Aspen results hit by catastrophe losses

by David Masters

Story link: Aspen results hit by catastrophe losses

Bermuda-based Aspen Insurance Holdings has posted its third quarter results, with a net loss after tax of $116.7 million, equivalent to an operating loss of $1.02 per share.

This is compared to a net profit after tax of $117.2 million in the third quarter of 2007.

The loss is being blamed on catastrophe payouts from hurricanes Gustav and Ike, as well as investment losses from the collapsed Lehman Brothers bank.

Together the hurricanes account for a $1.91 reduction in earnings per share in the third quarter, and a $1.80 reduction in earnings per share for the first nine months of 2008.

Aspen’s combined ratio for the three month period ending 30th September 2008 was 123.3%, 38.8 percentage points worse than the 84.5% for the same period last year.

Net investment income fell 73.3% on year to $19.3 million, whilst gross written premiums increased 18% to $441.3 million, compared to $373.5 million in the third quarter of 2007.

Most of the increased premiums were due to the contribution of new underwriting teams acquired over the last year.

Despite the losses, book value per share held up well at $26.21 per share at the end of the quarter, compared to $25.68 per share at the end of September 2007.

Chief executive officer Chris O’Kane said third quarter income was impacted by catastrophes and the global financial crisis.

O’Kane added that losses from Gustav and Ike were ‘in line with expectations’ and that the company is ‘well positioned’ to benefit from the revised pricing arrangements resulting from the hurricanes.