Aspen’s 2023 net income hits $485m, CoR improves to 87.5%

Aspen has revealed that net income available to ordinary shareholders increased significantly in 2023, climbing to $485 million, while its combined ratio improved 5.5 points to 87.5%.

Meanwhile, Aspen’s underwriting result for the full year 2023 improved by $136 million to $327 million.

The firm explained that the increase was driven by significantly lower current-year catastrophe losses ($187 million), an improvement in net acquisition costs ($52 million) and a net operating expense ($32 million).

Aspen’s 2023 operating income was $368 million, up from $202 million in the previous year, with the firm boasting an annualised operating return on average equity of 20.2%.

Aspen’s investment income also improved by $88 million in 2023, which was attributed to the higher interest rate environment and reinvestment of maturing assets into higher-yielding core fixed income assets.

For the year, Aspen Capital Markets generated $136 million in total fee income from capital sourced across multiple lines and classes in both its insurance and reinsurance segments.

Aspen’s insurance segment delivered an increased underwriting income of $113 million and a combined ratio of 92.3% in 2023.

The firm explained that its strategy to reduce property exposure in this segment helped to limit the impact of industry catastrophe events during 2023, contributing to a reduction in the CAT loss ratio by 2.0 percentage points compared with prior year, which was also impacted by Hurricane Ian.

At the same time, Aspen’s reinsurance segment saw strong growth in underwriting income to $214 million and a combined ratio of 81.4%.

The firm noted that the main driver of improved performance was an 8.6 percentage points improvement in the loss ratio, driven by a 12.1 percentage point improvement in the catastrophe loss ratio as a result of initiatives to reduce exposure and volatility and lower number of large industry losses impacting reinsurance programs.

Mark Cloutier, Executive Chairman and Group Chief Executive Officer, commented, “We are pleased to report an excellent set of results for 2023.

“It is pleasing to note the quality of earnings we are now generating, with meaningful contributions from each of our core earning engines, underwriting, investments and capital markets fees.

“We believe we have reached a state where we are able to sustain strong ROEs across cycles through the very healthy mix in the sources of our earnings.”

Cloutier continued, “The combination of our “One Aspen Approach”, balance sheet strength, and capital markets capabilities, positions us with a distinct advantage in the specialty (re)insurance sector, with the scale being an important source of capacity to our customers while still maintaining the ability to be nimble, decisive, and opportunistic in response to changes in trading conditions and market opportunities.

“In a year that again saw our sector challenged by climate, geopolitical events, and socio-economic challenges, this fourth consecutive year of improved results gives us confidence we have the talent, strategy, platforms, and brand to continue to perform at the top of our class, delivering strong returns for our shareholders through changing market cycles and across a wide range of industry loss event scenarios.”

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