Aspen Insurance Holdings Limited Reports First Quarter 2004 Financial Results
May 06 2004 - 4:17PM
PR Newswire (US)
Aspen Insurance Holdings Limited Reports First Quarter 2004
Financial Results * Net income of $85.0 million for first quarter
2004 HAMILTON, Bermuda, May 6 /PRNewswire-FirstCall/ -- Aspen
Insurance Holdings Limited today reported net income of $85.0
million, or $1.18 per diluted share, for the three months ended
March 31, 2004. Gross written premiums were $640.2 million for the
first quarter 2004. The combined ratio was 66% for the first
quarter 2004. Chris O'Kane, chief executive officer, said, "We had
an outstanding quarter. Our well-rated portfolio continues to
deliver strong returns and cash flow, starting us off on an
excellent footing for 2004. I am confident that through our
diversified portfolio, strong infrastructure and excellent people
we can continue to extract the best possible returns." Net
investment income was $12.0 million for the first quarter 2004. The
Company reports separately on its reinsurance and insurance
operations. Gross written premiums for the reinsurance segment were
$558.9 million for the first quarter 2004. The reinsurance
operations reported a combined ratio of 61% for the first quarter
2004. Gross written premiums for the insurance segment were $81.3
million for the first quarter 2004. The insurance operations
reported a combined ratio of 81% for the first quarter 2004.
Shareholders' equity increased from $1,299 million at December 31,
2003 to $1,393 million at March 31, 2004. Earnings conference call
Aspen will hold a conference call today to discuss its first
quarter 2004 financial results today, May 6 at 5:30 PM (EDT).
Investors may participate in the live conference call by dialing
800-473-6123 (toll-free domestic) or 973-582-2706 (international);
passcode: 4677183. Please call to register at least 10 minutes
before the conference call begins. A replay of the call will be
available for 30 days on Aspen's website at http://www.aspen.bm/
and for two days via the telephone starting approximately two hours
following the live call on May 6, 2004, and can be accessed at
877-519-4471 (toll-free domestic) or 973-341-3080 (international);
passcode: 4677183. In addition, a financial supplement relating to
the Company's financial results for the first quarter 2004 is
available in the Investor Relations section of the Company's
website at http://www.aspen.bm/. About Aspen Insurance Holdings
Limited Aspen Insurance Holdings Limited was established in June
2002. Aspen is a Bermudian holding company that provides property
and casualty reinsurance in the global market, property and
liability insurance principally in the United Kingdom and surplus
lines insurance in the United States. Aspen's operations are
conducted through its wholly-owned subsidiaries located in London,
Bermuda and the United States: Aspen Insurance UK Limited, Aspen
Insurance Limited and Aspen Specialty Insurance Company. Aspen's
reinsurance segment consists of property reinsurance, casualty
reinsurance and specialty reinsurance lines of business. Aspen's
insurance segment consists of commercial property insurance and
commercial liability insurance lines of business. Aspen's principal
existing shareholders include The Blackstone Group, Candover
Partners Limited, Wellington Underwriting plc and Credit Suisse
First Boston Private Equity. For more information about Aspen,
please visit the Company's website at http://www.aspen.bm/.
Application of the Safe Harbor of the Private Securities Litigation
Reform Act of 1995: This press release may contain, and Aspen may
from time-to-time make, written or oral "forward-looking
statements" within the meaning of the U.S. 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,"
"project," "anticipate," "seek," "will," "project," "estimate,"
"may," "continue," and similar expressions of a future or
forward-looking nature. All forward-looking statements rely on a
number of assumptions concerning future events and are subject to a
number of uncertainties and other factors, many of which are
outside the Company's control that could cause actual results to
differ materially from such statements. Important events that could
cause the actual results to differ include, but are not limited to:
the impact of acts of terrorism and acts of war and related
legislations; the possibility of greater frequency or severity of
or unanticipated losses from natural or man-made catastrophes; the
effectiveness of the Company's loss limitation methods; changes in
the availability, cost or quality of reinsurance or retrocessional
coverage; the loss of key personnel; a decline in the operating
subsidiaries' ratings with Standard & Poor's, A.M. Best or
Moody's; changes in general economic conditions; increased
competition on the basis of pricing, capacity, coverage terms or
other factors; decrease in demand for the Company's insurance or
reinsurance products and cyclical downturn of the industry; and
changes in governmental regulation or tax laws in the jurisdictions
where the Company conducts business. 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
for the year ended December 31, 2003, filed with the U.S.
