.9 | 3,156.0 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total liabilities and shareholders equity |
$10,353.8 | $10,336.3 | $10,310.6 | $10,237.8 | $10,079.3 | $9,867.2 | $9,460.5 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Book value per ordinary share |
$39.99 | $43.14 | $42.12 | $42.90 | $41.41 | $39.96 | $39.66 | |||||||||||||||||||||
Book value per diluted ordinary share |
$38.87 | $40.68 | $40.65 | $41.53 | $40.01 | $38.58 | $38.21 |
See pages 8 and 24 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.
(1) In 2012, the Company adopted the provision of ASU 2010-26, Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts. Under the standard, the Company is required to expense the proportion of its general and administrative deferred acquisition costs not directly related to successful business acquisition. The application of this standard has resulted in a net $16.0 million write down of deferred acquisition costs through retained earnings brought forward and the restatement of our quarterly balance sheets from December 31, 2010 to December 31, 2011.
6
![]() |
ASPEN INSURANCE HOLDINGS LIMITED | |
Earnings Per Share and Book Value Per Share |
Three Months Ended | Six Months Ended | |||||||||||||||
(in US$ except for number of shares) | June 30, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | ||||||||||||
Basic earnings per ordinary share |
||||||||||||||||
Net income adjusted for preference share dividend |
$ | 0.38 | $ | 1.07 | $ | 1.60 | $ | 2.10 | ||||||||
Operating income adjusted for preference share dividend |
$ | 0.67 | $ | 1.36 | $ | 1.80 | $ | 2.28 | ||||||||
Diluted earnings per ordinary share |
||||||||||||||||
Net income adjusted for preference share dividend |
$ | 0.36 | $ | 1.03 | $ | 1.52 | $ | 2.02 | ||||||||
Operating income adjusted for preference share dividend |
$ | 0.63 | $ | 1.32 | $ | 1.70 | $ | 2.20 | ||||||||
Weighted average number of ordinary shares outstanding (in millions) |
66.191 | 71.304 | 67.601 | 71.124 | ||||||||||||
Weighted average number of ordinary shares outstanding and dilutive potential ordinary shares (in millions) |
69.291 | 73.846 | 71.087 | 73.844 | ||||||||||||
Book value per ordinary share |
$ | 39.99 | $ | 41.41 | $ | 39.99 | $ | 41.41 | ||||||||
Diluted book value per ordinary share |
$ | 38.87 | $ | 40.01 | $ | 38.87 | $ | 40.01 | ||||||||
Ordinary shares outstanding at end of the period (in millions) |
67.003 | 70.687 | 67.003 | 70.687 | ||||||||||||
Ordinary shares outstanding and dilutive potential ordinary shares at end of the period (in millions) |
68.934 | 73.161 | 68.934 | 73.161 |
See pages 8 and 24 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.
7
![]() |
ASPEN INSURANCE HOLDINGS LIMITED | |
Return On Average Equity |
Three Months Ended | Six Months Ended | |||||||||||||||
(in US$ millions except for percentages) | June 30, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | ||||||||||||
Average shareholders equity |
$3,339.6 | $3,323.0 | $3,382.1 | $3,259.3 | ||||||||||||
Average preference shares |
(543.7) | (473.6) | (528.5) | (422.2) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Average ordinary shareholders equity |
$2,795.9 | $2,849.4 | $2,853.6 | $2,837.1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Return on average equity: |
||||||||||||||||
Net income adjusted for preference share dividend |
1.1% | 2.7% | 4.0% | 5.3% | ||||||||||||
Operating income adjusted for preference share dividend |
1.6% | 3.4% | 4.3% | 5.7% | ||||||||||||
Annualized return on average equity: |
||||||||||||||||
Net income |
4.4% | 10.8% | 8.0% | 10.6% | ||||||||||||
Operating income |
6.4% | 13.6% | 8.6% | 11.4% | ||||||||||||
Components of return on average equity: |
||||||||||||||||
Return on average equity from underwriting activity (1) |
0.6% | 2.3% | 2.3% | 3.4% | ||||||||||||
Return on average equity from investment and other activity (2) |
1.1% | 1.4% | 2.2% | 2.8% | ||||||||||||
Pre-tax operating income return on average equity |
1.7% | 3.7% | 4.6% | 6.2% | ||||||||||||
Post-tax operating income return on average equity (3) |
1.6% | 3.4% | 4.3% | 5.7% |
See page 24 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.
(1) Calculated by using underwriting income.
(2) Calculated by using total other operating revenue and other income/(expense) adjusted for preference share dividends.
(3) Calculated by using operating income after-tax adjusted for preference share dividends.
