EX-99.2 4 a992-ahlq217.htm EXHIBIT 99.2 Exhibit


Exhibit 99.2    
 
 
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 FINANCIAL SUPPLEMENT
 
 As of June 30, 2017
 
 
 
 
Aspen Insurance Holdings Limited
 
 
 
 
This financial supplement is for information purposes only. It should be read in conjunction with other documents filed or to be filed by Aspen Insurance Holdings Limited with the United States Securities and Exchange Commission.
 
 
 
www.aspen.co
 
 
 
 
 
 
Investor Contact:
 
 
Aspen Insurance Holdings Limited
 
 
Mark Jones, Senior Vice President, Investor Relations
 
 
T: +1 646 289 4945
 
 
email: Mark.P.Jones@aspen.co
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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1


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ASPEN INSURANCE HOLDINGS LIMITED
 
Table Of Contents
 
 
 
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
8 -9
 
10 - 11
 
 
 
 
 
 
 
 
 
 
 



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ASPEN INSURANCE HOLDINGS LIMITED
 
Basis of Presentation
 
 
 
 
 
 
Definitions and presentations: All financial information contained herein is unaudited except for information for the fiscal year ended December 31, 2016. Unless otherwise noted, all data is in U.S. dollar millions, except for per share amounts, percentages and ratio information.
 
 
 
 
 
In presenting Aspen's results, management has included and discussed certain "non-GAAP financial measures". Management believes that these non-GAAP measures, which may be defined differently by other companies, better explain Aspen's results of operations in a manner that allows for a more complete understanding of the underlying trends in Aspen's business. However, these measures should not be viewed as a substitute for those determined in accordance with GAAP. The reconciliation of such non-GAAP financial measures to their respective most directly comparable GAAP financial measures is included in this financial supplement.
 
 
 
 
 
Operating income (a non-GAAP financial measure): Operating income is an internal performance measure used by Aspen in the management of its operations and represents after-tax operational results excluding, as applicable, after-tax net realized and unrealized gains or losses, including net realized and unrealized gains and losses on interest rate swaps, after-tax net foreign exchange gains or losses, including net realized and unrealized gains and losses from foreign exchange contracts, net realized gains or losses on investments, amortization of intangibles and certain non-recurring income and expenses. Operating income in the first half of 2017 also included the issue cost associated with the redemption of the 7.401% Perpetual Non-Cumulative Preference Shares.
 
 
 
 
 
Aspen excludes these items above from its calculation of operating income because they are either not expected to recur and therefore are not reflective of underlying performance or the amount of these gains or losses is heavily influenced by, and fluctuates in part, according to the availability of market opportunities. Aspen believes these amounts are largely independent of its business and underwriting process and including them would distort the analysis of trends in its operations. In addition to presenting net income determined in accordance with GAAP, Aspen believes that showing operating income enables investors, analysts, rating agencies and other users of its financial information to more easily analyze Aspen's results of operations in a manner similar to how management analyzes Aspen's underlying business performance. Operating income should not be viewed as a substitute for GAAP net income. Please see page 22 for a reconciliation of net income to operating income.
 
 
 
 
 
Annualized operating return on average equity (“Operating ROE”) (a non-GAAP financial measure): Operating ROE is calculated using operating income, as defined above, and average equity is calculated as the arithmetic average on a monthly basis for the stated periods of shareholders' equity excluding the aggregate value of the liquidation preferences of our preference shares net of issuance costs and the total amount of non-controlling interest.
 
 
 
 
 
Aspen presents Operating ROE as a measure that is commonly recognized as a standard of performance by investors, analysts, rating agencies and other users of its financial information. See page 22 for a reconciliation of operating income to net income and page 7 for a reconciliation of average ordinary shareholders' equity to average shareholders' equity.
 
 
 
 
 
Diluted book value per ordinary share (not a non-GAAP financial measure): Aspen has included diluted book value per ordinary share as it illustrates the effect on basic book value per share of dilutive securities thereby providing a better benchmark for comparison with other companies. Diluted book value per share is calculated using the treasury stock method as defined on page 21.
 
 
 
 
 
 
Diluted operating earnings per share and basic operating earnings per share (non-GAAP financial measures): Aspen believes that the presentation of diluted operating earnings per share and basic operating earnings per share supports meaningful comparison from period to period and the analysis of normal business operations. Diluted operating earnings per share and basic operating earnings per share are calculated by dividing operating income by the diluted or basic weighted average number of shares outstanding for the period. See page 22 for a reconciliation of basic earnings per share to diluted and basic operating earnings per share.
 
 
Accident year loss ratio excluding catastrophes (a non-GAAP financial measure): Aspen believes that the presentation of loss ratios excluding catastrophes and prior year reserve movements supports meaningful comparison from period to period of the underlying performance of the business.  Accident year loss ratios excluding catastrophes are calculated by dividing net losses excluding catastrophe losses and prior year reserve movements by net earned premiums excluding catastrophe-related reinstatement premiums.  Aspen has defined catastrophe losses in the first half of 2017 as losses associated with a tornado in Mississippi, Cyclone Debbie in Australia, and various other U.S. weather-related events. Catastrophe losses in the first half of 2016 were defined as losses associated with wildfires in Canada, weather-related events in the U.S. and several earthquakes. See pages 10 and 11 for a reconciliation of loss ratios to accident year loss ratios excluding catastrophes.
 
 
 
 
 
 
Underwriting ratios (GAAP financial measures): Aspen, along with others in the industry, uses underwriting ratios as measures of performance. The loss ratio is the ratio of net claims and claims adjustment expenses to net premiums earned. The acquisition expense ratio is the ratio of underwriting expenses (commissions, premium taxes, licenses and fees, as well as other underwriting expenses) to net premiums earned. The general and administrative expense ratio is the ratio of general and administrative expenses to net premiums earned. The combined ratio is the sum of the loss ratio, the acquisition expense ratio and the general and administrative expense ratio. These ratios are relative measurements that describe for every $100 of net premiums earned, the cost of losses and expenses, respectively. The combined ratio presents the total cost per $100 of earned premium. A combined ratio below 100% demonstrates underwriting profit; a combined ratio above 100% demonstrates underwriting loss.
 
 
 
 
 
GAAP combined ratios differ from U.S. statutory combined ratios primarily due to the deferral of certain third-party acquisition expenses for GAAP reporting purposes and the use of net premiums earned rather than net premiums written in the denominator when calculating the acquisition expense and the general and administrative expense ratios.

1


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ASPEN INSURANCE HOLDINGS LIMITED
Financial Highlights
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in US$ millions except for percentages, share and per share amounts)
 
2017
 
2016
 
Change
 
2017
 
2016
 
Change
Gross written premium
 
$
822.1

 
$
801.7

 
2.5
 %
 
$
1,820.1

 
$
1,777.4

 
2.4
 %
Net written premium
 
$
578.7

 
$
724.8

 
(20.2
)%
 
$
1,264.9

 
$
1,524.5

 
(17.0
)%
Net earned premium
 
$
562.0

 
$
680.8

 
(17.5
)%
 
$
1,143.1

 
$
1,343.9

 
(14.9
)%
Net income after tax
 
$
75.8

 
$
64.9

 
16.8
 %
 
$
172.3

 
$
179.3

 
(3.9
)%
Operating income after tax
 
$
39.2

 
$
34.1

 
15.0
 %
 
$
99.0

 
$
124.0

 
(20.2
)%
Net investment income
 
$
47.4

 
$
48.0

 
(1.3
)%
 
$
95.1

 
$
97.5

 
(2.5
)%
Underwriting income/(loss)
 
$
1.8

 
$
(4.5
)
 
140.0
 %
 
$
21.9

 
$
51.2

 
(57.2
)%
Earnings Per Share and Book Value Per Share
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per ordinary share
 
 
 
 
 
 
 
 
 
 
 
 
    Net income adjusted for preference share dividend and non-controlling interest
 
$
1.09

 
$
0.91

 
19.8
 %
 
$
2.48

 
$
2.64

 
(6.1
)%
    Operating income adjusted for preference share dividend and non-controlling interest
 
$
0.48

 
$
0.40

 
20.0
 %
 
$
1.29

 
$
1.73

 
(25.4
)%
Diluted earnings per ordinary share
 
 
 
 
 
 
 
 
 
 
 
 
    Net income adjusted for preference share dividend and non-controlling interest
 
$
1.07

 
$
0.89

 
20.2
 %
 
$
2.43

 
$
2.57

 
(5.4
)%
    Operating income adjusted for preference share dividend and non-controlling interest
 
$
0.47

 
$
0.40

 
17.5
 %
 
$
1.27

 
$
1.68

 
(24.4
)%
Weighted average number of ordinary shares outstanding (in millions of shares)
 
