Aspen Insurance Holdings reported a 32 percent increase in fourth-quarter 2004 net income on Thursday and said it will sharply increase its quarterly dividend.

For the fourth quarter, net income was $75.2 million, or $1.01 per share compared with $54.5 million or 88 cents a share for the same period in 2003.

For the full year, income rose 28 percent to $195.1 million, or $2.74 per share.

Chief executive officer Chris O?Kane attributed the strong results to Aspen?s diversified strategy and underwriting discipline in a conference call reported by National Underwriter.

He said Aspen saw more price competition in the insurance market than in the reinsurance market, noting that Aspen?s portfolio is weighted toward reinsurance.

He added that in the property reinsurance arena, there is more discipline in the US market than in Europe.

?It could be described as a tale of two cities ? the relatively disciplined and thoughtful American experience contrasting with the much more competitive European environment,? Mr. O?Kane said.

Overall, Aspen?s net written premiums grew 24 percent to $1.4 billion in 2004, and the combined ratio was 83.4.

Return on equity for the year was 14 percent, noting that the company?s general guidance is for ROEs in the mid-to-high teens, absent major losses. Noting that 2004 was the most costly year in terms of catastrophe losses, he reported that Aspen matched its guidance in spite of recording $166 million in net catastrophe losses.

While Mr. O?Kane said that Aspen only had to increase its overall gross catastrophe loss estimates by seven percent since the last quarter, he noted that, like other insurers and reinsurers, Aspen recorded increases for two events ? Hurricane Ivan and Typhoon Songda.

The Ivan increase, he said, coincides with a three-times increase in market losses for offshore energy risks. Losses in this area, he said, have changed the marketstabilizing offshore energy rates in general and prompting significant hardening of insurance prices in the Gulf of Mexico where Ivan oil rig losses occurred.

Noting that Aspen exposures were ?relatively modest at the time of the loss,? he said, ?we expect to increase them significantly to take advantage of this emerging market opportunity.?

The Bermuda-based holding company with subsidiaries offering reinsurance and specialty insurance had been paying a dividend of three cents per share. The board of directors approved an increase to 15 cents a share, payable March 25 to shareholders of record on March 15.