8
![]() |
ASPEN INSURANCE HOLDINGS LIMITED | |
Consolidated Underwriting Results by Operating Segment |
Three Months Ended June 30, 2013 | Three Months Ended June 30, 2012 | |||||||||||||||||||||||
(in US$ millions except for percentages) | Reinsurance | Insurance | Total | Reinsurance | Insurance | Total | ||||||||||||||||||
Gross written premiums |
$298.6 | $388.7 | $687.3 | $299.8 | $366.8 | $666.6 | ||||||||||||||||||
Net written premiums |
288.6 | 324.1 | 612.7 | 276.8 | 305.1 | 581.9 | ||||||||||||||||||
Gross earned premiums |
288.4 | 331.3 | 619.7 | 300.8 | 279.9 | 580.7 | ||||||||||||||||||
Net earned premiums |
275.8 | 268.2 | 544.0 | 282.0 | 231.4 | 513.4 | ||||||||||||||||||
Losses and loss adjustment expenses |
158.4 | 175.0 | 333.4 | 133.7 | 128.4 | 262.1 | ||||||||||||||||||
Policy acquisition expenses |
56.6 | 50.6 | 107.2 | 59.3 | 42.7 | 102.0 | ||||||||||||||||||
General and administrative expenses |
30.4 | 42.1 | 72.5 | 30.0 | 42.1 | 72.1 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Underwriting income |
$30.4 | $0.5 | $30.9 | $59.0 | $18.2 | $77.2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Net investment income |
45.9 | 52.8 | ||||||||||||||||||||||
Net realized and unrealized investment gains/(losses) (1) |
0.2 | (10.0 | ) | |||||||||||||||||||||
Corporate expenses |
(15.2 | ) | (11.4 | ) | ||||||||||||||||||||
Other income |
0.9 | 2.9 | ||||||||||||||||||||||
Interest expense |
(7.8 | ) | (7.7 | ) | ||||||||||||||||||||
Net realized and unrealized foreign exchange (losses) (2) |
|
(13.8 | ) | (13.0 | ) | |||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Income before income tax expense |
$41.1 | $90.8 | ||||||||||||||||||||||
Income tax expense |
(1.0 | ) | (6.2 | ) | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Net income |
$40.1 | $84.6 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Ratios |
||||||||||||||||||||||||
Loss ratio |
57.4% | 65.2% | 61.3% | 47.4% | 55.5% | 51.1% | ||||||||||||||||||
Policy acquisition expense ratio |
20.5% | 18.9% | 19.7% | 21.0% | 18.5% | 19.9% | ||||||||||||||||||
General and administrative expense ratio (3) |
11.0% | 15.7% | 16.1% | 10.6% | 18.2% | 16.3% | ||||||||||||||||||
Expense ratio |
31.5% | 34.6% | 35.8% | 31.6% | 36.7% | 36.2% | ||||||||||||||||||
Combined ratio |
88.9% | 99.8% | 97.1% | 79.0% | 92.2% | 87.3% |
(1) Includes the net realized and unrealized gains/(losses) from interest rate swaps.
(2) Includes the net realized and unrealized gains/(losses) from foreign exchange contracts.
(3) The total group general and administrative expense ratio includes the impact from corporate expenses.
9
![]() |
ASPEN INSURANCE HOLDINGS LIMITED | |
Consolidated Underwriting Results by Operating Segment |
Six Months Ended June 30, 2013 | Six Months Ended June 30, 2012 | |||||||||||||||||||||||
(in US$ millions except for percentages) | Reinsurance | Insurance | Total | Reinsurance | Insurance | Total | ||||||||||||||||||
Gross written premiums |
$738.2 | $722.5 | $1,460.7 | $774.0 | $674.7 | $1,448.7 | ||||||||||||||||||
Net written premiums |
689.1 | 520.6 | 1,209.7 | 706.3 | 509.1 | 1,215.4 | ||||||||||||||||||
Gross earned premiums |
560.3 | 644.2 | 1,204.5 | 591.0 | 546.8 | 1,137.8 | ||||||||||||||||||
Net earned premiums |
532.5 | 522.4 | 1,054.9 | 553.0 | 455.8 | 1,008.8 | ||||||||||||||||||
Losses and loss adjustment expenses |
272.7 | 329.4 | 602.1 | 269.3 | 276.8 | 546.1 | ||||||||||||||||||
Policy acquisition expenses |
111.9 | 99.9 | 211.8 | 111.1 | 87.0 | 198.1 | ||||||||||||||||||
General and administrative expenses |
62.6 | 84.5 | 147.1 | 59.0 | 83.5 | 142.5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Underwriting income |
$85.3 | $8.6 | $93.9 | $113.6 | $8.5 | $122.1 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
Net investment income |
94.2 | 105.2 | ||||||||||||||||||||||
Net realized and unrealized investment gains/(losses) (1) |
16.0 | (4.5 | ) | |||||||||||||||||||||
Corporate expenses |
(27.2 | ) | (25.8 | ) | ||||||||||||||||||||
Other income |
1.4 | 2.6 | ||||||||||||||||||||||
Interest expense |
(15.5 | ) | (15.4 | ) | ||||||||||||||||||||
Net realized and unrealized foreign exchange (losses) (2) |
(24.0 | ) | (9.3 | ) | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Income before income tax expense |
$138.8 | $174.9 | ||||||||||||||||||||||
Income tax expense |
(6.9 | ) | (11.6 | ) | ||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Net income |
$131.9 | $163.3 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Ratios |
||||||||||||||||||||||||
Loss ratio |
51.2% | 63.1% | 57.1% | 48.7% | 60.7% | 54.1% | ||||||||||||||||||
Policy acquisition expense ratio |
21.0% | 19.1% | 20.1% | 20.1% | 19.1% | 19.6% | ||||||||||||||||||
General and administrative expense ratio (3) |
11.8% | 16.2% | 16.5% | 10.7% | 18.3% | 16.7% | ||||||||||||||||||
Expense ratio |
32.8% | 35.3% | 36.6% | 30.8% | 37.4% | 36.3% | ||||||||||||||||||
Combined ratio |
84.0% | 98.4% | 93.7% | 79.5% | 98.1% | 90.4% |
(1) Includes the net realized and unrealized gains/(losses) from interest rate swaps.
(2) Includes the net realized and unrealized gains/(losses) from foreign exchange contracts.
(3 The total group general and administrative expense ratio includes the impact from corporate expenses.
