Aspen Insurance Holdings Limited (AHL-PE) 8-K Aspen Insurance Holdings Limited Reports

Exhibit 99.1

FOR IMMEDIATE RELEASE

ASPEN INSURANCE HOLDINGS LIMITED REPORTS

RECORD NET INCOME,

FOR FOURTH QUARTER AND FULL YEAR 2006

HAMILTON, BERMUDA, February 8, 2007 — Aspen Insurance Holdings Limited (NYSE: AHL; BSX: AHL BH) today reported record quarterly results for the quarter ended December 31, 2006, and for the full year 2006.

•	Net income was $119.5 million for the three months ended December 31, 2006, and $378.1 million for the full year. For the quarter this translated to $1.20 net income per diluted ordinary share adjusted for preference share dividends, and for the full year, $3.75 net income per diluted ordinary share.

•	Net investment income in the fourth quarter of 2006 increased by 59.5% to $62.7 million compared to the fourth quarter of 2005, and was up 68.5% to $204.4 million for the full year versus $121.3 million for 2005.

•	The combined ratio for the fourth quarter of 2006 was 76.8% versus 104.8% for the same quarter in 2005. For the full year, the 2006 combined ratio was 82.4% compared to 117.2% for 2005.

•	Shareholders’ equity increased 17.1% to $2,389.3 million at December 31, 2006 from $2,039.8 million at December 31, 2005.

•	Annualized return on average equity for the quarter was 22.4% and 18.5% for the full year 2006.

Chris O’Kane, Chief Executive Officer, said, ‘‘The net income we achieved in the final quarter of 2006 is the highest of any quarter in the history of Aspen and contributed to a record full year result. I am particularly pleased that we achieved these results in a transitional year, where we reduced catastrophe exposures by about 50% while maintaining significant retrocessional spend. This underscores the strengths of our diversified business model and is highly encouraging for 2007 and beyond.’’

Earnings conference call

Aspen will hold a conference call tomorrow, February 9, 2007 at 9:30 a.m. (Eastern Time) to discuss its 2006 fourth quarter and year-end financial results. Investors may participate in the live conference call by dialing 888-868-9083 (toll-free domestic U.S.) or 973-935-8512 (international); conference ID: 8363714. Please call to register at least 10 minutes before the conference call begins. A replay of the call will be available for 10 days via telephone starting approximately two hours following the live call on February 9, 2007, and can be accessed at 877-519-4471 (toll-free domestic U.S.) or 973-341-3080 (international); digital pin: 8363714. The live call and a replay can also be heard via Aspen’s website at www.aspen.bm.

In addition, a financial supplement relating to Aspen’s financial results for the fourth quarter 2006 and twelve months ended December 31, 2006 is available in the Investor Relations section of Aspen’s website at www.aspen.bm. A brief slide presentation which will be used for reference during the earnings call will also be available in the Investor Relations section of Aspen’s website.

Investor Contact: Aspen Insurance Holdings Limited
Noah Fields, Head of Investor Relations Julian Cusack, Chief Financial Officer			T 441-297-9382
Tania Kerno, Head of Communications			T 44 (0) 20 7184 8855
European Press Contact: The Maitland Consultancy
Brian Hudspith			T 44 (0) 20 7379 5151
North American Press Contact: Abernathy MacGregor
Eliza Johnson			T 212-371-5999

About Aspen Insurance Holdings Limited

Aspen Insurance Holdings Limited was established in June 2002. Aspen is a Bermudian holding company that provides property and casualty reinsurance in the global market, property and liability insurance principally in the United Kingdom and the United States and specialty insurance and reinsurance consisting mainly of marine and energy and aviation worldwide. Aspen’s operations are conducted through its wholly-owned subsidiaries located in London, Bermuda and the United States: Aspen Insurance UK Limited, Aspen Insurance Limited and Aspen Specialty Insurance Company. Aspen has four operating segments: property reinsurance, casualty reinsurance, specialty insurance and reinsurance and property and casualty insurance. Aspen’s principal existing founding shareholders include The Blackstone Group, Candover Partners Limited and Credit Suisse First Boston Private Equity. For more information about Aspen, please visit Aspen’s website at www.aspen.bm.

Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995:

This press release contains, and Aspen’s earnings conference call may contain, written or oral ‘‘forward-looking statements’’ within the meaning of the U.S. federal securities laws. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can be identified by the use of words such as ‘‘expect,’’ ‘‘intend,’’ ‘‘plan,’’ ‘‘believe,’’ ‘‘project,’’ ‘‘anticipate,’’ ‘‘seek,’’ ‘‘will,’’ ‘‘estimate,’’ ‘‘may,’’ ‘‘continue,’’ and similar expressions of a future or forward-looking nature.

All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in these statements. Aspen believes these factors include, but are not limited to: the impact that our future operating results, capital position and rating agency and other considerations have on the execution of any capital management initiatives; the impact of any capital management activities on our financial condition; the impact of acts of terrorism and related legislation and acts of war; the possibility of greater frequency or severity of claims and loss activity, including as a result of natural or man-made catastrophic events such as Hurricanes Katrina, Rita and Wilma, than our underwriting, reserving or investment practices have anticipated; evolving interpretive issues with respect to coverage as a result of Hurricanes Katrina, Rita and Wilma; the level of inflation in repair costs due to limited availability of labor and materials after catastrophes; the effectiveness of Aspen’s loss limitation methods; changes in the availability, cost or quality of reinsurance or retrocessional coverage, which may affect our decision to purchase such coverage; the reliability of, and changes in assumptions to, catastrophe pricing, accumulation and estimated loss models; loss of key personnel; a decline in our operating subsidiaries’ ratings with Standard & Poor’s, A.M. Best Company or Moody’s Investors Service; changes in general economic conditions including inflation, foreign currency exchange rates, interest rates and other factors that could affect our investment portfolio; the number

and type of insurance and reinsurance contracts that we wrote at the January 1^st and other renewal periods in 2007 and the premium rates available at the time of such renewals within our targeted business lines; increased competition on the basis of pricing, capacity, coverage terms or other factors; decreased demand for Aspen’s insurance or reinsurance products and cyclical downturn of the industry; changes in governmental regulations, interpretations or tax laws in jurisdictions where Aspen conducts business; proposed and future changes to insurance laws and regulations, including with respect to U.S. state- and other government-sponsored reinsurance funds and primary insurers; Aspen or its Bermudian subsidiary becoming subject to income taxes in the United States or the United Kingdom; the effect on insurance markets, business practices and relationships of ongoing litigation, investigations and regulatory activity by the New York State Attorney General’s office and other authorities concerning contingent commission arrangements with brokers and bid solicitation activities; the total industry losses resulting from Hurricanes Katrina, Rita and Wilma and the actual number of Aspen’s insureds incurring losses from these storms; and with respect to Hurricanes Katrina, Rita and Wilma, Aspen’s continued reliance on loss reports received from cedants and loss adjustors, Aspen’s reliance on industry loss estimates and those generated by modeling techniques, the impact of these storms on Aspen’s reinsurers, any changes in Aspen’s reinsurers’ credit quality, the amount and timing of reinsurance recoverables and reimbursements actually received by Aspen from its reinsurers and the overall level of competition and the related demand and supply dynamics as contracts come up for renewal. For a more detailed description of these uncertainties and other factors, please see the ‘‘Risk Factors’’ section in Aspen’s Annual Reports on Form 10-K as filed with the U.S. Securities and Exchange Commission. Aspen undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.

