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

Exhibit 99.2

ASPEN INSURANCE HOLDINGS LIMITED
EARNINGS RELEASE SUPPLEMENT
AS OF DECEMBER 31, 2006

INDEX TO SUPPLEMENT

			PAGE
BASIS OF PREPARATION					2
INCOME STATEMENTS					3
CONSOLIDATED BALANCE SHEETS					4
PER SHARE DATA					5
FINANCIAL RATIOS					6
UNDERWRITING RESULTS BY OPERATING SEGMENT					7
CONSOLIDATED CHANGE IN SHAREHOLDERS’ EQUITY					13
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME					14
SUMMARIZED CASH FLOWS					14
SUPPLEMENTAL FINANCIAL INFORMATION					15

Page 2 of 24

This financial supplement is for information purposes only. It should be read in conjunction with other documents filed or to be filed shortly by Aspen Insurance Holdings Limited (the ‘‘Company’’ or ‘‘Aspen’’) with the United States Securities and Exchange Commission.

BASIS OF PREPARATION

Definitions and presentation: All financial information contained herein is unaudited except for information for the fiscal year ended December 31, 2005. Unless otherwise noted, all data is in US dollars millions, except for per share, percentage and ratio information.

In presenting the Company’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 the Company’s results of operations in a manner that allows for a more complete understanding of the underlying trends in the Company’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 this financial supplement.

Operating income (a non-GAAP financial measure):    Operating income is an internal performance measure used by the Company 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.

The Company 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. The Company 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, the Company believes that showing operating income enables investors, analysts, rating agencies and other users of its financial information to more easily analyze the Company’s results of operations in a manner similar to how management analyzes the Company’s underlying business performance. Operating income should not be viewed as a substitute for GAAP net income. Please see page 24 for a reconciliation of operating income to net income.

Annualized Operating Return on Average Equity (‘‘Operating ROAE’’) (a non-GAAP financial measure): Annualized Operating Return on Average Equity 1) is calculated using operating income, as defined above 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 the Company 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. The Company 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 for a reconciliation of operating income to net income and page 15 for a reconciliation of average equity.

Diluted book value per ordinary share (a non-GAAP financial measure):    The Company has included diluted book value per ordinary share because it takes into account the effect of dilutive securities; therefore, the Company believes it is a better measure of calculating shareholder returns than book value per share. Please see page 24 for a reconciliation of diluted book value per share to basic book value per share.

Underwriting ratios (are GAAP financial measures):    The Company, along with others in the industry, uses underwriting ratios as measures of performance. The loss ratio is the ratio of net claims and claims adjustment expenses to net premiums earned. The acquisition expense ratio is the ratio of underwriting expenses (commissions; premium taxes, licenses and fees; as well as other underwriting expenses) to net premiums earned. The general and administrative expense ratio is the ratio of general and administrative expenses to net premiums earned. The combined ratio is the sum of the loss ratio, the acquisition expense ratio and the general and administrative expense ratio. These ratios are relative measurements that describe for every $100 of net premiums earned or written, the cost of losses and expenses, respectively. The combined ratio presents the total cost per $100 of earned premium. A combined ratio below 100% demonstrates underwriting profit; a combined ratio above 100% demonstrates underwriting loss.

GAAP combined ratios differ from US statutory combined ratios primarily due to the deferral of certain third party acquisition expenses for GAAP reporting purposes and the use of net premiums earned rather than net premiums written in the denominator when calculating the acquisition expense and the general and administrative expense ratios.

Page 3 of 24

INCOME STATEMENTS

The following table summarizes the Company’s financial performance for the three and twelve months ended December 31, 2006 compared to the three and twelve months ended December 31, 2005

(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	)

(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
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	)

Page 4 of 24

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

(in US$ millions)			As at December 31, 2006						As at December 31, 2005
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

Page 5 of 24

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

See pages 15, 21 and 24 for detailed calculation and reconciliation of non-GAAP measures to their respective most directly comparable GAAP financial measures.

