Exhibit 99.1
Aspen Insurance Holdings Limited
November 2, 2007
Q3 2007 Earnings Conference Call
AHL:NYSE
AHL: NYSE
Safe Harbor Disclosure
This slide presentation is for information purposes only. It should be read in conjunction with our financial supplement posted on our website on the Investor Relations page and with other documents filed or to be filed shortly by Aspen Insurance Holdings Limited (the “Company” or “Aspen”) with the U.S. Securities and Exchange Commission.
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 herein or in the financial supplement, as applicable, which can be obtained from the Investor Relations section of Aspen's website at www.aspen.bm.
Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995:
This presentation contains, and Aspen's earnings conference call will 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,“ “guidance," and similar expressions of a future or forward-looking nature.
In addition, any estimates relating to loss events involve the exercise of considerable judgment and reflect a combination of ground-up evaluations, information available to date from brokers and cedants, market intelligence, initial tentative loss reports and other sources. Due to the complexity of factors contributing to the losses and the preliminary nature of the information used to prepare these estimates, there can be no assurance that Aspen's ultimate losses will remain within the stated amount.
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: changes in the total industry losses resulting from Hurricanes Katrina, Rita and Wilma and any other events, and the actual number of Aspen's insureds incurring losses from these events; with respect to events such as Hurricanes Katrina, Rita and Wilma, Aspen’s 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 events 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; 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 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 and any other events such as the UK floods; 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 1st 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. 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 on February 22, 2007. 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.
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Financial Highlights – Q3 2007
3
20.4%
$0.93
$1.12
Diluted Operating EPS 1
28.7%
$0.94
$1.21
Diluted EPS
18.0%
20.2%
Full Year *ROAE ¹
81.0%
84.5%
Combined Ratio
27.0%
32.1%
Expense Ratio
54.0%
52.4%
Loss Ratio
GAAP Ratios:
23.4%
$95.0
$117.2
Net Income after tax
53.1%
47.3
72.4
Net Investment Income
(20.2)%
81.6
65.1
Underwriting Income
(2.2)%
429.3
419.7
Net Earned Premiums
(19.5)%
433.5
348.8
Net Written Premiums
(18.4)%
457.5
373.5
Gross Written Premiums
Change
2006
2007
Quarter Ended September 30
(US$ in millions, except per share data)
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* Annualised
¹ Reconciliation of Average Equity to closing shareholders’ equity and operating income to net income is provided in our quarterly financial supplements
available in the Financial Results section of the Investor Relations page of Aspen’s website at www.aspen.bm
Financial Highlights – 9 months ended September 2007
4
21.0%
$21.87
$26.46
BV Per Ordinary Share
40.8%
$2.50
$3.52
Diluted Operating EPS
43.9%
$2.55
$3.67
Diluted EPS
16.4%
21.2%
Full Year *ROAE ¹
84.3%
84.1%
Combined Ratio
29.7%
29.3%
Expense Ratio
54.6%
54.8%
Loss Ratio
GAAP Ratios:
36.8%
$258.6
$353.8
Net Income after tax
54.3%
141.7
218.7
Net Investment Income
4.4%
199.3
208.0
Underwriting Income
3.9%
1,260.9
1,309.9
Net Earned Premiums
(4.6)%
1,385.5
1,322.4
Net Written Premiums
(8.7)%
1,658.6
1,513.5
Gross Written Premiums
Change
2006
2007
Nine months Ended September 30
(US$ in millions, except per share data)
AHL: NYSE
* Annualised
¹ Reconciliation of Average Equity to closing shareholders’ equity and operating income to net income is provided in our quarterly financial supplements
available in the Financial Results section of the Investor Relations page of Aspen’s website at www.aspen.bm
Segmental Analysis
Previous
Segment Name
Property Reinsurance
Casualty Reinsurance
Previous
Segment
Business Lines
Property Reinsurance
Casualty Reinsurance
U.K. Property &
Liability
Insurance
U.S. Property &
Casualty Excess
& Surplus Lines
Insurance
New Segment
Name
Property Reinsurance
Casualty Reinsurance
New Segment
Business Lines
Property Reinsurance
Casualty Reinsurance
Specialty
Reinsurance
Marine, Energy,
Transport and
Construction
Insurance and
Reinsurance
Property & Casualty Excess &
Surplus Lines Insurance
Specialty Insurance and Reinsurance
Property & Casualty Insurance
Marine and Aviation
Insurance
International Insurance
U.S. Insurance
Property,
Professional,
Employers' and
Public Liability
Insurance
As a result of a shift in the Company’s operating structure and the implementation of a number of strategic initiatives in 2007, the Company changed the composition of its business
segments to reflect the manner in which the business is managed. The Company is currently organized into four business segments; property reinsurance, casualty reinsurance,
international insurance, and U.S. insurance. These segments form the basis of how the Company monitors the performance of its operations.