Summary of Results – Consolidated Income Statements

(in US$ millions)			Three Months Ended December 31, 2006						Three Months Ended December 31, 2005						Twelve Months Ended December 31, 2006						Twelve Months Ended December 31, 2005
UNDERWRITING REVENUES
Gross premiums written					286.9						245.0						1,945.5						2,092.5
Premiums ceded					(8.8	)					(56.9	)					(281.9	)					(440.9	)
Net premiums written					278.1						188.1						1,663.6						1,651.6
Change in unearned premiums					137.2						167.2						12.6						(143.2	)
Net premiums earned					415.3						355.3						1,676.2						1,508.4
UNDERWRITING EXPENSES
Losses and loss expenses					(201.7	)					(272.2	)					(889.9	)					(1,358.5	)
Acquisition expenses					(67.4	)					(64.8	)					(322.8	)					(283.2	)
General and administrative expenses					(49.9	)					(35.3	)					(167.9	)					(125.9	)
Total underwriting expenses					(319.0	)					(372.3	)					(1,380.6	)					(1,767.6	)
Underwriting income (loss)					96.3						(17.0	)					295.6						(259.2	)
OTHER OPERATING REVENUE
Net investment income					62.7						39.3						204.4						121.3
Other income					0.0						28.6						0.0						28.6
Interest expense					(4.4	)					(4.0	)					(16.9	)					(16.2	)
Total other operating revenue					58.3						63.9						187.5						133.7
Other expense					(4.6	)					(3.1	)					(14.2	)					(12.3	)
OPERATING INCOME (LOSS) BEFORE TAX					150.0						43.8						468.9						(137.8	)
OTHER
Net realized exchange gains (losses)					(0.9	)					(9.5	)					9.5						(18.2	)
Net realized investment losses					(1.9	)					(3.0	)					(8.0	)					(4.4	)
INCOME (LOSS) BEFORE TAX					147.2						31.3						470.4						(160.4	)
Income taxes expense					(27.7	)					(1.0	)					(92.3	)					(17.4	)
NET INCOME (LOSS) AFTER TAX					119.5						30.3						378.1						(177.8	)
Dividends paid on ordinary shares					(13.3	)					(14.3	)					(56.2	)					(45.5	)
Dividend declared on preference shares					(5.2	)					0.0						(15.6	)					0.0
Retained income (loss)					101.0						16.0						306.3						(223.3	)
Components of net income (loss) (after tax)
Operating income (loss)					121.8						42.0						375.3						(156.4	)
Net realized exchange gains (losses) (after tax)					(0.9	)					(9.5	)					9.5						(18.2	)
Net realized investment losses (after tax)					(1.4	)					(2.2	)					(6.7	)					(3.2	)
NET INCOME (LOSS) AFTER TAX					119.5						30.3						378.1						(177.8	)

Per Share Data

(in US$ except for number of shares)			Three Months Ended December 31, 2006						Three Months Ended December 31, 2005						Twelve Months Ended December 31, 2006						Twelve Months Ended December 31, 2005
Basic earnings per ordinary share
Net income (loss) adjusted for preference share dividend					1.22						0.34						3.82						(2.40	)
Operating income (loss) adjusted for preference dividend					1.25						0.48						3.79						(2.11	)
Diluted earnings per ordinary share
Net income (loss) adjusted for preference share dividend					1.20						0.33						3.75						(2.40	)
Operating income (loss) adjusted for preference dividend					1.22						0.46						3.72						(2.11	)
Weighted average ordinary shares outstanding					93,457,487						87,755,442						94,802,413						74,020,302
Weighted average ordinary shares outstanding and dilutive potential ordinary shares					95,501,613						90,672,480						96,734,315						74,020,302
Book value per ordinary share																	22.35						19.30
Diluted book value (treasury stock method)																	21.83						18.73
Ordinary shares outstanding at end of the period																	87,788,375						95,209,008
Ordinary shares outstanding and dilutive potential ordinary shares at end of the period																	89,876,459						98,126,046

Consolidated Balance Sheets

(in US$ millions)			As at December 31, 2006						As at December 31, 2005
ASSETS
Investments
Fixed maturities					3,828.7						3,046.1
Short-term investments					695.5						643.0
Other investments					156.9						—
Total investments					4,681.1						3,689.1
Cash and cash equivalents					495.0						748.3
Reinsurance recoverables
Unpaid losses					468.3						1,192.7
Ceded unearned premiums					29.8						72.7
Receivables
Underwriting premiums					586.1						541.4
Other					62.2						55.7
Deferred policy acquisition costs					141.4						156.2
Derivative at fair value					33.8						40.5
Office properties and equipment					24.6						22.8
Other assets					21.2						10.2
Intangible assets					8.2						8.2
Total assets					6,551.7						6,537.8
LIABILITIES
Insurance reserves
Losses and loss adjustment expenses					2,820.0						3,041.6
Unearned premiums					841.3						868.0
Total insurance reserves					3,661.3						3,909.6
Payables
Reinsurance premiums					62.4						155.0
Taxation					75.4						32.7
Accrued expenses and other payables					84.2						139.4
Liabilities under derivative contracts					29.7						12.0
Total payables					251.7						339.1
Long-term debt					249.4						249.3
Total liabilities					4,162.4						4,498.0
SHAREHOLDERS’ EQUITY
Ordinary shares					0.1						0.1
Preference shares					—						—
Additional paid-in capital					1,921.7						1,887.0
Retained earnings					450.5						144.2
Accumulated other comprehensive income, net of taxes					17.0						8.5
Total shareholders’ equity					2,389.3						2,039.8
Total liabilities and shareholders’ equity					6,551.7						6,537.8

