Aspen Holdings Ltd. yesterday said it expects to write about $1.9 billion gross written premiums in the 2007 financial year, but warned rates will decline in some of its product lines.

Aspen chief executive officer Chris O?Kane also said: ?We are also planning to reduce significantly the amount of retrocession we purchase and therefore currently expect to cede only between six percent to ten percent of our gross written premiums.

?We expect the reduction in our retrocessional expense and a number of other changes in our underwriting portfolio to result in an improvement in our net underwriting margins.

?We currently expect that our combined ratio will be in the range of 83 percent to 88 percent assuming no major losses or prior year reserve movements.?

Retrocession is the term given when reinsurers cede some of the risk they take from primary insurers on to other reinsurers. In the wake of the 2005 hurricane season, many reinsurers ceded premiums to reduce risk.

Mr. O?Kane said Aspen sees investment income of $230 million to $250 million, and implied return on equity of between 16 percent and 20 percent for the year.

Separately, Aspen said it has approved the buyback of up to $300 million of its shares within the next two years.

The company also said it has begun a public offering of $200 million of a new series of its perpetual non-cumulative preference shares.