Aspen posts strong underwriting gains for 2024 as net income rises

Bermuda-based Aspen Insurance Holdings has reported an improved underwriting result for the fourth quarter and full year 2024, despite higher catastrophe losses in its insurance and reinsurance segments for both periods.

Group-wide, underwriting income increased by 102.8% to $143 million in Q4 2024 and rose by 5.8% to $345.8 million for full year 2024.

Top-line growth was solid for the carrier in 2024, with gross written premiums (GWP) rising 17.6% to more than $1 billion in Q4’24, and by more than 16% to $4.6 billion for the full year. Net premiums written (NPW) also increased for both periods, by 19% to $717 million for the quarter and by 14% to $2.9 billion for the year. Net premiums earned totalled $820 million in Q4’24, up 23% year-on-year, and for the year rose to $2.9 billion, an increase of 10.5%.

The quarter’s combined ratio strengthened from 89.4% to 82.5%, and for the full year deteriorated slightly to 87.9% from 87.5% in 2023.

Net investment income increased to $79.1 million from $68.4 million for the quarter, and rose to $318 million from $275.7 million for the full year, driven by the active repositioning of the firm’s investments to take advantage of higher interest rates.

Across the group, net income increased by 8% to $248.6 million but for the year decreased by 9% to $486.1 million. Operating income rose by 49% from Q4’23 to $145 million in Q4’24, and for the year jumped 18% to $432.5 million.

Before delving into the segment results, it’s worth highlighting Aspen’s loss estimate for the Los Angeles, California wildfires, which the firm says is within expectations with a range of between $50 million and $75 million, net of reinsurance and reinstatement premiums, based on industry losses of $35 billion to $45 billion.

Starting with the company’s reinsurance business, GWP increased 4% in Q4 and 24% in FY to $289 million and $1.9 billion, respectively. For the quarter, Aspen notes growth in casualty and property catastrophe lines driven by strategic line size growth, favorable renewals pricing with existing clients, and reinstatement premiums from Hurricanes Milton and Helene. For the year, Aspen says premium growth was driven by expansion across all lines, most prominent in casualty and specialty lines.

Reinsurance NWP declined 3.5% in the quarter to $223.7 million but increased by 16.2% for the full year to $1.3 billion. Net earned premiums rose 30.9% to $380.4 million in Q4’24 and increased 13.1% to $1.3 billion for FY’24.

Catastrophe losses totalled $37.8 million for Q4’24 compared with $10.8 million in the prior year, and for the full year increased to $146.8 million from $87 million in 2023. Aspen attributes the higher full year loss ratio of 56.8% to catastrophe losses relating to Hurricane Milton, flood events in Dubai, Baltimore bridge, Hurricane Helene, and various events in Canada. The loss ratio also reflects the amortization of the deferred gain under the LPT contract.

Reinsurance underwriting income increased by $44.6 million to $95.6 million in Q4’24, but fell by $18.5 million in the full year 2024 to $195.7 million, with a combined ratio of 74.9% and 85.1%, respectively.

Turning to the insurance segment, GWP rose 24% to $721.7 million in Q4’24 and rose 11.3% to $2.7 billion for the year, as NWP increased 33% to $493.3 million and 12.3% to $1.7 billion, respectively, while net earned premiums increased to $439.9 million in Q4’24 and increased to $1.6 billion for full year 2024.

Aspen attributes the top-line insurance segment growth to favorable market conditions in specialty and casualty lines, growth in carbon and also new partnerships in the year.

Catastrophe losses rose to $14.2 million in Q4’24 from $0.3 million in the prior year quarter, and for the full year increased to $40.5 million from $33.1 million.

Insurance underwriting income improved for both periods, rising by $27.9 million to $47.4 million in Q4’24, and increasing by $37.5 million to $150.1 million for full year 2024. The insurance segment combined ratio strengthened to 89.3% in Q4’24 from 94.9% in Q4’23, and for full year 2024 improved to 90.5% from 92.3% in 2023.

Mark Cloutier, Executive Chairman and Group Chief Executive Officer, said: “2024 has seen Aspen deliver yet another excellent set of results driven by healthy performance from each of our powerful earnings engines, underwriting, investments, and capital markets. 2025 is set to be an important year for Aspen, and one we enter with confidence with the business now demonstrating sustained strong performance.

“In a year challenged by several industry-wide major loss events, these results demonstrate how Aspen’s expert and disciplined underwriting, consistent investment performance and a growing contribution from Aspen Capital Markets are enabling us to successfully deliver against our strategy, resulting in an operating return on average equity of 19.4%.

“Ongoing political uncertainty and accelerated changes in technology, as well as a significant number of natural and weather-related catastrophes that are affecting millions of people, mean that the risk environment has never been more complex or challenging. I am proud of the role we at Aspen play in helping people, organizations and communities manage risk and recover from often tragic losses. Looking forward, we believe we have the product and service offerings, culture, market standing, and risk appetite that position us very well to continue to deliver much needed solutions to our customers and trading partners, while also achieving sustainable growth and consistent returns for our shareholders across a broad spectrum of industry loss event sets and market trading conditions.”

Christian Dunleavy, Group President, commented: “For the twelve months ended December 31, 2024, we saw gross written premiums grow by 16.2% to $4.6 billion. Aspen Capital Markets generated fee income of $169 million, an increase of 24.8%, while net investment income grew 15.3% to $318 million. The resulting operating income of $433 million represents an increase of 17.7% over the prior year. All of these results reinforce our core strategies and underscore the relevance and importance of our platforms, products, and service offerings in their respective markets.

“Alongside the strong, profitable growth we have achieved in 2024, we have maintained excellent underwriting performance, with an adjusted combined ratio of 86.8% and adjusted underwriting income increasing by 7.2% to $381 million. This performance is testament to our proactive portfolio construction, our distribution network and Aspen’s ability to nimbly allocate risk across our platforms, enhanced by Aspen Capital Markets, in response to the needs of our customers. Underpinned by our balance sheet strength, we are well placed to grow where we see opportunity, while delivering sustainable underwriting profitability for our shareholders.”

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