The property and casualty insurance segment previously comprised U.S. property and casualty insurance business written on an excess and surplus lines basis, U.K. commercial
property and liability insurance and international property facultative business. With the appointment of Nathan Warde, as head of U.S. insurance, and Matthew Yeldham, as head of
international insurance, we have now redesignated U.S. property and casualty insurance business as a separate segment. The U.K property and liability insurance business now
forms part of our international insurance segment which also consists of marine, energy, liability and aviation insurance, professional liability insurance and non-marine transport lines
of business as well as specialty reinsurance. We have also re-allocated our international property facultative business to the property reinsurance segment, which was previously part
of the property and casualty insurance segment. After these changes, the four segments are: property reinsurance, casualty reinsurance, international insurance and U.S. insurance.
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5
Market Conditions
2007 Outlook: Property Reinsurance
and Casualty Reinsurance
Market
Trend
Casualty
Facultative
US Casualty
Intl. Casualty
Aspen YTD
Performance
Market
Conditions
Line
Casualty Reinsurance
Property Reinsurance
Property & nbsp;
Facultative
Pro Rata
Market Trend
Risk Excess
Treaty
Catastrophe
Treaty
Aspen YTD
Performance
Market Conditions
Line
= Absolute rate levels attractive
= Absolute rate levels mixed
= Absolute rate levels very challenging
= 12 month rate trend positive
= 12 month rate trend neutral
= 12 month rate trend slightly downwards
= 12 month rate trend downwards
Strong
Good
Improvement Required
6
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Market Conditions
2007 Outlook: US Insurance and International
Insurance
Aspen YTD
Performance
UK Liability
UK
Property
Line
Market
Conditions
Market
Trend
Market
Trend
Specialty
Reinsurance
Marine &
Energy Liability
Offshore
Energy
Physical
Damage
Marine Hull
Aviation
Aspen YTD
Performance
Market
Conditions
Line
International Insurance
= Absolute rate levels attractive
= Absolute rate levels mixed
= Absolute rate levels very challenging
= 12 month rate trend positive
= 12 month rate trend neutral
= 12 month rate trend slightly downwards
= 12 month rate trend downwards
7
Strong
Good
Improvement Required
US Insurance
E&S Casualty
Market
Trend
E&S Property
Aspen YTD
Performance
Market
Conditions
Line
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Well-managed Diversification
Gross Written Premiums
8
FY 2005
Property Reinsurance Casualty Reinsurance
International Insurance U.S. Insurance
100% = $1.6bn
32%
35%
8%
25%
FY 2004
FY 2006
100% = $2.1bn
100% = $1.9bn
100% = $1.8bn
12 months: October 1, 2006 –
September 30, 2007
39%
29%
7%
25%
32%
37%
7%
24%
42%
26%
4%
28%
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Profitable Expansion into New / Adjacent Lines
Progressive diversification of strategic footprint through incremental expansion into
adjacent business lines*
Key enablers:
Consistent with core competencies
Timing
Availability of proven, successful underwriting teams
Focus on non-correlating lines
2003
2004
2005
2007
Specialty
Reinsurance
Aviation
Marine
US Casualty Re
US Excess &
Surplus lines
Aspen Re America
Aviation Insurance
Marine Insurance
Energy Insurance
International
Property
Facultative
* Businesses shown for first year of meaningful premium contribution
** Projected for 2007
*** Underwriting after 09/07
Diversification has Added over $1,134m** GWP in New Lines Since 2004
Development of Aspen’s GWP
0
500
1000
GWP $m
1500
2000
2500
2002
2003
2004
2005
2006
2007
Year
Original Lines
2003 Lines
2004 Lines
2005 Lines
2006 Line
2007 Lines **
2006
Professional
Liability***
Excess
Casualty***
Non-Marine
Liability***
9
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Govt*(incl.
GNMAs), 21%
Agency (incl.