59.966

 
60.705

 
(1.2
)%
 
59.915

 
60.772

 
(1.4
)%
Diluted weighted average number of ordinary shares outstanding (in millions of shares)
 
61.023

 
62.192

 
(1.9
)%
 
61.096

 
62.263

 
(1.9
)%
Book value per ordinary share
 
$
49.34

 
$
50.71

 
(2.7
)%
 
$
49.34

 
$
50.71

 
(2.7
)%
Diluted book value per ordinary share
 
$
48.64

 
$
49.53

 
(1.8
)%
 
$
48.64

 
$
49.53

 
(1.8
)%
Ordinary shares outstanding at June 30, 2017 and June 30, 2016 (in millions of shares)
 
59.844

 
60.329

 
(0.8
)%
 
59.844

 
60.329

 
(0.8
)%
Diluted ordinary shares outstanding at June 30, 2017 and June 30, 2016 (in millions of shares)
 
60.712

 
61.767

 
(1.7
)%
 
60.712

 
61.767

 
(1.7
)%
Underwriting Ratios
 
 
 
 
 
 
 
 
 
 
 
 
Loss ratio
 
61.6
%
 
65.0
%
 
 
 
59.0
%
 
59.5
%
 
 
   Policy acquisition expense ratio
 
17.1
%
 
18.6
%
 
 
 
18.4
%
 
19.1
%
 
 
   General, administrative and corporate expense ratio
 
21.3
%
 
17.1
%
 
 
 
21.1
%
 
17.6
%
 
 
   General, administrative and corporate expense ratio (excluding amortization and non-recurring expenses)
 
21.0
%
 
17.1
%
 
 
 
20.7
%
 
17.6
%
 
 
Expense ratio
 
38.4
%
 
35.7
%
 
 
 
39.5
%
 
36.7
%
 
 
Expense ratio (excluding amortization and non-recurring expenses)
 
38.1
%
 
35.7
%
 
 
 
39.1
%
 
36.7
%
 
 
Combined ratio
 
100.0
%
 
100.7
%
 
 
 
98.5
%
 
96.2
%
 
 
Combined ratio (excluding amortization and non-recurring expenses)
 
99.7
%
 
100.7
%
 
 
 
98.1
%
 
96.2
%
 
 
Return On Equity
 
 
 
 
 
 
 
 
 
 
 
 
Average equity (1)
 
$
2,939.8

 
$
3,029.9

 
 
 
$
2,930.9

 
$
2,977.9

 
 
Return on average equity
 
 
 
 
 
 
 
 
 
 
 
 
   Net income adjusted for preference share dividend and non-controlling interest
 
2.2
%
 
1.8
%
 
 
 
5.1
%
 
5.4
%
 
 
   Operating income adjusted for preference share dividend and non-controlling interest
 
1.0
%
 
0.8
%
 
 
 
2.7
%
 
3.5
%
 
 
Annualized return on average equity
 
 
 
 
 
 
 
 
 
 
 
 
   Net income
 
8.8
%
 
7.2
%
 
 
 
10.2
%
 
10.8
%
 
 
   Operating income
 
4.0
%
 
3.2
%
 
 
 
5.4
%
 
7.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
See pages 7 and 22 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.
 
 
 
 
 
 
(1) Average equity excludes preference shares.
 
 
 
 
 
 
 
 
 
 
 
 

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ASPEN INSURANCE HOLDINGS LIMITED
Consolidated Statements of Operations - Quarterly Results
(in US$ millions except for percentages)
Q2 2017
 
Q1 2017
 
Q4 2016
 
Q3 2016
 
Q2 2016
 
Q1 2016
UNDERWRITING REVENUES
 
 
 
 
 
 
 
 
 
 
 
Gross written premiums
$
822.1

 
$
998.0

 
$
606.1

 
$
763.5

 
$
801.7

 
$
975.7

Premiums ceded
(243.4
)
 
(311.8
)
 
(175.3
)
 
(125.1
)
 
(76.9
)
 
(176.0
)
Net written premiums
578.7

 
686.2

 
430.8

 
638.4

 
724.8

 
799.7

Change in unearned premiums
(16.7
)
 
(105.1
)
 
181.6

 
42.6

 
(44.0
)
 
(136.6
)
Net earned premiums
562.0

 
581.1

 
612.4

 
681.0

 
680.8

 
663.1

UNDERWRITING EXPENSES
 
 
 
 
 
 
 
 
 
 
 
Losses and loss adjustment expenses
346.1

 
328.2

 
387.3

 
389.2

 
442.2

 
357.4

Amortization of deferred policy acquisition costs
96.3

 
113.7

 
141.1

 
130.9

 
126.7

 
130.2

General, administrative and corporate expenses
117.8

 
119.1

 
125.5

 
118.7

 
116.4

 
119.8

Total underwriting expenses
560.2

 
561.0

 
653.9

 
638.8

 
685.3

 
607.4

 
 
 
 
 
 
 
 
 
 
 
 
Underwriting income/(loss) including corporate expenses
1.8

 
20.1

 
(41.5
)
 
42.2

 
(4.5
)
 
55.7

 
 
 
 
 
 
 
 
 
 
 
 
Net investment income
47.4

 
47.7

 
43.2

 
46.4

 
48.0

 
49.5

Interest expense
(7.4
)
 
(7.4
)
 
(7.4
)
 
(7.3
)
 
(7.4
)
 
(7.4
)
Other (expenses)/income
(1.7
)
 
0.7

 
(1.3
)
 
(7.4
)
 
(1.0
)
 
(3.0
)
Total other revenue
38.3

 
41.0

 
34.5

 
31.7

 
39.6

 
39.1

 
 
 
 
 
 
 
 
 
 
 
 
Amortization and non-recurring expenses
(2.1
)
 
(2.2
)
 
(3.4
)
 
(6.3
)
 
—

 
—

Net realized and unrealized exchange (losses)/gains (1)
(3.0
)
 
(5.8
)
 
(5.6
)
 
11.4

 
(5.4
)
 
(20.1
)
Net realized and unrealized investment gains/(losses) (2)
42.0

 
46.2

 
(58.1
)
 
21.5

 
36.5

 
42.2

INCOME/(LOSS) BEFORE TAX
77.0

 
99.3

 
(74.1
)
 
100.5

 
66.2

 
116.9

Income tax expense
(1.2
)
 
(2.8
)
 
2.6

 
(4.9
)
 
(1.3
)
 
(2.5
)
NET INCOME/(LOSS) AFTER TAX
75.8

 
96.5

 
(71.5
)
 
95.6

 
64.9

 
114.4

Dividends paid on ordinary shares
(14.4
)
 
(13.2
)
 
(13.2
)
 
(13.3
)
 
(13.4
)
 
(12.8
)
Dividends paid on preference shares
(10.5
)
 
(10.5
)
 
(13.4
)
 
(9.5
)
 
(9.4
)
 
(9.5
)
Preference share redemption costs
—

 
(2.4
)
 
—

 
—

 
—

 
—

Proportion due to non-controlling interest
(0.1
)
 
(0.1
)
 
(0.1
)
 
0.2

 
(0.4
)
 
0.2

Retained income/(loss)
$
50.8

 
$
70.3

 
$
(98.2
)
 
$
73.0

 
$
41.7

 
$
92.3

 
 
 
 
 
 
 
 
 
 
 
 
Loss ratio
61.6
%
 
56.5
%
 
63.2
%
 
57.2
%
 
65.0
%
 
53.9
%
Policy acquisition expense ratio
17.1
%
 
19.6
%
 
23.0
%
 
19.2
%
 
18.6
%
 
19.6
%
General, administrative and corporate expense ratio
21.3
%
 
20.9
%
 
21.0
%
 
18.4
%
 
17.1
%
 
18.1
%
General, administrative and corporate expense ratio (excluding amortization and non-recurring expenses)
21.0
%
 
20.5
%
 
20.5
%
 
17.4
%
 
17.1
%
 
18.1
%
Expense ratio
38.4
%
 
40.5
%
 
44.0
%
 
37.6
%
 
35.7
%
 
37.7
%
Expense ratio (excluding amortization and non-recurring expenses)
38.1
%
 
40.1
%
 
43.5
%
 
36.6
%
 
35.7
%
 
37.7
%
Combined ratio
100.0
%
 
97.0
%
 
107.2
%
 
94.8
%
 
100.7
%
 
91.6
%
Combined ratio (excluding amortization and non-recurring expenses)
99.7
%
 
96.6
%
 
106.7
%
 
93.8
%
 
100.7
%
 
91.6
%
See pages 7 and 22 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.
(1) Includes the net realized and unrealized gains/(losses) from foreign exchange contracts.
(2) Includes the net realized and unrealized gains/(losses) from interest rate swaps.