Page 6 of 24

FINANCIAL RATIOS

			Three Months Ended December 31, 2006						Three Months Ended December 31, 2005						Twelve Months Ended December 31, 2006						Twelve Months Ended December 31, 2005
(in US$ millions except for percentage figures)
Average equity					2,040						1,755						1,955						1,523
Return on average equity
Net income (loss) adjusted for preference share dividend					5.6	%					1.7	%					18.5	%					(11.7	%)
Operating income (loss) adjusted for preference share dividend					5.7	%					2.4	%					18.4	%					(10.3	%)
Loss ratio					48.6	%					76.6	%					53.1	%					90.1	%
Policy acquisition expense ratio					16.2	%					18.3	%					19.3	%					18.8	%
Operating and administration expense ratio					12.0	%					9.9	%					10.0	%					8.3	%
Expense ratio					28.2	%					28.2	%					29.3	%					27.1	%
Combined ratio					76.8	%					104.8	%					82.4	%					117.2	%

See pages 15, 21 and 24 for detailed calculation and reconciliation of non-GAAP measures to their respective most directly comparable GAAP financial measures.

Average equity excludes the average after tax unrealized appreciation or depreciation on investments and the average after tax unrealized foreign exchange gains or losses.

Page 7 of 24

UNDERWRITING RESULTS BY OPERATING SEGMENT

The following table summarizes gross and net written and earned premium, losses and loss expenses, policy acquisition, operating and administrative expenses, underwriting results, reserves and combined ratios for each of our four business segments for the three months ended December 31, 2006 and 2005.

			Three Months Ended December 31, 2006																														Three Months Ended December 31, 2005
			Property Reinsurance						Casualty Reinsurance						Specialty Insurance and Reinsurance						Property and Casualty Insurance						Total						Property Reinsurance						Casualty Reinsurance						Specialty Insurance and Reinsurance						Property and Casualty Insurance						Total
(in US$ millions)
Gross premiums written					54.4						49.7						111.2						71.6						286.9						58.4						44.2						66.6						75.8						245.0
Net premiums written					49.1						54.7						109.4						64.9						278.1						31.4						44.2						51.3						61.2						188.1
Gross premiums earned					152.2						126.1						121.4						85.9						485.6						200.4						123.3						78.9						113.4						516.0
Net premiums earned					114.4						125.1						106.6						69.2						415.3						101.2						119.9						55.2						79.0						355.3
Losses and loss expenses					(56.3	)					(75.3	)					(34.1	)					(36.0	)					(201.7	)					(146.2	)					(79.6	)					(24.0	)					(22.4	)					(272.2	)
Policy acquisition expenses					(19.7	)					(18.5	)					(19.1	)					(10.1	)					(67.4	)					(20.9	)					(21.9	)					(11.3	)					(10.7	)					(64.8	)
Operating and administration expenses					(16.8	)					(13.1	)					(9.8	)					(10.2	)					(49.9	)					(10.8	)					(10.2	)					(2.7	)					(11.6	)					(35.3	)
Underwriting profit (loss)					21.6						18.2						43.6						12.9						96.3						(76.7	)					8.2						17.2						34.3						(17.0	)
Net reserves for loss and loss adjustment expenses					549.5						961.8						353.8						486.6						2,351.7						599.8						674.8						207.2						367.1						1,848.9
Ratios
Loss ratio					49.2	%					60.2	%					32.0	%					52.0	%					48.6	%					144.5	%					66.4	%					43.5	%					28.4	%					76.6	%
Policy acquisition expense ratio					17.2	%					14.8	%					17.9	%					14.6	%					16.2	%					20.6	%					18.3	%					20.5	%					13.6	%					18.3	%
Operating and administration expense ratio					14.7	%					10.5	%					9.2	%					14.8	%					12.0	%					10.7	%					8.5	%					4.8	%					14.6	%					9.9	%
Expense ratio					31.9	%					25.3	%					27.1	%					29.4	%					28.2	%					31.3	%					26.8	%					25.3	%					28.2	%					28.2	%
Combined ratio					81.1	%					85.5	%					59.1	%					81.4	%					76.8	%					175.8	%					93.2	%					68.8	%					56.6	%					104.8	%

Page 8 of 24

UNDERWRITING RESULTS BY OPERATING SEGMENT

The following table summarizes gross and net written and earned premium, losses and loss expenses, policy acquisition, operating and administrative expenses, underwriting results, reserves and combined ratios for each of our four business segments for the twelve months ended December 31, 2006 and 2005.

