EX-99.2 3 a992-ahl3q13.htm EXHIBIT 99.2 99.2 - AHL3Q13 Landscape


Exhibit 99.2
 
 
 
 
 
 
 
 
 
 
 FINANCIAL SUPPLEMENT
 
 As of September 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, Investor Relations
 
 
T: +1 646-502-1076
 
 
email: kerry.calaiaro@aspen.co
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
            



ASPEN INSURANCE HOLDINGS LIMITED
 
Table Of Contents
 
 
 
 
 
 
 
 
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
8 - 9
 
10 - 11
 
 
 
 
 
 
 
 
 
 
 
 




ASPEN INSURANCE HOLDINGS LIMITED
Basis of Presentation
 
 
 
 
Definitions and presentations: All financial information contained herein is unaudited except for information for the fiscal year ended December 31, 2012 and December 31, 2011. Unless otherwise noted, all data is in U.S. dollar millions, except for per share amounts, percentages and ratio information.
 
 
 
 
In presenting Aspen's 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 Aspen's results of operations in a manner that allows for a more complete understanding of the underlying trends in Aspen's 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, and 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 Aspen's results of operations in a manner similar to how management analyzes Aspen's underlying business performance. Operating income should not be viewed as a substitute for GAAP net income. Please see page 23 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 23 for a reconciliation of operating income to net income and page 7 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 23 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 22.
 
 
 
 
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.
 
 
 
 
 
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.

1


ASPEN INSURANCE HOLDINGS LIMITED
 
 
Financial Highlights
 
 
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(in US$ millions except for percentages, share and per share amounts)
 
2013
 
2012
 
Change
 
2013
 
2012
 
Change
Gross written premium
 
$
581.6

 
$
558.4

 
4.2
 %
 
$
2,042.3

 
$
2,007.1

 
1.8
 %
Net written premium
 
$
542.0

 
$
507.1

 
6.9
 %
 
$
1,751.7

 
$
1,722.5

 
1.7
 %
Net earned premium
 
$
544.3

 
$
516.2

 
5.4
 %
 
$
1,599.2

 
$
1,525.0

 
4.9
 %
Net income after tax
 
$
107.4

 
$
115.1

 
(6.7
)%
 
$
239.3

 
$
278.4

 
(14.0
)%
Operating income after tax
 
$
82.0

 
$
106.5

 
(23.0
)%
 
$
219.9

 
$
282.8

 
(22.2
)%
Net investment income
 
$
45.0

 
$
48.6

 
(7.4
)%
 
$
139.2

 
$
153.8

 
(9.5
)%
Underwriting income
 
$
44.7

 
$
67.4

 
(33.7
)%
 
$
111.4

 
$
163.7

 
(31.9
)%
Earnings Per Share and Book Value Per Share
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per ordinary share
 
 
 
 
 
 
 
 
 
 
 
 
    Net income adjusted for preference share dividend
 
$
1.47

 
$
1.50

 
(2.0
)%
 
$
3.06

 
$
3.60

 
(13.9
)%
    Operating income adjusted for preference share dividend
 
$
1.09

 
$
1.37

 
(20.4
)%
 
$
2.88

 
$
3.67

 
(21.6
)%
Diluted earnings per ordinary share
 
 
 
 
 
 
 
 
 
 
 
 
    Net income adjusted for preference share dividend
 
$
1.43

 
$
1.45

 
(1.4
)%
 
$
2.95

 
$
3.47

 
(17.1
)%
    Operating income adjusted for preference share dividend
 
$
1.05

 
$
1.34

 
(21.6
)%
 
$
2.78

 
$
3.53

 
(20.0
)%
    Operating income adjusted for preference share dividend
 
66.716

 
71.129

 
(6.2
)%
 
67.303

 
71.126

 
(5.4
)%
Diluted weighted average number of ordinary shares outstanding (in millions of shares)
 
68.562

 
73.398

 
(6.6
)%
 
69.959

 
73.703

 
(5.1
)%
Book value per ordinary share
 
$
41.33

 
$
42.90

 
(3.7
)%
 
$
41.33

 
$
42.90

 
(3.7
)%
Diluted book value per ordinary share
 
$
40.43

 
$
41.53

 
(2.6
)%
 
$
40.43

 
$
41.53

 
(2.6
)%
Ordinary shares outstanding at September 30, 2013 and September 30, 2012 (in millions of shares)
 
65.701

 
71.012

 
(7.5
)%
 
65.701

 
71.012

 
(7.5
)%
Diluted ordinary shares outstanding at September 30, 2013 and September 30, 2012 (in millions of shares)
 
67.171

 
73.341

 
(8.4
)%
 
67.171

 
73.341

 
(8.4
)%
Underwriting Ratios
 
 
 
 
 
 
 
 
 
 
 
 
Loss ratio
 
53.3
%
 
49.4
%
 
 
 
55.8
%
 
52.5
%
 
 
   Policy acquisition expense ratio
 
20.3
%
 
20.0
%
 
 
 
20.2
%
 
19.8
%
 
 
   General, administrative and corporate expense ratio
 
18.2
%
 
17.6
%
 
 
 
17.1
%
 
17.0
%
 
 
Expense ratio
 
38.5
%
 
37.6
%
 
 
 
37.3
%
 
36.8
%
 
 
Combined ratio
 
91.8
%
 
87.0
%
 
 
 
93.1
%
 
89.3
%
 
 
Return On Equity
 
 
 
 
 
 
 
 
 
 
 
 
Average equity (1)
 
$
2,679.3

 
$
2,981.1

 
 
 
$
2,801.4

 
$
2,886.2

 
 
Return on average equity
 
 
 
 
 
 
 
 
 
 
 
 
   Net income adjusted for preference share dividend
 
3.7
%
 
3.6
%
 
 
 
7.6
%
 
8.9
%
 
 
   Operating income adjusted for preference share dividend
 
2.7
%
 
3.3
%
 
 
 
6.9
%
 
9.0
%
 
 
Annualized return on average equity
 
 
 
 
 
 
 
 
 
 
 
 
Net income
 
14.8
%
 
14.4
%
 
 
 
10.1
%
 
11.9
%
 
 
Operating income
 
10.8
%
 
13.2
%
 
 
 
9.2
%
 
12.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See pages 7 and 23 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.
 
 
 
 
 
 
 
 
 
 
 
 
(1) Average equity excludes preference shares.
 