3


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ASPEN INSURANCE HOLDINGS LIMITED
Consolidated Statements of Operations - Year To Date Results
(in US$ millions except for percentages)
 
Six Months Ended June 30,
 
 
2017
 
2016
UNDERWRITING REVENUES
 
 
 
Gross written premiums
 
$
1,820.1

 
$
1,777.4

Premiums ceded
 
(555.2
)
 
(252.9
)
Net written premiums
 
1,264.9

 
1,524.5

Change in unearned premiums
 
(121.8
)
 
(180.6
)
Net earned premiums
 
1,143.1

 
1,343.9

UNDERWRITING EXPENSES
 
 
 
 
Losses and loss adjustment expenses
 
674.3

 
799.6

Amortization of deferred policy acquisition costs
 
210.0

 
256.9

General, administrative and corporate expenses
 
236.9

 
236.2

Total underwriting expenses
 
1,121.2

 
1,292.7

 
 
 
 
 
Underwriting income including corporate expenses
 
21.9

 
51.2

 
 
 
 
 
Net investment income
 
95.1

 
97.5

Interest expense
 
(14.8
)
 
(14.8
)
Other expenses
 
(1.0
)
 
(4.0
)
Total other revenue
 
79.3

 
78.7

 
 
 
 
 
Amortization and non-recurring expenses
 
(4.3
)
 
—

Net realized and unrealized exchange (losses)(1)
 
(8.8
)
 
(25.5
)
Net realized and unrealized investment gains(2)
 
88.2

 
78.7

INCOME BEFORE TAX
 
176.3

 
183.1

Income tax expense
 
(4.0
)
 
(3.8
)
NET INCOME AFTER TAX
 
172.3

 
179.3

Dividends paid on ordinary shares
 
(27.6
)
 
(26.2
)
Dividends paid on preference shares
 
(21.0
)
 
(18.9
)
Preference share redemption costs
 
(2.4
)
 
—

Proportion due to non-controlling interest
 
(0.2
)
 
(0.2
)
Retained income
 
$
121.1

 
$
134.0

 
 
 
 
 
Loss ratio
 
59.0
%
 
59.5
%
 
Policy acquisition expense ratio
 
18.4
%
 
19.1
%
 
General, administrative and corporate expense ratio
 
21.1
%
 
17.6
%
 
General, administrative and corporate expense ratio (excluding amortization and non-recurring expenses)
 
20.7
%
 
17.6
%
Expense ratio
 
39.5
%
 
36.7
%
Expense ratio (excluding amortization and non-recurring expenses)
 
39.1
%
 
36.7
%
Combined ratio
 
98.5
%
 
96.2
%
Combined ratio (excluding amortization and non-recurring expenses)
 
98.1
%
 
96.2
%
 
 
See pages 7 and 22 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.
 
(1) Includes the net realized and unrealized gains/(losses) from foreign exchange contracts.
(2) Includes the net realized and unrealized gains/(losses) from interest rate swaps.

4


 
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Consolidated Balance Sheets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in US$ millions except for per share amounts)
 
June 30,
2017
 
March 31,
2017
 
December 31,
2016
 
September 30, 2016
 
June 30,
 2016
 
March 31,
2016
 
 
Investments
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed income securities
 
$
6,854.8

 
$
6,977.6

 
$
6,930.3

 
$
6,961.6

 
$
6,965.9

 
$
6,960.5

 
Equity securities
 
658.7

 
623.6

 
584.7

 
797.7

 
785.6

 
757.8

 
Other investments
 
3.9

 
5.0

 
12.1

 
13.0

 
8.7

 
8.9

 
Catastrophe bonds
 
28.3

 
41.8

 
42.5

 
17.8

 
21.5

 
46.1

 
Short-term investments
 
115.6

 
348.1

 
330.7

 
338.7

 
121.8

 
143.0

 
Total investments
 
7,661.3

 
7,996.1

 
7,900.3

 
8,128.8

 
7,903.5

 
7,916.3

 
Cash and cash equivalents
 
1,228.4

 
873.1

 
1,273.8

 
1,183.3

 
1,038.8

 
903.1

 
Reinsurance recoverables
 
 
 
 
 
 
 
 
 
 
 
 
 
Unpaid losses
 
779.4

 
635.8

 
560.7

 
419.8

 
410.4

 
366.0

 
Ceded unearned premiums
 
464.1

 
404.8

 
255.2

 
229.5

 
226.2

 
243.6

 
Receivables
 
 
 
 
 
 
 
 
 
 
 
 
 
Underwriting premiums
 
1,614.1

 
1,557.8

 
1,399.4

 
1,437.7

 
1,428.5

 
1,339.1

 
Other
 
106.1

 
120.7

 
95.5

 
131.6

 
124.6

 
117.9

 
Funds withheld
 
89.9

 
90.4

 
73.1

 
51.6

 
46.0

 
39.6

 
Deferred policy acquisition costs
 
364.6

 
367.5

 
358.4

 
388.2

 
409.1

 
407.7

 
Derivatives at fair value
 
22.1

 
5.2

 
7.2

 
6.3

 
12.9

 
10.9

 
Receivable for securities sold
 
13.6

 
25.7

 
1.6

 
10.8

 
30.0

 
1.9

 
Office properties and equipment
 
85.3

 
86.1

 
83.8

 
84.0

 
83.9

 
83.2

 
Taxation
 
7.2

 
—

 
0.5

 
—

 
—

 
—

 
Other assets
 
1.0

 
1.0

 
1.0

 
1.0

 
1.0

 
1.8

 
Intangible assets and goodwill
 
79.4

 
80.5

 
79.6

 
73.1

 
72.0

 
74.3

 
Total assets
 
$
12,516.5

 
$
12,244.7

 
$
12,090.1

 
$
12,145.7

 
$
11,786.9

 
$
11,505.4

 
LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance reserves
 
 
 
 
 
 
 
 
 
 
 
 
 
Losses and loss adjustment expenses
 
$
5,571.4

 
$
5,365.9

 
$
5,319.9

 
$
5,246.6

 
$
5,181.5

 
$
5,011.5

 
Unearned premiums
 
1,981.5

 
1,891.8

 
1,618.6

 
1,781.2

 
1,819.4

 
1,804.0

 
Total insurance reserves
 
7,552.9

 
7,257.7

 
6,938.5

 
7,027.8

 
7,000.9

 
6,815.5

 
Payables
 
 
 
 
 
 
 
 
 
 
 
 
 
Reinsurance premiums
 
316.7

 
362.9

 
345.3

 
182.8

 
142.7

 
148.9

 
Taxation
 
4.4

 
4.0

 
6.1

 
18.3

 
28.5

 
19.2

 
Accrued expenses and other payables
 
352.8

 
361.8

 
469.2

 
344.2

 
333.1

 
293.3

 
Liabilities under derivative contracts
 
8.6

 
4.3

 
18.4

 
6.5

 
11.5

 
17.6

 
Total payables
 
682.5

 
733.0

 
839.0

 
551.8

 
515.8

 
479.0

 
Loan notes issued by variable interest entities, at fair value
 
110.8

 
110.2

 
115.0

 
112.7

 
104.1

 
104.5

 
Long-term debt
 
549.4

 
549.4

 
549.3

 
549.3

 
549.3

 
549.3

 
Total liabilities
 
8,895.6

 
8,650.3

 
8,441.8

 
8,241.6

 
8,170.1

 
7,948.3

 
SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
 
 
 
 
Ordinary shares
 
0.1

 
0.1

 
0.1

 
0.1

 
0.1

 
0.1

 
Non-controlling interest
 
1.6

 
1.5

 
1.4

 
1.3

 
1.5

 
1.1

 
Preference shares
 
—

 
—

 
—

 
—

 
—

 
—

 
Additional paid-in capital
 
1,125.2

 
1,142.1

 
1,259.6

 
1,280.2

 
1,040.5

 
1,055.9

 
Retained earnings
 
2,516.2

 
2,465.4

 
2,392.3

 
2,490.6

 
2,417.6

 
2,375.9

 
Accumulated other comprehensive income, net of taxes
 
(22.2
)
 
(14.7
)
 
(5.1
)
 
131.9

 
157.1

 
124.1

 
Total shareholders’ equity
 
3,620.9

 
3,594.4

 
3,648.3

 
3,904.1

 
3,616.8

 
3,557.1

 
Total liabilities and shareholders’ equity
 
$
12,516.5

 
$
12,244.7

 
$
12,090.1

 
$
12,145.7

 
$
11,786.9

 
$
11,505.4

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Book value per ordinary share
 