			Twelve Months Ended December 31, 2006																														Twelve Months Ended December 31, 2005
			Property Reinsurance						Casualty Reinsurance						Specialty Insurance and Reinsurance						Property and Casualty Insurance						Total						Property Reinsurance						Casualty Reinsurance						Specialty Insurance and Reinsurance						Property and Casualty Insurance						Total
(in US$ millions)
Gross premiums written					609.2						485.5						511.1						339.7						1,945.5						813.2						526.7						368.3						384.3						2,092.5
Net premiums written					466.1						474.0						455.3						268.2						1,663.6						523.4						508.9						317.7						301.6						1,651.6
Gross premiums earned					662.4						502.7						468.0						367.8						2,000.9						763.2						488.1						278.8						402.5						1,932.6
Net premiums earned					491.3						489.9						408.0						287.0						1,676.2						497.3						470.6						232.9						307.6						1,508.4
Losses and loss expenses					(209.8	)					(285.6	)					(206.8	)					(187.7	)					(889.9	)					(700.8	)					(328.3	)					(148.5	)					(180.9	)					(1,358.5	)
Policy acquisition expenses					(122.7	)					(81.4	)					(76.4	)					(42.3	)					(322.8	)					(123.5	)					(70.2	)					(39.8	)					(49.7	)					(283.2	)
Operating and administration expenses					(53.4	)					(41.6	)					(35.7	)					(37.2	)					(167.9	)					(31.2	)					(42.6	)					(20.8	)					(31.3	)					(125.9	)
Underwriting profit (loss)					105.4						81.3						89.1						19.8						295.6						(358.2	)					29.5						23.8						45.7						(259.2	)
Net reserves for loss and loss adjustment expenses					549.5						961.8						353.8						486.6						2,351.7						599.8						674.8						207.2						367.1						1,848.9
Ratios
Loss ratio					42.7	%					58.3	%					50.7	%					65.4	%					53.1	%					140.9	%					69.7	%					63.8	%					58.8	%					90.1	%
Policy acquisition expense ratio					25.0	%					16.6	%					18.7	%					14.7	%					19.3	%					24.8	%					14.9	%					17.1	%					16.1	%					18.8	%
Operating and administration expense ratio					10.8	%					8.5	%					8.8	%					13.0	%					10.0	%					6.3	%					9.1	%					8.9	%					10.2	%					8.3	%
Expense ratio					35.8	%					25.1	%					27.5	%					27.7	%					29.3	%					31.1	%					24.0	%					26.0	%					26.3	%					27.1	%
Combined ratio					78.5	%					83.4	%					78.2	%					93.1	%					82.4	%					172.0	%					93.7	%					89.8	%					85.1	%					117.2	%

Page 9 of 24

SPECIALTY INSURANCE AND REINSURANCE

			Three Months Ended December 31, 2006																		Three Months Ended December 31, 2005
			Specialty Insurance						Specialty Reinsurance						Total						Specialty Insurance						Specialty Reinsurance						Total
(in US$ millions)
Gross premiums written					104.4						6.8						111.2						51.0						15.6						66.6
Net premiums written					102.5						6.9						109.4						36.1						15.2						51.3
Gross premiums earned					104.5						16.9						121.4						52.5						26.4						78.9
Net premiums earned					90.4						16.2						106.6						38.0						17.2						55.2
Losses and loss expenses					(28.8	)					(5.3	)					(34.1	)					(17.1	)					(6.9	)					(24.0	)
Policy acquisition expenses					(17.0	)					(2.1	)					(19.1	)					(4.7	)					(6.6	)					(11.3	)
Operating and administration expenses					(8.4	)					(1.4	)					(9.8	)					(5.3	)					2.6						(2.7	)
Underwriting profit					36.2						7.4						43.6						10.9						6.3						17.2
Ratios
Loss ratio					31.9	%					32.7	%					32.0	%					45.0	%					40.1	%					43.5	%
Policy acquisition expense ratio					18.8	%					13.0	%					17.9	%					12.4	%					38.3	%					20.5	%
Operating and administration expense ratio					9.3	%					8.6	%					9.2	%					13.9	%					(15.0	%)1					4.8	%
Expense ratio					28.1	%					21.6	%					27.1	%					26.3	%					23.3	%					25.3	%
Combined ratio					60.0	%					54.3	%					59.1	%					71.3	%					63.4	%					68.8	%

1)	Relates to a re-allocation of expenses between segments in the fourth quarter 2005.