 
 
 
 
 
 
 
 
 
 
 

2


ASPEN INSURANCE HOLDINGS LIMITED
 
 
 
Consolidated Statements of Operations - Quarterly Results
 
 
 
(in US$ millions except for percentages and per share amounts)
 
Q3 2013
 
Q2 2013
 
Q1 2013
 
Q4 2013
 
Q3 2012
 
Q2 2012
 
Q1 2012
UNDERWRITING REVENUES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross written premiums
 
$
581.6

 
$
687.3

 
$
773.4

 
$
576.2

 
$
558.4

 
$
666.6

 
$
782.1

Premiums ceded
 
(39.6
)
 
(74.6
)
 
(176.4
)
 
(51.8
)
 
(51.3
)
 
(84.7
)
 
(148.6
)
Net written premiums
 
542.0

 
612.7

 
597.0

 
524.4

 
507.1

 
581.9

 
633.5

Change in unearned premiums
 
2.3

 
(68.7
)
 
(86.1
)
 
34.1

 
9.1

 
(68.5
)
 
(138.1
)
Net earned premiums
 
544.3

 
544.0

 
510.9

 
558.5

 
516.2

 
513.4

 
495.4

UNDERWRITING EXPENSES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Losses and loss adjustment expenses
 
290.2

 
333.4

 
268.7

 
437.4

 
255.0

 
262.1

 
284.0

Policy acquisition expenses
 
110.5

 
107.2

 
104.6

 
80.0

 
103.1

 
102.0

 
96.1

General, administrative and corporate expenses
 
98.9

 
87.7

 
86.6

 
86.1

 
90.7

 
83.5

 
84.8

Total underwriting expenses
 
499.6

 
528.3

 
459.9

 
603.5

 
448.8

 
447.6

 
464.9

Underwriting income/(loss) including corporate expenses
 
44.7

 
15.7

 
51.0

 
(45.0
)
 
67.4

 
65.8

 
30.5

OTHER OPERATING REVENUE AND EXPENSES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income
 
45.0

 
45.9

 
48.3

 
51.1

 
48.6

 
52.8

 
52.4

Interest expense
 
(7.7
)
 
(7.8
)
 
(7.7
)
 
(7.7
)
 
(7.8
)
 
(7.7
)
 
(7.7
)
Other income/(expense)
 
1.6

 
0.9

 
0.5

 
(6.2
)
 
4.5

 
2.9

 
(0.3
)
Total other operating revenue
 
38.9

 
39.0

 
41.1

 
37.2

 
45.3

 
48.0

 
44.4

OPERATING INCOME/(LOSS) BEFORE TAX
 
83.6

 
54.7

 
92.1

 
(7.8
)
 
112.7

 
113.8

 
74.9

Net realized and unrealized exchange gains/(losses) (1)
 
13.3

 
(13.8
)
 
(10.2
)
 
(0.4
)
 
7.7

 
(13.0
)
 
3.7

Net realized and unrealized investment gains/(losses) (2)
 
13.4

 
0.2

 
15.8

 
5.6

 
2.7

 
(10.0
)
 
5.5

INCOME/(LOSS) BEFORE TAX
 
110.3

 
41.1

 
97.7

 
(2.6
)
 
123.1

 
90.8

 
84.1

Income tax (expense)/recovery
 
(2.9
)
 
(1.0
)
 
(5.9
)
 
4.6

 
(8.0
)
 
(6.2
)
 
(5.4
)
NET INCOME AFTER TAX
 
107.4

 
40.1

 
91.8

 
2.0

 
115.1

 
84.6

 
78.7

Dividends paid on ordinary shares
 
(12.2
)
 
(11.9
)
 
(11.9
)
 
(12.0
)
 
(12.2
)
 
(12.2
)
 
(10.6
)
Dividends paid on preference shares
 
(9.5
)
 
(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
 
0.3

 
—

 
—

 
(0.1
)
 
—

 
0.2

 
0.1

Retained income/(loss)
 
$
86.0

 
$
13.1

 
$
71.3

 
$
(18.6
)
 
$
94.2

 
$
64.3

 
$
62.5

Components of net income/(loss) after tax
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating income/(loss)
 
82.0

 
52.2

 
85.7

 
(2.9
)
 
106.5

 
105.8

 
70.5

Net realized and unrealized exchange gains/(losses) after tax (1)
 
12.0

 
(12.0
)
 
(9.5
)
 
(0.4
)
 
6.1

 
(10.9
)
 
3.0

Net realized and unrealized investment gains/(losses) after tax (2)
 
13.4

 
(0.1
)
 
15.6

 
5.3

 
2.5

 
(10.3
)
 
5.2

NET INCOME AFTER TAX
 
$
107.4

 
$
40.1

 
$
91.8

 
$
2.0

 
$
115.1

 
$
84.6

 
$
78.7

Loss ratio
 
53.3
%
 
61.3
%
 
52.6
%
 
78.3
 %
 
49.4
%
 
51.1
%
 
57.3
%
Policy acquisition expense ratio
 
20.3
%
 
19.7
%
 
20.5
%
 
14.3
 %
 
20.0
%
 
19.9
%
 
19.4
%
General, administrative and corporate expense ratio
 
18.2
%
 
16.1
%
 
17.0
%
 
15.4
 %
 
17.6
%
 
16.3
%
 
17.1
%
Expense ratio
 
38.5
%
 
35.8
%
 
37.5
%
 
29.7
 %
 
37.6
%
 
36.2
%
 
36.5
%
Combined ratio
 
91.8
%
 
97.1
%
 
90.1
%
 
108.0
 %
 
87.0
%
 
87.3
%
 
93.8
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings/(losses) per share (4)
 
$
1.47

 
$
0.38

 
$
1.21

 
$
(0.09
)
 
$
1.50

 
$
1.07

 
$
1.03

Diluted earnings/(losses) per share (4)
 
$
1.43

 
$
0.36

 
$
1.15

 
$
(0.09
)
 
$
1.45

 
$
1.03

 
$
0.99

Annualized return on average equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income/(loss)
 
 
14.8
%
 
4.4
%
 
11.6
%
 
(0.8
)%
 
14.4
%
 
10.8
%
 
10.4
%
 
Operating income/(loss)
 
10.8
%
 
6.4
%
 
10.8
%
 
(1.6
)%
 
13.2
%
 
13.6
%
 
9.2
%
 
See pages 7 and 23 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.
 
 
 
 
 
 
 
 
 
 
 
 
 
 

3


ASPEN INSURANCE HOLDINGS LIMITED
Consolidated Statements of Operations - Year To Date Results
 
 
 
 
Nine Months Ended September 30,
(in US$ millions except for percentages)
 
2013
 
2012
 
2011
UNDERWRITING REVENUES
 
 
 
 
 
Gross written premiums
 
$
2,042.3

 
$
2,007.1

 
$
1,749.1

Premiums ceded
 
(290.6
)
 
(284.6
)
 
(251.2
)
Net written premiums
 
1,751.7

 
1,722.5

 
1,497.9

Change in unearned premiums
 
(152.5
)
 
(197.5
)
 
(98.8
)
Net earned premiums
 
1,599.2

 
1,525.0

 
1,399.1

UNDERWRITING EXPENSES
 
 
 
 
 
 
Losses and loss adjustment expenses
 
892.3

 
801.1

 
1,161.5

Policy acquisition expenses
 
322.3

 
301.2

 
261.5

General, administrative and corporate expenses (1)
 
273.2

 
259.0

 
205.2

Total underwriting expenses
 
1,487.8

 
1,361.3

 
1,628.2

Underwriting income/(loss) including corporate expenses
 
111.4

 
163.7

 
(229.1
)
OTHER OPERATING REVENUE AND EXPENSES
 
 
 
 
 
 
Net investment income
 
139.2

 
153.8

 
171.4

Interest expense
 
(23.2
)
 
(23.2
)
 
(23.1
)
Other income/(expense)
 
3.0

 
7.1

 
(10.4
)
Total other operating revenue
 
119.0

 
137.7

 
137.9

OPERATING INCOME/(LOSS) BEFORE TAX
 
230.4

 
301.4

 
(91.2
)
Net realized and unrealized exchange (losses) (2)
 
(10.7
)
 
(1.6
)
 
(4.5
)
Net realized and unrealized investment gains/(losses) (3)
 
29.4

 
(1.8
)
 
