Aspen Insurance (NYSE:AHL)
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Aspen Insurance Holdings Limited Reports Fourth Quarter and Full Year 2003
Financial Results
HAMILTON, Bermuda, February 20 /PRNewswire/ --
- Net Income of US$54.5 Million for Fourth Quarter 2003 and
US$152.1 Million For Full Year 2003
- Fourth Quarter 2003 Combined Ratio 79%; Full Year 2003 Combined
Ratio 78%
HAMILTON, Bermuda, February 20 /PRNewswire/ --
Aspen Insurance Holdings Limited (NYSE: AHL) today reported net income of
US$54.5 million, or US$0.88 per diluted share, for the three months ended
December 31, 2003 and net income of US$152.1 million, or US$2.56 per diluted
share, for the year ended December 31, 2003.
Gross written premiums were US$145.0 million for the fourth quarter 2003
and US$1.3 billion for the full year 2003.
The combined ratio was 79% for the fourth quarter 2003 and 78% for the
full year 2003.
Chris O'Kane, chief executive officer, said, "All of our businesses
produced excellent results in 2003, resulting inan operating return on
equity (1) of 16% for the year and 23% for the quarter. Our strong
performance demonstrates that we are succeeding in establishing Aspen as a
highly focused leader in key reinsurance and insurance lines. Our financial
strength, diverse operating platform and our sophisticated risk selection
criteria position us to achieve continued growth in 2004."
Net investment income was US$12.9 million for the fourth quarter 2003 and
US$29.6 million for the full year 2003.
The Company reports separately on its reinsurance and insurance
operations. Gross written premiums for the reinsurance segment were
US$62.3 million for the fourth quarter 2003 and US$1.0 billion for the full
year 2003. The reinsurance operationsreported a combined ratio of 80% for
the fourth quarter 2003 and 79% for the full year 2003. Gross written
premiums for the insurance segment were US$82.7 million for the fourth
quarter 2003 and US$304.9 million for the full year 2003. The insurance
operations reported a combined ratio of 77% for the fourth quarter 2003 and
77% for the full year 2003.
Shareholders' equity increased from US$878.1 million at December 31, 2002
to US$1.3 billion at December 31, 2003, including US$246.4 million
attributable to the issue of new shares and US$7.5 million attributable to
share-based compensation.
Earnings conference call
Aspen will hold a conference call today to discuss its fourth quarter and
full year 2003 financial resultstoday, February 20th at 10:00 AM (EST).
Investors may participate in the live conference call by dialing
800-473-6123 (toll-free domestic) or +1-973-582-2706 (international);
passcode: 4524907. Please call to register at least 10 minutes before the
conference call begins. A replay of the call will be available for two days
via the telephone starting approximately two hours following the call on
February 20, 2004, and can be accessed at 877-519-4471 (toll-free domestic)
or +1-973-341-3080 (international); passcode: 4524907.
In addition, a financial supplement relating to the Company's financial
results for the fourth quarter and full year 2003 is available in the
Investor Relations section of the Company's website at www.aspen.bm.
About Aspen Insurance Holdings Limited
Aspen Insurance Holdings Limited was established in June 2002. Aspen is
a Bermudian holding company that provides property and casualty reinsurance
in the global market, property and liability insurance principally in the
United Kingdom and surplus lines insurance in the United States. Aspen's
operations are conducted through its wholly-owned subsidiaries located in
London, Bermuda and the United States: Aspen Insurance UK Limited, Aspen
Insurance Limited and Aspen Specialty Insurance Company. Aspen's reinsurance
segment consists of property reinsurance, casualty reinsurance and specialty
reinsurance lines of business. Aspen's insurance segment consists of
commercial property insurance andcommercial liability insurance lines of
business. Aspen's principal existing shareholders include The Blackstone
Group, Candover Partners Limited, Wellington Underwriting plc and Credit
Suisse First Boston Private Equity. For more information about Aspen, please
visit the Company's website at www.aspen.bm.
Application of the Safe Harbor of the Private Securities Litigation
Reform Act of 1995:
This press release may contain, and Aspen may from time-to-time make,
written or oral "forward-looking statements" within the meaning of the U.S.
federal securities laws. These statements 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," "project," "anticipate,"
"seek," "will," "project," "estimate," "may," "continue," and similar
expressions of a future or forward-looking nature.