Page 10 of 24

SPECIALTY INSURANCE AND REINSURANCE

			Twelve Months Ended December 31, 2006																		Twelve Months Ended December 31, 2005
			Specialty Insurance						Specialty Reinsurance						Total						Specialty Insurance						Specialty Reinsurance						Total
(in US$ millions)
Gross premiums written					420.5						90.6						511.1						265.2						103.1						368.3
Net premiums written					366.9						88.4						455.3						221.0						96.7						317.7
Gross premiums earned					381.8						86.2						468.0						167.1						111.7						278.8
Net premiums earned					324.4						83.6						408.0						132.1						100.8						232.9
Losses and loss expenses					(186.2	)					(20.6	)					(206.8	)					(100.5	)					(48.0	)					(148.5	)
Policy acquisition expenses					(63.1	)					(13.3	)					(76.4	)					(23.1	)					(16.7	)					(39.8	)
Operating and administration expenses					(28.5	)					(7.2	)					(35.7	)					(14.6	)					(6.2	)					(20.8	)
Underwriting profit (loss)					46.6						42.5						89.1						(6.1	)					29.9						23.8
Ratios
Loss ratio					57.4	%					24.7	%					50.7	%					76.1	%					47.6	%					63.8	%
Policy acquisition expense ratio					19.4	%					15.9	%					18.7	%					17.5	%					16.6	%					17.1	%
Operating and administration expense ratio					8.8	%					8.6	%					8.8	%					11.0	%					6.1	%					8.9	%
Expense ratio					28.2	%					24.5	%					27.5	%					28.5	%					22.7	%					26.0	%
Combined ratio					85.6	%					49.2	%					78.2	%					104.6	%					70.3	%					89.8	%

Page 11 of 24

PROPERTY AND CASUALTY INSURANCE

			Three Months Ended December 31, 2006																		Three Months Ended December 31, 2005
			Property Insurance						Casualty Insurance						Total						Property Insurance						Casualty Insurance						Total
(in US$ millions)
Gross premiums written					25.5						46.1						71.6						26.4						49.4						75.8
Net premiums written					19.3						45.6						64.9						14.4						46.8						61.2
Gross premiums earned					32.9						53.0						85.9						37.5						75.9						113.4
Net premiums earned					17.2						52.0						69.2						19.7						59.3						79.0
Losses and loss expenses					(14.6	)					(21.4	)					(36.0	)					9.11						(31.5	)					(22.4	)
Policy acquisition expenses					(5.7	)					(4.4	)					(10.1	)					(1.8	)					(8.9	)					(10.7	)
Operating and administration expenses					(4.2	)					(6.0	)					(10.2	)					(5.1	)					(6.5	)					(11.6	)
Underwriting profit (loss)					(7.3	)					20.2						12.9						21.9						12.4						34.3
Ratios
Loss ratio					84.9	%					41.2	%					52.0	%					(46.2	%)					53.1	%					28.4	%
Policy acquisition expense ratio					33.1	%					8.5	%					14.6	%					9.0	%					15.1	%					13.6	%
Operating and administration expense ratio					24.4	%					11.5	%					14.8	%					26.0	%					10.9	%					14.6	%
Expense ratio					57.5	%					20.0	%					29.4	%					35.0	%					26.0	%					28.2	%
Combined ratio					142.4	%					61.2	%					81.4	%					(11.2	%)					79.1	%					56.6	%

1)

Property insurance benefited in the fourth quarter 2005 from favorable development in relation to a number of specific reserves totaling a $9 million reduction together with favorable movements of nearly $8 million on the reserves established in relation to Hurricanes Katrina and Rita. Losses arose within this segment in relation to Hurricane Wilma which, because of the nature of the specific reinsurance covering this segment together with an allocation of the general reinsurance program recoveries, resulted in this segment recording a net credit in relation to Hurricane Wilma in the quarter. These positive movements have resulted in this segment recording positive claims incurred in the quarter.