$
49.34

 
$
48.79

 
$
47.68

 
$
51.58

 
$
50.71

 
$
49.45

 
Book value per diluted ordinary share
 
$
48.64

 
$
47.89

 
$
46.72

 
$
50.49

 
$
49.53

 
$
48.22

 
 

5


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ASPEN INSURANCE HOLDINGS LIMITED
Earnings Per Share and Book Value Per Share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
(in US$ except for number of shares)
 
June 30, 2017
 
June 30, 2016
 
June 30, 2017
 
June 30, 2016
 
 
 
 
 
 
 
 
 
 
 
Basic earnings per ordinary share
 
 
 
 
 
 
 
 
 
Net income adjusted for preference share dividend and non-controlling interest
 
$
1.09

 
$
0.91

 
$
2.48

 
$
2.64

 
Operating income adjusted for preference share dividend and non-controlling interest
 
$
0.48

 
$
0.40

 
$
1.29

 
$
1.73

Diluted earnings per ordinary share
 
 
 
 
 
 
 
 
 
Net income adjusted for preference share dividend and non-controlling interest
 
$
1.07

 
$
0.89

 
$
2.43

 
$
2.57

 
Operating income adjusted for preference share dividend and non-controlling interest
 
$
0.47

 
$
0.40

 
$
1.27

 
$
1.68

 
 
 
 
 
 
 
 
 
 
 
Weighted average number of ordinary shares outstanding (in millions)
 
59.966

 
60.705

 
59.915

 
60.772

Weighted average number of ordinary shares outstanding and dilutive potential ordinary shares (in millions)
 
61.023

 
62.192

 
61.096

 
62.263

 
 
 
 
 
 
 
 
 
Book value per ordinary share
 
$
49.34

 
$
50.71

 
$
49.34

 
$
50.71

Diluted book value per ordinary share
 
$
48.64

 
$
49.53

 
$
48.64

 
$
49.53

 
 
 
 
 
 
 
 
 
Ordinary shares outstanding at end of the period (in millions)
 
59.844

 
60.329

 
59.844

 
60.329

Ordinary shares outstanding and dilutive potential ordinary shares at end of the period (in millions)
 
60.712

 
61.767

 
60.712

 
61.767

 
See pages 7 and 22 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.


6


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ASPEN INSURANCE HOLDINGS LIMITED
 
 
 
 
Return On Average Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
(in US$ millions except for percentages)
 
June 30, 2017
 
June 30, 2016
 
June 30, 2017
 
June 30, 2016
 
 
 
 
 
 
 
 
 
 
 
Average shareholders' equity
$
3,607.7

 
$
3,587.0

 
$
3,617.4

 
$
3,535.0

Average non-controlling interest
(1.6
)
 
(1.3
)
 
(1.5
)
 
(1.3
)
Average preference shares
(666.3
)
 
(555.8
)
 
(685.0
)
 
(555.8
)
Average ordinary shareholders' equity
$
2,939.8

 
$
3,029.9

 
$
2,930.9

 
$
2,977.9

Return on average equity:
 
 
 
 
 
 
 
 
Net income adjusted for preference share dividend and non-controlling interest
2.2
%
 
1.8
 %
 
5.1
%
 
5.4
%
 
Operating income adjusted for preference share dividend and non-controlling interest
1.0
%
 
0.8
 %
 
2.7
%
 
3.5
%
Annualized return on average equity:
 
 
 
 
 
 
 
 
Net income
8.8
%
 
7.2
 %
 
10.2
%
 
10.8
%
 
Operating income
 
4.0
%
 
3.2
 %
 
5.4
%
 
7.0
%
Components of return on average equity:
 
 
 
 
 
 
 
 
Return on average equity from underwriting activity (1)
0.1
%
 
(0.1
)%
 
0.5
%
 
1.5
%
 
Return on average equity from investment and other activity (2)
0.9
%
 
0.9
 %
 
2.3
%
 
2.2
%
 
Pre-tax operating income return on average equity (3)
1.0
%
 
0.8
 %
 
2.8
%
 
3.7
%
 
Post-tax operating income return on average equity (4)
1.0
%
 
0.8
 %
 
2.7
%
 
3.5
%
 
 
 
 
 
 
 
 
 
 
 
See page 22 for a reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures.
 
 
 
 
(1) Calculated by using underwriting income.
 
 
 
 
(2) Calculated by using total other operating revenue and other income/(expense) adjusted for preference share dividends and non-controlling interest.
 
 
 
 
(3) Calculated by using operating income before tax adjusted for preference share dividends and non-controlling interest.
 
 
 
 
(4) Calculated by using operating income after-tax adjusted for preference share dividends and non-controlling interest.
 
 
 
 


7


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ASPEN INSURANCE HOLDINGS LIMITED
 
 
Consolidated Underwriting Results by Operating Segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30, 2017
 
Three Months Ended June 30, 2016
(in US$ millions except for percentages)
Reinsurance
 
Insurance
 
Total
 
Reinsurance
 
Insurance
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross written premiums
$
335.6

 
$
486.5

 
$
822.1

 
$
332.6

 
$
469.1

 
$
801.7

Net written premiums
285.5

 
293.2

 
578.7

 
306.8

 
418.0

 
724.8

Gross earned premiums
320.6

 
429.1

 
749.7

 
329.8

 
454.7

 
784.5

Net earned premiums
272.7

 
289.3

 
562.0

 
299.4

 
381.4

 
680.8

Losses and loss adjustment expenses
152.6

 
193.5

 
346.1

 
181.1

 
261.1

 
442.2

Amortization of deferred policy acquisition costs
53.4

 
42.9

 
96.3

 
50.7

 
76.0

 
126.7

General and administrative expenses
40.7

 
65.7

 
106.4

 
39.1

 
57.2

 
96.3

Underwriting income/(loss)
$
26.0

 
$
(12.8
)
 
$
13.2

 
$
28.5

 
$
(12.9
)
 
$
15.6

Net investment income
 
 
 
 
47.4

 
 
 
 
 
48.0

Net realized and unrealized investment gains (1)
 
 
 
 
42.0

 
 
 
 
 
36.5

Corporate expenses
 
 
 
 
(11.4
)
 
 
 
 
 
(20.1
)
Amortization and non-recurring expenses
 
 
 
 
(2.1
)
 
 
 
 
 
—

Other expenses
 
 
 
 
(1.7
)
 
 
 
 
 
(1.0
)
Interest expense
 
 
 
 
(7.4
)
 
 
 
 
 
(7.4
)
Net realized and unrealized foreign exchange (losses) (2)
 
 
 
 
(3.0
)
 
 
 
 
 
(5.4
)
Income before tax
 
 
 
 
$
77.0

 
 
 
 
 
$
66.2

Income tax expense
 
 
 
 
(1.2
)
 
 
 
 
 
(1.3
)
Net income
 
 
 
 
$
75.8

 
 
 
 
 
$
64.9

Ratios
 
 
 
 
 
 
 
 
 
 
 
Loss ratio
56.0
%
 
66.9
%
 
61.6
%
 
60.5
%
 
68.5
%
 
65.0
%
 Policy acquisition expense ratio
19.6
%
 
14.8
%
 
17.1
%
 
16.9
%
 
19.9
%
 
18.6
%
 General and administrative expense ratio (3)
14.9
%
 
22.7
%
 
21.3
%
 
13.1
%
 
15.0
%
 
17.1
%
 General and administrative expense ratio (excluding amortization and non-recurring expenses)(3)
14.9
%
 
22.7
%
 
21.0
%
 
13.1
%
 
15.0
%
 
17.1
%
Expense ratio
34.5
%
 
37.5
%
 
38.4
%
 
30.0
%
 
34.9
%
 
35.7
%
Expense ratio (excluding amortization and non-recurring expenses)
34.5
%
 
37.5
%
 
38.1
%
 
30.0
%
 
34.9
%
 
35.7
%
Combined ratio
90.5
%
 
104.4
%
 
100.0
%
 
90.5
%
 
103.4
%
 
100.7
%
Combined ratio (excluding amortization and non-recurring expenses)
90.5
%
 
104.4
%
 
99.7
%
 
90.5
%
 
103.4
%
 
100.7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Includes the net realized and unrealized gains/(losses) from interest rate swaps.
 
 
 
 
 
 
 
 
 
 
(2) Includes the net realized and unrealized gains/(losses) from foreign exchange contracts.
 
 
 
 
 
 
 
 
 
 
(3) The total group general and administrative expense ratio includes the impact from corporate and non-recurring expenses.
 