10
![]() |
ASPEN INSURANCE HOLDINGS LIMITED | |
Reinsurance Segment - Quarterly Results |
(in US$ millions except for percentages) | Q2 2013 | Q1 2013 | Q4 2012 | Q3 2012 | Q2 2012 | Q1 2012 | ||||||||||||||||||
Gross written premiums |
$298.6 | $439.6 | $194.4 | $259.5 | $299.8 | $474.2 | ||||||||||||||||||
Net written premiums |
288.6 | 400.5 | 193.7 | 256.9 | 276.8 | 429.5 | ||||||||||||||||||
Gross earned premiums |
288.4 | 271.9 | 317.2 | 299.8 | 300.8 | 290.2 | ||||||||||||||||||
Net earned premiums |
275.8 | 256.7 | 299.8 | 279.6 | 282.0 | 271.0 | ||||||||||||||||||
Net losses and loss adjustment expenses |
158.4 | 114.3 | 248.9 | 117.1 | 133.7 | 135.6 | ||||||||||||||||||
Policy acquisition expenses |
56.6 | 55.3 | 41.0 | 55.7 | 59.3 | 51.8 | ||||||||||||||||||
General and administrative expenses |
30.4 | 32.2 | 31.3 | 33.6 | 30.0 | 29.0 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Underwriting income/(loss) |
$30.4 | $54.9 | $(21.4 | ) | $73.2 | $59.0 | $54.6 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Ratios |
||||||||||||||||||||||||
Loss ratio |
57.4% | 44.5% | 83.0% | 41.9% | 47.4% | 50.0% | ||||||||||||||||||
Policy acquisition expense ratio |
20.5% | 21.5% | 13.7% | 19.9% | 21.0% | 19.1% | ||||||||||||||||||
General and administrative expense ratio |
11.0% | 12.5% | 10.4% | 12.0% | 10.6% | 10.7% | ||||||||||||||||||
Expense ratio |
31.5% | 34.0% | 24.1% | 31.9% | 31.6% | 29.8% | ||||||||||||||||||
Combined ratio |
88.9% | 78.5% | 107.1% | 73.8% | 79.0% | 79.8% |
11
![]() |
ASPEN INSURANCE HOLDINGS LIMITED | |
Insurance Segment - Quarterly Results |
(in US$ millions except for percentages) | Q2 2013 | Q1 2013 | Q4 2012 | Q3 2012 | Q2 2012 | Q1 2012 | ||||||||||||||||||
Gross written premiums |
$388.7 | $333.8 | $381.8 | $298.9 | $366.8 | $307.9 | ||||||||||||||||||
Net written premiums |
324.1 | 196.5 | 330.7 | 250.2 | 305.1 | 204.0 | ||||||||||||||||||
Gross earned premiums |
331.3 | 312.9 | 328.2 | 302.0 | 279.9 | 266.9 | ||||||||||||||||||
Net earned premiums |
268.2 | 254.2 | 258.7 | 236.6 | 231.4 | 224.4 | ||||||||||||||||||
Net losses and loss adjustment expenses |
175.0 | 154.4 | 188.5 | 137.9 | 128.4 | 148.4 | ||||||||||||||||||
Policy acquisition expenses |
50.6 | 49.3 | 39.0 | 47.4 | 42.7 | 44.3 | ||||||||||||||||||
General and administrative expenses |
42.1 | 42.4 | 41.9 | 42.8 | 42.1 | 41.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Underwriting income/(loss) |
$0.5 | $8.1 | $(10.7) | $8.5 | $18.2 | $(9.7) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Ratios |
||||||||||||||||||||||||
Loss ratio |
65.2% | 60.7% | 72.9% | 58.3% | 55.5% | 66.1% | ||||||||||||||||||
Policy acquisition expense ratio |
18.9% | 19.4% | 15.1% | 20.0% | 18.5% | 19.7% | ||||||||||||||||||
General and administrative expense ratio |
15.7% | 16.7% | 16.2% | 18.1% | 18.2% | 18.4% | ||||||||||||||||||
Expense ratio |
34.6% | 36.1% | 31.3% | 38.1% | 36.7% | 38.1% | ||||||||||||||||||
Combined ratio |
99.8% | 96.8% | 104.2% | 96.4% | 92.2% | 104.2% |
12
![]() |
ASPEN INSURANCE HOLDINGS LIMITED | |
Written and Earned Premiums by Segment and Line of Business |
(in US$ millions) | ||||||||||||||||||||||||
Gross Written Premiums | Q2 2013 | Q1 2013 | Q4 2012 | Q3 2012 | Q2 2012 | Q1 2012 | ||||||||||||||||||
Reinsurance |
||||||||||||||||||||||||
Property Catastrophe Reinsurance |
$83.2 | $145.5 | $23.8 | $42.7 | $91.9 | $152.9 | ||||||||||||||||||
Other Property Reinsurance |
91.0 | 79.5 | 61.3 | 92.6 | 81.0 | 78.5 | ||||||||||||||||||
Casualty Reinsurance |
63.4 | 125.3 | 55.7 | 76.3 | 66.6 | 138.9 | ||||||||||||||||||
Specialty Reinsurance |
61.0 | 89.3 | 53.6 | 47.9 | 60.3 | 103.9 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Reinsurance |
$298.6 | $439.6 | $194.4 | $259.5 | $299.8 | $474.2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Insurance |
||||||||||||||||||||||||
Property Insurance |
$74.0 | $54.6 | $53.7 | $51.5 | $82.1 | $52.4 | ||||||||||||||||||
Casualty Insurance |
63.9 | 43.7 | 61.3 | 49.9 | 53.0 | 28.6 | ||||||||||||||||||
Marine, Energy and Transportation Insurance |
143.8 | 136.8 | 145.4 | 102.2 | 133.7 | 149.6 | ||||||||||||||||||
Financial and Professional Lines Insurance |
68.1 | 65.8 | 89.8 | 63.8 | 68.3 | 49.7 | ||||||||||||||||||
Programs |
38.9 | 32.9 | 31.6 | 31.5 | 29.7 | 27.6 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Insurance |