Agency MBS), 18%
AAA, 32%
AA, 8%
A, 10%
BBB, 2%
FOHF, 9%
Aggregate Investment Portfolio
Asset Class Allocation
19%
5%
20%
9%
19%
6%
13%
21%
6%
3%
22%
4%
24%
28%
0%
5%
10%
15%
20%
25%
30%
35%
Govt
Agency
MBS
Corp
ABS
FOHF
Cash/ST
Sept 07
Dec 06
89% of Portfolio ‘A’ or Better
10
AAA
AA+
Overall Fixed Income Rating
AAA
3%
Actual as at
December 31,
2006
AA+
Overall Portfolio Rating
9%
Fund of Hedge Funds
Actual as at
September
30, 2007
Indicator (S&P Ratings)
Portfolio Credit Ratings (as at September 30, 2007)
* Govt rated securities includes GNMAs that are classified as “MBS” at left; Agency rated securities include Agency issued mortgage backed securities that are classified as “MBS” at left.
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Improvement in Book Yield
3.0%
3.5%
4.0%
4.5%
5.0%
Q404
Q105
Q205
Q305
Q405
Q106
Q206
Q306
Q406
Q107
Q207
Q307
Fixed Income
Fixed income and cash and cash equivalents
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2007 Guidance
Full 2007 Year Outlook
Implied ROE of 16% - 20%
12
$90 million
(full year)
$145 million
(full year)
$135 million
(full year)
$135 million
(full year)
Assumed Average Cat-
Load
14% to 16%
16% to 19%
16% to 19%
16% to 19%
Tax Rate
$280 - $300
million
$250 - $270
million
$250 - $270
million
$230 - $250
million
Investment Income
83% - 86%
83% - 88%
83% - 88%
83% - 88%
Combined Ratio
Approx 9% of
GEP*
Approx 9% of
GEP*
6% - 8% of GWP
6% - 8% of GWP
% Premium Ceded
$1.8 billion ± 5%
$1.8 billion ± 5%
$1.8 billion ± 5%
$1.9 billion ± 5%
GWP
November 1, 2007
August 6, 2007
May 3, 2007
February 9, 2007
* Metric changed from percent of GWP to percent of GEP to reflect that the company has purchased multi year retrocessional policies and believes that a comparison with earned premiums is more appropriate than written premium for guidance purposes. This change in the ceded premium metric does not impact our current ROE guidance.
AHL: NYSE
Financial Highlights – Group Summary Q3
Underwriting Revenues
458
24
434
429
374
25
349
420
0
200
$ms
400
600
GWP
Premiums
Ceded
NWP
NEP
2006 Q3
2007 Q3
Income
117
119
95
77
131
138
117
97
0
40
$ms
80
120
160
200
Operating
Income
Before Tax
Income
Before Tax
Income After
Tax
Retained
Income
2006 Q3
2007 Q3
Income Contribution
82
47
65
72
0
$ms
40
80
120
Underwriting Income
Net Investment Income
2006 Q3
2007 Q3
Underwriting Expenses
232
79
37
348
76
59
355
220
0
$ms
200
400
600
Losses &
Loss
Expenses
Acquisition
Exp
General &
Admin
Expenses
Total
Underwriting
Expenses
2006 Q3
2007 Q3
13
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Financial Highlights – Group Summary – 9 months
1659
273
1386
1261
1514
191
1322
1310
0
400
800
$ms
1,200
1,600
2,000
GWP
Premiums
Ceded
NWP
NEP
2006
2007
199
142
208
219
0
40
80
$ms
120
160
200
240
Underwriting Income
Net Investment Income
2006
2007
688
255
118
1062
236
148
1102
718
0
400
$ms
800
1200
1600
Losses &
Loss
Expenses
Acquisition
Exp
General &
Admin
Expenses
Total
Underwriting
Expenses
2006
2007
14
319
323
259
205
406
416
354
293
0
100
$ms
200
300
400
500
Operating
Income
Before Tax
Income
Before Tax
Income After
Tax
Retained
Income
2006
2007
Underwriting Revenues
Underwriting Expenses
Income
Income Contribution
AHL: NYSE
Results by Business Segment – Q3 2007
GWP
140
78
129
28
0
40
80
$ms
120
160
200
240
Property Re
Casualty Re
International
Insurance
US Insurance
NWP
132
77
118
22
0
40
80
$ms
120
160
200
240
Property Re
Casualty Re
International
Insurance
US Insurance
Underwriting Income
39
-2
28
1
-10
10
$ms
30
50
Property Re
Casualty Re
International
Insurance
US Insurance
15
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Results by Business Segment – 9 months
GWP
522
380
513
98
0
200
$ms
400
600
Property Re
Casualty Re
International
Insurance
US Insurance
NWP
424
372
455
72
0
200
$ms
400
600
Property Re
Casualty Re
International
Insurance
US Insurance
Underwriting Income
119
21
72
-4
-20
0
20
40
60
$ms
80
100
120
140
160
Property Re
Casualty Re
International
Insurance
US Insurance
16
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