 
 
 
 
 
 
 

8


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ASPEN INSURANCE HOLDINGS LIMITED
 
 
Consolidated Underwriting Results by Operating Segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2017
 
Six Months Ended June 30, 2016
(in US$ millions except for percentages)
Reinsurance
 
Insurance
 
Total
 
Reinsurance
 
Insurance
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross written premiums
$
900.9

 
$
919.2

 
$
1,820.1

 
$
850.2

 
$
927.2

 
$
1,777.4

Net written premiums
733.7

 
531.2

 
1,264.9

 
756.3

 
768.2

 
1,524.5

Gross earned premiums
648.2

 
852.8

 
1,501.0

 
636.6

 
900.3

 
1,536.9

Net earned premiums
550.2

 
592.9

 
1,143.1

 
579.7

 
764.2

 
1,343.9

Losses and loss adjustment expenses
295.7

 
378.6

 
674.3

 
315.6

 
484.0

 
799.6

Amortization of deferred policy acquisition costs
112.9

 
97.1

 
210.0

 
110.1

 
146.8

 
256.9

General and administrative expenses
84.6

 
127.5

 
212.1

 
83.2

 
115.8

 
199.0

Underwriting income/(loss)
$
57.0

 
$
(10.3
)
 
$
46.7

 
$
70.8

 
$
17.6

 
$
88.4

Net investment income
 
 
 
 
95.1

 
 
 
 
 
97.5

Net realized and unrealized investment gains (1)
 
 
 
 
88.2

 
 
 
 
 
78.7

Corporate expenses
 
 
 
 
(24.8
)
 
 
 
 
 
(37.2
)
Amortization and non-recurring expenses
 
 
 
 
(4.3
)
 
 
 
 
 
—

Other expenses
 
 
 
 
(1.0
)
 
 
 
 
 
(4.0
)
Interest expense
 
 
 
 
(14.8
)
 
 
 
 
 
(14.8
)
Net realized and unrealized foreign exchange (losses) (2)
 
 
 
 
(8.8
)
 
 
 
 
 
(25.5
)
Income before tax
 
 
 
 
$
176.3

 
 
 
 
 
$
183.1

Income tax expense
 
 
 
 
(4.0
)
 
 
 
 
 
(3.8
)
Net income
 
 
 
 
$
172.3

 
 
 
 
 
$
179.3

Ratios
 
 
 
 
 
 
 
 
 
 
 
Loss ratio
53.7
%
 
63.9
%
 
59.0
%
 
54.4
%
 
63.3
%
 
59.5
%
 Policy acquisition expense ratio
20.5
%
 
16.4
%
 
18.4
%
 
19.0
%
 
19.2
%
 
19.1
%
 General and administrative expense ratio (3)
15.4
%
 
21.5
%
 
21.1
%
 
14.4
%
 
15.2
%
 
17.6
%
 General and administrative expense ratio (excluding amortization and non-recurring expenses)(3)
15.4
%
 
21.5
%
 
20.7
%
 
14.4
%
 
15.2
%
 
17.6
%
Expense ratio
35.9
%
 
37.9
%
 
39.5
%
 
33.4
%
 
34.4
%
 
36.7
%
Expense ratio (excluding amortization and non-recurring expenses)
35.9
%
 
37.9
%
 
39.1
%
 
33.4
%
 
34.4
%
 
36.7
%
Combined ratio
89.6
%
 
101.8
%
 
98.5
%
 
87.8
%
 
97.7
%
 
96.2
%
Combined ratio (excluding amortization and non-recurring expenses)
89.6
%
 
101.8
%
 
98.1
%
 
87.8
%
 
97.7
%
 
96.2
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Includes the net realized and unrealized gains/(losses) from interest rate swaps.
 
 
 
 
 
 
 
 
 
 
(2) Includes the net realized and unrealized gains/(losses) from foreign exchange contracts.
 
 
 
 
 
 
 
 
 
 
(3) The total group general and administrative expense ratio includes the impact from corporate and non-recurring expenses.
 
 
 
 
 
 
 
 

9


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ASPEN INSURANCE HOLDINGS LIMITED
Reinsurance Segment - Quarterly Results
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in US$ millions except for percentages)
 
Q2 2017
 
Q1 2017
 
Q4 2016
 
Q3 2016
 
Q2 2016
 
Q1 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross written premiums
 
$
335.6

 
$
565.3

 
$
197.1

 
$
365.9

 
$
332.6

 
$
517.6

Net written premiums
 
285.5

 
448.2

 
198.4

 
314.5

 
306.8

 
449.5

Gross earned premiums
 
320.6

 
327.6

 
317.0

 
364.3

 
329.8

 
306.8

Net earned premiums
 
272.7

 
277.5

 
285.9

 
316.3

 
299.4

 
280.3

Net losses and loss adjustment expenses
 
152.6

 
143.1

 
163.6

 
178.7

 
181.1

 
134.5

Amortization of deferred policy acquisition costs
 
53.4

 
59.5

 
63.3

 
53.0

 
50.7

 
59.4

General and administrative expenses
 
40.7

 
43.9

 
47.6

 
47.4

 
39.1

 
44.1

Underwriting income
 
$
26.0

 
$
31.0

 
$
11.4

 
$
37.2

 
$
28.5

 
$
42.3

Ratios
 
 
 
 
 
 
 
 
 
 
 
 
Loss ratio
 
56.0
 %
 
51.6
 %
 
57.2
 %
 
56.5
 %
 
60.5
 %
 
48.0
 %
 Policy acquisition expense ratio
 
19.6
 %
 
21.4
 %
 
22.1
 %
 
16.8
 %
 
16.9
 %
 
21.2
 %
 General and administrative expense ratio
 
14.9
 %
 
15.8
 %
 
16.6
 %
 
15.0
 %
 
13.1
 %
 
15.7
 %
Expense ratio
 
34.5
 %
 
37.2
 %
 
38.7
 %
 
31.8
 %
 
30.0
 %
 
36.9
 %
Combined ratio
 
90.5
 %
 
88.8
 %
 
95.9
 %
 
88.3
 %
 
90.5
 %
 
84.9
 %
Accident Year Ex-cat Loss Ratio
 
 
 
 
 
 
 
 
 
 
 
 
Loss ratio
 
56.0
 %
 
51.6
 %
 
57.2
 %
 
56.5
 %
 
60.5
 %
 
48.0
 %
Prior year loss development
 
12.0
 %
 
7.6
 %
 
12.2
 %
 
6.4
 %
 
4.6
 %
 
6.5
 %
Catastrophe losses
 
(3.8
)%
 
(8.9
)%
 
(13.2
)%
 
(4.7
)%
 
(17.4
)%
 
(3.8
)%
Accident year ex-cat loss ratio
 
64.2
 %
 
50.3
 %
 
56.2
 %
 
58.2
 %
 
47.7
 %
 
50.7
 %


10


q2_2017smalllogo.jpg
ASPEN INSURANCE HOLDINGS LIMITED
Insurance Segment - Quarterly Results
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in US$ millions except for percentages)
 
Q2 2017
 
Q1 2017
 
Q4 2016
 
Q3 2016
 
Q2 2016
 
Q1 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross written premiums
 
$
486.5

 
$
432.7

 
$
409.0

 
$
397.6

 
$
469.1

 
$
458.1

Net written premiums
 
293.2

 
238.0

 
232.4

 
323.9

 
418.0

 
350.2

Gross earned premiums
 
429.1

 
423.7

 
422.6

 
445.5

 
454.7

 
445.6

Net earned premiums
 
289.3

 
303.6

 
326.5

 
364.7

 
381.4

 
382.8

Net losses and loss adjustment expenses
 
193.5

 
185.1

 
223.7

 
210.5

 
261.1

 
222.9

Amortization of deferred policy acquisition costs
 
42.9

 
54.2

 
77.8

 
77.9

 
76.0

 
70.8

General and administrative expenses
 
65.7

 
61.8

 
54.7

 
57.9

 
57.2

 
58.6

Underwriting (loss)/income
 
$
(12.8
)
 
$
2.5

 
$
(29.7
)
 
$
18.4

 
$
(12.9
)
 
$
30.5

Ratios
 
 
 
 
 
 
 
 
 
 
 
 
Loss ratio
 
66.9
 %
 
61.0
 %
 
68.5
 %
 
57.7
 %
 
68.5
 %
 
58.2
 %
 Policy acquisition expense ratio
 
14.8
 %
 
17.9
 %
 
23.8
 %
 
21.4
 %
 
19.9
 %
 
18.5
 %
 General and administrative expense ratio
 
22.7
 %
 
20.4
 %
 
16.8
 %
 
15.9
 %
 
15.0
 %
 
15.3
 %
Expense ratio
 
37.5
 %
 
38.3
 %
 
40.6
 %
 
37.3
 %
 
34.9
 %
 
33.8
 %
Combined ratio
 
104.4
 %
 
99.3
 %
 
109.1
 %
 
95.0
 %
 
103.4
 %
 
92.0
 %
Accident Year Ex-cat Loss Ratio
 
 
 