$388.7 | $333.8 | $381.8 | $298.9 | $366.8 | $307.9 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Gross Written Premiums |
$687.3 | $773.4 | $576.2 | $558.4 | $666.6 | $782.1 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net Written Premiums |
||||||||||||||||||||||||
Reinsurance |
||||||||||||||||||||||||
Property Catastrophe Reinsurance |
$75.2 | $124.0 | $23.9 | $43.7 | $76.0 | $123.5 | ||||||||||||||||||
Other Property Reinsurance |
89.8 | 65.6 | 62.3 | 89.2 | 76.8 | 64.8 | ||||||||||||||||||
Casualty Reinsurance |
62.6 | 123.1 | 53.9 | 76.1 | 66.5 | 137.3 | ||||||||||||||||||
Specialty Reinsurance |
61.0 | 87.8 | 53.6 | 47.9 | 57.5 | 103.9 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Reinsurance |
$288.6 | $400.5 | $193.7 | $256.9 | $276.8 | $429.5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Insurance |
||||||||||||||||||||||||
Property Insurance |
$67.1 | $16.3 | $41.4 | $37.9 | $72.1 | $21.0 | ||||||||||||||||||
Casualty Insurance |
56.2 | 24.6 | 43.6 | 35.5 | 42.1 | 20.0 | ||||||||||||||||||
Marine, Energy and Transportation Insurance |
102.7 | 126.4 | 142.2 | 93.1 | 103.4 | 140.7 | ||||||||||||||||||
Financial and Professional Lines Insurance |
64.3 | 2.9 | 82.0 | 57.9 | 59.0 | (3.1) | ||||||||||||||||||
Programs |
33.8 | 26.3 | 21.5 | 25.8 | 28.5 | 25.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Insurance |
$324.1 | $196.5 | $330.7 | $250.2 | $305.1 | $204.0 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Net Written Premiums |
$612.7 | $597.0 | $524.4 | $507.1 | $581.9 | $633.5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net Earned Premiums |
||||||||||||||||||||||||
Reinsurance |
||||||||||||||||||||||||
Property Catastrophe Reinsurance |
$65.1 | $58.7 | $83.3 | $62.3 | $60.8 | $62.9 | ||||||||||||||||||
Other Property Reinsurance |
79.1 | 71.0 | 68.0 | 72.7 | 68.2 | 68.2 | ||||||||||||||||||
Casualty Reinsurance |
75.2 | 66.6 | 88.1 | 82.3 | 88.1 | 66.9 | ||||||||||||||||||
Specialty Reinsurance |
56.4 | 60.4 | 60.4 | 62.3 | 64.9 | 73.0 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Reinsurance |
$275.8 | $256.7 | $299.8 | $279.6 | $282.0 | $271.0 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Insurance |
||||||||||||||||||||||||
Property Insurance |
$44.1 | $45.7 | $42.8 | $36.9 | $38.4 | $38.4 | ||||||||||||||||||
Casualty Insurance |
40.7 | 34.6 | 32.5 | 29.6 | 29.9 | 26.3 | ||||||||||||||||||
Marine, Energy and Transportation Insurance |
116.8 | 101.6 | 126.3 | 108.2 | 110.9 | 102.6 | ||||||||||||||||||
Financial and Professional Lines Insurance |
45.9 | 51.0 | 47.0 | 45.4 | 39.9 | 51.5 | ||||||||||||||||||
Programs |
20.7 | 21.3 | 10.1 | 16.5 | 12.3 | 5.6 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Insurance |
$268.2 | $254.2 | $258.7 | $236.6 | $231.4 | $224.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total Net Earned Premiums |
$544.0 | $510.9 | $558.5 | $516.2 | $513.4 | $495.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
13
![]() |
ASPEN INSURANCE HOLDINGS LIMITED | |
Consolidated Statements of Changes in Shareholders Equity |
Six Months Ended June 30, | ||||||||
(in US$ millions) | 2013 | 2012 | ||||||
Ordinary shares |
||||||||
Beginning and end of period |
$0.1 | $0.1 | ||||||
|
|
|
|
|||||
Preference shares |
||||||||
Beginning and end of period |
- | - | ||||||
|
|
|
|
|||||
Non-controlling interest |
||||||||
Beginning of period |
0.2 | 0.4 | ||||||
Net (loss) for the period |
- | (0.3) | ||||||
|
|
|
|
|||||
End of period |
0.2 | 0.1 | ||||||
|
|
|
|
|||||
Additional paid-in capital |
||||||||
Beginning of period |
1,516.7 | 1,385.0 | ||||||
New shares issued |
12.8 | 2.0 | ||||||
Ordinary shares repurchased |
(240.1) | (26.8) | ||||||
Preference shares issued |
270.4 | 154.5 | ||||||
Preference shares repurchased and cancelled |
(230.0) | - | ||||||
Changes in redemption value of the PIERS (1) |
7.1 | - | ||||||
Share-based compensation |
9.8 | 8.5 | ||||||
|
|
|
|
|||||
End of period |
1,346.7 | 1,523.2 | ||||||
|
|
|
|
|||||
Retained earnings |
||||||||
Beginning of period |
1,544.0 | 1,341.6 | ||||||
Net income for the period |
131.9 | 163.3 | ||||||
Dividends paid on ordinary and preference shares |
(40.4) | (36.8) | ||||||
Changes in redemption value of the PIERS (1) |
(7.1) | - | ||||||
Proportion due to non-controlling interest |
- | 0.3 | ||||||
|
|
|
|
|||||
End of period |
1,628.4 | 1,468.4 | ||||||
|
|
|
|
|||||
