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Earnings Review and Free Research Report: Aspen Reported Better than Expected Results

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LONDON, UK / ACCESSWIRE / November 21, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Aspen Insurance Holdings Ltd (NYSE: AHL) ("Aspen"), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=AHL, following the Company's posting of its third quarter fiscal 2017 operating results on October 25, 2017. The insurance and reinsurance Company's gross written premiums jumped 11.7%. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:


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Earnings Reviewed

For the three months ended September 30, 2017, Aspen's gross written premiums advanced 11.7% to $852.5 million compared to $763.5 million in Q3 2016. The Company's net written premiums for the reported quarter were $607.4 million, down 4.9% compared to $638.4 million in the prior year's same quarter. Aspen's net earned premiums for Q3 2017 was $652.5 million versus $681.0 million in the year-ago same period and ahead of analysts' expectations by $46.76 million.

Aspen's retention ratio in Q3 2017 was 71.2% compared to 83.6% in Q3 2016. During Q3 2017, Aspen's loss ratio totaled 119.0% compared to 57.2% in Q3 2016. The loss ratio included pre-tax catastrophe losses of 55.9%, net of reinsurance recoveries, and $12.5 million of reinstatement premiums, in the reported quarter, primarily due to hurricanes Harvey, Irma, and Maria, and other catastrophes, including weather-related events and the Mexican earthquakes.

Aspen's total expense ratio was 33.2% compared to 37.6% in Q3 2016. The Company's policy acquisition expense ratio was 16.2% in the reported quarter compared to 19.2% in the year-ago corresponding period. Aspen's accident year loss ratio excluding catastrophes was 65.9% in Q3 2017 compared to 58.6% in Q3 2016.

Aspen reported net loss after tax of $253.8 million, or $4.48 per diluted share, compared to net income after tax of $95.6 million, or $1.40 per diluted share, in Q3 2016. The Company's operating loss after tax came in at $276.6 million, or $4.78 per diluted share, in the reported quarter compared to operating income of $69.3 million, or $0.97 per diluted ordinary share, in the year-ago same period, but was lower than Wall Street's expectations for a loss of $4.99 per share.

Aspen's annualized net income return on average equity was negative 37.6% and annualized operating return on average equity was negative 40.0% for Q3 2017 compared to 11.2% and 8.0%, respectively, for Q3 2016.

Operating highlights

During Q3 2017, Aspen's Insurance gross written premiums grew 5.9% to $421.0 million compared to $397.6 million in Q3 2016, primarily due to growth in the Financial and Professional lines sub-segment. The segment's net written premiums totaled $243.8 million, down 24.7% from $323.9 million in the year-ago same period. The Insurance retention ratio in Q3 2017 was 57.9% compared to 81.5% in Q3 2016.

For Q3 2017, Aspen's Reinsurance division's gross written premiums were $431.5 million, up 17.9% from $365.9 million in Q3 2016, primarily due to growth in the Specialty sub-segment, largely from AgriLogic. The segment's net written premiums advanced 15.6% to $363.6 million, from $314.5 million in the year-ago same period. Reinsurance segment's accident year loss ratio excluding catastrophes for Q3 2017 was 61.7% compared to 58.2% in Q3 2016.

Investment performance

Aspen's Investment income of $46.4 million in Q3 2017 was unchanged on a y-o-y basis. The total return on the Company's aggregate investment portfolio was 0.8% for the reported quarter and reflected net realized and unrealized gains and losses in both the fixed income and equity portfolios. Aspen's Book yield on the fixed income portfolio as at September 30, 2017, was 2.54% compared to 2.49% as at December 31, 2016.


Aspen's total shareholders' equity was $3.2 billion as at September 30, 2017. The Company's diluted book value per share was $44.00 as at September 30, 2017, down 5.8% from December 31, 2016.

During Q3 2017, Aspen repurchased 451,268 ordinary shares at an average price of $44.32 per share for a cost of $20 million. Since the beginning of 2017, Aspen has repurchased 648,941 ordinary shares at an average price of $46.23 per share for a total cost of $30 million.

Stock Performance

At the close of trading session on Monday, November 20, 2017, Aspen Insurance's stock price ended the day flat at $41.00. A total volume of 263.01 thousand shares were exchanged during the session. The Company's shares have a dividend yield of 2.34%. At Monday's closing price, the stock's net capitalization stands at $2.43 billion.

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