(40.1
)
INCOME/(LOSS) BEFORE TAX
 
249.1

 
298.0

 
(135.8
)
Income tax (expense)/recovery
 
(9.8
)
 
(19.6
)
 
13.3

NET INCOME/(LOSS) AFTER TAX
 
239.3

 
278.4

 
(122.5
)
Dividends paid on ordinary shares
 
(36.0
)
 
(35.0
)
 
(31.8
)
Dividends paid on preference shares
 
(26.1
)
 
(22.6
)
 
(17.1
)
Dividends paid to non-controlling interest
 
—

 
(0.1
)
 
(0.1
)
Change in redemption value of the PIERS
 
(7.1
)
 
—

 
—

Proportion due to non-controlling interest
 
0.3

 
0.3

 
0.3

Retained income/(loss)
 
$
170.4

 
$
221.0

 
$
(171.2
)
Components of net income/(loss) after tax
 
 
 
 
 
 
 
Operating income/(loss)
 
$
219.9

 
$
282.8

 
$
(75.4
)
 
Net realized and unrealized exchange (losses) after tax (2)
 
(9.5
)
 
(1.8
)
 
(3.8
)
 
Net realized and unrealized investment gains/(losses) after tax (3)
 
28.9

 
(2.6
)
 
(43.3
)
NET INCOME/(LOSS) AFTER TAX
 
$
239.3

 
$
278.4

 
$
(122.5
)
Loss ratio
 
55.8
%
 
52.5
%
 
83.0
%
 
Policy acquisition expense ratio
 
20.2
%
 
19.8
%
 
18.7
%
 
General, administrative and corporate expense ratio (1)
 
17.1
%
 
17.0
%
 
14.7
%
Expense ratio
 
37.3
%
 
36.8
%
 
33.4
%
Combined ratio
 
93.1
%
 
89.3
%
 
116.4
%
 
 
See pages 7 and 23 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


ASPEN INSURANCE HOLDINGS LIMITED
 
 
Consolidated Balance Sheets
 
 
(in US$ millions except for per share amounts)
 
September 30,
 
June 30,
 
March 31,
 
December 31,
 
September 30,
 
June 30,
 
March 31,
 
2013
 
2013
 
2013
 
2012
 
2012
 
2012
 
2012
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed income maturities
 
$
6,263.5

 
$
6,046.4

 
$
5,961.9

 
$
6,013.4

 
$
5,983.1

 
$
5,791.2

 
$
5,842.1

Equity securities
 
441.5

 
413.1

 
414.1

 
200.1

 
197.1

 
187.4

 
188.1

Other investments
 
46.1

 
44.9

 
45.0

 
45.0

 
34.8

 
33.1

 
33.1

Short-term investments
 
148.5

 
242.3

 
353.1

 
433.9

 
505.3

 
503.6

 
433.8

Total investments
 
6,899.6

 
6,746.7

 
6,774.1

 
6,692.4

 
6,720.3

 
6,515.3

 
6,497.1

Cash and cash equivalents
 
1,198.3

 
1,188.9

 
1,212.7

 
1,463.6

 
1,374.2

 
1,309.0

 
1,173.3

Reinsurance recoverables
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unpaid losses
 
442.2

 
472.3

 
479.2

 
499.0

 
461.6

 
457.4

 
455.4

Ceded unearned premiums
 
179.6

 
226.0

 
217.4

 
122.6

 
151.3

 
190.8

 
175.3

Receivables
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Underwriting premiums
 
1,089.1

 
1,197.6

 
1,149.7

 
1,057.5

 
993.4

 
1,063.3

 
1,061.2

Other
 
76.3

 
71.8

 
66.0

 
68.5

 
76.4

 
75.1

 
70.2

Funds withheld
 
47.7

 
81.5

 
85.0

 
84.3

 
79.5

 
91.0

 
86.9

Deferred policy acquisition costs (1)
 
262.1

 
264.4

 
238.5

 
223.0

 
232.0

 
233.2

 
215.3

Derivatives at fair value
 
5.6

 
2.0

 
2.0

 
2.0

 
5.8

 
3.3

 
0.9

Receivable for securities sold
 
5.9

 
5.8

 
20.7

 
0.2

 
14.6

 
9.5

 
2.0

Office properties and equipment
 
60.5

 
57.2

 
55.2

 
57.9

 
59.1

 
56.9

 
58.5

Income tax receivable
 
3.1

 
—

 
—

 
2.4

 
12.3

 
15.7

 
20.3

Other assets
 
13.1

 
20.9

 
17.0

 
18.2

 
38.1

 
39.3

 
31.1

Intangible assets
 
18.6

 
18.7

 
18.8

 
19.0

 
19.2

 
19.5

 
19.7

Total assets
 
$
10,301.7

 
$
10,353.8

 
$
10,336.3

 
$
10,310.6

 
$
10,237.8

 
$
10,079.3

 
$
9,867.2

LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance reserves
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Losses and loss adjustment expenses
 
$
4,715.6

 
$
4,734.9

 
$
4,683.8

 
$
4,779.7

 
$
4,639.6

 
$
4,556.4

 
$
4,585.7

Unearned premiums
 
1,334.6

 
1,375.3

 
1,295.7

 
1,120.8

 
1,184.0

 
1,223.8

 
1,146.3

Total insurance reserves
 
6,050.2

 
6,110.2

 
5,979.5

 
5,900.5

 
5,823.6

 
5,780.2

 
5,732.0

Payables
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reinsurance premiums
 
178.4

 
224.8

 
209.7

 
154.1

 
71.1

 
109.5

 
192.2

Taxation
 
17.7

 
16.4

 
14.7

 
11.8

 
23.7

 
22.5

 
22.9

Accrued expenses and other payables
 
282.8

 
258.7

 
285.6

 
249.3

 
261.4

 
230.3

 
208.9

Liabilities under derivative contracts
 
2.3

 
9.6

 
8.0

 
7.4

 
4.7

 
2.7

 
1.3

Total payables
 
481.2

 
509.5

 
518.0

 
422.6

 
360.9

 
365.0

 
425.3

Long-term debt
 
499.2

 
499.2

 
499.2

 
499.1

 
499.1

 
499.0

 
499.0

Total liabilities
 
7,030.6

 
7,118.9

 
6,996.7

 
6,822.2

 
6,683.6

 
6,644.2

 
6,656.3

SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ordinary shares
 
0.1

 
0.1

 
0.1

 
0.1

 
0.1

 
0.1

 
0.1

Non-controlling interest
 
(0.1
)
 
0.2

 
0.2

 
0.2

 
(0.1
)
 
0.1

 
0.3

Preference shares
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Additional paid-in capital
 
1,297.6

 
1,346.7

 
1,318.2

 
1,516.7

 
1,521.9

 
1,523.2

 
1,390.8

Retained earnings (1)
 
1,714.4

 
1,628.4

 
1,615.3

 
1,544.0

 
1,562.6

 
1,468.4

 
1,404.1

Accumulated other comprehensive income, net of taxes
 
259.1

 
259.5

 
405.8

 
427.4

 
469.7

 
443.3

 
415.6

Total shareholders’ equity
 
3,271.1

 
3,234.9

 
3,339.6

 
3,488.4

 
3,554.2

 
3,435.1

 
3,210.9

Total liabilities and shareholders’ equity
 
$
10,301.7

 
$
10,353.8

 
$
10,336.3

 
$
10,310.6

 
$
10,237.8

 
$
10,079.3

 
$
9,867.2

Book value per ordinary share
 
$
41.33

 
$
39.99

 
$
43.14

 
$
42.12

 
$
42.90

 
$
41.41

 
$
39.96

Book value per diluted ordinary share
 
$
40.43

 
$
38.87

 
$
40.68

 
$
40.65

 
$
41.53

 
$
40.01

 
$
38.58

See pages 7 and 23 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.

