Aspen’s reinsurance GWP up significantly in Q2’24 on targeted casualty & specialty growth

Insurer and reinsurer Aspen Insurance Holdings Limited grew its reinsurance gross written premiums (GWP) 42% in the second quarter of 2024 to $566.2 million, as the segment generated underwriting income of $44.8 million with a combined ratio of 86.3%.

Aspen’s insurance and reinsurance businesses performed well in the second quarter, contributing to group-wide GWP growth of 17% to almost $1.3 billion for the period.

Across the group, net written premiums (NWP) rose 14% to $811 million and net earned premiums (NEP) increased 9% to $705 million.

Total underwriting income fell by 6.6% year-on-year to $80.3 million, while adjusted underwriting income increased by 11% to $93.9 million, as the combined ratio moved from 86.7% to 88.7%.

On the asset side of the balance sheet, net investment income increased from $69.7 million to $82.5 million. All in all, Aspen has reported net income of $69 million for Q2’24 compared with $89.6 million a year earlier, as operating income increased to $97.6 million from $82.9 million.

Aspen has highlighted the significant growth in its reinsurance business in the quarter, where the firm maximised on opportunities within casualty and specialty.

Alongside the solid growth in GWP to $566.2 million, the reinsurance segment’s NWP increased by 32% to $385.6 million, and NPE swelled 18% to $327.1 million.

Current accident year net losses and loss expenses rose to $136 million from $123.2 million, as catastrophe losses increased to $43.2 million from $15.2 million.

The reinsurance segment’s underwriting income fell slightly to $44.8 million from $53.7 million, although adjusted underwriting income increased from $47.5 million to $58.3 million. Given the higher loss ratio on the back of a higher catastrophe load, the reinsurance combined ratio moved from 80.7% to 86.3%, so remains solid.

Within the insurance segment, GWP growth of 1.9% to $684.2 million was less dramatic than the reinsurance growth, as insurance NWP increased by 2% to $425.3 million and NPE rose 2.6% year-on-year to $378.3 million.

Insurance current accident year net losses and loss expenses increased to $229.6 million from $219.4 million, as catastrophe losses came down by $1.6 million to $5 million.

The insurance segment’s underwriting income increased slightly to $35.5 million from $32.3 million, while adjusted underwriting income fell slightly to $35.6 million from $37.5 million. The improved loss ratio saw the insurance combined ratio strengthen to 90.6% from 91.3%.

Mark Cloutier, Executive Chairman and Group Chief Executive Officer, said: “Aspen continues on its path of delivering consistently strong performance. For the six months ended June 30, we reported top line growth, and a healthy annualized operating return on average equity and combined ratio. The results for both the second quarter and first six months demonstrate the robustness of our platform, and are in line with our expectations, given the major industry wide loss events in the period.

“In the first half of the year, we continued to match interesting business opportunities with our disciplined underwriting approach, which resulted in a 17% growth in our gross written premium to $2.5 billion (HY 2023: $2.1 billion). In addition to our underwriting performance, Aspen Capital Markets generated fee income of $68 million, representing a 13% growth, and we reported net investment income of $159 million, an increase of 23% from prior year. This resulted in operating income of $201 million up by 5%.

“Our adjusted combined operating ratio of 86.5% (HY 2023: 84.8%) reflects the impact of industry event major loss activity year over year, principally in the first quarter of the year compared to the prior year period.

“Our view on trading conditions remains generally optimistic, and we believe there is ample opportunity for continued profitable growth within the construct of our current portfolio and appetite.”

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