Page 12 of 24

PROPERTY AND CASUALTY INSURANCE

			Twelve Months Ended December 31, 2006																		Twelve Months Ended December 31, 2005
			Property Insurance						Casualty Insurance						Total						Property Insurance						Casualty Insurance						Total
(in US$ millions)
Gross premiums written					133.3						206.4						339.7						138.3						246.0						384.3
Net premiums written					80.5						187.7						268.2						79.5						222.1						301.6
Gross premiums earned					141.3						226.5						367.8						127.4						275.1						402.5
Net premiums earned					82.6						204.4						287.0						71.2						236.4						307.6
Losses and loss expenses					(71.0	)					(116.7	)					(187.7	)					(40.8	)					(140.1	)					(180.9	)
Policy acquisition expenses					(17.9	)					(24.4	)					(42.3	)					(17.8	)					(31.9	)					(49.7	)
Operating and administration expenses					(16.7	)					(20.5	)					(37.2	)					(7.9	)					(23.4	)					(31.3	)
Underwriting profit (loss)					(23.0	)					42.8						19.8						4.7						41.0						45.7
Ratios
Loss ratio					85.9	%					57.1	%					65.4	%					57.3	%					59.3	%					58.8	%
Policy acquisition expense ratio					21.7	%					11.9	%					14.7	%					25.0	%					13.5	%					16.1	%
Operating and administration expense ratio					20.2	%					10.1	%					13.0	%					11.1	%					9.9	%					10.2	%
Expense ratio					41.9	%					22.0	%					27.7	%					36.1	%					23.4	%					26.3	%
Combined ratio					127.8	%					79.1	%					93.1	%					93.4	%					82.7	%					85.1	%

Page 13 of 24

CONSOLIDATED CHANGE IN SHAREHOLDERS’ EQUITY    

(in US$ millions)			Twelve Months Ended December 31, 2006						Twelve Months Ended December 31, 2005
Ordinary shares
Beginning of year					0.1						0.1
New shares issued					—						—
End of year					0.1						0.1
Preference shares
Beginning of year					—						—
5.625% Preference shares issued					—						—
7.401% Preference shares issued					—						—
End of year					—						—
Additional paid-in capital
Beginning of year					1,887.0						1,096.0
New shares issued					0.1						596.4
Shares repurchased					(200.8	)					(1.9	)
New share issue costs					—						(0.7	)
New Preference shares issued					229.1						194.5
New Preference shares issue costs					(3.7	)					(0.7	)
Share-based compensation					10.0						3.4
End of year					1,921.7						1,887.0
Retained earnings
Beginning of year					144.2						367.5
Net income (loss) for the year					378.1						(177.8	)
Dividends paid on ordinary and preference shares					(71.8	)					(45.5	)
End of year					450.5						144.2

(in US$ millions)			Twelve Months Ended December 31, 2006						Twelve Months Ended December 31, 2005
Accumulated other comprehensive income:
Cumulative foreign currency translation adjustments net of taxes
Beginning of year					42.8						27.9
Change for the year					16.3						14.9
End of year					59.1						42.8
Gain (loss) on derivatives
Beginning of year					(2.0	)					(2.2	)
Change for the year					—						—
Reclassification to interest payable					0.2						0.2
End of year					(1.8	)					(2.0	)
Unrealized appreciation / (depreciation) on investments, net of taxes:
Beginning of year					(32.3	)					(7.8	)
Change for the year					(10.0	)					(30.3	)
Reclassification to net realized gains (losses)					2.0						5.8
End of year					(40.3	)					(32.3	)
Total accumulated other comprehensive income					17.0						8.5
Total shareholders’ equity					2,389.3						2,039.8

Page 14 of 24

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(in US$ millions)			Twelve Months Ended December 31, 2006						Twelve Months Ended December 31, 2005
Net income (loss)					378.1						(177.8	)
Other comprehensive income (loss), net of taxes
Reclassification adjustment for net realized gains included in net income (loss)					2.0						5.8
Change in unrealized (losses) on investments					(10.0	)					(30.3	)
Loss on derivatives reclassified to interest expense					0.2						0.2
Change in unrealized gains on foreign currency translation					16.3						14.9
Other comprehensive income (loss)					8.5						(9.4	)
Comprehensive income (loss)					386.6						(187.2	)

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

Page 15 of 24

SUPPLEMENTAL FINANCIAL INFORMATION

Return on Average Equity Analysis

The following table presents the return on average equity for the three and twelve months ended December 31, 2006 and 2005:

(in US$ millions except for percentages)			Three Months Ended December 31, 2006						Three Months Ended December 31, 2005						Twelve Months Ended December 31, 2006						Twelve Months Ended December 31, 2005
Closing shareholders’ equity					2,389						2,040						2,389						2,040
Average adjustment					(349	)					(285	)					(434	)					(517	)
Average equity (1)					2,040						1,755						1,955						1,523
Return on average equity from underwriting activity (2)					4.7	%					(1.0	%)					15.1	%					(17.0	%)
Return on average equity from investment and other activity (3)					2.4	%					3.5	%					8.1	%					8.0	%
Pre-tax operating income (loss) return on average equity, for period					7.1	%					2.5	%					23.2	%					(9.1	%)
Post-tax return on average equity (4)					5.7	%					2.4	%					18.4	%					(10.3	%)
Ratios
Combined ratio					76.8	%					104.8	%					82.4	%					117.2	%

See page 24 for detailed calculation and reconciliation of non-GAAP measures to their respective most directly comparable GAAP finance measures.