5


ASPEN INSURANCE HOLDINGS LIMITED
 
 
Earnings Per Share and Book Value Per Share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
(in US$ except for number of shares)
 
September 30, 2013
 
September 30, 2012
 
September 30, 2013
 
September 30, 2012
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per ordinary share
 
 
 
 
 
 
 
 
 
Net income adjusted for preference share dividend
 
$
1.47

 
$
1.50

 
$
3.06

 
$
3.60

 
Operating income adjusted for preference share dividend
 
$
1.09

 
$
1.37

 
$
2.88

 
$
3.67

Diluted earnings per ordinary share
 
 
 
 
 
 
 
 
 
Net income adjusted for preference share dividend
 
$
1.43

 
$
1.45

 
$
2.95

 
$
3.47

 
Operating income adjusted for preference share dividend
 
$
1.05

 
$
1.34

 
$
2.78

 
$
3.53

Weighted average number of ordinary shares outstanding (in millions)
 
66.716

 
71.129

 
67.303

 
71.126

Weighted average number of ordinary shares outstanding and dilutive potential ordinary shares (in millions)
 
68.562

 
73.398

 
69.959

 
73.703

Book value per ordinary share
 
$
41.33

 
$
42.90

 
$
41.33

 
$
42.90

Diluted book value per ordinary share
 
$
40.43

 
$
41.53

 
$
40.43

 
$
41.53

Ordinary shares outstanding at end of the period (in millions)
 
65.701

 
71.012

 
65.701

 
71.012

Ordinary shares outstanding and dilutive potential ordinary shares at end of the period (in millions)
 
67.171

 
73.341

 
67.171

 
73.341

 
See pages 7 and 23 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.


6


ASPEN INSURANCE HOLDINGS LIMITED
 
 
Return On Average Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
(in US$ millions except for percentages)
 
September 30, 2013
 
September 30, 2012
 
September 30, 2013
 
September 30, 2012
 
 
 
 
 
 
 
 
 
 
 
Average shareholders' equity
$
3,234.9

 
$
3,494.7

 
$
3,338.0

 
$
3,335.8

Average preference shares
(555.6
)
 
(513.6
)
 
(536.6
)
 
(449.6
)
Average ordinary shareholders' equity
$
2,679.3

 
$
2,981.1

 
$
2,801.4

 
$
2,886.2

Return on average equity:
 
 
 
 
 
 
 
 
Net income adjusted for preference share dividend
3.7
%
 
3.6
%
 
7.6
%
 
8.9
%
 
Operating income adjusted for preference share dividend
2.7
%
 
3.3
%
 
6.9
%
 
9.0
%
Annualized return on average equity:
 
 
 
 
 
 
 
 
Net income
14.8
%
 
14.4
%
 
10.1
%
 
11.9
%
 
Operating income
 
10.8
%
 
13.2
%
 
9.2
%
 
12.0
%
Components of return on average equity:
 
 
 
 
 
 
 
 
Return on average equity from underwriting activity (1)
1.7
%
 
2.3
%
 
4.0
%
 
5.7
%
 
Return on average equity from investment and other activity (2)
1.1
%
 
1.2
%
 
3.3
%
 
4.0
%
 
Pre-tax operating income return on average equity
2.8
%
 
3.5
%
 
7.3
%
 
9.7
%
 
Post-tax operating income return on average equity (3)
2.7
%
 
3.3
%
 
6.9
%
 
9.0
%
 
 
 
 
 
 
 
 
 
 
 
See page 23 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.


7


ASPEN INSURANCE HOLDINGS LIMITED
 
 
Consolidated Underwriting Results by Operating Segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30, 2013
 
Three Months Ended September 30, 2012
(in US$ millions except for percentages)
Reinsurance
 
Insurance
 
Total
 
Reinsurance
 
Insurance
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross written premiums
$
219.5

 
$
362.1

 
$
581.6

 
$
259.5

 
$
298.9

 
$
558.4

Net written premiums
218.4

 
323.6

 
542.0

 
256.9

 
250.2

 
507.1

Gross earned premiums
268.6

 
356.5

 
625.1

 
299.8

 
302.0

 
601.8

Net earned premiums
255.7

 
288.6

 
544.3

 
279.6

 
236.6

 
516.2

Losses and loss adjustment expenses
122.2

 
168.0

 
290.2

 
117.1

 
137.9

 
255.0

Policy acquisition expenses
49.1

 
61.4

 
110.5

 
55.7

 
47.4

 
103.1

General and administrative expenses
34.6

 
49.5

 
84.1

 
33.6

 
42.8

 
76.4

Underwriting income
$
49.8

 
$
9.7

 
$
59.5

 
$
73.2

 
$
8.5

 
$
81.7

Net investment income
 
 
 
 
45.0

 
 
 
 
 
48.6

Net realized and unrealized investment gains (1)
 
 
 
 
13.4

 
 
 
 
 
2.7

Corporate expenses
 
 
 
 
(14.8
)
 
 
 
 
 
(14.3
)
Other income
 
 
 
 
1.6

 
 
 
 
 
4.5

Interest expense
 
 
 
 
(7.7
)
 
 
 
 
 
(7.8
)
Net realized and unrealized foreign exchange gains (2)
 
 
 
 
13.3

 
 
 
 
 
7.7

Income before income taxes
 
 
 
 
$
110.3

 
 
 
 
 
$
123.1

Income tax expense
 
 
 
 
(2.9
)
 
 
 
 
 
(8.0
)
Net income
 
 
 
 
$
107.4

 
 
 
 
 
$
115.1

Ratios
 
 
 
 
 
 
 
 
 
 
 
Loss ratio
47.8
%
 
58.2
%
 
53.3
%
 
41.9
%
 
58.3
%
 
49.4
%
 Policy acquisition expense ratio
19.2
%
 
21.3
%
 
20.3
%
 
19.9
%
 
20.0
%
 
20.0
%
 General and administrative expense ratio (3)
13.5
%
 
17.2
%
 
18.2
%
 
12.0
%
 
18.1
%
 
17.6
%
Expense ratio
32.7
%
 
38.5
%
 
38.5
%
 
31.9
%
 
38.1
%
 
37.6
%
Combined ratio
80.5
%
 
96.7
%
 
91.8
%
 
73.8
%
 
96.4
%
 
87.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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.
 