Securities and Exchange Commission. 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. SUMMARY OF RESULTS - CONSOLIDATED INCOME
STATEMENT Three Months Three Months Ended Ended (in US $ millions)
March 31, 2004 March 31, 2003 UNDERWRITING REVENUES Gross premiums
written 640.2 577.7 Premiums ceded (130.8) (168.6) Net premiums
written 509.4 409.1 Change in unearned premiums (203.6) (287.5) Net
premiums earned 305.8 121.6 UNDERWRITING EXPENSES Losses and loss
expenses (124.1) (70.7) Acquisition expenses (59.0) (26.3) General
and administrative expenses (18.1) (7.4) Total Underwriting
Expenses (201.2) (104.4) Underwriting Income 104.6 17.2 OTHER
OPERATING REVENUE Net investment income 12.0 4.9 Interest expense
(0.4) 0.0 Other income 0.0 0.2 Total other operating revenue 11.6
5.1 OPERATING INCOME BEFORE TAX 116.2 22.3 OTHER Net exchange
(losses) (0.8) 0.0 Net realized investment (losses) (0.3) 0.0
INCOME BEFORE INCOME TAX 115.1 22.3 Income taxes (30.1) (7.1) NET
INCOME AFTER TAX 85.0 15.2 Dividends Paid (2.1) Retained Income
82.9 15.2 Components of Net Income (after tax) Operating income
85.7 15.2 Net realized investment (losses) (0.2) 0.0 Net realized
exchange losses (0.5) 0.0 NET INCOME AFTER TAX 85.0 15.2 PER SHARE
DATA Three Three Months Months (In US$ except for number of shares)
Ended Ended March 31, March 31, 2004 2003 Basic earnings per share
Net income 1.23 0.27 Operating income 1.24 0.27 Diluted earnings
per share Net income 1.18 0.27 Operating income 1.19 0.27 Weighted
average common shares outstanding 69,178,203 56,919,780 Weighted
average common shares outstanding and dilutive potential common
shares 72,020,678 56,919,780 Book value per share 20.0 15.6 Diluted
book value (treasury stock method) 19.2 15.6 Common shares
outstanding at end of the period 69,174,303 56,919,780 Common
shares outstanding and dilutive potential common shares at end of
the period 72,046,579 56,919,780 Consolidated Balance Sheet (in US$
millions) March 31, 2004 December 31, 2003 ASSETS Investments Fixed
Maturities 1,211.2 1,048.1 Short term investments 661.7 568.2 Total
Investments 1,872.9 1,616.3 Cash and cash equivalents 185.8 230.8
Reinsurance Recoverables Unpaid losses 50.7 43.6 Ceded unearned
premiums 127.9 48.9 Receivables Underwriting premiums 713.9 496.5
Other 37.5 40.8 Deferred policy acquisition costs 148.8 94.6 Office
properties and equipment 0.9 0.4 Intangible assets 6.6 6.6 Total
Assets 3,145.0 2,578.5 LIABILITIES Insurance Reserves Losses and
loss adjustment expenses 643.4 525.8 Unearned premiums 867.3 572.4
Total insurance reserves 1,510.7 1,098.2 Payables Reinsurance
premiums 112.1 59.9 Accrued expenses and other payables 89.4 81.7
Bank debt 40.0 40.0 Total Liabilities 1,752.2 1,279.8 SHAREHOLDERS'
EQUITY Ordinary shares 1,091.8 1,090.8 Retained earnings 263.6
180.7 Accumulated other comprehensive income, net of taxes 37.4
27.2 Total shareholders' equity 1,392.8 1,298.7 Total Liabilities
and Shareholders' Equity 3,145.0 2,578.5 SUMMARIZED CASH FLOW (in
US$ millions) Three months Three months ended March ended March 31,
20034 31, 2003 Net cash from operating activities 208.6 62.8 Net
cash from investing activities (254.0) 98.0 Net cash from financing
activities (2.1) (0.3) Effect of exchange rate movements on cash
and cash equivalents 2.5 (2.8) Increase in cash and cash
equivalents: Cash at beginning of the period 230.8 9.6 Cash at end
of the period 185.8 167.3 Non-GAAP Financial Measures In presenting
the Company'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
the Company's results of operations in a manner that allows for a
more complete understanding of the underlying trends in the
Company'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 the financial
supplement, which can be obtained from Aspen's website at