Accumulated other comprehensive income: |
||||||||
Cumulative foreign currency translation adjustments, net of taxes: |
||||||||
Beginning of period |
112.7 | 124.2 | ||||||
Change for the period |
(24.4) | (10.9) | ||||||
|
|
|
|
|||||
End of period |
88.3 | 113.3 | ||||||
|
|
|
|
|||||
Loss on derivatives: |
||||||||
Beginning of period |
(0.5) | (0.7) | ||||||
Reclassification to interest payable |
0.2 | 0.1 | ||||||
|
|
|
|
|||||
End of period |
(0.3) | (0.6) | ||||||
|
|
|
|
|||||
Unrealized (depreciation)/appreciation on investments, net of taxes: |
||||||||
Beginning of period |
315.2 | 305.4 | ||||||
Change for the period |
(143.7) | 25.2 | ||||||
|
|
|
|
|||||
End of period |
171.5 | 330.6 | ||||||
|
|
|
|
|||||
Total accumulated other comprehensive income |
259.5 | 443.3 | ||||||
|
|
|
|
|||||
|
|
|
|
|||||
Total shareholders equity |
$3,234.9 | $3,435.1 | ||||||
|
|
|
|
(1) Preferred Income Equity Redemption Securities.
14
![]() |
ASPEN INSURANCE HOLDINGS LIMITED | |
Consolidated Statements of Comprehensive Income |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(in US$ millions) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Net income |
$40.1 | $84.6 | $131.9 | $163.3 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income/(loss), net of taxes: |
||||||||||||||||
Available for sale investments: |
||||||||||||||||
Reclassification adjustment for net realized (gains)/losses included in net income |
(4.0) | 1.2 | (10.5) | 0.3 | ||||||||||||
Change in net unrealized gains and losses on available for sale securities held |
(123.5) | 35.8 | (133.2) | 24.9 | ||||||||||||
Loss on derivatives reclassified to interest expense |
0.1 | 0.1 | 0.2 | 0.1 | ||||||||||||
Change in foreign currency translation adjustment |
(18.9) | (9.4) | (24.4) | (10.9) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive (loss)/income |
(146.3) | 27.7 | (167.9) | 14.4 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive (loss)/income |
$(106.2) | $112.3 | $(36.0) | $177.7 | ||||||||||||
|
|
|
|
|
|
|
|
15
![]() |
ASPEN INSURANCE HOLDINGS LIMITED | |
Condensed Consolidated Statements of Cash Flows |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
(in US$ millions) | 2013 | 2012 | 2013 | 2012 | ||||||||||||
Net cash from operating activities |
$144.7 | $60.2 | $248.2 | $159.6 | ||||||||||||
Net cash (used in) investing activities |
(155.7) | (23.3) | (284.2) | (179.6) | ||||||||||||
Net cash (used in)/from financing activities |
(2.6) | 107.9 | (227.3) | 92.9 | ||||||||||||
Effect of exchange rate movements on cash and cash equivalents |
(10.2) | (9.1) | (11.4) | (3.0) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(Decrease)/increase in cash and cash equivalents |
(23.8) | 135.7 | (274.7) | 69.9 | ||||||||||||
Cash at beginning of period |
1,212.7 | 1,173.3 | 1,463.6 | 1,239.1 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash at end of period |
$1,188.9 | $1,309.0 | $1,188.9 | $1,309.0 | ||||||||||||
|
|
|
|
|
|
|
|
16
![]() |
ASPEN INSURANCE HOLDINGS LIMITED | |
Reserves for Losses and Loss Adjustment Expenses |
(in US$ millions) | For the Six Months Ended June 30, 2013 |
For
the Twelve Months Ended December 31, 2012 |
||||||
Provision for losses and loss adjustment expenses at the start of the period |
$4,779.7 | $4,525.2 | ||||||
Reinsurance recoverables |
(499.0 | ) | (426.6 | ) | ||||
|
|
|
|
|||||
Net loss and loss adjustment expenses at the start of the period |
4,280.7 | 4,098.6 | ||||||
|
|
|
|
|||||
Net loss and loss adjustment expenses disposed |
(17.3 | ) | (9.0 | ) | ||||
|
|
|
|
|||||
Provision for losses and loss adjustment expenses for claims incurred |
||||||||
Current period |
655.7 | 1,375.9 | ||||||
Prior period release |
(53.6 | ) | (137.4 | ) | ||||
|
|
|
|
|||||
Total incurred |
602.1 | 1,238.5 | ||||||
|
|
|
|
|||||
Losses and loss adjustment expenses payments for claims incurred |
(526.6 | ) | (1,080.0 | ) | ||||
|
|
|
|
|||||
Foreign exchange (gains)/losses |
(76.3 | ) | 32.6 | |||||
|
|
|
|
|||||
Net loss and loss adjustment expenses reserves at the end of the period |
4,262.6 | 4,280.7 | ||||||
Reinsurance recoverables on unpaid losses at the end of the period |
472.3 | 499.0 | ||||||
|
|
|
|
|||||
Gross loss and loss adjustment expenses reserves at the end of the period |
$4,734.9 | $4,779.7 | ||||||
|
|
|
|
17
![]() |
ASPEN INSURANCE HOLDINGS LIMITED | |
Reserves by Operating Segment |
