Aspen Q4 adj UW income jumps 30% to $136 million as GWP grows 18% to $1.01 billion

By James Thaler

Feb 27 - (The Insurer) - Aspen grew its Q4 adjusted underwriting gain by 30.1% to $136 million, driven by an adjusted gain in reinsurance that grew by 59% to $96.1 million from $60.3 million, which more than offset a modest downturn in the insurance adjusted gain to $40.2 million from $44.5 million.

• Aspen’s adj Q4 UW gain +30% to $136 million driven by 59% jump in reinsurance

• FY:24 NI drops 9% to $486.1 million in ’24; op income +18% to $432.5 million

• Adjusted combined ratio rises slightly in 2024 to 86.8% from 86.4%

• Companywide gross written premiums rise by 16.2% to $4.61 billion in 2024

The Bermuda-based firm reported results after markets closed on Thursday where net income improved in the quarter to $234.8 million from $215.6 million and operating income grew to $145.0 million from $97.6 million.

Aspen’s reported group combined ratio improved significantly in the quarter to 82.5% from 89.4%, but was only 0.9 points better on an adjusted basis at 83.4%, versus the 84.3% it reported in 2023’s fourth quarter.

The insurance segment’s reported combined ratio improved to 89.3% from 94.9%, but deteriorated on an adjusted basis to 90.9% from 88.2%, while the reinsurance segment reported combined ratio was better at 74.9% from 82.5% in Q4 2023.

On an adjusted basis the reinsurance combined ratio improved to 74.7% from 79.3%.

ASPEN GROWS GWP BY 16.2% TO $4.61 BILLION IN 2024

Companywide gross written premiums grew by 17.6% to $1.01 billion from $859.7 million, with insurance GWP in the quarter surging by 24.0% to $721.7 million from $581.9 million, as the same figure in reinsurance grew by only 4.0% to $289.0 million.

Overall in 2024, GWP increased by 16.2% to $4.61 billion from $3.97 billion, boosted by 24.0% GWP growth in reinsurance to $1.89 billion from $1.52 billion and 11.3% growth in insurance GWP to $2.72 billion from $2.45 billion.

Full-year net income at the company dropped to $486.1 million in 2024 from $534.7 million in 2023, though operating income for the year grew to $432.5 million from $367.6 million.

Aspen’s full-year reported combined ratio ticked up slightly in 2024 to 87.9% from 87.5%, and grew on an adjusted basis to 86.8% from 86.4%, while its annualised operating return on equity slipped in 2024 to 19.4% from 20.2% in 2023.

Companywide underwriting income grew by 5.8% in 2024 to $345.8 million from $326.8 million, and on an adjusted basis by 7.2% to $380.8 million from $355.3 million.

The insurance division reported $150.1 million in underwriting income in 2024, a 37.5% increase from $112.6 million in 2023, though it fell on an adjusted basis to $160.5 million from $161.3 million.

Full-year reinsurance underwriting profits fell by 18.5% to $195.7 million from $214.2 million, but grew on an adjusted basis to $220.3 million from $194.0 million.

Aspen recorded $52.0 in fourth quarter catastrophe losses, up from $11.1 million in 2023’s fourth quarter, and had $187.3 million in cat losses overall in 2024, up from $120.1 million in 2023.

For the year, the insurance division generated $40.5 million in cat losses, an increase from $33.1 million in 2023, while reinsurance cat losses for the year jumped to $146.8 million from $87.0 million.

Insurance cat losses in the fourth quarter increased to $14.2 million from $0.3 million, and in reinsurance rose to $37.8 million from $10.8 million.

ADVERSE DEVELOPMENT FALLS TO $600K IN '24 FROM $32.3 MILLION IN '23

Adverse development for accident years not covered by legacy transactions amounted to $0.6 million in 2024, down from $32.3 million in 2023, with Aspen’s fourth quarter $2.6 million reserve charge an improvement from $16.0 million in Q4 2023.

In total, Aspen’s insurance segment recorded $0.8 million in reserve charges in 2024, down from $26.6 million in 2023, as it had $0.2 million in releases in reinsurance during the year, after recording a $5.7 million charge in 2023.

Net investment income also improved in 2024 to $318.0 million from $275.7 million.

“2024 has seen Aspen deliver yet another excellent set of results driven by healthy performance from each of our powerful earnings engines, underwriting, investments, and capital markets,” Aspen executive chair and CEO Mark Cloutier said in a statement.

“2025 is set to be an important year for Aspen, and one we enter with confidence with the business now demonstrating sustained strong performance,” he added.

“In a year challenged by several industry-wide major loss events, these results demonstrate how Aspen’s expert and disciplined underwriting, consistent investment performance and a growing contribution from Aspen Capital Markets are enabling us to successfully deliver against our strategy, resulting in an operating return on average equity of 19.4%,” Cloutier continued.

The Aspen CEO said that ongoing political uncertainty and accelerated changes in technology, as well as a significant number of natural and weather-related catastrophes that are affecting millions of people, mean that the risk environment has never been more complex or challenging.

“I am proud of the role we at Aspen play in helping people, organizations and communities manage risk and recover from often tragic losses,” he commented.

“Looking forward, we believe we have the product and service offerings, culture, market standing, and risk appetite that position us very well to continue to deliver much needed solutions to our customers and trading partners, while also achieving sustainable growth and consistent returns for our shareholders across a broad spectrum of industry loss event sets and market trading conditions,” Cloutier said.

Aspen group president Christian Dunleavy highlighted Aspen’s written premium growth in 2024, as well as a 24.8% increase in Aspen Capital Markets fee income to $169 million and the firm’s 17.7% increase in operating income to $433 million.

“All of these results reinforce our core strategies and underscore the relevance and importance of our platforms, products, and service offerings in their respective markets,” Dunleavy said in a statement.

Dunleavy also commented on Aspen’s 86.8% adjusted combined ratio to make the case that the company “maintained excellent underwriting performance” in 2024, while growing adjusted underwriting income by 7.2% to $381 million.

“This performance is testament to our proactive portfolio construction, our distribution network and Aspen’s ability to nimbly allocate risk across our platforms, enhanced by Aspen Capital Markets, in response to the needs of our customers,” Dunleavy said.

“Underpinned by our balance sheet strength, we are well-placed to grow where we see opportunity, while delivering sustainable underwriting profitability for our shareholders,” he concluded.