Aspen Insurance Holdings Ltd.
) reported fourth-quarter 2013 operating net income of $1.13 per
share, which beat the Zacks Consensus Estimate of $1.12 by a
penny. The number, however, rebounded substantially from the
prior-year quarter's operating net loss of 15 cents a share.
Including net realized and unrealized exchange losses and net
realized and unrealized gains on investments, this property and
casualty insurer reported net income of $1.21 per share for the
quarter, which compared favorably with 9 cents of net loss
reported in the year-ago quarter.
The bottom-line surge was driven by strong growth in net premiums
earned at the Insurance segment.
Gross premiums written increased 4.9% during the quarter to
$604.4 million. Higher gross written premiums in the Insurance
segment drove the overall improvement which was, however,
partially offset by lower premiums written at the Reinsurance
Aspen Insurance's net investment income amounted to $47.2
million, down 7.6% year over year.
Total underwriting expenses of Aspen Insurance stood at $526
million in the fourth quarter, reflecting a year-over-year
decline of 12.8%. The decrease was attributable to lower losses
and loss adjustment expenses and partially offset by higher
policy acquisition expenses (up 10.7% year over year) and
general, administrative and corporate expenses (up 6.7%).
Underwriting income of Aspen Insurance grossed $55.8 million in
the reported quarter compared to underwriting loss reported in
the previous-year quarter. The significant improvement was driven
by better underwriting income result at the Reinsurance segment
partially offset by weak results at the Insurance segment.
Combined ratio improved 1610 basis points (bps) year over year to
91.9% during the fourth quarter.
$176.2 million of gross written premiums during the reported
quarter declined 9.4% year over year due to prior-year
reinstatement premiums of $21 million related to the outbreak of
the super-storm Sandy in 2012.
This segment's underwriting income during the quarter under
review totaled $118 million against $21.4 million of underwriting
loss reported in the year-ago quarter. The improvement was
primarily attributable to significantly lower losses and loss
adjustment expenses partially offset by lower net earned
Combined ratio of 58.6% improved 4850 bps year over year due to
higher prior-year loss reserve development.
$428.2 million of gross written premiums during the reported
quarter improved 12.2% year over year due to growth in Casualty
and Financial and Professional lines of business.
This segment of Aspen Insurance witnessed an underwriting loss of
$62.2 million during the quarter, wider than an underwriting loss
of $10.7 million in the prior-year quarter. The wider loss was
mainly attributable to higher loss and loss adjustment expenses.
Combined ratio also deteriorated 1740 bps year over year to
Full-Year 2013 Highlights
For full-year 2013, Aspen Insurance reported operating net income
of $3.88 per share, up 14.8% from the 2012 number. Better capital
management, increasing investment returns and also optimization
of business portfolio drove bottom-line growth.
Including net realized and unrealized exchange losses and gains
on investment, Aspen Insurance reported net income of $329.3
million for 2013, up 17.4% year over year.
Net earned premium of $2.17 billion during 2013 was 4.2% than
that of 2012.
Aspen Insurance exited the third quarter with total assets of
$10.23 billion, down 0.8% compared to the 2012-end level.
As of Sep 30, total cash and cash equivalents of Aspen Insurance
amounted to $1.29 billion, decreasing 11.6% from the end of 2012.
Aspen Insurance's long-term debt of $549 million as of Dec 31,
2013 was 10% higher than the 2012-end level.
Aspen Insurance's total shareholders' equity amounted to
approximately $3.35 billion, sliding almost 4% from the end of
Aspen Insurance reported operating return on average equity of
9.7% for 2013 comparing favorable with 8.5% reported in 2012.
Share Repurchase Update
During 2013, Aspen Insurance repurchased 8.5 million of its
shares for $309.6 million. Additionally, since the beginning of
2014, the company has bought back shares worth $22.1 million.
Assuming normal loss experience, current interest rate
environment and pre-tax catastrophe loss of $185 million per
annum, Aspen Insurance expects its operating return on equity to
be 10% in 2014, in line with its previously issued guidance.
Performance of Other Stocks
Among other property and casualty insurers,
) reported operating net earnings of $2.39 per share in the
fourth quarter of 2013, surpassing the Zacks Consensus Estimate
by 19.5%. Moreover, earnings surged nearly 67% on a
American Financial Group Inc.
) reported fourth-quarter operating earnings per share of $1.28,
which comfortably beat the Zacks Consensus Estimate of $1.23. On
a year-over-year basis, earnings soared 91%.
The Travelers Companies Inc.
) reported operating net earnings of $2.68 per share in the
fourth quarter, surpassing the Zacks Consensus Estimate by 23.5%.
Moreover, earnings improved nearly fourfold on a year-over-year
Aspen Insurance presently carries a Zacks Rank #3 (Hold).
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