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.
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version on businesswire.com: http://www.businesswire.com/news/home/20180125006328/en/
AspenInvestorsMark Jones, +1-646-289-4945Senior
Vice President, Investor
Relationsmark.p.jones@aspen.coorMediaSteve Colton, +44 20
7184 8337Head of Group CommunicationsSteve.colton@aspen.co
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