 
 
 
 
 
 
 
 
 
Loss ratio
 
66.9
 %
 
61.0
 %
 
68.5
 %
 
57.7
 %
 
68.5
 %
 
58.2
 %
Prior year loss development
 
5.6
 %
 
1.6
 %
 
5.0
 %
 
4.2
 %
 
1.9
 %
 
0.9
 %
Catastrophe losses
 
(9.4
)%
 
(1.5
)%
 
(5.2
)%
 
(2.8
)%
 
(4.3
)%
 
(2.1
)%
Accident year ex-cat loss ratio
 
63.1
 %
 
61.1
 %
 
68.3
 %
 
59.1
 %
 
66.1
 %
 
57.0
 %
 

11


q2_2017smalllogo.jpg
ASPEN INSURANCE HOLDINGS LIMITED
Written and Earned Premiums by Segment and Lines of Business
(in US$ millions)
 
 
 
 
 
 
 
 
 
 
 
 
Gross Written Premiums
 
Q2 2017
 
Q1 2017
 
Q4 2016
 
Q3 2016
 
Q2 2016
 
Q1 2016
 
Reinsurance
 
 
 
 
 
 
 
 
 
 
 
 
 
Property Catastrophe Reinsurance
 
$
72.4

 
$
130.7

 
$
0.4

 
$
47.3

 
$
97.7

 
$
127.6

 
Other Property Reinsurance
 
79.7

 
118.9

 
63.5

 
77.4

 
84.3

 
103.0

 
Casualty Reinsurance
 
53.1

 
143.7

 
56.9

 
79.3

 
57.3

 
127.1

 
Specialty Reinsurance
 
130.4

 
172.0

 
76.3

 
161.9

 
93.3

 
159.9

 
Total Reinsurance
 
$
335.6

 
$
565.3

 
$
197.1

 
$
365.9

 
$
332.6

 
$
517.6

 
Insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
Property and Casualty Insurance
 
$
249.3

 
$
211.1

 
$
189.4

 
$
184.9

 
$
257.6

 
$
226.3

 
Marine, Aviation and Energy Insurance
 
92.7

 
105.8

 
88.5

 
96.3

 
93.8

 
117.7

 
Financial and Professional Lines Insurance
 
144.5

 
115.8

 
131.1

 
116.4

 
117.7

 
114.1

 
Total Insurance
 
$
486.5

 
$
432.7

 
$
409.0

 
$
397.6

 
$
469.1

 
$
458.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Gross Written Premiums
 
$
822.1

 
$
998.0

 
$
606.1

 
$
763.5

 
$
801.7

 
$
975.7

Net Written Premiums
 
 
 
 
 
 
 
 
 
 
 
 
 
Reinsurance
 
 
 
 
 
 
 
 
 
 
 
 
 
Property Catastrophe Reinsurance
 
$
58.2

 
$
71.1

 
$
1.0

 
$
26.7

 
$
78.3

 
$
92.1

 
Other Property Reinsurance
 
65.6

 
89.0

 
63.6

 
73.6

 
82.7

 
92.9

 
Casualty Reinsurance
 
46.5

 
142.0

 
57.7

 
78.1

 
57.3

 
125.6

 
Specialty Reinsurance
 
115.2

 
146.1

 
76.1

 
136.1

 
88.5

 
138.9

 
Total Reinsurance
 
$
285.5

 
$
448.2

 
$
198.4

 
$
314.5

 
$
306.8

 
$
449.5

 
Insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
Property and Casualty Insurance
 
$
180.0

 
$
94.8

 
$
85.2

 
$
161.9

 
$
228.5

 
$
180.5

 
Marine, Aviation and Energy Insurance
 
40.8

 
71.1

 
54.9

 
56.9

 
80.0

 
106.6

 
Financial and Professional Lines Insurance
 
72.4

 
72.1

 
92.3

 
105.1

 
109.5

 
63.1

 
Total Insurance
 
$
293.2

 
$
238.0

 
$
232.4

 
$
323.9

 
$
418.0

 
$
350.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Net Written Premiums
 
$
578.7

 
$
686.2

 
$
430.8

 
$
638.4

 
$
724.8

 
$
799.7

Net Earned Premiums
 
 
 
 
 
 
 
 
 
 
 
 
 
Reinsurance
 
 
 
 
 
 
 
 
 
 
 
 
 
Property Catastrophe Reinsurance
 
$
48.3

 
$
34.0

 
$
44.0

 
$
50.5

 
$
53.1

 
$
47.3

 
Other Property Reinsurance
 
66.2

 
77.3

 
77.4

 
70.5

 
80.8

 
87.3

 
Casualty Reinsurance
 
68.9

 
81.8

 
88.3

 
78.3

 
74.1

 
67.0

 
Specialty Reinsurance
 
89.3

 
84.4

 
76.2

 
117.0

 
91.4

 
78.7

 
Total Reinsurance
 
$
272.7

 
$
277.5

 
$
285.9

 
$
316.3

 
$
299.4

 
$
280.3

 
Insurance
 
 
 
 
 
 
 
 
 
 
 
 
 
Property and Casualty Insurance
 
$
156.7

 
$
144.4

 
$
168.6

 
$
175.9

 
$
201.0

 
$
189.7

 
Marine, Aviation and Energy Insurance
 
52.7

 
77.4

 
59.2

 
86.4

 
86.9

 
93.9

 
Financial and Professional Lines Insurance
 
79.9

 
81.8

 
98.7

 
102.4

 
93.5

 
99.2

 
Total Insurance
 
$
289.3

 
$
303.6

 
$
326.5

 
$
364.7

 
$
381.4

 
$
382.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Net Earned Premiums
 
$
562.0

 
$
581.1

 
$
612.4

 
$
681.0

 
$
680.8

 
$
663.1




12


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ASPEN INSURANCE HOLDINGS LIMITED
 
Consolidated Statements of Changes in Shareholders' Equity
 
 
 
Six Months Ended June 30,
(in US$ millions)
 
2017
 
2016
Ordinary shares
 
 
 
 
 
Beginning and end of period
 
$
0.1

 
$
0.1

Preference shares
 
 
 
 
 
Beginning and end of period
 
—

 
—

Non-controlling interest
 
 
 
 
 
Beginning of period
 
1.4

 
1.3

 
Net change for the period
 
0.2

 
0.2

 
End of period
 
1.6

 
1.5

Additional paid-in capital
 
 
 
 
 
Beginning of period
 
1,259.6

 
1,075.3

 
New shares issued
 
0.4

 
1.9

 
Ordinary shares repurchased
 
(10.0
)
 
(43.5
)
 
Preference shares redemption
 
(133.2
)
 
—

 
Preference share redemption costs
 
2.4

 
—

 
Share-based compensation
 
6.0

 
6.8

 
End of period
 
1,125.2

 
1,040.5

Retained earnings
 
 
 
 
 
Beginning of period
 
2,392.3

 
2,283.6

 
Net income for the period
 
172.3

 
179.3

 
Dividends paid on ordinary and preference shares
 
(48.6
)
 
(45.1
)
 
Preference shares redemption costs
 
(2.4
)
 
—

 
Proportion due to non-controlling interest
 
(0.2
)
 
(0.2
)
 
Share-based payment
 
2.8

 
—

 
End of period
 
2,516.2

 
2,417.6

Accumulated other comprehensive income:
 
 
 
 
Cumulative foreign currency translation adjustments, net of taxes:
 
 
 
 
 
Beginning of period
 
(27.1
)
 
0.6

 
Change for the period
 
(34.2
)
 
(12.8
)
 
End of period
 
(61.3
)
 
(12.2
)
Loss on derivatives:
 
 
 
 
 
Beginning of period
 
(0.5
)
 
(1.2
)
 
Net change from current period hedged transactions
 
3.2

 
(3.8
)
 
End of period
 
2.7

 
(5.0
)
Unrealized appreciation/(depreciation) on available for sale investments, net of taxes:
 
 
 
 
Beginning of period
 
22.5

 
60.2

 
Change for the period
 
13.9

 
114.1

 
End of period
 
36.4

 
174.3

Total accumulated other comprehensive (loss)/income
 
(22.2
)
 
157.1

 
 
 
 
 
Total shareholders' equity
 
$
3,620.9

 
$
3,616.8

 
 
 

13


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ASPEN INSURANCE HOLDINGS LIMITED
 