All forward-looking statements rely on a number of assumptions concerning
future events and are subject to a number of uncertainties and other factors,
many of which are outside the Company's control that could cause actual
results to differ materially from such statements. Important events that
could cause the actual results to differ include, but are not limited to: the
impact of acts of terrorism and acts of war and related legislations; the
possibility of greater frequency or severity of or unanticipated losses from
natural or man-made catastrophes; the effectiveness of the Company's loss
limitation methods; changes in the availability, cost or quality of
reinsurance or retrocessional coverage; the loss of key personnel; a decline
in the operating subsidiaries' ratings with Standard & Poor's, A.M. Best or
Moody's; changes in general economic conditions; increased competition on the
basis of pricing, capacity, coverage terms or other factors; decrease in
demand for the Company's insurance or reinsurance products and cyclical
downturn of the industry; and changes in governmental regulation or tax laws
in the jurisdictions where the Company conducts business. For a more
detailed description of these uncertainties and other factors, please see the
"Risk Factors" section in Aspen's registration statement on Form F-1, filed
with the U.S. Securities and Exchange Commission in connection with the
Company's initial public offering. 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, whichspeak only as
of the dates on which they are made.
Summary of Results - Consolidated Income Statement
(in US$ millions) Three Months Ended Twelve Period
Months Ended
Ended
December 31 December 31
2003 2002 2003 2002
UNDERWRITING REVENUES
Gross premiums written 145.0 77.0 1,306.8 374.8
Premiums ceded (13.3) 2.6 (214.0) (62.2)
Net premiums written 131.7 79.6 1,092.8 312.6
Change in unearned premiums 141.6 (11.0) (280.5) (192.3)
Net premiums earned 273.3 68.6 812.3 120.3
UNDERWRITING EXPENSES
Losses and loss expenses (152.0) (41.4) (428.4) (76.9)
Acquisition expenses (40.0) (13.3) (152.3) (21.1)
General and administrative
expenses (24.8) (6.6) (53.3) (8.7)
Total Underwriting Expenses (216.8) (61.3) (634.0) (106.7)
Underwriting Income 56.5 7.3 178.3 13.6
OTHER OPERATING REVENUE
Net investment income 12.9 5.3 29.6 8.5
Interest expense (0.4) 0.0 (0.4) 0.0
Other income (expense) (0.1) 0.4 0.0 0.4
Total other operating revenue 12.4 5.7 29.2 8.9
OPERATING INCOME BEFORE TAX (2) 68.9 13.0 207.5 22.5
OTHER
Netexchange gains (losses) 1.5 (0.2) 1.5 12.7
Net realized investment gains
(losses) (0.6) 0.1 (2.4) (0.1)
INCOME BEFORE INCOME TAX 69.8 12.9 206.6 35.1
Income taxes / credits (15.3) 0.2 (54.5) (6.5)
NET INCOME AFTER TAX 54.5 13.1 152.1 28.6
Components of Net Income (after
tax)
Operating income (2) 53.8 9.4 152.7 16.0
Net realized investment
gains (losses) (0.4) 0.0 (1.7) (0.1)
Net realized exchange gains 1.1 3.7 1.1 12.7
NET INCOME AFTER TAX 54.5 13.1 152.1 28.6
PER SHARE AND SHARES (in US$)
DATA
Basic earnings per share
Net income (as reported) 0.90 0.34 2.63 0.89
Operating income (as
reported) (2) 0.89 0.24 2.64 0.50
Diluted earnings per share
Net income (as reported) 0.88 0.34 2.56 0.89
Operating income (as
reported) (2) 0.87 0.24 2.57 0.50
Weighted average common shares
outstanding 60.4 38.9 57.8 32.0
Weighted average common shares 62.1 38.9 59.5 32.0
outstanding
and dilutive potential common
shares
Consolidated Balance Sheet
(in US$ millions) December 31, December 31,
2003 2002
ASSETS
Investments
Fixed Maturities 1,048.1 87.3
Short term investments 568.2 835.1
Total Investments 1,616.3 922.4
Cash and cash equivalents 230.8 9.6
Reinsurance Recoverables
Unpaid losses 43.6 12.5
Ceded unearned premiums 48.9 18.9
Receivables
Underwriting premiums 496.5 214.5
Other 40.8 0.8
Deferred policy acquisition costs 94.6 31.0
Office properties and equipment 0.4 0.1
Intangible assets 6.6 2.0
Total Assets 2,578.5 1,211.8
LIABILITIES
Insurance Reserves
Losses and loss adjustment
expenses 525.8 93.9
Unearned premiums 572.4 215.7
Total insurance reserves 1,098.2 309.6
Payables
Reinsurance premiums 59.9 2.1
Accrued expenses and other
payables 81.7 22.0
Bank debt 40.0 -
Total Liabilities 1,279.8 333.7
SHAREHOLDERS' EQUITY
Ordinary shares 1,090.8 836.9
Retained earnings 180.7 28.6
Accumulated other comprehensive 27.2 12.6
income, net of
taxes
Total shareholders' equity 1,298.7 878.1
Total Liabilities and Shareholders'
Equity 2,578.5 1,211.8
Book value per share 18.7 15.4
Diluted book value per share (treasury 18.3 15.4
stock method)
(3)
Summarized Cash Flow
(in US$ millions)
Year ended Period from
December 31, incorporation
2003 on May
23, 2002 to
December 31,
2002
Net cash from operating activities 636.6 78.1
Net cash from investing activities (703.3) (917.4)
