Diluted Book Value Per Share between $44.60
and $44.80; Up 4.4-4.9% from March 31, 2014
Diluted Operating Earnings Per Share between
$1.30 and $1.35
Diluted Earnings Per Share between $1.70 and
$1.75
Annualized Operating ROE between 12.0% and
12.8%
Annualized Net Income ROE between 16.0% and
16.8%
Aspen Insurance Holdings Limited (“Aspen”) (NYSE:AHL) announced
today its preliminary financial results for the quarter ended June
30, 2014. Aspen will report final results for the quarter on July
23, 2014.
For the second quarter of 2014 Aspen expects the following
results:
- Diluted Book Value per Share at June
30, 2014 between $44.60 and $44.80; up 4.4-4.9% from March 31,
2014
- Diluted Operating Earnings per Share
between $1.30 and $1.35
- Diluted Earnings per Share between
$1.70 and $1.75
- Gross Written Premiums between $775 and
$780 million
- Combined Ratio between 90.0% and 91.0%
or 89.0% to 90.0% excluding bid defense costs1
- Net favorable reserve development
equating to between 4.5 and 5.5 combined ratio points
- Annualized Operating Return on Equity
between 12.0% and 12.8%
- Annualized Net Income ROE between 16.0%
and 16.8%
Chris O’Kane, Chief Executive Officer, commented,
“Our results this quarter reinforce the strong momentum
evidenced by Aspen in the first quarter. The continued excellent
performance across our businesses gives us confidence in the
diversity, growth, quality and profitability of our platforms. We
remain intensely focused on the achievement of our strategic and
financial objectives for 2014 and beyond and are excited about
seeing our shareholders benefit from the investments we have made
in our business.”
Aspen will discuss its second quarter results and outlook for
2014 on a conference call on Thursday, July 24, 2014 beginning at
9:00AM EDT.
To participate in the July 24 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 60476327
To listen live online
Aspen will provide a live webcast on Aspen’s website at
www.aspen.co.
To download the materials
The earnings press release and a detailed financial supplement
will also be published on Aspen’s 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 60476327
The recording will be also available at www.aspen.co on the
Event Calendar page within the Investor Relations section.
1 The Combined Ratio includes catastrophe losses equating to
between 3.5-4.0 combined ratio points.
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, 2013, Aspen reported $10.2 billion
in total assets, $4.7 billion in gross reserves, $3.3 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 & Poor’s, an “A” (“Excellent”) by A.M.
Best and an “A2” (“Good”) by Moody’s.
Cautionary Statements Concerning Forward-Looking
Statements
This press release contains written, and Aspen may make related
oral, "forward-looking statements" within the meaning of the U.S.
federal securities laws. These statements are made pursuant to
common law doctrine and, to the extent applicable, 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," “assume,” "estimate," "may," "continue," "guidance,"
“objective,” “outlook,” “trends,” “future,” “could,” “would,”
“should,” “target,” and similar expressions of a future or
forward-looking nature.
The preliminary results preannounced in this release are
forward-looking statements of particular financial measures and no
inferences should be made in relation to other financial measures,
outlook or guidance that Aspen may disclose when the final second
quarter and six month results are announced on July 23. 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 Aspen’s control that could cause actual results
to differ materially from such statements.
Forward-looking statements do not reflect the potential impact
of any future collaboration, acquisition, merger, disposition,
joint venture or investments that Aspen may enter into or make, and
the risks, uncertainties and other factors relating to such
statements might also relate to the counterparty in any such
transaction if entered into or made by Aspen.
