Aspen Insurance Holdings Limited has reported an improved half-year performance to June 30, after writing more than $2 billion in premium.

The company declared net income after tax of $87.4 for the six month period, compared to last year’s half-year net loss after tax of $172.8 million.

Impacted by legacy business, the combined ratio of 98.0 per cent compared favourably to the 110.1 per cent in the same period last year.

Group executive chairman and chief executive officer, Mark Cloutier, said this was driven by a combination of improved underwriting results and further expense and efficiency gains.

“Against the backdrop of a global pandemic, to have delivered the progress we have is, ultimately, a reflection of the quality of our people, our platform, and the clarity of our vision,” Mr Cloutier said.

He was encouraged that the company was continuing its journey to becoming a more disciplined, focused and performance driven global speciality reinsurer.

He said this was reflected in Aspen’s underwriting performance, including an ex-catastrophe combined ratio of 89.9 per cent and an overall combined ratio of 98 per cent, despite the impact of winter storm Uri and an increased Covid-19 provision.

“Furthermore, we are a simpler business today than we were twelve months ago, and this is reflected by our ongoing focus on expense discipline, with our operating expense ratio improving to 14.8 per cent and our general and administrative expense ratio seeing a 0.9 per cent year-on-year reduction from our H1 2020 results,” Mr Cloutier said.

“Gross written premiums of $2,018.5 million is relatively stable compared to our prior period results, despite a significant repositioning of our book,” he said.

“Over the past 18 months, we have actively taken the decision to non-renew circa $800m of business, while at the same time, in the first half of this year, we have largely delivered double digit growth in our continuing lines where we are seeing continued improvement in rate, terms and conditions.

“That level of growth illustrates how we are now well positioned to respond to market opportunities. We believe the reshaping of our portfolio will be positively reflected in our results with our evolving portfolio focused in the areas where Aspen is best placed to deliver sustainable and scalable returns to our shareholders.”

Mr Cloutier said capital markets remains an important pillar of their strategy, reflecting the appetite from third party investors for access to both their platform and underwriting.

He said Aspen has seen successful capital raises for Aspen Capital Markets’ cat and non-cat products.

“In addition, we are well on track to exceed our 2020 fee income significantly,” he said.

“We also recognised the synergies between ACM and our outwards reinsurance teams – combining the two into Aspen Capital Partners. This move allows us to further enable our trading partners to access the full breadth of Aspen’s capabilities, including risk sourcing, underwriting, modelling, actuarial and claims.”

The company has also gone through a brand overhaul, aligning their external identity with their collaborative internal culture and clear vision to transform risk into opportunity for their clients.

“Among several initiatives under way, we are continuously reviewing our investment portfolio and underwriting strategies to ensure they are aligned with our focus on responsibility, the needs of our customers and generating a sustainable return for our shareholders,” he said.

Mr Cloutier said looking ahead the ongoing strength of their balance sheet, affirmed by the recent upgrade to the outlook assigned to their AM Best rating from ‘negative’ to ‘stable’, and growing momentum in their core insurance and reinsurance business, alongside their leading capital markets proposition, gave them confidence as they continue on their mission to be a top quartile performing speciality reinsurer.

Key strategic and financial highlights:

• Gross written premiums of $2,018.5 million in the six months ended June 30, a decrease of 4.7 per cent compared to $2,118.6 million in the six months ended June 30, 2020, primarily attributable to US crop reinsurance business, which was previously written on a reinsurance basis through a strategic partnership until disposed of in Q4 2020. This decline was largely offset by growth in premiums written in casualty reinsurance, property catastrophe reinsurance and other property reinsurance, and growth in both casualty and liability lines insurance and financial and professional lines insurance as a result of improved market conditions.

• General, administrative and corporate expenses, excluding non-operating expenses, of $166.9 million in the six months ended June 30, down from $186.7 million in the six months ended June 30, 2020 with an operating expense ratio of 14.8 per cent in the six months ended June 30, 2021 compared with 15.7 per cent in the six months ended June 30, 2020.

• Investment income of $68.7 million in the six months ended June 30, 2021 compared to $84.9 million in the six months ended June 30, 2020.

• Net income after tax of $87.4 million and an operating income after tax of $88.9 million in the six months ended June 30, 2021 compared to a net loss after tax of $172.8 million and an operating loss after tax of $49 million in the six months ended June 30, 2020.

• Catastrophe losses of $84.5 million in the six months ended June 30, 2021 compared to $231.3 million in the six months ended June 30, 2020. Catastrophe losses in the six months ended June 30, 2020 included losses associated with Covid-19 totaling $187.3 million.

• The combined ratio of 98 per cent in the six months ended June 30, 2021, compared to 110.1 per cent in the six months ended June 30, 2020, was impacted by 5.3 percentage points from legacy business.

• Total comprehensive income after preference dividends and non-controlling interests of $7.7 million in the six months ended June 30, 2021 compared with a total comprehensive loss of $46.3 million in the six months ended June 30, 2020.