HAMILTON, Bermuda--(BUSINESS WIRE)--
Aspen Insurance Holdings Limited (“Aspen”) (NYSE:AHL) announced today a
preliminary estimate of approximately $135 million in pre-tax losses,
net of reinsurance and reinstatement premiums, related to wildfires in
California in the fourth quarter of 2017. The estimated losses are
predominantly attributed to Aspen’s Reinsurance segment.
Aspen expects to record an underwriting loss of approximately $245
million in the fourth quarter of 2017. These results reflect the natural
catastrophe losses described above as well as an increased frequency of
mid-sized and attritional losses primarily in Aspen’s Insurance segment.
These include property and fire-related losses in the U.K. and the U.S.
and, to a lesser extent, cyber losses and an increase in a previously
reported surety loss. Aspen's reserves for losses and loss adjustment
expenses remain strong and the expected fourth quarter 2017 underwriting
loss includes a release of reserves from prior years.
Chris O’Kane, Chief Executive Officer, commented: “We are deeply
disappointed with our financial performance in 2017. We have taken a
number of actions to improve our underwriting performance and expect to
see the impact of these reflected in our 2018 underwriting year results
and beyond. We believe our capital position is appropriate to support
our ongoing business and underpins our financial strength ratings.”
Updated loss estimates and full operating results for the fourth quarter
of 2017 will be reflected in Aspen’s press release containing its fourth
quarter 2017 financial results, which are scheduled for release on
Wednesday, February 7, 2018, following the close of the New York Stock
Exchange.
Aspen’s preliminary estimates of losses in the fourth quarter of 2017
involve the exercise of considerable judgment and are based, among other
factors, on a review of the individual treaties and policies expected to
be impacted, information available to date from clients and brokers,
market intelligence, initial loss reports, modeled loss projections and
exposure analysis. Due to the complexity of losses from natural
catastrophes and the uncertainty associated with Aspen’s assumptions and
the preliminary information used to prepare these estimates, Aspen’s
actual losses from these natural catastrophes may differ materially from
the preliminary estimates provided above.
Based on its initial assessment of the Tax Cuts and Jobs Act of 2017
(“U.S. Tax Reform”), Aspen does not anticipate a significant impact on
its net income in 2018.
About Aspen Insurance Holdings Limited
Aspen provides reinsurance and insurance coverage to clients in various
domestic and global markets through wholly-owned subsidiaries and
offices in Australia, Bermuda, Canada, France, Germany, Ireland,
Singapore, Switzerland, the United Arab Emirates, the United Kingdom and
the United States. For the year ended December 31, 2016, Aspen reported
$12.1 billion in total assets, $5.3 billion in gross reserves, $3.6
billion in total shareholders’ equity and $3.1 billion in gross written
premiums. Its operating subsidiaries have been assigned a rating of “A”
by Standard & Poor’s Financial Services LLC (“S&P”), an “A”
(“Excellent”) by A.M. Best Company Inc. (“A.M. Best”) and an “A2” by
Moody’s Investors Service, Inc. (“Moody’s”).
Application of the Safe Harbor of the Private Securities Litigation
Reform Act of 1995
This press release contains written forward-looking statements, such as
those related to preliminary loss estimates from natural catastrophes
and other loss activity in the fourth quarter of 2017, which are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include all
statements that do not relate solely to historical or current facts, and
can be identified by the use of words such as “expect,” “intend,”
“plan,” “believe,” “do not believe,” “project,” “anticipate,” “seek,”
“will,” “estimate,” “may,” “likely,” “continue,” “assume,” “objective,”
“aim,” “guidance,” “outlook,” “trends,” “future,” “could,” “would,”
“should,” “target,” “on track” and similar expressions of a future or
forward-looking nature.
All forward-looking statements rely on a number of assumptions,
estimates and data concerning future results and events and are subject
to a number of uncertainties and other factors, many of which are
outside Aspen’s control that could cause actual results to differ
materially from such statements. Aspen believes these factors include,
but are not limited to: the actual development of losses and expenses
impacting estimates for the Northern and Southern California wildfires
that occurred in the fourth quarter of 2017; the impact of complex and
unique causation and coverage issues associated with the attribution of
losses relating to such events; potential uncertainties relating to
reinsurance recoveries, reinstatement premiums and other factors
inherent in loss estimation; the possibility of greater frequency or
severity of claims and loss activity, including as a result of natural
or man-made (including economic and political risks) catastrophic or
material loss events, than our underwriting, reserving, reinsurance
purchasing or investment practices have anticipated; the assumptions and
uncertainties underlying reserve levels that may be impacted by future
payments for settlements of claims and expenses or by other factors
causing adverse or favorable development; the reliability of, and
changes in assumptions to, natural and man-made catastrophe pricing,
accumulation and estimated loss models; the models we use to assess our
exposure to losses from future catastrophes contain inherent
uncertainties and our actual losses may differ significantly from
expectations; our capital models may provide materially different
indications than actual results; evolving issues with respect to
interpretation of coverage after major loss events; changes in U.S.
federal income tax laws or regulations or the manner in which they are
interpreted; the impact of U.S. Tax Reform on Aspen’s business,
investments and assets, including (i) changes to the valuation of
deferred tax assets and liabilities, (ii) that the costs associated with
U.S. Tax Reform may be greater than expected; and (iii) the risk that
technical corrections, regulations and supplemental legislation and
future interpretations or applications thereof or other changes may be
issued in the future, including the rules affecting the valuation of
deferred tax assets; any intervening legislative or governmental action
and changing judicial interpretation and judgments on insurers’
liability to various risks; changes in the total industry losses or our
share of total industry losses resulting from events, such as
catastrophes, that have occurred in prior years or may occur and, with
respect to such events, our reliance on loss reports received from
cedants and loss adjustors; our reliance on industry loss estimates and
those generated by modeling techniques; and the impact of one or more
large losses from events other than catastrophes or by an unexpected
accumulation of attritional losses and deterioration in loss estimates.
For a more detailed description of these uncertainties and other
factors, please see the “Risk Factors” section in Aspen’s Annual Report
on Form 10-K and Aspen’s Quarterly Reports on Form 10-Q for the quarters
ended March 31, 2017, June 30, 2017 and September 30, 2017 as filed with
the United States Securities and Exchange Commission. Aspen undertakes
no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the dates on which
they are made.
For further information:
Please visit www.aspen.co.
View source version on businesswire.com: http://www.businesswire.com/news/home/20180125006328/en/
Aspen
Investors
Mark Jones, +1-646-289-4945
Senior
Vice President, Investor Relations
mark.p.jones@aspen.co
or
Media
Steve
Colton, +44 20 7184 8337
Head of Group Communications
Steve.colton@aspen.co
Source: Aspen Insurance Holdings Limited