 
 
 
 
 
 
 

8


ASPEN INSURANCE HOLDINGS LIMITED
Consolidated Underwriting Results by Operating Segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2013
 
Nine Months Ended September 30, 2012
(in US$ millions except for percentages)
 
Reinsurance
 
Insurance
 
Total
 
Reinsurance
 
Insurance
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross written premiums
 
$
957.7

 
$
1,084.6

 
$
2,042.3

 
$
1,033.5

 
$
973.6

 
$
2,007.1

Net written premiums
 
907.5

 
844.2

 
1,751.7

 
963.2

 
759.3

 
1,722.5

Gross earned premiums
 
828.9

 
1,000.7

 
1,829.6

 
890.8

 
848.8

 
1,739.6

Net earned premiums
 
788.2

 
811.0

 
1,599.2

 
832.6

 
692.4

 
1,525.0

Losses and loss adjustment expenses
 
394.9

 
497.4

 
892.3

 
386.4

 
414.7

 
801.1

Policy acquisition expenses
 
161.0

 
161.3

 
322.3

 
166.8

 
134.4

 
301.2

General and administrative expenses
 
97.2

 
134.0

 
231.2

 
92.6

 
126.3

 
218.9

Underwriting income
 
$
135.1

 
$
18.3

 
$
153.4

 
$
186.8

 
$
17.0

 
$
203.8

Net investment income
 
 
 
 
 
139.2

 
 
 
 
 
153.8

Net realized and unrealized investment gains/(losses) (1)
 
 
 
 
 
29.4

 
 
 
 
 
(1.8
)
Corporate expenses
 
 
 
 
 
(42.0
)
 
 
 
 
 
(40.1
)
Other income
 
 
 
 
 
3.0

 
 
 
 
 
7.1

Interest expense
 
 
 
 
 
(23.2
)
 
 
 
 
 
(23.2
)
Net realized and unrealized foreign exchange (losses) (2)
 
 
 
 
 
(10.7
)
 
 
 
 
 
(1.6
)
Income before income tax
 
 
 
 
 
$
249.1

 
 
 
 
 
$
298.0

Income tax expense
 
 
 
 
 
(9.8
)
 
 
 
 
 
(19.6
)
Net income
 
 
 
 
 
$
239.3

 
 
 
 
 
$
278.4

Ratios
 
 
 
 
 
 
 
 
 
 
 
 
Loss ratio
 
50.1
%
 
61.3
%
 
55.8
%
 
46.4
%
 
59.9
%
 
52.5
%
 Policy acquisition expense ratio
 
20.4
%
 
19.9
%
 
20.2
%
 
20.0
%
 
19.4
%
 
19.8
%
 General and administrative expense ratio (3)
 
12.3
%
 
16.5
%
 
17.1
%
 
11.1
%
 
18.2
%
 
17.0
%
Expense ratio
 
32.7
%
 
36.4
%
 
37.3
%
 
31.1
%
 
37.6
%
 
36.8
%
Combined ratio
 
82.8
%
 
97.7
%
 
93.1
%
 
77.5
%
 
97.5
%
 
89.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(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
Reinsurance Segment - Quarterly Results
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in US$ millions except for percentages)
 
Q3 2013
 
Q2 2013
 
Q1 2013
 
Q4 2012
 
Q3 2012
 
Q2 2012
 
Q1 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross written premiums
 
$
219.5

 
$
298.6

 
$
439.6

 
$
194.4

 
$
259.5

 
$
299.8

 
$
474.2

Net written premiums
 
218.4

 
288.6

 
400.5

 
193.7

 
256.9

 
276.8

 
429.5

Gross earned premiums
 
268.6

 
288.4

 
271.9

 
317.2

 
299.8

 
300.8

 
290.2

Net earned premiums
 
255.7

 
275.8

 
256.7

 
299.8

 
279.6

 
282.0

 
271.0

Net losses and loss adjustment expenses
 
122.2

 
158.4

 
114.3

 
248.9

 
117.1

 
133.7

 
135.6

Policy acquisition expenses
 
49.1

 
56.6

 
55.3

 
41.0

 
55.7

 
59.3

 
51.8

General and administrative expenses
 
34.6

 
30.4

 
32.2

 
31.3

 
33.6

 
30.0

 
29.0

Underwriting income/(loss)
 
$
49.8

 
$
30.4

 
$
54.9

 
$
(21.4
)
 
$
73.2

 
$
59.0

 
$
54.6

Ratios
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss ratio
 
47.8
%
 
57.4
%
 
44.5
%
 
83.0
%
 
41.9
%
 
47.4
%
 
50.0
%
 Policy acquisition expense ratio
 
19.2
%
 
20.5
%
 
21.5
%
 
13.7
%
 
19.9
%
 
21.0
%
 
19.1
%
 General and administrative expense ratio
 
13.5
%
 
11.0
%
 
12.5
%
 
10.4
%
 
12.0
%
 
10.6
%
 
10.7
%
Expense ratio
 
32.7
%
 
31.5
%
 
34.0
%
 
24.1
%
 
31.9
%
 
31.6
%
 
29.8
%
Combined ratio
 
80.5
%
 
88.9
%
 
78.5
%
 
107.1
%
 
73.8
%
 
79.0
%
 
79.8
%


10


ASPEN INSURANCE HOLDINGS LIMITED
Insurance Segment - Quarterly Results
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in US$ millions except for percentages)
 
Q3 2013
 
Q2 2013
 
Q1 2013
 
Q4 2012
 
Q3 2012
 
Q2 2012
 
Q1 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross written premiums
 
$
362.1

 
$
388.7

 
$
333.8

 
$
381.8

 
$
298.9

 
$
366.8

 
$
307.9

Net written premiums
 
323.6

 
324.1

 
196.5

 
330.7

 
250.2

 
305.1

 
204.0

Gross earned premiums
 
356.5

 
331.3

 
312.9

 
328.2

 
302.0

 
279.9

 
266.9

Net earned premiums
 
288.6

 
268.2

 
254.2

 
258.7

 
236.6

 
231.4

 
224.4

Net losses and loss adjustment expenses
 
168.0

 
175.0

 
154.4

 
188.5

 
137.9

 
128.4

 
148.4

Policy acquisition expenses
 
61.4

 
50.6

 
49.3

 
39.0

 
47.4

 
42.7

 
44.3

General and administrative expenses
 
49.5

 
42.1

 
42.4

 
41.9

 
42.8

 
42.1

 
41.4

Underwriting income/(loss)
 
$
9.7

 
$
0.5

 
$
8.1

 
$
(10.7
)
 
$
8.5

 
$
18.2

 
$
(9.7
)
Ratios
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss ratio
 
58.2
%
 
65.2
%
 
60.7
%
 
72.9
%
 
58.3
%
 
55.5
%
 
66.1
%
 Policy acquisition expense ratio
 
21.3
%
 
18.9
%
 
19.4
%
 
15.1
%
 
20.0
%
 
18.5
%
 
19.7
%
 General and administrative expense ratio
 
17.2
%
 
15.7
%
 
16.7
%
 
16.2
%
 
18.1
%
 
18.2
%
 
18.4
%
Expense ratio
 
38.5
%
 
34.6
%
 
36.1
%
 
31.3
%
 
38.1
%
 
36.7
%
 
38.1
%
Combined ratio
 
96.7
%
 
99.8
%
 
96.8
%
 
104.2
%
 
96.4
%
 
92.2
%
 
104.2
%


11


ASPEN INSURANCE HOLDINGS LIMITED
 
 
Written and Earned Premiums by Segment and Line of Business
 
 
(in US$ millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross Written Premiums
Q3 2013
 
Q2 2013
 
Q1 2013
 
Q4 2012
 
Q3 2012
 
Q2 2012
 
Q1 2012
 
Reinsurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property Catastrophe Reinsurance
$
37.8