Summarized Cash Flows

(in US$ millions)			Twelve Months Ended December 31, 2006						Twelve Months Ended December 31, 2005
Net cash from operating activities					721.9						789.1
Net cash used in investing activities					(943.2	)					(1,061.2	)
Net cash from / (used in) financing activities					(46.9	)					742.1
Effect of exchange rate movements on cash and cash equivalents					14.9						(6.6	)
Increase (decrease) in cash and cash equivalents					(253.3	)					463.4
Cash at beginning of the year					748.3						284.9
Cash at end of the year					495.0						748.3

Non-GAAP Financial Measures

In presenting Aspen’s results, management has included and discussed certain ‘‘non-GAAP financial measures’’, as such term is defined in Regulation G. Management believes that these non-GAAP measures, which may be defined differently by other companies, better explain Aspen’s results of operations in a manner that allows for a more complete understanding of the underlying trends in Aspen’s business. However, these measures should not be viewed as a substitute for those determined in accordance with GAAP. The reconciliation of such non-GAAP financial measures to their respective most directly comparable GAAP financial measures in accordance with Regulation G is included in the financial supplement, which can be obtained from the Investor Relations section of Aspen’s website at www.aspen.bm.

(1)    Annualized Operating Return on Average Equity (‘‘Operating ROAE’’) is a non-GAAP financial measure. Annualized Operating Return on Average Equity 1) is calculated using operating income, as defined below and 2) excludes from average equity, the average after-tax unrealized appreciation or depreciation on investments and the average after-tax unrealized foreign exchange gains or losses and the aggregate value of the liquidation preferences of our preference shares. Unrealized appreciation (depreciation) on investments is primarily the result of interest rate movements and the resultant impact on fixed income securities, and unrealized appreciation (depreciation) on foreign exchange is the result of exchange rate movements between the U.S. dollar and the British pound. Such appreciation (depreciation) is not related to management actions or operational performance (nor is it likely to be realized). Therefore Aspen believes that excluding these unrealized appreciations (depreciations) provides a more consistent and useful measurement of operating performance, which supplements GAAP information. Average equity is calculated as the arithmetic average on a monthly basis for the stated periods.

Aspen presents Operating ROAE as a measure that is commonly recognized as a standard of performance by investors, analysts, rating agencies and other users of its financial information.

See page 24 of Aspen’s financial supplement for a reconciliation of operating income to net income and page 15 for a reconciliation of average equity.

(2)    Operating income is a non-GAAP financial measure. Operating income is an internal performance measure used by Aspen in the management of its operations and represents after-tax operational results excluding, as applicable, after-tax net realized capital gains or losses and after-tax net foreign exchange gains or losses.

Aspen excludes after-tax net realized capital gains or losses and after-tax net foreign exchange gains or losses from its calculation of operating income because the amount of these gains or losses is heavily influenced by, and fluctuates in part, according to the availability of market opportunities. Aspen believes these amounts are largely independent of its business and underwriting process and including them distorts the analysis of trends in its operations. In addition to presenting net income determined in accordance with GAAP, Aspen believes that showing operating income enables investors, analysts, rating agencies and other users of its financial information to more easily analyze Aspen’s results of operations in a manner similar to how management analyzes Aspen’s underlying business performance. Operating income should not be viewed as a substitute for GAAP net income. Please see above and page 24 of Aspen’s financial supplement for a reconciliation of operating income to net income. Aspen’s financial supplement can be obtained from the Investor Relations section of Aspen’s website at www.aspen.bm.

(3)    Diluted book value per ordinary share is a non-GAAP financial measure. Aspen has included diluted book value per ordinary share because it takes into account the effect of dilutive securities; therefore, Aspen believes it is a better measure of calculating shareholder returns than book value per share. Please see page 24 of Aspen’s financial supplement for a reconciliation of diluted book value per share to basic book value per share. Aspen’s financial supplement can be obtained from the Investor Relations section of Aspen’s website at www.aspen.bm.

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