1) Average equity is calculated by taking the simple average at latest month end and each previous month end in the period of the closing shareholders’ equity excluding (i) preference shares, (ii) after tax unrealized appreciation or depreciation on investments and (iii) the average after tax unrealized foreign exchange gains and losses.

2) Calculated by using underwriting income.

3) Calculated by using total other operating revenue and other expense adjusted for preference share dividend.

4) Calculated by using operating income after tax adjusted for preference share dividend.

Page 16 of 24

INVESTMENT PORTFOLIO

(in US$ millions)			As at December 31, 2006
Fixed maturities			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
U.S. government and agencies					1,366.1						1.1						(25.6	)					1,341.6
Corporate securities					1,088.1						2.4						(13.4	)					1,077.1
Foreign government					449.7						0.2						(7.8	)					442.1
Municipals					1.6						0.0						0.0						1.6
Asset-backed securities					293.8						0.2						(2.2	)					291.8
Mortgage-backed securities					677.9						4.0						(7.4	)					674.5
Total fixed maturities					3,877.2						7.9						(56.4	)					3,828.7
Other investments					156.9						0.0						0.0						156.9
Short-term investments					695.9						0.4						(0.8	)					695.5
Total investments					4,730.0						8.3						(57.2	)					4,681.1

Page 17 of 24

RESERVES FOR LOSSES AND LOSS ADJUSTMENT EXPENSES

The following table represents a reconciliation of beginning and ending consolidated loss and loss expense reserves:

(in US$ millions)			Twelve Months Ended December 31, 2006						Twelve Months Ended December 31, 2005
Provision for losses and loss expenses at start of year					3,041.6						1,277.9
Less reinsurance recoverable					(1,192.7	)					(197.7	)
Net loss and loss expenses at start of year					1,848.9						1,080.2
Loss reserve portfolio transfer					0.7						26.2
Provision for losses and loss expenses for claims incurred
Current year					941.2						1,409.1
Prior year (release)					(51.3	)					(50.6	)
Total incurred					889.9						1,358.5
Losses and loss expense payments for claims incurred					(469.7	)					(551.9	)
Foreign exchange (gains) losses					81.9						(64.1	)
Net loss and loss expense reserves at end of year					2,351.7						1,848.9
Plus reinsurance recoverables on unpaid losses at end of year					468.3						1,192.7
Gross loss and loss expense reserves at December 31, 2006 and 2005					2,820.0						3,041.6

Page 18 of 24

RESERVES BY BUSINESS SEGMENT

The following table presents our reserves as at December 31, 2006 and December 31, 2005:

(in US$ millions)			As at December 31, 2006																		As at December 31, 2005
			Gross						Reinsurance Recoverable						Net						Gross						Reinsurance Recoverable						Net
Property reinsurance					709.2						(159.7	)					549.5						1,266.7						(666.9	)					599.8
Casualty reinsurance					970.9						(9.1	)					961.8						683.4						(8.6	)					674.8
Specialty insurance and reinsurance					570.1						(216.3	)					353.8						526.5						(319.3	)					207.2
Property and casualty insurance					569.8						(83.2	)					486.6						565.0						(197.9	)					367.1
Total losses and loss expense reserves					2,820.0						(468.3	)					2,351.7						3,041.6						(1,192.7	)					1,848.9

Page 19 of 24

MOVEMENTS IN PRIOR YEAR RESERVES

The following table presents the movements in the net reserves for loss and loss adjustment expenses in prior years that have been made during the three and twelve months ended December 31, 2006:

(in US$ millions)			Three Months Ended December 31, 2006																		Twelve Months Ended December 31, 2006
			Total						2005 Hurricanes						Other Events						Total						2005 Hurricanes						Other Events
Property reinsurance					(7.4	)					(1.4	)					(6.0	)					(40.9	)					(35.6	)					(5.3	)
Casualty reinsurance					6.1						0.0						6.1						60.3						0.0						60.3
Specialty insurance and reinsurance					5.3						(3.2	)					8.5						9.4						(19.0	)					28.4
Property and casualty insurance					(10.8	)					(10.1	)					(0.7	)					22.5						(11.4	)					33.9
Prior year (increase) / release in reserves for the three and twelve months ended December 31, 2006 (1)					(6.8	)					(14.7	)					7.9						51.3						(66.0	)					117.3

(1)	Amounts shown as negatives in parentheses represent a strengthening of reserves.