 
$
83.2

 
$
145.5

 
$
23.8

 
$
42.7

 
$
91.9

 
$
152.9

 
Other Property Reinsurance
70.8

 
91.0

 
79.5

 
61.3

 
92.6

 
81.0

 
78.5

 
Casualty Reinsurance
68.6

 
63.4

 
125.3

 
55.7

 
76.3

 
66.6

 
138.9

 
Specialty Reinsurance
42.3

 
61.0

 
89.3

 
53.6

 
47.9

 
60.3

 
103.9

 
Total Reinsurance
$
219.5

 
$
298.6

 
$
439.6

 
$
194.4

 
$
259.5

 
$
299.8

 
$
474.2

 
Insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property Insurance
$
52.8

 
$
74.0

 
$
54.6

 
$
53.7

 
$
51.5

 
$
82.1

 
$
52.4

 
Casualty Insurance
74.7

 
63.9

 
43.7

 
61.3

 
49.9

 
53.0

 
28.6

 
Marine, Energy and Transportation Insurance
112.9

 
143.8

 
136.8

 
145.4

 
102.2

 
133.7

 
149.6

 
Financial and Professional Lines Insurance
84.6

 
68.1

 
65.8

 
89.8

 
63.8

 
68.3

 
49.7

 
Programs
37.1

 
38.9

 
32.9

 
31.6

 
31.5

 
29.7

 
27.6

 
Total Insurance
$
362.1

 
$
388.7

 
$
333.8

 
$
381.8

 
$
298.9

 
$
366.8

 
$
307.9

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Gross Written Premiums
$
581.6

 
$
687.3

 
$
773.4

 
$
576.2

 
$
558.4

 
$
666.6

 
$
782.1

Net Written Premiums
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reinsurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property Catastrophe Reinsurance
$
37.6

 
$
75.2

 
$
124.0

 
$
23.9

 
$
43.7

 
$
76.0

 
$
123.5

 
Other Property Reinsurance
70.8

 
89.8

 
65.6

 
62.3

 
89.2

 
76.8

 
64.8

 
Casualty Reinsurance
67.7

 
62.6

 
123.1

 
53.9

 
76.1

 
66.5

 
137.3

 
Specialty Reinsurance
42.3

 
61.0

 
87.8

 
53.6

 
47.9

 
57.5

 
103.9

 
Total Reinsurance
$
218.4

 
$
288.6

 
$
400.5

 
$
193.7

 
$
256.9

 
$
276.8

 
$
429.5

 
Insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property Insurance
$
50.9

 
$
67.1

 
$
16.3

 
$
41.4

 
$
37.9

 
$
72.1

 
$
21.0

 
Casualty Insurance
61.6

 
56.2

 
24.6

 
43.6

 
35.5

 
42.1

 
20.0

 
Marine, Energy and Transportation Insurance
107.1

 
102.7

 
126.4

 
142.2

 
93.1

 
103.4

 
140.7

 
Financial and Professional Lines Insurance
69.3

 
64.3

 
2.9

 
82.0

 
57.9

 
59.0

 
(3.1
)
 
Programs
34.7

 
33.8

 
26.3

 
21.5

 
25.8

 
28.5

 
25.4

 
Total Insurance
$
323.6

 
$
324.1

 
$
196.5

 
$
330.7

 
$
250.2

 
$
305.1

 
$
204.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Net Written Premiums
$
542.0

 
$
612.7

 
$
597.0

 
$
524.4

 
$
507.1

 
$
581.9

 
$
633.5

Net Earned Premiums
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reinsurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property Catastrophe Reinsurance
$
60.4

 
$
65.1

 
$
58.7

 
$
83.3

 
$
62.3

 
$
60.8

 
$
62.9

 
Other Property Reinsurance
62.5

 
79.1

 
71.0

 
68.0

 
72.7

 
68.2

 
68.2

 
Casualty Reinsurance
78.9

 
75.2

 
66.6

 
88.1

 
82.3

 
88.1

 
66.9

 
Specialty Reinsurance
53.9

 
56.4

 
60.4

 
60.4

 
62.3

 
64.9

 
73.0

 
Total Reinsurance
$
255.7

 
$
275.8

 
$
256.7

 
$
299.8

 
$
279.6

 
$
282.0

 
$
271.0

 
Insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property Insurance
$
46.2

 
$
44.1

 
$
45.7

 
$
42.8

 
$
36.9

 
$
38.4

 
$
38.4

 
Casualty Insurance
44.5

 
40.7

 
34.6

 
32.5

 
29.6

 
29.9

 
26.3

 
Marine, Energy and Transportation Insurance
123.3

 
116.8

 
101.6

 
126.3

 
108.2

 
110.9

 
102.6

 
Financial and Professional Lines Insurance
52.5

 
45.9

 
51.0

 
47.0

 
45.4

 
39.9

 
51.5

 
Programs
22.1

 
20.7

 
21.3

 
10.1

 
16.5

 
12.3

 
5.6

 
Total Insurance
$
288.6

 
$
268.2

 
$
254.2

 
$
258.7

 
$
236.6

 
$
231.4

 
$
224.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Net Earned Premiums
$
544.3

 
$
544.0

 
$
510.9

 
$
558.5

 
$
516.2

 
$
513.4

 
$
495.4


12


ASPEN INSURANCE HOLDINGS LIMITED
 
Consolidated Statements of Changes in Shareholders' Equity
 
 
 
Nine Months Ended September 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

 
0.3

 
Dividends paid to non-controlling interest
 
—

 
(0.1
)
 
Net (loss) for the period
 
(0.3
)
 
(0.3
)
 
End of period
 
(0.1
)
 
(0.1
)
Additional paid-in capital
 
 
 
 
 
Beginning of period
 
1,516.7

 
1,385.0

 
New shares issued
 
16.7

 
21.5

 
Ordinary shares repurchased
 
(294.9
)
 
(51.9
)
 
Preference shares issued
 
270.4

 
154.5

 
Preference shares repurchased and cancelled
 
(230.0
)
 
—

 
Changes in redemption value of the PIERS
 
7.1

 
—

 
Share-based compensation
 
11.6

 
12.8

 
End of period
 
1,297.6

 
1,521.9

Retained earnings
 
 
 
 
 
Beginning of period
 
1,544.0

 
1,341.6

 
Net income for the period
 
239.3

 
278.4

 
Dividends paid on ordinary and preference shares
 
(62.1
)
 
(57.7
)
 
Changes in redemption value of the PIERS
 
(7.1
)
 
—

 
Proportion due to non-controlling interest
 
0.3

 
0.3

 
End of period
 
1,714.4

 
1,562.6

Accumulated other comprehensive income:
 
 
 
 
Cumulative foreign currency translation adjustments, net of taxes:
 
 
 
 
 
Beginning of period
 
112.7

 
124.2

 
Change for the period
 
(21.0
)
 
(15.8
)
 
End of period
 
91.7

 
108.4

Loss on derivatives:
 
 
 
 
 
Beginning of period
 
(0.5
)
 
(0.7
)
 
Reclassification to interest payable
 
0.2

 
0.3

 
End of period
 
(0.3
)
 
(0.4
)
Unrealized (depreciation)/appreciation on investments, net of taxes:
 
 
 
 
Beginning of period
 
315.2

 
305.4

 
Change for the period
 
(147.5
)
 
56.3

 
End of period
 
167.7

 
361.7

Total accumulated other comprehensive income
 
259.1

 
469.7

 
 
 
 
 
Total shareholders' equity
 
$
3,271.1

 
$
3,554.2


13


ASPEN INSURANCE HOLDINGS LIMITED
 
Consolidated Statements of Comprehensive Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(in US$ millions)
 