As At June 30, 2013 | As At December 31, 2012 | |||||||||||||||||||||||
(in US$ millions) | Gross | Reinsurance Recoverables |
Net | Gross | Reinsurance Recoverables |
Net | ||||||||||||||||||
Reinsurance |
$2,868.0 | $(152.1) | $2,715.9 | $2,983.7 | $(172.4) | $2,811.3 | ||||||||||||||||||
Insurance |
1,866.9 | (320.2) | 1,546.7 | 1,796.0 | (326.6) | 1,469.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total losses and loss adjustment expense reserves |
$4,734.9 | $(472.3) | $4,262.6 | $4,779.7 | $(499.0) | $4,280.7 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
18
![]() |
ASPEN INSURANCE HOLDINGS LIMITED | |
Prior Year Reserve Releases |
(in US$ millions) | Three Months Ended June 30, 2013 | Three Months Ended June 30, 2012 | ||||||||||||||||||||||
Gross | Reinsurance Recoverables |
Net | Gross | Reinsurance Recoverables |
Net | |||||||||||||||||||
Reinsurance |
$24.0 | $0.1 | $24.1 | $12.6 | $1.5 | $14.1 | ||||||||||||||||||
Insurance |
(9.3) | 12.6 | 3.3 | 15.5 | (1.0) | 14.5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Release in reserves for prior years during the period |
$14.7 | $12.7 | $27.4 | $28.1 | $0.5 | $28.6 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Six Months Ended June 30, 2013 | Six Months Ended June 30, 2012 | |||||||||||||||||||||||
Gross | Reinsurance Recoverables |
Net | Gross | Reinsurance Recoverables |
Net | |||||||||||||||||||
Reinsurance |
$44.1 | $0.1 | $44.2 | $37.1 | $5.1 | $42.2 | ||||||||||||||||||
Insurance |
(7.4) | 16.8 | 9.4 | 18.8 | 4.5 | 23.3 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Release in reserves for prior years during the period |
$36.7 | $16.9 | $53.6 | $55.9 | $9.6 | $65.5 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
19
![]() |
ASPEN INSURANCE HOLDINGS LIMITED | |
Worldwide Natural Catastrophe Exposures: Major Peril Zones |
Based on Shareholders equity of $3,234.9 million as at June 30, 2013. The estimates reflect Aspens own view of the modelled maximum losses ("PMLs") at the return periods shown which include input from various third party vendor models and our own proprietary adjustments to these models. Catastrophe loss experience may materially differ from the modelled PMLs due to limitations in one or more of the models or uncertainties in the application of policy terms and limits.
20
![]() |
ASPEN INSURANCE HOLDINGS LIMITED | |
Consolidated Investment Portfolio |
(in US$ millions)
Fair Market Value | ||||||||||||||||||||
Marketable Securities - Available For Sale | As At June 30, 2013 |
As At March 31, 2013 |
As At December 31, 2012 |
As At September 30, 2012 |
As At June 30, 2012 |
|||||||||||||||
U.S. government securities |
$1,118.4 | $1,175.3 | $1,126.3 | $1,068.6 | $975.7 | |||||||||||||||
U.S. agency securities |
308.7 | 314.0 | 308.6 | 311.7 | 309.2 | |||||||||||||||
Municipal securities |
33.1 | 38.0 | 39.7 | 39.9 | 39.9 | |||||||||||||||
Corporate securities |
2,027.3 | 2,006.0 | 2,038.5 | 1,929.7 | 1,896.7 | |||||||||||||||
Foreign government securities |
755.7 | 644.6 | 641.0 | 628.5 | 596.3 | |||||||||||||||
Asset-backed securities |
86.8 | 74.5 | 53.8 | 63.8 | 62.0 | |||||||||||||||
FDIC Guaranteed |
- | - | - | 3.0 | 3.0 | |||||||||||||||
Bonds backed by foreign government |
87.0 | 85.3 | 101.1 | 139.1 | 119.8 | |||||||||||||||
Mortgage-backed securities |
1,125.6 | 1,155.4 | 1,248.3 | 1,363.5 | 1,384.8 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total fixed income maturities |
5,542.6 | 5,493.1 | 5,557.3 | 5,547.8 | 5,387.4 | |||||||||||||||
Short-term investments |
231.7 | 352.3 | 431.5 | 494.7 | 489.6 | |||||||||||||||
Equity securities |
183.2 | 209.1 | 200.1 | 197.1 | 187.4 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Available For Sale |
$5,957.5 | $6,054.5 | $6,188.9 | $6,239.6 | $6,064.4 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Marketable Securities - Trading |
||||||||||||||||||||
U.S. government securities |
$39.0 | $27.7 | $9.4 | $38.8 | $38.8 | |||||||||||||||
U.S. agency securities |
0.2 | 0.2 | 0.2 | 2.0 | 1.9 | |||||||||||||||
Municipal securities |
0.6 | 2.8 | 2.9 | 2.9 | 2.9 | |||||||||||||||
Corporate securities |
365.6 | 395.9 | 414.4 | 368.2 | 337.7 | |||||||||||||||
Foreign government securities |
27.5 | 27.3 | 26.3 | 21.8 | 21.9 | |||||||||||||||
Mortgage-backed securities |
- | - | - | 0.3 | - | |||||||||||||||
Asset-backed securities |
