Record profits for Aspen

by David Masters

Story link: Record profits for Aspen

Aspen Insurance Holdings this week reported a fourth quarter net income of $135 million, an increase of 13.1% compared to the same quarter in the previous year. Net investment income was $80 million for the quarter, representing a 28.1% on the same quarter in 2006.

Full year net income for 2007 was $489 million, up 29.3% compared to 2006. 2007’s net investment income was $299 million, 46.3% higher than 2006.

The combined ratio for the year was 72.6%, a good improvement on the 79.2% for 2006.

“For the fourth quarter and full year 2007, Aspen delivered record net income and earnings per share,” commented Aspen’s CEO, Chris O’Kane. “These outstanding results reflect that all areas of the company are executing in-line with our strategy to diversify and leverage our underwriting platforms, and generate strong consistent results from our investment portfolio.”

He added: “We are well positioned for the softening markets in 2008 and expect to continue delivering value for our shareholders.”

Aspen’s improvements should be seen against the backdrop of a year of catastrophic events. 2006 saw almost no catastrophic events, whilst in 2007 UK floods, California wildfires and Windstorn Kyrill all produced losses. However, these losses were comfortably within the initial catastrophe loss guidance of $135 million for the year.

2007 also saw Aspen complete a $300 million share buyback programme, with the final $50 million being purchased in the fourth quarter. The programme was authorised by the Board in November 2006.

On 6th February 2008 the Board authorised a new buyback programme for a further $300 million of ordinary equity. This will take place over the next two years.

Aspen expects the current competitive pricing environment to continue throughout 2008.