2013
 
2012
 
2013
 
2012
 
 
 
 
 
 
 
 
 
 
Net income
 
$
107.4

 
$
115.1

 
$
239.3

 
$
278.4

Other comprehensive income/(loss), net of taxes:
 
 
 
 
 
 
 
 
 
Available for sale investments:
 
 
 
 
 
 
 
 
 
    Reclassification adjustment for net realized (gains)/losses included in net income
 
(8.1
)
 
4.8

 
(18.6
)
 
5.1

 
    Change in net unrealized gains and losses on available for sale securities held
 
4.3

 
26.3

 
(128.9
)
 
51.2

 
    Loss on derivatives reclassified to interest expense
 
—

 
0.2

 
0.2

 
0.3

 
Change in foreign currency translation adjustment
 
3.4

 
(4.9
)
 
(21.0
)
 
(15.8
)
 
Other comprehensive (loss)/income
 
(0.4
)
 
26.4

 
(168.3
)
 
40.8

Comprehensive income
 
$
107.0

 
$
141.5

 
$
71.0

 
$
319.2



14


ASPEN INSURANCE HOLDINGS LIMITED
 
Condensed Consolidated Statements of Cash Flows
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
(in US$ millions)
2013
 
2012
 
2013
 
2012
 
 
 
 
 
 
 
 
 
 
Net cash from operating activities
$
184.8

 
$
185.6

 
$
433.0

 
$
345.1

Net cash (used in) investing activities
(109.0
)
 
(107.6
)
 
(393.2
)
 
(287.2
)
Net cash (used in)/from financing activities
(72.6
)
 
(26.5
)
 
(299.9
)
 
66.4

Effect of exchange rate movements on cash and cash equivalents
6.2

 
13.7

 
(5.2
)
 
10.8

Increase/(decrease) in cash and cash equivalents
9.4

 
65.2

 
(265.3
)
 
135.1

Cash at beginning of period
1,188.9

 
1,309.0

 
1,463.6

 
1,239.1

Cash at end of period
$
1,198.3

 
$
1,374.2

 
$
1,198.3

 
$
1,374.2



15


ASPEN INSURANCE HOLDINGS LIMITED
 
 
Reserves for Losses and Loss Adjustment Expenses
 
 
 
 
 
 
 
 
(in US$ millions)
For the Nine Months Ended September 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
(34.5
)
 
(9.0
)
Provision for losses and loss adjustment expenses for claims incurred
 
 
 
    Current period
979.5

 
1,375.9

    Prior period release
(87.2
)
 
(137.4
)
    Total incurred
892.3

 
1,238.5

 
 
 
 
Losses and loss adjustment expenses payments for claims incurred
(827.8
)
 
(1,080.0
)
 
 
 
 
Foreign exchange (gains)/losses
(37.3
)
 
32.6

 
 
 
 
Net loss and loss adjustment expenses reserves at the end of the period
4,273.4

 
4,280.7

Reinsurance recoverables on unpaid losses at the end of the period
442.2

 
499.0

Gross loss and loss adjustment expenses reserves at the end of the period
$
4,715.6

 
$
4,779.7



16


ASPEN INSURANCE HOLDINGS LIMITED
 
 
Reserves by Operating Segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As At September 30, 2013
 
As At December 31, 2012
(in US$ millions)
Gross
 
Reinsurance Recoverables
 
Net
 
Gross
 
Reinsurance Recoverables
 
Net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reinsurance
$
2,841.5

 
$
(123.5
)
 
$
2,718.0

 
$
2,983.7

 
$
(172.4
)
 
$
2,811.3

Insurance
1,874.1

 
(318.7
)
 
1,555.4

 
1,796.0

 
(326.6
)
 
1,469.4

Total losses and loss adjustment expense reserves
$
4,715.6

 
$
(442.2
)
 
$
4,273.4

 
$
4,779.7

 
$
(499.0
)
 
$
4,280.7



17


ASPEN INSURANCE HOLDINGS LIMITED
Prior Year Reserve Releases
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in US$ millions)
Three Months Ended September 30, 2013
 
Three Months Ended September 30, 2012
 
 
 
Gross
 
 Reinsurance Recoverables
 
Net
 
Gross
 
 Reinsurance Recoverables
 
Net
Reinsurance
$
46.6

 
$
(14.3
)
 
$
32.3

 
$
22.0

 
—

 
$
22.0

Insurance
9.4

 
(8.1
)
 
1.3

 
4.6

 
3.2

 
7.8

Release in reserves for prior years during the period
$
56.0

 
$
(22.4
)
 
$
33.6

 
$
26.6

 
$
3.2

 
$
29.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30, 2013
 
Nine Months Ended September 30, 2012
 
 
 
Gross
 
 Reinsurance Recoverables
 
Net
 
Gross
 
 Reinsurance Recoverables
 
Net
Reinsurance
$
90.7

 
$
(14.2
)
 
$
76.5

 
$
59.2

 
$
5.0

 
$
64.2

Insurance
2.0

 
8.7

 
10.7

 
23.4

 
7.8

 
31.2

Release in reserves for prior years during the period
$
92.7

 
$
(5.5
)
 
$
87.2

 
$
82.6

 
$
12.8

 
$
95.4



18


ASPEN INSURANCE HOLDINGS LIMITED
 
Worldwide Natural Catastrophe Exposures: Major Peril Zones
 
 
 
 
 
 
1 in 100 year tolerance: 17.5% of total shareholders' equity
 
1 in 250 year tolerance: 25.0% of total shareholders' equity
 
 
 
 
 
 
 
 
 
Based on shareholders' equity of $3,271.1 million as at September 30, 2013. The estimates reflect Aspen's own view of the modelled maximum losses ("PML's") 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 PML’s due to limitations in one or more of the models or uncertainties in the application of policy terms and limits.

 


19


ASPEN INSURANCE HOLDINGS LIMITED
Consolidated Investment Portfolio
(in US$ millions)
Fair Market Value
Marketable Securities - Available For Sale
As At September 30, 2013
 
As At June 30,
2013
 
As At March 31, 2013
 
As At December 31, 2012
 
As At September 30, 2012
U.S. government securities
$
1,021.1

 
$
1,118.4

 
$
1,175.3

 
$
1,126.3

 
$
1,068.6

U.S. agency securities
281.5

 
308.7

 
314.0

 
308.6

 
311.7

Municipal securities
29.9

 
33.1

 
38.0

 
39.7

 
39.9

Corporate securities
2,018.1

 
2,027.3

 
2,006.0

 
2,038.5

 
1,929.7

Foreign government securities
822.2

 
755.7

 
644.6

 
641.0

 
628.5

Asset-backed securities
116.5

 
86.8

 
74.5

 
53.8

 
63.8

FDIC Guaranteed
—

 
—

 
—

 
—

 
3.0

Bonds backed by foreign government
78.9

 
87.0

 
85.3

 
101.1

 
139.1

Mortgage-backed securities
1,176.7

 
1,125.6

 
1,155.4

 
1,248.3

 
1,363.5

  Total fixed income maturities
5,544.9

 
5,542.6

 
5,493.1

 
5,557.3

 
5,547.8

Short-term investments
148.3

 
231.7

 
352.3

 
431.5

 
494.7

Equity securities
163.2

 
183.2

 
209.1

 
200.1

 
197.1

  Total Available For Sale
$
5,856.4

 
$
5,957.5

 
$
6,054.5

 
$
6,188.9

 
$
6,239.6

 
 
