Aspen Insurance (AHL) Q4 2023 earnings summary

Executive summary

• Fourth consecutive year of improved performance; net income reached $534.7 million versus $51.1 million in 2022, with a reported combined ratio of 87.5% and adjusted combined ratio of 86.4%.

• Underwriting discipline, portfolio optimization, investment income and capital-markets fees supported stronger results; operating return on average equity rose to 20.2% from 11.9%.

Financial highlights

• Net earned premiums were $2,614.5 million, down 2.8% YoY; gross written premiums fell 8.6% to $3,967.6 million as exposure reductions outweighed renewal-rate gains.

• Net investment income increased 46.6% to $275.7 million; net realized and unrealized investment gains were $14.5 million versus a $177.6 million loss in 2022.

• GAAP EPS was $8.03 versus $0.11; net income available to ordinary shareholders was $484.8 million versus $6.5 million.

• Income tax benefit was $132.1 million, including a $201.1 million deferred tax benefit from Bermuda's new tax regime; 2022 included a $94.1 million U.S. deferred-tax valuation-allowance reversal.

Outlook and guidance

• Hard-market conditions, tighter capacity, catastrophe activity and sustained inflation are expected to support favorable insurance pricing; continued focus is on sustainable growth, underwriting returns and catastrophe-risk management.

• Higher rates are expected to increase investment income; mark-to-market losses are expected to reverse as securities mature.

• Bermuda's 15% corporate income tax applies to qualifying entities for fiscal years beginning on or after January 1, 2025; increased Bermuda tax payments are expected from 2025.