http://www.aspen.bm/. (1) Annualized Operating Return on Average
Equity (ROAE) is a non-GAAP financial measure. Annualized Operating
Return on Average Equity is calculated using 1) operating income,
as defined below and 2) excludes from average equity, the average
after tax unrealized appreciation or depreciation on investments
and the average after tax unrealized foreign exchange gains or
losses. Unrealized appreciation (depreciation) on foreign exchange
on investments is primarily the result of interest rate movements
and the resultant impact on fixed income securities, and unrealized
appreciation (depreciation) is the result of exchange rate
movements between the US dollar and the British pound. Such
appreciation (depreciation) is not related to management actions or
operational performance, nor is it likely to be realized. Therefore
the Company believes that excluding this unrealized appreciation
(depreciation) provides a more consistent and useful measurement of
operating performance, which supplements GAAP information. Average
equity is calculated as the arithmetic average on a monthly basis
for the stated periods. The Company presents ROAE as a measure that
it is commonly recognized as a standard of performance by
investors, analysts, rating agencies and other users of its
financial information. See page 15 of the Company's financial
supplement for a reconciliation of operating income to net income
and page 12 for a reconciliation of average equity. (2) Operating
income is a non-GAAP financial measure. Operating income is an
internal performance measure used by the Company in the management
of its operations and represents after-tax operational results
excluding, as applicable, after-tax net realized capital gains or
losses and after-tax net foreign exchange gains or losses. The
Company excludes after tax net realized capital gains or losses and
after-tax net foreign exchange gains or losses 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. The Company believes these
amounts are largely independent of its business and underwriting
process and including them distorts the analysis of trends in its
operations. In addition to presenting net income determined in
accordance with GAAP, the Company believes that showing operating
income enables investors, analysts, rating agencies and other users
of its financial information to more easily analyze the Company's
results of operations in a manner similar to how management
analyzes the Company's underlying business performance. Operating
income should not be viewed as a substitute for GAAP net income.
Please see page 15 of the company's financial supplement for a
reconciliation of operating income to net income. The company's
financial supplement can be obtained from Aspen's website at
http://www.aspen.bm/. (3) Diluted book value per share is a
non-GAAP financial measure. The Company has included diluted book
value per share because it takes into account the effect of
dilutive securities; therefore, the Company believes it is a better
measure of calculating shareholder returns than book value per
share. Please see page 15 of the company's financial supplement for
a reconciliation of diluted book value per share to basic book
value per share. The company's financial supplement can be obtained
from Aspen's website at http://www.aspen.bm/. DATASOURCE: Aspen
Insurance Holdings Limited CONTACT: U.S.: Jason Thompson,
+1-212-371-5999, or Erin Moore, +1-917-412-3447, both of The
Abernathy MacGregor Group; or U.K.: Brian Hudspith of The Maitland
Consultancy, +44-20-7379-5151; or Investors: Julian Cusack, Chief
Financial Officer of Aspen Insurance Holdings Limited,
+1-441-295-8201 Web site: http://www.aspen.bm/
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