Aspen Insurance Holdings Limited Reports Second Quarter and Six
Months to June 30, 2004 Financial Results -- Net income of $80.9
million for second quarter 2004 and $165.9 for the six months to
June 30, 2004. HAMILTON, Bermuda, Aug. 3 /PRNewswire-FirstCall/ --
Aspen Insurance Holdings Limited (NYSE:AHL)(BSX:AHLBSX:BH) today
reported net income of $80.9 million, or $1.13 per diluted share,
for the three months ended June 30, 2004 and $165.9 million, or
$2.31 per diluted share for the six months to June 30, 2004. Gross
written premiums were $380.4 million for the second quarter 2004
and $1,020.6 million for the six months to June 30, 2004. The
combined ratio was 71% for the second quarter 2004, and 68% for the
six months to June 30, 2004. Chris O'Kane, chief executive officer,
said, "I am very pleased to report another strong quarter for
Aspen. Our diversified reinsurance and insurance platform continues
to generate excellent returns and positions us to manage growth and
profitability in a market where the number of attractive
underwriting opportunities is declining." Net investment income was
$14.9 million for the second quarter 2004 and $26.9 for the six
months to June 30, 2004. The Company reports separately on its
reinsurance and insurance operations. Gross written premiums for
the reinsurance segment were $292.5 million for the second quarter
2004 and $851.4 for the six months to June 30, 2004. The
reinsurance operations reported a combined ratio of 68% for the
second quarter 2004 and 64% for the six months to June 30, 2004
Gross written premiums for the insurance segment were $87.9 million
for the second quarter 2004 and $169.2 for the six months to June
30, 2004. The insurance operations reported a combined ratio of 79%
for the second quarter 2004 and 80% for the six months to June 30,
2004. Shareholders' equity increased from $1,299 million at
December 31, 2003 to $1,453 million at June 30, 2004. Earnings
conference call Aspen will hold a conference call tomorrow, August
4, 2004, to discuss its second quarter 2004 financial results at
8:30 AM (New York City time). Investors may participate in the live
conference call by dialing 800-473-6123 (toll-free domestic) or
973-582-2706 (international); passcode: 4914896. Please call to
register at least 10 minutes before the conference call begins. A
replay of the call will be available through August 14, 2004 via
the telephone starting approximately two hours following the live
call on August 4, 2004, and can be accessed at 877-519-4471
(toll-free domestic) or 973-341-3080 (international); passcode:
4914896. In addition, a financial supplement relating to the
Company's financial results for the second quarter 2004 and six
months to June 30, 2004 is available in the Investor Relations
section of the Company's website at http://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 and commercial 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
http://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," "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 Annual Report on Form 10-K
for the year ended December 31, 2003, filed with the U.S.
Securities and Exchange Commission on March 26, 2004. 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. Summary of Results --
Consolidated Income Statement Three Months Three Months Six Months
Six Months Ended Ended Ended Ended June 30, June 30, June 30, June
30, (in US$ millions) 2004 2003 2004 2003 UNDERWRITING REVENUES
Gross premiums written 380.4 252.3 1,020.6 830.0 Premiums ceded
(16.8) 4.6 (147.6) (164.0) Net premiums written 363.6 256.9 873.0
666.0 Change in unearned premiums (36.6) (46.2) (240.2) (333.7) Net
premiums earned 327.0 210.7 632.8 332.3 UNDERWRITING EXPENSES
Losses and loss expenses (139.4) (95.2) (263.5) (165.9) Acquisition
expenses (65.2) (44.8) (124.2) (71.1) General and administrative
expenses (26.1) (7.1) (44.2) (14.5) Total Underwriting Expenses
(230.7) (147.1) (431.9) (251.5) Underwriting income 96.3 63.6 200.9
80.8 OTHER OPERATING REVENUE Net investment income 14.9 5.8 26.9
10.7 Interest expense (0.1) 0.0 (0.5) 0.0 Other income 0.0 (0.2)
0.0 0.0 Total other operating revenue 14.8 5.6 26.4 10.7 OPERATING
INCOME BEFORE TAX 111.1 69.2 227.3 91.5 OTHER Net exchange gain
(loss) 0.1 0.0 (0.7) 0.0 Net realized investment (losses) (4.0) 0.0
(4.3) 0.0 INCOME BEFORE INCOME TAX 107.2 69.2 222.3 91.5 Income
taxes (26.3) (19.3) (56.4) (26.4) NET INCOME AFTER TAX 80.9 49.9
165.9 65.1 Dividends paid (2.1) (4.2) Retained income 78.8 49.9
161.7 65.1 Components of Net Income (after tax) Operating income
83.7 49.9 169.4 65.1 Net realized investment (losses) (2.8) 0.0
(3.0) 0.0 Net realized exchange (losses) 0.0 0.0 (0.5) 0.0 NET