 
 
 
 
 
 
 
 
 
 
Marketable Securities - Trading
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government securities
$
31.1

 
$
39.0

 
$
27.7

 
$
9.4

 
$
38.8

U.S. agency securities
0.2

 
0.2

 
0.2

 
0.2

 
2.0

Municipal securities
0.6

 
0.6

 
2.8

 
2.9

 
2.9

Corporate securities
471.0

 
365.6

 
395.9

 
414.4

 
368.2

Foreign government securities
136.3

 
27.5

 
27.3

 
26.3

 
21.8

Mortgage-backed securities
—

 
—

 
—

 
—

 
0.3

Asset-backed securities
6.6

 
5.7

 
5.8

 
2.9

 
1.3

Bank loans
72.8

 
65.2

 
9.1

 
—

 
—

  Total fixed income maturities
718.6

 
503.8

 
468.8

 
456.1

 
435.3

Short-term investments
0.2

 
10.6

 
0.8

 
2.4

 
10.6

Equity securities
278.3

 
229.9

 
205.0

 
—

 
—

 Total Trading
$
997.1

 
$
744.3

 
$
674.6

 
$
458.5

 
$
445.9

Other investments
$
46.1

 
$
44.9

 
$
45.0

 
$
45.0

 
$
34.8

Cash
1,198.3

 
1,188.9

 
1,212.7

 
1,463.6

 
1,374.2

Accrued interest
48.5

 
48.3

 
45.0

 
47.7

 
49.7

 
  Total Cash and Accrued Interest
$
1,246.8

 
$
1,237.2

 
$
1,257.7

 
$
1,511.3

 
$
1,423.9

 
 
 
 
 
 
 
 
 
 
 
 
 
  Total Cash and Investments
$
8,146.4

 
$
7,983.9

 
$
8,031.8

 
$
8,203.7

 
$
8,144.2


20


ASPEN INSURANCE HOLDINGS LIMITED
 
 
Investment Analysis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in US$ millions except for percentages)
Q3 2013
 
Q2 2013
 
Q1 2013
 
Q4 2012
 
Q3 2012
 
Q2 2012
 
Q1 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income from fixed income investments and cash
$
42.0

 
$
42.0

 
$
45.0

 
$
49.8

 
$
46.9

 
$
51.0

 
$
51.0

Net investment income from equity securities
3.0

 
3.9

 
3.3

 
1.3

 
1.7

 
1.8

 
1.4

Net investment income
45.0

 
45.9

 
48.3

 
51.1

 
48.6

 
52.8

 
52.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net realized and unrealized investment gains/(losses) excluding the interest rate swaps
17.7

 
(6.6
)
 
15.2

 
5.7

 
12.9

 
2.2

 
9.0

Net realized investment (losses)/gains from the interest rate swaps
(4.3
)
 
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)
13.4

 
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)
(9.7
)
 
(138.4
)
 
(17.5
)
 
(37.9
)
 
32.2

 
36.6

 
(11.7
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total return/(loss) on investments
$
48.7

 
$
(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)
2.82
%
 
2.71
%
 
2.80
%
 
2.88
%
 
3.04
%
 
3.19
%
 
3.31
%
Fixed income portfolio duration (excluding the impact of the interest rate swaps)
3.5 years
 
3.4 years
 
3.2 years
 
3.0 years
 
2.8 years
 
2.9 years
 
3.0 years


21


 
ASPEN INSURANCE HOLDINGS LIMITED
 
Book Value Per Ordinary Share
 
 
 
 
 
 
 
 
 
 
 
 
(in US$ millions except for number of shares and per share amounts)
September 30, 2013
 
June 30, 2013
 
March 31, 2013
 
December 31, 2012
 
September 30, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
$
3,271.1

 
$
3,234.9

 
$
3,339.6

 
$
3,488.4

 
$
3,554.2

 
Less: Preference shares
 
(555.6
)
 
(555.6
)
 
(508.1
)
 
(508.1
)
 
(508.1
)
 
Total
 
 
 
$
2,715.5

 
$
2,679.3

 
$
2,831.5

 
$
2,980.3

 
$
3,046.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ordinary shares outstanding (in millions)
 
65.701

 
67.003

 
65.634

 
70.754

 
71.012

 
Ordinary shares and dilutive potential ordinary shares (in millions)
 
67.171

 
68.934

 
69.611

 
73.312

 
73.341

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Book value per ordinary share
 
$
41.33

 
$
39.99

 
$
43.14

 
$
42.12

 
$
42.90

 
Diluted book value per ordinary share
 
$
40.43

 
$
38.87

 
$
40.68

 
$
40.65

 
$
41.53

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 Company's ordinary shares at the average market price during the period of calculation.
 

22


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
 
Nine Months Ended
(in US$ millions except where stated)
September 30, 2013
 
September 30, 2012
 
September 30, 2013
 
September 30, 2012
 
 
 
 
 
 
 
 
Net income as reported
$
107.4

 
$
115.1

 
$
239.3

 
$
278.4

Changes in redemption value of the PIERS
—

 
—

 
(7.1
)
 
—

Preference share dividends
(9.5
)
 
(8.6
)
 
(26.1
)
 
(22.6
)
Net income available to ordinary shareholders
97.9

 
106.5

 
206.1

 
255.8

Add (deduct) after tax income:
 
 
 
 
 
 
 
 
Net foreign exchange (gains)/losses
(12.0
)
 
(6.1
)
 
9.5

 
1.8

 
Net realized (gains)/losses on investments
(13.4
)
 
(2.5
)
 
(28.9
)
 
2.6

 
Changes in redemption value of the PIERS
—

 
—

 
7.1

 
—

Operating income after tax available to ordinary shareholders
72.5

 
97.9

 
193.8

 
260.2

Tax on operating income
1.6

 
6.2

 
10.5

 
18.6

Operating income before tax available to ordinary shareholders
$
74.1

 
$
104.1

 
$
204.3

 
$
278.8

Basic earnings per ordinary share
 
 
 
 
 
 
 
Net income adjusted for preference share dividend
$
1.47

 
$
1.50

 
$
3.06

 
$
3.60

Add (deduct) after tax income:
 
 
 
 
 
 
 
 
Net foreign exchange (gains)/losses
(0.18
)
 
(0.09
)
 
0.14

 
0.03

 
Net realized (gains)/losses on investments
(0.20
)
 
(0.04
)
 
(0.43
)
 
0.04

 
Changes in redemption value of the PIERS
—

 
—

 
0.11

 
—

Operating income adjusted for preference shares dividend
$
1.09

 
$
1.37

 
$
2.88

 
$
3.67

Diluted earnings per ordinary share
 
 
 
 
 
 
 
Net income adjusted for preference share dividend
$
1.43

 
$
1.45

 
$
2.95

 
$
3.47

Add (deduct) after tax income:
 
 
 
 
 
 
 
 
Net foreign exchange (gains)/losses
(0.18
)
 
(0.08
)
 
0.14

 
0.02

 
Net realized (gains)/losses on investments
(0.20
)
 
(0.03
)
 
(0.41
)
 
0.04

 
Changes in redemption value of the PIERS
—

 
—

 
0.10

 
—

Operating income adjusted for preference shares dividend
$
1.05

 
$
1.34

 
$
2.78

 
$
3.53

 
 
 
 
 
 
 
 
 
 
 
 

23