 
 
 
Consolidated Statements of Comprehensive Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in US$ millions)
 
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
 
 
Net income adjusted for non-controlling interest
 
$
75.8

 
$
64.9

 
$
172.3

 
$
179.3

Other comprehensive income, net of taxes:
 
 
 
 
 
 
 
 
 
Available for sale investments:
 
 
 
 
 
 
 
 
 
    Reclassification adjustment for net realized (gains) included in net income
 
(0.8
)
 
(1.0
)
 
(1.6
)
 
(4.7
)
 
    Change in net unrealized gains on available for sale securities held
 
12.6

 
38.2

 
15.5

 
118.8

 
    Net change from current period hedged transactions
 
2.0

 
(2.4
)
 
3.2

 
(3.8
)
 
Change in foreign currency translation adjustment
 
(21.3
)
 
(1.8
)
 
(34.2
)
 
(12.8
)
 
Other comprehensive (loss)/income
 
(7.5
)
 
33.0

 
(17.1
)
 
97.5

Comprehensive income
 
$
68.3

 
$
97.9

 
$
155.2

 
$
276.8



14


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ASPEN INSURANCE HOLDINGS LIMITED
 
 
 
 
Condensed Consolidated Statements of Cash Flows
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(in US$ millions)
 
2017
 
2016
 
2017
 
2016
 
 
 
 
 
 
 
 
 
 
 
Net cash (used in)/from operating activities
 
$
(20.2
)
 
$
181.7

 
$
(104.5
)
 
$
242.2

Net cash from/(used in) investing activities
 
409.7

 
0.9

 
365.6

 
(118.5
)
Net cash (used in) financing activities
 
(38.8
)
 
(42.5
)
 
(314.6
)
 
(175.7
)
Effect of exchange rate movements on cash and cash equivalents
 
4.6

 
(4.4
)
 
8.1

 
(8.7
)
Increase/(decrease) in cash and cash equivalents
 
355.3

 
135.7

 
(45.4
)
 
(60.7
)
Cash at beginning of period
 
873.1

 
903.1

 
1,273.8

 
1,099.5

Cash at end of period
 
$
1,228.4

 
$
1,038.8

 
$
1,228.4

 
$
1,038.8



15


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ASPEN INSURANCE HOLDINGS LIMITED
Reserves for Losses and Loss Adjustment Expenses
 
 
 
 
 
 
 
 
(in US$ millions)
For the Six Months Ended June 30, 2017
 
For the Six Months Ended June 30, 2016
 
For the Twelve Months Ended
December 31, 2016
 
 
 
 
 
 
 
 
Provision for losses and loss adjustment expenses at the start of the period
$
5,319.9

 
4,938.2

 
$
4,938.2

Reinsurance recoverables
(560.7
)
 
(354.8
)
 
(354.8
)
Net loss and loss adjustment expenses at the start of the period
4,759.2

 
4,583.4

 
4,583.4

 
 
 
 
 
 
Net loss and loss adjustment expenses assumed
—

 
5.7

 
(80.1
)
Provision for losses and loss adjustment expenses for claims incurred
 
 
 
 
 
    Current period
749.2

 
842.4

 
1,705.4

    Prior period release
(74.9
)
 
(42.8
)
 
(129.3
)
    Total incurred
674.3

 
799.6

 
1,576.1

 
 
 
 
 
 
Losses and loss adjustment expenses payments for claims incurred
(741.1
)
 
(576.2
)
 
(1,222.8
)
 
 
 
 
 
 
Foreign exchange losses/(gains)
99.6

 
(41.4
)
 
(97.4
)
 
 
 
 
 
 
Net loss and loss adjustment expenses reserves at the end of the period
4,792.0

 
4,771.1

 
4,759.2

Reinsurance recoverables on unpaid losses at the end of the period
779.4

 
410.4

 
560.7

Gross loss and loss adjustment expenses reserves at the end of the period
$
5,571.4

 
5,181.5

 
$
5,319.9



16


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ASPEN INSURANCE HOLDINGS LIMITED
 
 
Reserves by Operating Segment
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As at June 30, 2017
 
As at December 31, 2016
(in US$ millions)
Gross
 
Reinsurance Recoverables
 
Net
 
Gross
 
Reinsurance Recoverables
 
Net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reinsurance
$
2,571.1

 
$
(126.1
)
 
$
2,445.0

 
$
2,536.1

 
$
(74.0
)
 
$
2,462.1

Insurance
3,000.3

 
(653.3
)
 
2,347.0

 
2,783.8

 
(486.7
)
 
2,297.1

Total losses and loss adjustment expense reserves
$
5,571.4

 
$
(779.4
)
 
$
4,792.0

 
$
5,319.9

 
$
(560.7
)
 
$
4,759.2



17


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ASPEN INSURANCE HOLDINGS LIMITED
Prior Year Reserve Movements
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in US$ millions)
Three Months Ended June 30, 2017
 
Three Months Ended June 30, 2016
 
 
 
Gross
 
 Reinsurance Recoverables
 
Net
 
Gross
 
 Reinsurance Recoverables
 
Net
Reinsurance
$
20.8

 
$
11.8

 
$
32.6

 
$
13.6

 
$
0.2

 
$
13.8

Insurance
(10.9
)
 
27.0

 
16.1

 
3.4

 
4.0

 
7.4

Movements in reserves for prior years during the period
$
9.9

 
$
38.8

 
$
48.7

 
$
17.0

 
$
4.2

 
$
21.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2017
 
Six Months Ended June 30, 2016
 
 
 
Gross
 
 Reinsurance Recoverables
 
Net
 
Gross
 
 Reinsurance Recoverables
 
Net
Reinsurance
$
44.8

 
$
9.0

 
$
53.8

 
$
33.9

 
$
(1.9
)
 
$
32.0

Insurance
(14.7
)
 
35.8

 
21.1

 
6.2

 
4.6

 
10.8

Movements in reserves for prior years during the period
$
30.1

 
$
44.8

 
$
74.9

 
$
40.1

 
$
2.7

 
$
42.8



18


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ASPEN INSURANCE HOLDINGS LIMITED
Consolidated Investment Portfolio
(in US$ millions)
 
Fair Market Value
 
 
June 30, 2017
 
March 31, 2017
 
December 31,
2016
 
September 30,
2016
 
June 30, 2016
 
March 31, 2016
Marketable Securities - Available For Sale
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government securities
 
$
1,220.8

 
$
1,267.1

 
$
1,206.1

 
$
1,086.4

 
$
1,147.4

 
$
1,111.7

U.S. agency securities
 
75.5

 
107.4

 
119.6

 
127.3

 
131.2

 
149.9

Municipal securities
 
32.8

 
24.4

 
24.4

 
26.2

 
26.2

 
32.9

Corporate securities
 
2,503.4

 
2,587.7

 
2,586.5

 
2,790.8

 
2,663.2

 
2,680.9

Foreign government securities
 
525.9

 
494.2

 
488.7

 
583.1

 
641.7

 
674.5

Asset-backed securities
 
48.9

 
54.8

 
63.0

 
69.1

 
72.9

 
76.3

Bonds backed by foreign government
 
92.6

 
84.5

 
89.8

 
82.4

 
69.5

 
72.5

Mortgage-backed securities
 
997.4

 
1,044.3

 
1,086.5

 
1,199.4

 
1,256.0

 
1,265.0

  Total fixed income securities
 
5,497.3

 
5,664.4

 
5,664.6

 
5,964.7

 
6,008.1

 
6,063.7

Short-term investments
 
41.9

 
163.5

 
145.3

 
169.1

 
108.9

 
135.3

  Total Available For Sale
 
$
5,539.2

 
$
5,827.9

 
$
5,809.9

 
$
6,133.8

 
$
6,117.0

 
$
6,199.0

 
 
 
 
 
 
 
 
 
 
 
 
 
Marketable Securities - Trading
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government securities
 
$
112.8

 
$
95.4

 
$
82.4

 
$
44.4

 
$
53.9

 
$
42.1

Municipal securities
 
5.7

 
15.6

 
15.5

 
4.9

 
4.8

 
4.0

Corporate securities
 
896.0

 
866.2

 
820.6

 
677.0

 
658.0

 
615.2

Foreign government securities
 
186.5

 
191.7

 
202.8

 
213.1

 
202.2

 
198.5

Asset-backed securities
 
12.2

 
13.4

 
14.5

 
15.5

 
15.8

 
19.6

Mortgage-backed securities
 
142.3

 
130.9

 
130.0

 
42.0

 
23.1

 
17.4

Bonds backed by foreign government
 
2.0

 
—

 
—

 
—

 
—

 
—

  Total fixed income securities
 
1,357.5

 
1,313.2

 
1,265.8

 
996.9

 
957.8

 
896.8

Short-term investments
 
73.7

 
184.6

 
185.4

 
169.6

 
12.9

 
7.7

Equity securities
 
658.7

 
623.6

 
584.7

 
797.7

 
785.6

 
757.8

Catastrophe bonds
 
28.3

 
41.8

 
42.5

 
17.8

 
21.5

 
46.1

 Total Trading
 
$
2,118.2

 
$
2,163.2

 
$
2,078.4

 
$
1,982.0

 
$
1,777.8

 
$
1,708.4

 
 
