Insurers and reinsurers underestimated the exposure danger of hurricanes by a whopping 80 percent when the triple-slam of Katrina, Rita and Wilma shook the multi-billion dollar industry in the latter half of 2005.

Hurricane risk models were woefully off target but from that humbling experience, which left a number of companies such as Bermuda's PXRE struggling for survival, wiser heads and more realistic risk assessment models now prevail.

That is the story for specialty reinsurer Aspen, which has seen its share price improve more than 18 percent in a year after readjusting from the aftermath of 2005 by cutting its exposure risk and headhunting some of the most best-regarded talent in the industry.

In 2005 Aspen had $1.7 billion of exposure on the southern tip of Florida. Today it has slashed that exposure to $700 million, however it is pulling in the same level of premiums all the same.

A wiser business model? Chief executive officer Chris O'Kane believes so. Yes, customers are paying more dollars but that is because the risk from hurricanes is far greater than was thought before.

"Prices are higher than pre-Katrina. On a risk-adjusted basis they are not higher, but for the ordinary consumer it is more dollars because there is more risk," Mr. O'Kane explained in an interview with Bloomberg TV as Aspen marked its fifth anniversary with the CEO ringing the closing bell at the New York Stock Exchange.

At the end of the first quarter of this year Aspen had a combined ratio of 79.4 percent and profits of $121.9m.

Reflecting on the reasons for the one-year 18.47-percent rise in the company's share price, Mr. O'Kane said: "We did it by looking at all the things that make our business work. Our investment performance, our financial management, our underwriting management, the right kind of risk management controls.

"All those things that have been coming together really, in the first quarter of this year."

During his day on Wall Street, Mr. O'Kane also gave a second video presentation to describe the company's ongoing risk management, business opportunities and its efforts in recruiting recognised underwriting talent.

He said the company will, over the coming 12 months, look to go into political risk, marine cargo, professional liability, and commercial automobile underwriting.

"Katrina showed the industry that there is about 80 percent more danger in hurricanes than had previously been recognised.

"We changed our model and reduced exposures. We had $1.7bn exposure in the southern tip of Florida in 2005, today it is about $700m and we are charging about the same amount of premium for that, so as I look forward to what I think is going to be a fairly dangerous hurricane season in 2007," said Mr. O'Kane.

"We are still a major provider of catastrophe risk in the US and Florida. After the hurricanes in 2005 we had to look at the models. Essentially those hurricanes presented more risk than the models we had been using. There was a 're-booting' recalibration, but we are carrying on that business with a stronger foundation.

"We have our exposure under control, risk-to-price correct and whether the wind blows or not Aspen is going to fair well."

The company has grown from a staff of 39 to around 440. Mr. O'Kane said: "We are going to be looking at new teams, talented individuals or teams of underwriters."

Its newest recruits include chief financial officer Richard Houghton, who was formerly chief operations officer with the Royal Bank of Scotland, and Matthew Yeldham as head of international insurance and based in London.

Mr. Yeldham's position is a new one within Aspen. He was previously deputy chief underwriting officer for the Lloyd's business at Catlin.

"He (Mr. Yeldham) is a specialist in marine business and casualty business and has an important following with clients and brokers. Since Matt joined us a lot of teams from London and elsewhere have been calling and saying 'If Yeldham is working for you, we want a job too'," said Mr. O'Kane.

"The other important hire is Nathan Warde, he's doing US insurance, nine people have joined him in those three weeks. That is going to mean a much bigger and stronger footprint and a bigger flow of business."

Asked if Aspen can maintain its impressive share price performance, the CEO replied: "I think we can. There are a number of steps that we have taken that are going to give the company a much firmer foundation going forward and as I keep saying to our investor base, 'You ain't seen nothing yet'.

"We do some property catastrophe risk in the UK, US and Australia. These are markets that are probably past their peak in an underwriting sense, but we are very selective risk. We choose our customers carefully we listen to their needs and we try to avoid the commodification of the product that we sell."