Net cash from financing activities 286.4 836.9
Effect of exchangerate movements on cash and
cash equivalents 1.5 12.0
Increase in cash and cash equivalents:
Cash at beginning of the period 9.6
Cash at end of the period 230.8 9.6
HAMILTON, Bermuda, February 20 /PRNewswire/ --
Non-GAAP Financial Measures
In presenting the Company's results, management has included and
discussed certain "non-GAAP financial measures", as such term is defined in
Regulation G. Management believes that these non-GAAP measures, which may be
defined differently by other companies, better explain the Company's results
of operations in a manner that allows for a more complete understanding of
the underlyingtrends in the Company's business. However, these measures
should not be viewed as a substitute for those determined in accordance with
GAAP. The reconciliation of such non-GAAP financial measures to their
respective most directly comparable GAAP financial measures in accordance
with Regulation G is included in the financial supplement, which can be
obtained from Aspen's website at www.aspen.bm.
(1) Annualised Operating Return on Average Equity (ROAE) is a non-GAAP
financial measure. Annualized Operating Return on Average Equity is
calculated using 1) operating income, as defined and reconciled below and 2)
excludes from average equity, the average after tax unrealised appreciation
or depreciation on investments and the average after tax unrealised foreign
exchange gains or losses. Unrealised appreciation (depreciation) on
investments is primarily the result of interest rate movements and the
resultant impact on fixed income securities, and unrealised appreciation
(depreciation) isthe result of exchange rate movements between the US dollar
and the British pound. Such appreciation (depreciation) is not related to
management actions or operational performance, nor is it likely to be
realised. Therefore the Company believes that excluding this unrealised
appreciation (depreciation) provides a more consistent and useful measurement
of operating performance, which supplements GAAP information. Average equity
is calculated as the arithmetic average on a monthly basis for the stated
periods.
The Company presents ROAE as a measure that it is commonly recognised as
a standard of performance by investors, analysts, rating agencies and other
users of its financial information.
(2) Operating income is a non-GAAP financial measure. Operating income
is an internal performance measure used by the Company in the management of
its operations and represents after-tax operational results excluding, as
applicable, after-tax net realised capital gains or losses and after-tax net
foreign exchange gains or losses.
The Company excludes after tax net realised capital gains or losses and
after-tax net foreign exchange gains or losses from its calculation of
operating income because the amount of these gains or losses is heavily
influenced by, and fluctuates in part, according to the availability of
market opportunities. The Company believes these amounts are largely
independent of its business and underwriting process and including them
distorts the analysis of trends in its operations. In addition to presenting
net income determined in accordance with GAAP, the Company believes that
showing operating income enables investors, analysts, rating agencies and
other users of its financial information to more easily analyse the Company's
results of operations in a manner similar to how management analyses the
Company's underlying business performance. Operating income should not be
viewed as a substitute for GAAP net income. Please see page 21 of the
company's financial supplement for a reconciliation of operating income to
net income. The company's financial supplement can be obtained from Aspen's
website at www.aspen.bm.
(3) Diluted book value per share is a non-GAAP financial measure. The
Company has included diluted book value per share because it takes into
account the effect of dilutive securities; therefore, the Company believes it
is a better measure of calculating shareholder returns than book value per
share. Please see page 21 of the company's financial supplement for a
reconciliation of diluted book value per share to basic book value per share.
The company's financial supplement can be obtained from Aspen's website at
www.aspen.bm.
Web site: http://www.aspen.bm
DATASOURCE: Aspen Insurance Holdings Limited
CONTACT: U.S. - Carina Thate or Jason Thompson, both of The Abernathy MacGregor
Group, +1-212-371-5999; or U.K. - Brian Hudspith of The Maitland Consultancy,
+44-20-7379-5151, all for Aspen Insurance Holdings Limited; or Investors -
Julian Cusack, Chief Financial Officer of Aspen Insurance Holdings Limited,
+1-441-295-8201