Aspen Insurance Holdings Ltd.
) reported third-quarter 2013 operating net income of $1.05 per
share, which surpassed the Zacks Consensus Estimate of 80 cents
by 31.2%. However, the results lagged the year-ago quarter number
ASPEN INS HLDGS (AHL): Free Stock Analysis
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The outperformance of Aspen Insurance came on the back of
higher-than-expected net earned premiums at the Insurance
Including net realized investment gains, Aspen Insurance's net
income came in at $1.43 per share, down 1.4% year over year.
Increase in total underwriting expenses was responsible for the
decline in net income.
Gross premiums written increased 4.2% during the quarter to
$581.6 million. Higher gross written premiums in the Insurance
segment drove the overall improvement, which was however,
partially offset by weak results in the Reinsurance segment.
Net investment income amounted to $45 million, down 7.4% year
Total underwriting expenses of Aspen Insurance stood at $499.6
million in the third quarter, reflecting a year-over-year hike of
11.3%. The increase was attributable to higher losses and
loss adjustment expenses (up 13.8% year over year), policy
acquisition expenses (up 7.2%) and general, administrative and
corporate expenses (up 9%).
The underwriting income of Aspen Insurance declined 27.2% year
over year to $59.5 million.
Combined ratio deteriorated 480 basis points (bps) year over year
to 91.8%, the downturn stemming from higher catastrophe losses.
Gross written premiums of $219.5 million declined 15.4%
year over year due to higher commutations and previous year
Underwriting income of $49.8 million plunged 32% from the
prior-year quarter results. Lower premiums along with higher
losses and loss adjustment expenses induced the decline.
Combined ratio of the segment also deteriorated 670 bps year from
the prior-year quarter owing to higher catastrophe losses and
$17.1 million of non-catastrophe losses.
Gross written premiums of $362.1 million improved 21.1% year over
year due to growth in Casualty and Financial and Professional
lines of business.
Underwriting income improved 14.1% year over year to $9.7
million, driven by higher net earned premiums.
Combined ratio deteriorated 30 bps from the year-ago quarter to
Aspen Insurance exited the third quarter with total assets of
$10.3 billion, almost in line with the 2012-end level.
As of Sep 30, total cash and cash equivalents amounted to $1.2
billion, decreasing 18.1% from the end of 2012.
Aspen insurance's long term debt of $499.2 million as of Sep 30
was in line with the 2012-end level.
Total shareholders' equity amounted to approximately $3.3
billion, sliding 6.2% from the end of 2012.
Share Repurchase and Dividend Update
During the third quarter, Aspen Insurance spent $54.8 million to
buy back 1.5 million shares. Subsequent to the third quarter,
through Oct 30, the company spent another $2.8 million to
repurchase shares, bringing the year-to-date tally to $295.8
million spent to buy back 8.1 million shares. Aspen Insurance is
left with $236 million under its share repurchase authorization
On Oct 30, the board of directors of Aspen Insurance approved a
quarterly cash dividend of 18 cents per share, which will be paid
on Nov 27, 2013 to shareholders of record as on Nov 13, 2013.
Assuming normal loss experience, current interest rate
environment, and pre-tax catastrophe loss of $190 million per
annum, Aspen Insurance expects its operating return on equity to
be 10% in 2014.
Performances by Other Property and Casualty
Allied World Assurance Company Holdings, AG
) reported its third-quarter 2013 operating net income of $2.93
per share, surpassing the Zacks Consensus Estimate by 37.5% and
the prior-year figure by 35.6%.
Montpelier Re Holdings Ltd.
) reported third-quarter 2013 operating net income of $1.38 per
share, beating the Zacks Consensus Estimate significantly by 86%.
Earnings also surged 62% year over year.
Platinum Underwriters Holdings Ltd.
) reported its third-quarter 2013 net earnings of $1.32 per
share, which beat the Zacks Consensus Estimate of $1.00. However,
the results declined 48% from the year-ago quarter number.
Aspen Insurance presently holds a Zacks Rank #2 (Buy).