Bermuda-based insurer and reinsurer, Aspen Insurance Holdings, has reported a 10% rise in gross written premiums (GWP) and an improved underwriting income in its full year results despite an array of economic, environmental, and geopolitical challenges.
Aspen’s GWP in 2022 were $4,339 million, up from $3,938 million in the previous year. Of this total, insurance accounted for $2,532 million, while reinsurance accounted for $1,807 million.
Net written premiums in 2022 were $2,896 million, a 12% increase from 2021.
Aspen generated $202 million of operating income in 2022, and $51 million of net income. The firm’s underwriting income stood at $190 million, with a reported combined ratio of 93.0%, a dramatic improvement from 2021’s 101.2%.
Adjusted for the impacts of the loss portfolio transfer and adverse development contracts, Apsen’s combined ratio was 92.4% compared to 2021’s 98.8%.
The firm suggests that this adjusted combined ratio represents a strong underwriting result for the year and reflects the quality of its portfolio following extensive repositioning in recent years.
Catastrophe losses for 2022 amounted to $307 million, or 11 percentage points on the combined ratio.
This included losses associated with Hurricane Ian, floods in Australia and South Africa, the Russian/Ukraine war, alongside other weather-related events.
Meanwhile, Aspen’s net investment income rose 28% to $188 million, compared to $148 million in 2021.
On this, the firm states that like the wider market, it has not been immune from the impact of rising interest rates on its investment portfolio.
Mark Cloutier, Group Executive Chairman and Chief Executive Officer, said, “As we said in our half-year 2022 statement, we broadly expect the unrealized investment losses to unwind as securities reach maturity, while higher interest rates will also positively impact future returns.”
Aspen Capital Markets generated a total fee income of $104 million, driven by an increase in assets under management to $1.3 billion.
Aspen explains that this fee income is primarily reflected as an offset to its acquisition costs and therefore benefits the firm’s underwriting results.
Cloutier added, “Given the challenges facing the insurance-linked securities market in raising capital, this is a testament to the innovative team we have and our track record of delivering for our investors.”
He continued, “The results we have reported today mark the third consecutive year of improved underwriting performance.
“This is a reflection of our transformation efforts over the past few years as we simplified, reshaped and improved Aspen, taking decisive and timely actions on our risk appetite and exposures.
“Our proactive approach to portfolio management means we have a flexible, robust and diversified franchise across multiple product lines and geographies that provides value and support for our clients.
“As a result, we are well-positioned to take advantage of the opportunities that the market is currently providing.
“Our focus remains on sustainable growth, optimizing our underwriting returns and prudently managing catastrophe risk, as we continue to work towards our objective of delivering consistent top quartile results.”