5.7 | 5.8 | 2.9 | 1.3 | 0.6 | |||||||||||||||
Bank loans |
65.2 | 9.1 | - | - | - | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total fixed income maturities |
503.8 | 468.8 | 456.1 | 435.3 | 403.8 | |||||||||||||||
Short-term investments |
10.6 | 0.8 | 2.4 | 10.6 | 14.0 | |||||||||||||||
Equity securities |
229.9 | 205.0 | - | - | - | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Trading |
$744.3 | $674.6 | $458.5 | $445.9 | $417.8 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other investments |
$44.9 | $45.0 | $45.0 | $34.8 | $33.1 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cash |
1,188.9 | 1,212.7 | 1,463.6 | 1,374.2 | 1,309.0 | |||||||||||||||
Accrued interest |
48.3 | 45.0 | 47.7 | 49.7 | 48.8 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Cash and Accrued Interest |
$1,237.2 | $1,257.7 | $1,511.3 | $1,423.9 | $1,357.8 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Cash and Investments |
$7,983.9 | $8,031.8 | $8,203.7 | $8,144.2 | $7,873.1 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
21
![]() |
ASPEN INSURANCE HOLDINGS LIMITED | |
Investment Analysis |
(in US$ millions except for percentages and years) | Q2 2013 | Q1 2013 | Q4 2012 | Q3 2012 | Q2 2012 | Q1 2012 | ||||||||||||||||||
Net investment income from fixed income investments and cash |
$42.0 | $45.0 | $49.8 | $46.9 | $51.0 | $51.0 | ||||||||||||||||||
Net investment income from equity securities |
3.9 | 3.3 | 1.3 | 1.7 | 1.8 | 1.4 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net investment income |
45.9 | 48.3 | 51.1 | 48.6 | 52.8 | 52.4 | ||||||||||||||||||
Net realized and unrealized investment (losses)/gains excluding the interest rate swaps |
(6.6) | 15.2 | 5.7 | 12.9 | 2.2 | 9.0 | ||||||||||||||||||
Net realized investment gains/(losses) from the interest rate swaps |
6.8 | 0.6 | (0.1) | (8.1) | (11.3) | (3.5) | ||||||||||||||||||
Other-than-temporary impairment charges |
- | - | - | (2.1) | (0.9) | - | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net realized and unrealized investment gains/(losses) |
0.2 | 15.8 | 5.6 | 2.7 | (10.0) | 5.5 | ||||||||||||||||||
Change in unrealized (losses)/gains on available for sale investments (gross of tax) |
(138.4) | (17.5) | (37.9) | 32.2 | 36.6 | (11.7) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total (loss)/return on investments |
$(92.3) | $46.6 | $18.8 | $83.5 | $79.4 | $46.2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Portfolio Characteristics |
||||||||||||||||||||||||
Fixed income portfolio book yield (excluding the impact of the interest rate swaps) |
2.71% | 2.80% | 2.88% | 3.04% | 3.19% | 3.31% | ||||||||||||||||||
Fixed income portfolio duration (excluding the impact of the interest rate swaps) |
3.4 years | 3.2 years | 3.0 years | 2.8 years | 2.9 years | 3.0 years |
22
![]() |
ASPEN INSURANCE HOLDINGS LIMITED | |
Book Value Per Ordinary Share |
(in US$ millions except for number of shares and per share amounts) | June 30, 2013 |
March 31, 2013 |
December 31, 2012 |
September 30, 2012 |
June 30, 2012 |
March 31, 2012 |
||||||||||||||||||
Net assets |
$3,234.9 | $3,339.6 | $3,488.4 | $3,554.2 | $3,435.1 | $3,210.9 | ||||||||||||||||||
Less: Preference shares |
(555.6) | (508.1) | (508.1) | (508.1) | (508.1) | (353.6) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$2,679.3 | $2,831.5 | $2,980.3 | $3,046.1 | $2,927.0 | $2,857.3 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Ordinary shares outstanding (in millions) |
67.003 | 65.634 | 70.754 | 71.012 | 70.687 | 71.496 | ||||||||||||||||||
Ordinary shares and dilutive potential ordinary shares (in millions) |
68.934 | 69.611 | 73.312 | 73.341 | 73.161 | 74.064 | ||||||||||||||||||
Book value per ordinary share |
$39.99 | $43.14 | $42.12 | $42.90 | $41.41 | $39.96 | ||||||||||||||||||
Diluted book value per ordinary share |
$38.87 | $40.68 | $40.65 | $41.53 | $40.01 | $38.58 |
The dilutive effect of options has been calculated using the treasury stock method. The treasury stock method assumes that the proceeds received from the exercise of options will be used to purchase the Companys ordinary shares at the average market price during the period of calculation.
23
|
ASPEN INSURANCE HOLDINGS LIMITED | |
Operating Income Reconciliation |
Net income is adjusted to exclude after-tax change in net foreign exchange gains and losses and realized gains and losses in investments.
