Aspen’s reinsurance arm sees 16% drop in H1’23 premiums, underwriting income improves

Bermuda-based insurer and reinsurer, Aspen Insurance Holdings, has reported a 16% decrease in gross written premiums for its reinsurance segment for the first six months of 2023, while underwriting income rose.

Gross written premiums (GWP) for H1’23 was $876 million for the reinsurance segment, compared to $1.05 billion in 2022, primarily driven by management’s planned initiatives to reduce exposure to certain more volatile lines of business with inadequate terms as part of our continued portfolio optimisation, partially offset by strong rate increases.

In the the company’s reinsurance arm, net written premiums (NWP) was $605 million, in the six months ended June 30, 2023, a decrease of 23% compared with $784 million in the six months ended June 30, 2022.

Underwriting income for the reinsurance segment was $111 million (adjusted underwriting income of $112 million) in H1’23, compared to an underwriting income of $38 million (adjusted underwriting income of $24 million) in 2022.

The combined ratio was 80.7% for the reinsurance segment in H1’23, compared to 93.7% in H1’22.

Turning to Aspen’s primary insurance business, GWP decreased from $1.31 billion in H1’22 to $1.25 billion in H1’23. This is primarily due to our decision to reduce writing certain programs, which did not meet our profitability expectations, actively managing down premiums within financial and professional lines, offset by favourable market conditions in first party and specialty lines, evidenced with new business activity and a strong rate environment.

NWP increased within insurance by 3% to $746 million in H1’23, compared with $722 million in H1’22, primarily due to changes to Aspen’s reinsurance programs.

On the asset side of the balance sheet, Aspen has reported investment income of $129 million for H1’23, which is an increase of 46% slightly from $89 million seen in H1’22. This is a result of active repositioning of investments to take advantage of higher interest rates, with limited increase in investment risk, the re/insurer noted.

Across the group, the re/insurer reported an increase in operating income and net income by 47% to $191 million and by 352% to $219 million, respectively.

Underwriting income increased by 33% to $208 million, compared with $157 million, resulting in a combined ratio of 83.8% in H1’23, compared to 88.2% in H1’22.

Across the group, the GWP was $2.13 billion, which was slightly lower compared to the same period last year. While, net investment income of $129 million saw an increase of 46%.

Mark Cloutier, Group Executive Chairman and Chief Executive Officer (CEO), commented: “Our diverse portfolio across our two underwriting segments, Insurance and Reinsurance, allows us to flexibly manage our business. Our underwriting income was well balanced across these two segments and their positive performance was further strengthened by continued expense discipline across the Group, with general and administrative expenses decreasing by 9% to $169 million, notwithstanding inflationary pressures on our cost base.”

“In the first half of the year, we again saw significant rate increases across our portfolio, and the outlook remains favorable. Our relentless focus on underwriting discipline and managing volatility means we are well placed to continue to take advantage of current market conditions,” he added.

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