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Aspen News

Aspen announces preliminary estimate of fourth quarter 2017 underwriting loss and initial assessment of the impact of U.S. Tax Reform

25th January

Aspen announced today a preliminary estimate of approximately $135 million in pre-tax losses, net of reinsurance and reinstatement premiums, related to wildfires in California in the fourth quarter of 2017. The estimated losses are predominantly attributed to Aspen’s Reinsurance segment.

Aspen expects to record an underwriting loss of approximately $245 million in the fourth quarter of 2017. These results reflect the natural catastrophe losses described above as well as an increased frequency of mid-sized and attritional losses primarily in Aspen’s Insurance segment. These include property and fire-related losses in the U.K. and U.S. and, to a lesser extent, cyber losses and an increase in a previously reported surety loss. Aspen's reserves for losses and loss adjustment expenses remain strong and the expected fourth quarter 2017 underwriting loss includes a release of reserves from prior years.

Chris O’Kane, Chief Executive Officer, commented: “We are deeply disappointed with our financial performance in 2017. We have taken a number of actions to improve our underwriting performance and expect to see the impact of these reflected in our 2018 underwriting year results and beyond. We believe our capital position is appropriate to support our ongoing business and underpins our financial strength ratings.”

Updated loss estimates and full operating results for the fourth quarter of 2017 will be reflected in Aspen’s press release containing its fourth quarter 2017 financial results, which are scheduled for release on Wednesday, February 7, 2018, following the close of the New York Stock Exchange.

Aspen’s preliminary estimates of losses in the fourth quarter of 2017 involve the exercise of considerable judgment and are based, among other factors, on a review of the individual treaties and policies expected to be impacted, information available to date from clients and brokers, market intelligence, initial loss reports, modeled loss projections and exposure analysis. Due to the complexity of losses from natural catastrophes and the uncertainty associated with Aspen’s assumptions and the preliminary information used to prepare these estimates, Aspen’s actual losses from these natural catastrophes may differ materially from the preliminary estimates provided above.

Based on its initial assessment of the Tax Cuts and Jobs Act of 2017 (“U.S. Tax Reform”), Aspen does not anticipate a significant impact on its net income in 2018.