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, 2013 | June 30, 2012 | June 30, 2013 | June 30, 2012 | |||||||||||||
(in US$ millions except where stated) | ||||||||||||||||
Net income as reported |
$40.1 | $84.6 | $131.9 | $163.3 | ||||||||||||
Changes in redemption value of the PIERS (1) |
(7.1) | - | (7.1) | - | ||||||||||||
Preference share dividends |
(8.0) | (8.3) | (16.6) | (14.0) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income available to ordinary shareholders |
25.0 | 76.3 | 108.2 | 149.3 | ||||||||||||
Add (deduct) after tax income: |
||||||||||||||||
Net foreign exchange losses |
12.0 | 10.9 | 21.5 | 7.9 | ||||||||||||
Net realized losses/(gains) on investments |
0.1 | 10.3 | (15.5) | 5.1 | ||||||||||||
Changes in redemption value of the PIERS (1) |
7.1 | - | 7.1 | - | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating income after tax available to ordinary shareholders |
44.2 | 97.5 | 121.3 | 162.3 | ||||||||||||
Tax on operating income |
2.5 | 8.0 | 8.9 | 12.4 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating income before tax available to ordinary shareholders |
$46.7 | $105.5 | $130.2 | $174.7 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Basic earnings per ordinary share |
||||||||||||||||
Net income adjusted for preference share dividend |
$0.38 | $1.07 | $1.60 | $2.10 | ||||||||||||
Add (deduct) after tax income: |
||||||||||||||||
Net foreign exchange losses |
0.18 | 0.15 | 0.32 | 0.11 | ||||||||||||
Net realized losses/(gains) on investments |
- | 0.14 | (0.23) | 0.07 | ||||||||||||
Changes in redemption value of the PIERS (1) |
0.11 | - | 0.11 | - | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating income adjusted for preference shares dividend |
$0.67 | $1.36 | $1.80 | $2.28 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted earnings per ordinary share |
||||||||||||||||
Net income adjusted for preference share dividend |
$0.36 | $1.03 | $1.52 | $2.02 | ||||||||||||
Add (deduct) after tax income: |
||||||||||||||||
Net foreign exchange losses |
0.17 | 0.15 | 0.30 | 0.11 | ||||||||||||
Net realized losses/(gains) on investments |
- | 0.14 | (0.22) | 0.07 | ||||||||||||
Changes in redemption value of the PIERS (1) |
0.10 | - | 0.10 | - | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Operating income adjusted for preference shares dividend |
$0.63 | $1.32 | $1.70 | $2.20 | ||||||||||||
|
|
|
|
|
|
|
|
(1) Preferred Income Equity Redemption Securities
24
![]() |
|
Exhibit 99.3
|
|
Aspen Insurance Holdings Limited: Directorate Appointment
Hamilton, Bermuda, July 24, 2013 Aspen Insurance Holdings Limited (Aspen or the Company) (NYSE: AHL) announces a directorate appointment.
Aspen announces that Bret Pearlman has been appointed as a non-executive director of the Company. Mr. Pearlman will also be a member of Aspens Corporate Governance and Nominating Committee and the Investment Committee.
Mr. Pearlman is a Managing Director and co-founder of the private equity firm, Elevation Partners. He has extensive experience as a private equity investor in large-scale transactions during his twenty year career. Mr. Pearlman joined The Blackstone Group in 1989 as the firms first analyst and from 2000 through mid-2004, he was one of a number of Senior Managing Directors whose primary responsibility was investing Blackstones private equity funds. Blackstone was a founding investor in Aspen and Mr. Pearlman served as the firms representative on Aspens Board from June 2002 until July 2004. Since co-founding Elevation in 2004, Mr. Pearlman has served as Chair and a board member of VGH Holdings and he is currently on the board of directors of Forbes Media.
Glyn Jones, Chairman of Aspen, said: I am delighted that Bret is joining the Aspen Board. His wealth of financial services experience, in particular in the area of private equity where he has had significant exposure to a broad range of issues including performance management, corporate finance and capital management, will be a great asset to Aspen. I would like to welcome Bret back to the Aspen Board and I look forward to working with him in the future.
- ENDS -
About Aspen Insurance Holdings Limited (Aspen)
Aspen provides reinsurance and insurance coverage to clients in various domestic and global markets through wholly-owned subsidiaries and offices in Bermuda, France, Germany, Ireland, Singapore, Switzerland, the United Kingdom and the United States. For the year ended December 31, 2012, Aspen reported $10.3 billion in total assets, $4.8 billion in gross reserves, $3.5 billion in shareholders equity, and $2.6 billion in gross written premiums. Its operating subsidiaries have been assigned a rating of A (Strong) by Standard & Poors, an A (Excellent) by A.M. Best and an A2 (Good) by Moodys Investors Service.
Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements regarding future results and events, including, without limitation, statements regarding Board appointments. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as expect, intend, plan, believe, project, anticipate, seek, will, estimate, may, likely, continue, and similar expressions of a future or forward-looking nature.
All forward-looking statements rely on a number of assumptions, estimates and data concerning future results and events and are subject to a number of uncertainties and other factors, many of which are outside Aspens control that could cause actual results to differ materially from such statements, including our ability to consummate the transactions contemplated by the terms of the accelerated share repurchase agreement, the share price and share volumes which may impact timing of repurchases, changes in market conditions and the impact on our business of such factors. For a detailed description of uncertainties and other factors that could impact the forward-looking statements in this press release, please see the Risk Factors section in Aspens Annual Report on Form 10-K for the year ended December 31, 2012, filed with the U.S. Securities and Exchange Commission on February 26, 2013. Aspen undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
For further information
Please visit www.aspen.co or contact:
Investors
Kerry Calaiaro, Senior Vice President, Investor Relations, Aspen
Kerry.Calaiaro@aspen.co
+1 646 502 1076
Media
Steve Colton, Head of Communications, Aspen
Steve.Colton@aspen.co
+44 20 7184 8337
International Citigate Dewe Rogerson
Caroline Merrell or Jos Bieneman
caroline.merrell@citigatedr.co.uk
jos.bieneman@citigatedr.co.uk
+44 20 7638 9571
North America Abernathy MacGregor
Allyson Vento
amv@abmac.com
+1 212 371 5999
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