Aspen Reports Strong Financial Results for the First Six Months of 2023
- Net income increased by 352% to $219 million (June 30, 2022: $48 million)
- Operating income* increased by 47% to $191 million (June 30, 2022: $130 million)
- Annualized operating return on average equity* of 22% (June 30, 2022: 14%)
- Underwriting income increased by 33% to $208 million (June 30, 2022: $157 million), resulting in a combined ratio of 83.8% (June 30, 2022: 88.2%)
- Aspen Capital Markets’ total fee income increased by 28% to $61 million (June 30, 2022: $47 million)
- Net investment income increased by 46% to $129 million (June 30, 2022: $89 million)
Hamilton, Bermuda, August 22, 2023 -Aspen Insurance Holdings Limited (“Aspen”) today reported results for the six months ended June 30, 2023.
We are pleased to report a strong set of results for the first half of 2023, which saw our operating income* and net income continue to increase, by 47% to $191 million and by 352% to $219 million, respectively.
We are particularly encouraged to report another period of improved underwriting performance, with our reported combined ratio improving to 83.8% and underwriting income of $208 million. This result reflects the sustained impact of our highly disciplined approach and the benefits of the well-diversified portfolio we have deliberately constructed.
Our gross written premium was $2,125 million, which was slightly lower compared to the same period last year. This is the result of our continuing effort to use current favorable trading conditions to further reduce exposure and manage volatility, while holding our discipline in certain classes where pricing and terms do not meet our return objectives, as demonstrated by our improved underwriting income. While broadly trading conditions are strong, resulting in a 12% rate increase across our whole portfolio, our focus remains on rate adequacy, terms and conditions rather than just rate change. Growing and maintaining our profitability as conditions shift will always be our first priority.
Positive performance across Insurance, Reinsurance and Investments
Our diverse portfolio across our two underwriting segments, Insurance and Reinsurance, allows us to flexibly manage our business. Our underwriting income was well balanced across these two segments and their positive performance was further strengthened by continued expense discipline across the Group, with general and administrative expenses decreasing by 9% to $169 million, notwithstanding inflationary pressures on our cost base.
* Non-GAAP financial measures are used throughout this release, such as Operating Income. For additional information and reconciliation of non-GAAP financial measures, refer to the end of this press release. Refer to “Cautionary Statement Regarding Forward-Looking Statements” at the end of this press release.
Our net investment income of $129 million saw an increase of 46%, as a result of active repositioning of our investments to take advantage of higher interest rates, with limited increase in investment risk.
Continued growth in our capital markets franchise
Aspen Capital Markets continues to be an important differentiator, enabling us to offer a broader range of solutions while also generating attractive fee income. In the first half of the year, it generated total fee income of $61 million (June 30, 2022: $47 million), which is recorded within the underwriting result as a decrease to acquisition expenses, driven by further growth in assets under management to $1.3 billion (June 30, 2022: $1.0 billion).
Strengthening the team
We have made a number of hires across the different areas of the business. This is a reflection of our continuously improving business, as we strengthen our leadership teams shaping Aspen for the future. Notable hires in the period were: John Welch, appointed as Chief Underwriting Officer, Reinsurance, and a member of the Group Executive Committee; Yelena La Forgia who joined Aspen as Chief Financial Officer, Insurance and US; Robert Tartaglia who was appointed as Chief Operations Officer, Insurance; and Peter Grant who was appointed Chief Finance Transformation Officer.
Encouraging results for a strong 2023
In the first half of the year, we again saw significant rate increases across our portfolio, and the outlook remains favorable. Our relentless focus on underwriting discipline and managing volatility means we are well placed to continue to take advantage of current market conditions. We have an enviable international franchise: our leading Insurance, Reinsurance and Capital Market’s businesses and established platforms across the US, UK, Lloyd’s and Bermuda give us the tools to unlock further value and access new opportunities. We look to the future, confident we can deliver on our objective of being a top quartile specialty (re)insurer.
Mark Cloutier, Group Executive Chairman and Chief Executive Officer