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: our ability to
successfully implement steps to further optimize the business
portfolio, ensure capital efficiency and enhance investment
returns; 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
assumptions and uncertainties underlying reserve levels that may be
impacted by future payments for settlements of claims and expenses
or by other factors causing adverse or favorable development; 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 highly competitive insurance and
reinsurance industry; increased competition from existing insurers
and reinsurers and from alternative capital providers and
insurance-linked funds and collateralized special purpose insurers
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;
changes in general economic conditions, including inflation,
deflation, 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; our ability to
adequately model and price the effect of climate cycles and climate
change; any intervening legislative or governmental action and
changing judicial interpretation and judgments on insurers’
liability to various risks; the effectiveness of our risk
management loss limitation methods, including our reinsurance
purchasing; 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, acts of war
and related legislation; any changes in our reinsurers’ credit
quality and the amount and timing of reinsurance recoverables;
changes in the availability, cost or quality of reinsurance or
retrocessional coverage; the continuing and uncertain impact of the
current depressed lower growth 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 Moody’s; 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; changes in our ability to
exercise capital management initiatives (including our share
repurchase program) or to arrange banking 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; changes in accounting principles or
policies or in the application of such accounting principles or
policies; Aspen or Aspen Bermuda Limited 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 and 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 Aspen's Annual Report on
Form 10-K as filed with the U.S. Securities and Exchange Commission
on February 20, 2014 and in Aspen’s Quarterly Report on Form 10-Q
as filed with the U.S. Securities and Exchange Commission on May 1,
2014. 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. The actuarial range of reserves and management's
best estimate represents a distribution from our internal capital
model for reserving risk based on our then current state of
knowledge and explicit and implicit assumptions relating to the
incurred pattern of claims, the expected ultimate settlement
amount, inflation and dependencies between lines of business. 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 Aspen’s ultimate losses
will remain within the stated amounts.
Non-GAAP Financial Measures
In presenting Aspen's preliminary 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 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. In this release, Aspen provides non-GAAP
financial information regarding its expected financial results for
the second quarter of 2014. A reconciliation of such non-GAAP
financial measures to their respective most directly comparable
GAAP financial measures is not accessible at this time because
Aspen believes it is not possible to finalize particular
information which can fluctuate significantly within or without a
range and may have a significant impact on the GAAP financial
measures. The information that is being finalized includes net
foreign exchange gains and losses and realized gains and losses in
investments. A reconciliation of operating income to net income,
average ordinary shareholders’ equity to average shareholders’
equity and diluted and basic operating earnings per share to basic
earnings per share will be provided in Aspen’s quarterly financial
supplement to be issued with Aspen’s final quarterly earnings
announcement to be released on July 23, 2014. At such time, Aspen’s
financial supplement can be obtained from the Investor Relations
section of Aspen's website at www.aspen.co.
(1) Annualized Operating Return on Average Equity (“Operating
ROE”) is a non-GAAP financial measure. Operating ROE 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 and the total amount of non-controlling interest.
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.
(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
certain non-recurring items. In the second quarter 2014,
non-recurring items included costs associated with defending the
unsolicited approach from Endurance Specialty Holdings Ltd. in the
amount of $5.3 million.
Aspen excludes these above items from its calculation of
operating income because they are either not expected to recur and
therefore are not reflective of underlying performance or 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 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.
(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, which assumes that
the proceeds received from the exercise of options will be used to
purchase Aspen’s ordinary shares at the average market price during
the period of calculation.
(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.
(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.
Aspen has defined catastrophe losses in 2014 as losses associated
with winter storms in the U.S., snowstorms in Japan and flooding in
the U.K. Aspen has defined losses in the comparative period in 2013
as losses associated with flooding in Central Europe, Canada and
India, and tornadoes and hailstorms in the U.S.
For further
information:Please visit www.aspen.co or
contact:InvestorsAspenKerry Calaiaro, +1-646-502-1076Senior
Vice President, Investor RelationsKerry.Calaiaro@aspen.coorKathleen
de Guzman, +1-646-289-4912Vice President, Investor
Relationskathleen.deGuzman@aspen.coorInnisfree M&A
IncorporatedArthur Crozier/Jennifer Shotwell/Larry Miller+1-212-750
5833orMediaAspenSteve Colton, +44 20 7184 8337Head of
CommunicationsSteve.Colton@aspen.coorNorth America – Sard Verbinnen
& CoPaul Scarpetta or Jamie Tully+1-212-687-8080orInternational
– Citigate Dewe RogersonPatrick Donovan or Caroline Merrell+44 20
7638
9571Patrick.Donovan@citigatedr.co.ukCaroline.Merrell@citigatedr.co.uk
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