Bermuda-based insurer and reinsurer, Aspen Insurance Holdings, has reported improved underwriting income for the first six months of 2022, as top line growth helped to offset a moderate increase in catastrophe losses.
Underwriting income for H1 amounted to $156.5 million, up from $59.4 million for the same period last year, resulting in a combined ratio of 88.2% for 2022 period, compared to 94.7% previously.
These results included catastrophe losses of $92.9 million, or 7.0 percentage points, with major costs stemming in particular from floods in Australia and South Africa, the Russian/Ukraine war, and Storm Eunice.
In H1 2021, Aspen reported $84.5 million, or 7.5 percentage points, worth of catastrophe losses, with the Texas winter storms accounting for the largest share.
Net written premiums also increased by 21.8% to $1,506.1 million in H1, with a slightly higher retention ratio of 64.1%, versus 61.2% last year.
This figure comprises premium growth of 16.8% to $722.4 million for Aspen’s primary insurance business, and growth of 26.9% to $783.7 million for its reinsurance business.
The loss ratio of 54.9% for the primary side included catastrophe losses of $19.7 million, or 2.7 percentage points, net of reinsurance recoveries, while for reinsurance the 61.4% loss ratio included catastrophe losses of $73.3 million, or 12.2 percentage points.
Aspen further reported prior year net unfavourable reserve development of $8.8 million for its reinsurance segment, arising from unfavourable experience within property catastrophe reinsurance together with the impact of a loss portfolio transfer, partially offset by favourable reserve development on casualty reinsurance and other property reinsurance lines.
Together, these results contributed to a significant rise in operating income, which grew from $66.7 million to $130.0 million for the H1 period.
However, net income fell from $87.4 million to $48.4 million over the same period, mainly due to net realized and unrealized investment losses of $126.4 million, which includes unrealized losses of $81.5 million.
This compares to $3.0 million net realized and unrealized investment gains for H1 2021, including net unrealized gains of $16.1 million.
“This is a strong set of results for Aspen with the business reporting both double digit top line growth and very healthy underwriting performance,” said Mark Cloutier, Aspen’s Group Executive Chairman and Chief Executive Officer.
“Our year over year trends continue to show the impact of the work we have done to reshape our business and improve performance,” he continued. “The trends we see in many of the key ratios and performance indicators we track give us confidence that Aspen is in a strong position to continue to benefit from attractive trading conditions we see across our markets, while at the same time continue to manage down volatility.”