 
 
 
 
 
 
 
 
 
 
 
Other Investments
 
$
3.9

 
$
5.0

 
$
12.1

 
$
13.0

 
$
8.7

 
$
8.9

 
 
 
 
 
 
 
 
 
 
 
 
 
Cash
 
1,228.4

 
873.1

 
1,273.8

 
1,183.3

 
1,038.8

 
903.1

Accrued interest
 
46.9

 
46.5

 
46.0

 
45.6

 
47.3

 
46.0

 
  Total Cash and Accrued Interest
 
$
1,275.3

 
$
919.6

 
$
1,319.8

 
$
1,228.9

 
$
1,086.1

 
$
949.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Total Cash and Investments
 
$
8,936.6

 
$
8,915.7

 
$
9,220.2

 
$
9,357.7

 
$
8,989.6

 
$
8,865.4


19


 
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ASPEN INSURANCE HOLDINGS LIMITED
 
Investment Analysis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in US$ millions except for percentages)
Q2 2017
 
Q1 2017
 
Q4 2016
 
Q3 2016
 
Q2 2016
 
Q1 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income from fixed income investments and cash
$
43.7

 
$
42.5

 
$
40.7

 
$
40.9

 
$
42.5

 
$
42.6

 
Net investment income from equity securities
3.7

 
5.2

 
2.5

 
5.5

 
5.5

 
6.9

 
Net investment income
47.4

 
47.7

 
43.2

 
46.4

 
48.0

 
49.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net realized and unrealized investment gains/(losses) excluding the interest rate swaps
42.1

 
46.5

 
(58.1
)
 
21.5

 
36.8

 
45.0

 
Net realized investment (losses) from the interest rate swaps
—

 
—

 
—

 
—

 
(0.3
)
 
(2.8
)
 
Other-than-temporary impairment charges
(0.1
)
 
(0.3
)
 
—

 
—

 
—

 
—

 
Net realized and unrealized investment gains/(losses)
42.0

 
46.2

 
(58.1
)
 
21.5

 
36.5

 
42.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Change in unrealized gains/(losses) on available for sale investments (gross of tax) 
12.9

 
2.0

 
(143.1
)
 
(23.2
)
 
42.2

 
85.0

 
Total return/(loss) on investments (1)
$
102.3

 
$
95.9

 
$
(158.0
)
 
$
44.7

 
$
126.7

 
$
176.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Portfolio Characteristics
 
 
 
 
 
 
 
 
 
 
 
 
Fixed income portfolio book yield (excluding the impact of the interest rate swaps) (1)
2.53
%
 
2.53
%
 
2.49
%
 
2.46
%
 
2.50
%
 
2.56
%
 
Fixed income portfolio duration (excluding the impact of the interest rate swaps) (1)
3.9 years
 
3.9 years
 
3.9 years
 
3.6 years
 
3.6 years
 
3.6 years
 
 (1) On May 9, 2016, the Company terminated all remaining outstanding interest rate swaps under its International Swap Dealers Association agreement.
 


20


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ASPEN INSURANCE HOLDINGS LIMITED
Book Value Per Ordinary Share
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in US$ millions except for number of shares and per share amounts)
 
June 30, 2017
 
March 31, 2017
 
December 31, 2016
 
September 30, 2016
 
June 30, 2016
 
March 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net assets
 
$
3,620.9

 
$
3,594.4

 
$
3,648.3

 
$
3,904.1

 
$
3,616.8

 
$
3,557.1

Less: Preference shares
 
(666.3
)
 
(666.3
)
 
(797.1
)
 
(797.1
)
 
(555.8
)
 
(555.8
)
Less: Non-controlling interest
 
 
(1.6
)
 
(1.5
)
 
(1.4
)
 
(1.3
)
 
(1.5
)
 
(1.1
)
Total
 
 
 
$
2,953.0

 
$
2,926.6

 
$
2,849.8

 
$
3,105.7

 
$
3,059.5

 
$
3,000.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ordinary shares outstanding (in millions)
 
59.844

 
59.988

 
59.774

 
60.211

 
60.329

 
60.675

Ordinary shares and dilutive potential ordinary shares (in millions)
 
60.712

 
61.107

 
61.001

 
61.516

 
61.767

 
62.213

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Book value per ordinary share
 
$
49.34

 
$
48.79

 
$
47.68

 
$
51.58

 
$
50.71

 
$
49.45

Diluted book value per ordinary share
 
$
48.64

 
$
47.89

 
$
46.72

 
$
50.49

 
$
49.53

 
$
48.22

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The dilutive effect of options has been calculated using the treasury stock method. The treasury stock method assumes that the proceeds received from the exercise of options will be used to purchase the Company's ordinary shares at the average market price during the period of calculation.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

21


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ASPEN INSURANCE HOLDINGS LIMITED
 
 
 
 
Operating Income Reconciliation
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income is adjusted to exclude after-tax change in net foreign exchange gains and losses, realized gains and losses in investments and non-recurring items.
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
(in US$ millions except where stated)
 
June 30, 2017
 
June 30, 2016
 
June 30, 2017
 
June 30, 2016
 
 
 
 
 
 
 
 
 
Net income as reported
 
$
75.8

 
$
64.9

 
$
172.3

 
$
179.3

Change in the redemption value of preference shares
 
—

 
—

 
(2.4
)
 
—

Net change attributable to non-controlling interest
 
(0.1
)
 
(0.4
)
 
(0.2
)
 
(0.2
)
Preference share dividends
 
(10.5
)
 
(9.4
)
 
(21.0
)
 
(18.9
)
Net income available to ordinary shareholders
 
65.2

 
55.1

 
148.7

 
160.2

Add (deduct) after tax income:
 
 
 
 
 
 
 
 
 
Net foreign exchange losses
 
3.0

 
4.9

 
8.1

 
21.8

 
Net realized (gains) on investments
 
(41.4
)
 
(35.7
)
 
(85.2
)
 
(77.1
)
 
Changes in redemption value of the preference shares
 
—

 
—

 
2.4

 
—

 
Amortization and non-recurring expenses
 
1.8

 
—

 
3.8

 
—

Operating income after tax available to ordinary shareholders
 
28.6

 
24.3

 
77.8

 
104.9

Tax expense on operating income
 
0.9

 
1.0

 
2.2

 
5.9

Operating income before tax available to ordinary shareholders
 
$
29.5

 
$
25.3

 
$
80.0

 
$
110.8

 
 
 
 
 
 
 
 
 
Basic earnings per ordinary share
 
 
 
 
 
 
 
 
Net income adjusted for preference share dividends and non-controlling interest
 
$
1.09

 
0.91

 
$
2.48

 
$
2.64

Add (deduct) after tax income:
 
 
 
 
 
 
 
 
 
Net foreign exchange losses
 
0.05

 
0.08

 
0.13

 
0.36

 
Net realized (gains) on investments
 
(0.69
)
 
(0.59
)
 
(1.42
)
 
(1.27
)
 
Changes in redemption value of the preference shares
 
—

 
—

 
0.04

 
—

 
Amortization and non-recurring expenses
 
0.03

 
—

 
0.06

 
—

Operating income adjusted for preference shares dividends and non-controlling interest
 
$
0.48

 
0.40

 
$
1.29

 
$
1.73

 
 
 
 
 
 
 
 
 
Diluted earnings per ordinary share
 
 
 
 
 
 
 
 
Net income adjusted for preference share dividends and non-controlling interest
 
$
1.07

 
0.89

 
$
2.43

 
$
2.57

Add (deduct) after tax income:
 
 
 
 
 
 
 
 
 
Net foreign exchange losses
 
0.05

 
0.08

 
0.13

 
0.35

 
Net realized (gains) on investments
 
(0.68
)
 
(0.57
)
 
(1.39
)
 
(1.24
)
 
Changes in redemption value of the preference shares
 
—

 
—

 
0.04

 
—

 
Amortization and non-recurring expenses
 
0.03

 
—

 
0.06

 
—

Operating income adjusted for preference shares dividends and non-controlling interest
 
$
0.47

 
0.40

 
$
1.27

 
$
1.68


22