Wildfires and storms drive Aspen to loss
Catastrophe losses drove Aspen Insurance Holdings Ltd to a net after-tax loss of $146.8 million for the fourth quarter of last year.
The quarter’s costly events included wildfires in California, Hurricane Michael in the US and Typhoon Jebi in Japan.
The operating after tax loss was $124.4 million, or $2.23 per share, worse than the $1.03 loss per share average estimate of analysts tracked by Yahoo Finance.
Aspen is going through the process of being acquired by funds affiliated with private-equity firm Apollo Global Management in a deal worth $2.6 billion.
Chris O’Kane, Aspen’s chief executive officer, said: “Aspen’s fourth-quarter 2018 results were impacted by the significant natural catastrophe activity that we witnessed across the industry during the period.
“However, we improved our underwriting performance for the full year and achieved our target for reducing our expense ratio.”
He added: “We are making good progress with our proposed transaction with the Apollo Funds and have received most of the required regulatory approvals. We anticipate completing the transaction during the first quarter of 2019.”
The closing of the deal is subject to closing conditions, including receipt of regulatory approvals, as well as the maintenance of certain financial strength ratings by Aspen’s subsidiaries.
Gross written premiums of $603.1 million in the fourth quarter fell by 12.4 per cent compared to the $688.3 million recorded in the corresponding quarter a year earlier. in the fourth quarter of 2017
Aspen’s total expense ratio was 36 per cent in the fourth quarter, compared to 46.1 per cent in the fourth quarter of 2017.
Amortisation and non-recurring expenses of $5 million included $11.6 million of expenses related to the operational effectiveness and efficiency programme, $5.7 million of retention costs and $0.4 million of adviser fees relating to the proposed transaction with the Apollo Funds, partially offset by the write-back of a $14.1 million buy-out provision.