Aspen Insurance Holdings Limited, the Bermudian insurance and reinsurance group, is taking steps to improve the performance of its property insurance book, beginning with the shuttering of its Bermuda-based U.S. property underwriting unit.
Aspen’s 2017 results were deeply disappointing, according to CEO Chris O’Kane, who said that the company was taking “a number of actions to improve our underwriting performance” which would be reflected in 2018 results.
The first of these appears to be the shuttering of the re/insurers Bermuda-based U.S. property insurance unit, which O’Kane said had delivered “considerable” underperformance recently.
O’Kane said that Aspen’s U.S. property insurance book has been the most disappointing part of the firms book lately, leading the company to take the step of halting underwriting this business from its Bermuda platform.
The company has confirmed that Aspen is seeking to reduce volatility within its global insurance book and that after the catastrophe losses of 2017, when Aspen took a particularly large hit, the firm has decided to try to control its U.S. property insurance book.
The first action taken is to cease underwriting property insurance on the Aspen Bermuda platform immediately, the firm said in a statement.
Aspen noted that the Bermuda underwritten book of U.S. property insurance risks is only a small part of its overall U.S. property platform, with the rest of the book unaffected.
Aspen’s insurance business has undergone leadership changes recently as well, with Stephen Postlewhite, the Chief Executive Officer of Aspen Insurance, leaving the business recently and David Cohen, President and Chief Underwriting Officer of Aspen Insurance, set to lead that business on a day-to-day basis.
Aspen said it has let one of the Bermuda property team go, Stephanie Law, while two others would be staying on to manage the transition, Natasha Pethick and Allison Bassett. The company said that underwriting expertise was not a driver of its decision to shutter the Bermuda property insurance unit, saying that the talent had been outstanding.
Aspen underwrites U.S. property insurance business, largely excess and surplus lines, from its Atlanta office and this business has been unaffected by these changes so far.
O’Kane insisted on the firm’s recent earnings call that steps would be taken to reduce volatility and to shed underperforming business from its book, as it looks to target only the best risk adjusted returns.
He said this will involve a gradual shift away from catastrophe exposed property accounts as well, so it seems more portfolio changes are to be expected.
The poor 2017 performance of this property insurance book could also see Aspen looking to harness more reinsurance and retrocession, as a way to continue to write catastrophe exposed property while passing on the volatility to those better able to manage it and with the appetite to hold these peak U.S. cat risks.