INCOME AFTER TAX 80.9 49.9 165.9 65.1 PER SHARE DATA (in US$ except
for number of shares) Three Months Three Months Six Months Six
Months Ended Ended Ended Ended June 30, June 30, June 30, June 30,
2004 2003 2004 2003 Basic earnings per share Net income 1.17 0.88
2.40 1.14 Operating income 1.21 0.88 2.45 1.14 Diluted earnings per
share Net income 1.13 0.88 2.31 1.14 Operating income 1.16 0.88
2.36 1.14 Weighted average common shares outstanding 69,174,303
56,919,780 69,176,253 56,919,780 Weighted average common shares
outstanding and dilutive potential common shares 71,929,628
56,919,780 71,916,678 56,919,780 Book, value per share 20.9 16.6
20.9 16.6 Diluted book value (treasury stock method) 20.1 16.6 20.1
16.6 Common shares outstanding at end of the period 69,174,303
56,919,780 69,174,303 56,919,780 Common shares outstanding and
dilutive potential common shares at end of the period 71,929,628
56,919,780 71,929,628 56,919,780 Consolidated Balance Sheet (in US$
millions) June 30, 2004 December 31, 2003 ASSETS Investments Fixed
Maturities 1,515.0 1,048.1 Short term investments 535.5 568.2 Total
Investments 2,050.5 1,616.3 Cash and cash equivalents 217.7 230.8
Reinsurance Recoverables Unpaid losses 63.1 43.6 Ceded unearned
premiums 93.7 48.9 Receivables Underwriting premiums 754.8 496.5
Other 21.5 40.8 Deferred policy acquisition costs 146.6 94.6 Office
properties and equipment 1.2 0.4 Intangible assets 6.5 6.6 Total
Assets 3,355.6 2,578.5 LIABILITIES Insurance Reserves Losses and
loss adjustment expenses 755.9 525.8 Unearned premiums 864.3 572.4
Total insurance reserves 1,620.2 1,098.2 Payables Reinsurance
premiums 99.3 59.9 Accrued expenses and other payables 142.6 81.7
Bank debt 40.0 40.0 Total Liabilities 1,902.1 1,279.8 SHAREHOLDERS'
EQUITY Ordinary shares 1,092.7 1,090.8 Retained earnings 342.4
180.7 Accumulated other comprehensive income, net of taxes 18.4
27.2 Total shareholders' equity 1,453.5 1,298.7 Total Liabilities
and Shareholders' Equity 3,355.6 2,578.5 SUMMARIZED CASH FLOW (in
US$ millions) Six Months Six Months Ended June Ended June 30, 2004
30, 2003 Net cash from operating activities 437.3 158.5 Net cash
from investing activities (449.0) (63.6) Net cash from financing
activities (2.1) 0.7 Effect of exchange rate movements on cash and
cash equivalents 0.7 0.1 Increase in cash and cash equivalents:
Cash at beginning of the period 230.8 9.6 Cash at end of the period
217.7 105.3 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 underlying trends 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
http://www.aspen.bm/. (1) Annualized 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 below and 2) excludes from average equity, the average
after tax unrealized appreciation or depreciation on investments
and the average after tax unrealized foreign exchange gains or
losses. Unrealized appreciation (depreciation) on foreign exchange
on investments is primarily the result of interest rate movements
and the resultant impact on fixed income securities, and unrealized
appreciation (depreciation) is the 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 realized. Therefore
the Company believes that excluding this unrealized 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 recognized as a standard of performance by
investors, analysts, rating agencies and other users of its
financial information. See page 20 of the Company's financial
supplement for a reconciliation of operating income to net income
and page 15 for a reconciliation of average equity. (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 realized capital gains or
losses and after-tax net foreign exchange gains or losses. The
Company excludes after tax net realized 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 analyze the Company's
results of operations in a manner similar to how management
analyzes the Company's underlying business performance. Operating
income should not be viewed as a substitute for GAAP net income.
Please see page 20 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
http://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 20 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 http://www.aspen.bm/. DATASOURCE: Aspen
Insurance Holdings Limited CONTACT: Investors, Noah Fields, Head of
Investor Relations, or Julian Cusack, Chief Financial Officer, both
of Aspen Insurance Holdings Limited, +1-441-297-9382; U.S.
Contacts, Carina Thate or Jason Thompson, both of The Abernathy
MacGregor Group, +1-212-371-5999; U.K. Contacts, Brian Hudspith of
The Maitland Consultancy, +44-20-7379-5151, all for Aspen Insurance
Holdings Limited Web site: http://www.aspen.bm/
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