Page 20 of 24

REINSURER SECURITY RATING

     The following tables show our reinsurance recoverables and our reinsurers’ ratings as at December 31, 2006:

(in US$ millions except for percentages)			As at December 31, 2006
S&P
AAA					77.9						16.6	%
AA+					2.1						0.4	%
AA					0.0						0.0	%
AA−					105.2						22.5	%
A+					13.2						2.8	%
A					166.3						35.6	%
A−					61.1						13.0	%
BBB+					0.0						0.0	%
Fully collateralised					3.8						0.8	%
Not rated					38.7						8.3	%
					468.3						100.0	%
A.M. Best
A++					77.9						16.6	%
A+					36.5						7.8	%
A					289.0						61.8	%
A−					61.1						13.0	%
B+					0.0						0.0	%
Fully collateralised					3.8						0.8	%
Not rated					0.0						0.0	%
					468.3						100.0	%

Page 21 of 24

DILUTED SHARE ANALYSIS USED FOR EPS CALCULATION

(shares in 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
Basic weighted average ordinary shares outstanding					93.457						87.755						94.802						74.020
Add: weighted average of employee options					1.554						1.465						1.502						0.000
Add: weighted average of options issued to Wellington Investment Holding (Jersey) Limited					0.229						0.966						0.229						0.000
Add: weighted average of options issued to Appleby Trust (Bermuda) Limited (Names Trust)					0.083						0.359						0.083						0.000
Add: weighted average of restricted share units					0.179						0.127						0.118						0.000
Diluted weighted average ordinary shares outstanding					95.502						90.672						96.734						74.020

The dilutive effect of options has been calculated using the treasury stock method. The treasury stock method assumes that the proceeds received from the exercise of options will be used to repurchase the Company’s ordinary shares at the average market price during the period of calculation. In a loss making period the number of potentially dilutive ordinary shares is considered to be zero.

Page 22 of 24

QUARTERLY INCOME STATEMENTS

The following table summarizes the Company’s financial performance for the three months ended March 31, June 30, September 30 and December 31, 2006.

(in US $ millions)			Three Months Ended March 31, 2006						Three Months Ended June 30, 2006						Three Months Ended September 30, 2006						Three Months Ended December 31, 2006
UNDERWRITING REVENUES
Gross premiums written					678.7						522.4						457.5						286.9
Premiums ceded					(226.8	)					(22.3	)					(24.0	)					(8.8	)
Net premiums written					451.9						500.1						433.5						278.1
Change in unearned premiums					(49.3	)					(71.1	)					(4.2	)					137.2
Net premiums earned					402.6						429.0						429.3						415.3
UNDERWRITING EXPENSES
Losses and loss adjustment expenses					(232.4	)					(223.8	)					(232.0	)					(201.7	)
Acquisition expenses					(93.3	)					(83.2	)					(78.9	)					(67.4	)
General and administrative expenses					(38.2	)					(43.0	)					(36.8	)					(49.9	)
Total Underwriting Expenses					(363.9	)					(350.0	)					(347.7	)					(319.0	)
Underwriting Income (Loss)					38.7						79.0						81.6						96.3
OTHER OPERATING REVENUE
Net investment income					44.5						49.9						47.3						62.7
Other income					0.0						0.0						0.0						0.0
Interest expense					(3.9	)					(4.0	)					(4.6	)					(4.4	)
Total other operating revenue					40.6						45.9						42.7						58.3
Other expense					(1.9	)					(0.6	)					(7.1	)					(4.6	)
OPERATING INCOME (LOSS) BEFORE TAX					77.4						124.3						117.2						150.0
OTHER
Net exchange gains (losses)					1.3						6.6						2.5						(0.9	)
Net realized investment gains (losses)					(1.4	)					(3.7	)					(1.0	)					(1.9	)
INCOME (LOSS) BEFORE INCOME TAX					77.3						127.2						118.7						147.2
Income taxes					(15.5	)					(25.4	)					(23.7	)					(27.7	)
NET INCOME (LOSS) AFTER TAX					61.8						101.8						95.0						119.5
Dividends Paid					(14.3	)					(14.3	)					(14.3	)					(13.3	)
Dividends declared on preference shares					(3.9	)					(3.2	)					(3.3	)					(5.2	)
Retained Income					43.6						84.3						77.4						101.0

