Aspen Insurance Holdings Ltd. (NYSE:AHL) Q2 2016 Earnings Conference Call - Final Transcript

Jul 28, 2016 • 08:00 am ET


Aspen Insurance Holdings Ltd. (NYSE:AHL) Q2 2016 Earnings Conference Call - Final Transcript


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Good morning and welcome to the Aspen Insurance holdings Limited Second Quarter 2016 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Mark Jones. Mr. Jones, please go ahead.

Mark Jones

Thank you, and good morning, everyone. On today's call we have Chris O'Kane, Chief Executive Officer; and Scott Kirk, Chief Financial Officer. Last night, we issued our press release announcing Aspen's financial results for the second quarter of 2016. This press release, as well as corresponding supplementary financial information and the slide presentation, can be found on our website at

Today's presentation contains and Aspen may make from time to time, written or oral forward-looking statements within the meaning under and pursuant to the Safe Harbor provisions of US federal securities laws. All forward-looking statements rely on a number of assumptions concerning future events that are subject to a number of uncertainties and other factors. For more detailed descriptions of these uncertainties and other factors, please see the Risk Factors section in Aspen's annual report on Form 10-K filed with the SEC and posted on our website.

Today's presentation also contains non-GAAP financial measures, which we believe are meaningful in evaluating the Company's performance. For a detailed disclosure on non-GAAP financials, please refer to the supplementary financial data and our earnings release posted on the Aspen website.

I will now turn the call over to Chris O'Kane.

Christopher O'Kane

Thank you, Mark. Good morning, everyone. Aspen grew diluted book value per share by almost 8% from the year-end 2015 to $49.53 as of June 30, 2016. And also reported operating ROE of 7% through the first six months of 2016. Both of our operating segments reported strong underlying results. The accident year ex-cat loss ratio for the Group improved by 400 basis points to 58% compared to the prior year quarter, with reinsurance and insurance improving to 48% and 66%, respectively.

Let's look at Aspen Re first. The segment's premiums on a like-for-like underlying basis were up 6% from a year ago. We had successful mid-year renewals and continued to demonstrate the length of our client relationships and our ability to find attractive opportunities. For example, in our specialty re sub-segment we have grown in marine, energy and mortgage lines. The mortgage opportunities are one-time deals that we write highly selectively when we think the returns are adequate. Additionally, our property cat business, which was impacted by a shift in timing of some renewals, saw modest growth. We continue to utilize Aspen Capital Markets to manage our PML exposures downwards and also to provide our investors with the risks they seek. Our reinsurance team in these circumstances continues to stay disciplined, and where there is business does not meet our underwriting mark targets, we will not write the business.

Turning now to our insurance lines, we grew about 2% this quarter, driven largely by our financial commercial lines sub-segment, and to a lesser degree, by property and casualty. This growth