Aspen reports ‘disappointing’ results for 2019 as it appoints CFO

Mark Coutier

Aspen Insurance has reported an operating loss after tax of $48.4m (£39.7m), which it says is driven by costs relating to the acquisition of the company by Apollo Global Management, restructuring costs, reserve strengthening, unrealised investment losses and exchange rate impact.

Aspen entered an agreement with investment manager Apollo in August 2018 to sell all remaining shares in the business for $42.75 (£33.15) per share, a total of $2.6bn (£2bn).

Gross written premiums were broadly in line with 2018, at $3.44bn for 2019. General and administrative expenses, excluding non-operating expenses, were $396m down from $414.5m in 2018 with an operating expense ratio of 17.3% compared with 18.7% in 2018.

In its results statement Aspen said its combined ratio, excluding non-operating expenses, of 108.5% (2018: 106.5%) was impacted by 5.8 percentage points from legacy and US agriculture business.

Mark Cloutier, group executive chairman and CEO, pictured, said in a statement: “2019 was both a challenging and transitional year for our group. Since completion of the merger transaction early in the year we have undertaken a number of initiatives targeted at protecting the financial strength of the company, while also driving change geared at improving performance over the medium and longer term - all with a focus on long term total value creation.”

Cloutier said these actions included refocusing the products underwritten, strengthening its balance sheet, enhancing management team, and simplifying the global footprint and operating structure.

He added: “During 2019, we saw sustained improvement to wider insurance market conditions, including reduced capacity and limits in a number of our core product lines, which has contributed to improving rates, terms, and conditions. Within reinsurance, we also saw pockets of corrections over 2018, which extended to improvements in rate across the majority of classes and regions throughout 2019. We have seen these trends continue into 2020.

“These trends are indeed positive but we continue to take a cautious and selective approach to growth as evidenced in our year-over-year gross written premium numbers.”

He added: “While our financial results for 2019 are disappointing, given the impact of deal related costs, restructuring charges and specific actions taken to improve underwriting performance and strengthen reserves, it is rewarding to see that underlying trends in our forward trading businesses are showing significant improvement. I am confident that the decisive actions we have taken are the right ones and will see us realise our objective of becoming a top quartile specialty reinsurer in the near term.”

The Bermudan insurer said its position remains robust, with capital reserves of $2.73bn after net reserve strengthening of $59.5m in 2019 following comprehensive review by new management.

This came as the group confirmed the appointment of Kevin Chidwick as group chief financial officer, effective 1 May.

Chidwick was previously CFO at financial advice network Openwork and Admiral Group and CEO of Confused. He will report to Cloutier and succeeds Scott Kirk, who will leave Aspen on 30 April to pursue opportunities outside of the company.

No separate results were available for Aspen UK and Aspen Managing Agency which appointed Clive Edwards as CEO in September four  months after it cut loose its UK SME managing general agent in May 2019, putting 111 jobs on the line as a result. 

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