(in US $ millions)			Three Months Ended March 31, 2006						Three Months Ended June 30, 2006						Three Months Ended September 30, 2006						Three Months Ended December 31, 2006
Components of Net Income (loss) (after tax)
Operating income (loss)					61.7						98.3						93.5						121.8
Net realized exchange gains (losses) (after tax)					1.3						6.6						2.5						(0.9	)
Net realized investment gains (losses) (after tax)					(1.2	)					(3.1	)					(1.0	)					(1.4	)
NET INCOME (LOSS) AFTER TAX					61.8						101.8						95.0						119.5

Page 23 of 24

QUARTERLY PROGRESSION OF FINANCIAL RATIOS

			Three months ended March 31, 2006						Three months ended June 30, 2006						Three months ended September 30, 2006						Three months ended December 31, 2006
Diluted book value per share treasury stock method				$	18.95					$	19.76					$	21.41					$	21.83
Diluted earnings per share				$	0.59					$	1.01					$	0.94					$	1.20
Return on average equity					3.12	%					5.14	%					4.54	%					5.60	%
Combined ratio					90.4	%					81.6	%					81.0	%					76.8	%
Operating leverage (1)					0.22	X					0.22	X					0.21	X					0.20	X
Annualized operating leverage (2)					0.87	X					0.90	X					0.85	X					0.81	X
Investment leverage (3)					2.12	X					2.20	X					2.17	X					2.25	X
Tax rate					20.1	%					20.0	%					20.0	%					18.8	%

1)	Operating leverage is the ratio of net premium earned to average equity. Average equity is defined on page 2.

	2)    Annualized operating leverage is calculated as four times the operating leverage.

	3)    Investment leverage is the ratio of average amortized cost of investments for the quarter to average equity.

Page 24 of 24

OPERATING INCOME RECONCILIATION

The reconciliation of operating income to net income is set out in the following table for the three and twelve months ended December 31, 2006 and 2005:

(in US$ millions except where stated)			Three Months Ended December 31, 2006						Three Months Ended December 31, 2005						Twelve Months Ended December 31, 2006						Twelve Months Ended December 31, 2005
Net income (loss) adjusted for preference share dividend					114.3						30.3						362.5						(177.8	)
Add (deduct) after tax income (loss):
Net exchange (gains) losses					0.9						9.5						(9.5	)					18.2
Net realized (gains) losses on investments					1.4						2.2						6.7						3.2
Operating income (loss) adjusted for preference share dividend					116.6						42.0						359.7						(156.4	)
Tax on operating income (loss)					(28.2	)					(1.8	)					(93.6	)					(18.6	)
Operating income (loss) before tax adjusted for preference share dividend					144.8						43.8						453.3						(137.8	)
Weighted average ordinary shares outstanding (millions)
Basic					93.46						87.76						94.80						74.02
Diluted					95.50						90.67						96.73						74.02
Basic per ordinary share data			$						$						$						$
Net income (loss) adjusted for preference share dividend					1.22						0.34						3.82						(2.40	)
Add (deduct) after tax income (loss)
Net exchange (gains) losses					0.01						0.11						(0.10	)					0.25
Net realized (gains) losses on investments					0.02						0.03						0.07						0.04
Operating income (loss) adjusted for preference shares dividend					1.25						0.48						3.79						(2.11	)
Diluted per ordinary share data
Net income (loss) adjusted for preference share dividend					1.20						0.33						3.75						(2.40	)
Add (deduct) after tax income (loss)
Net exchange (gains) losses					0.01						0.10						(0.10	)					0.25
Net realized (gains) losses on investments					0.01						0.03						0.07						0.04
Operating income (loss) adjusted for preference share dividend					1.22						0.46						3.72						(2.11	)
Book value per ordinary share
Net assets (excluding intangible assets and preference shares)																	1,961.9						1,837.8
Number of ordinary shares in issue at the end of the period																	87,788,375						95,209,008
Diluted number of ordinary shares in issue at the end of the period																	89,876,459						98,126,046
															$						$
Book value per ordinary share																	22.35						19.30
Diluted book value per ordinary share																	21.83						18.73