Exhibit 99.1
Aspen Insurance Holdings Limited
February 7, 2008
Q4 2007 Earnings Conference Call
AHL:NYSE
AHL: NYSE
Exhibit 99.1
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: the impact of deteriorating credit environment created by the sub-prime crisis; a decline in the value of our investment portfolio or a rating downgrade of the securities in our portfolio; 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 2008 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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AHL: NYSE
Financial Highlights – Q4 2007
3
* Annualized
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
20.5%
$1.22
$1. 47
Diluted Operating EPS ¹
20.0%
$1.20
$1. 44
Diluted EPS
22.8%
23.2%
Full Year Operating *ROAE ¹
76.8%
79.4%
Combined Ratio
28.2%
31.8%
Expense Ratio
48.6%
47.6%
Loss Ratio
GAAP Ratios:
13.1%
$119.5
$135.2
Net Income after tax
28.1%
62.7
80.3
Net Investment Income
(9.6)%
96.3
87.1
Underwriting Income
2.0%
415.3
423.7
Net Earned Premiums
0.3%
278.1
279.0
Net Written Premiums
6.3%
286.9
305.0
Gross Written Premiums
Change
2006
2007
Quarter Ended December 31
(US$ in millions, except per share data and percentages)
AHL: NYSE
Financial Highlights – 12 months ended December 2007
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
4
25.1%
$22.35
$27.95
BV Per Ordinary Share
34.1%
$3.72
$4.99
Diluted Operating EPS
36.3%
$3.75
$5.11
Diluted EPS
18.4%
21.1%
Full Year Operating ROAE ¹
82.4%
83.0%
Combined Ratio
29.3%
29.9%
Expense Ratio
53.1%
53.1%
Loss Ratio
GAAP Ratios:
29.3%
$378.1
$489.0
Net Income after tax
46.3%
204.4
299.0
Net Investment Income
(0.2)%
295.6
295.1
Underwriting Income
3.4%
1,676.2
1,733.6
Net Earned Premiums
(3.7)%
1,663.6
1,601.4
Net Written Premiums
(6.5)%
1, 945.5
1,818.5
Gross Written Premiums
Change
2006
2007
12 months ended December 31
(US$ in millions, except per share data and percentages)
AHL: NYSE
Growth in ROAE and Book Value Per Share
12.5%
18.0%
22.4%
22.9%
20.4%
20.2%
22.8%
20.4%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
24.0%
26.0%
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
ROAE %
10.0
12.0
14.0
16.0
18.0
20.0
22.0
24.0
26.0
28.0
$ Diluted B/V Per Share
Annualized ROAE
Diluted BV Per Share*
CAGR in BVPS over last 8 quarters of 20%
5
(*) Note: See Aspen’s quarterly financial supplement for a reconciliation of diluted book value per share to basic book value per share and reconciliation of average equity to closing shareholders’ equity in the Investor Relations section of Aspen’s website at www.aspen.bm
2006
2007
Financial Highlights – Group Summary Q4
Underwriting Revenues
287
9
278
415
305
26
279
424
0
200
400
600
GWP
Premiums
Ceded
NWP
NEP
$ms
2006 Q4
2007 Q4
Income
150
147
120
101
161
158
135
115
0
40
80
120
160
200
Operating
Income
Before Tax
Income
Before Tax
Income After
Tax
Retained
Income
$ms
2006 Q4
2007 Q4
Income Contribution
96
63
87
80
0
40
80
120
Underwriting Income
Net Investment Income
$ms
2006 Q4
2007 Q4
Underwriting Expenses
202
67
50
319
78
57
337
202
0
200
400
600
Losses &
Loss
Expenses
Acquisition
Exp
General &
Admin
Expenses
Total
Underwriting
Expenses
$ms
2006 Q4
2007 Q4
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AHL: NYSE
Financial Highlights – Group Summary – 12 months
1946
282
1664
1676
1819
217
1601
1734
0
400
800
1,200
1,600
2,000
GWP
Premiums
Ceded
NWP
NEP
$ms
2006
2007
296
204
295
299
0
40
80
120
160
200
240
280
320
Underwriting Income
Net Investment Income
$ms
2006
2007
890
323
168
1381
314
205
1439
920
0
400
800
1200
1600
Losses &
Loss
Expenses
Acquisition
Exp
General &
Admin
Expenses
Total
Underwriting
Expenses
$ms
2006
2007
7
469
470
378
306
567
574
489
408
0
100
200
300
400
500
600
700
Operating
Income
Before Tax
Income
Before Tax
Income After
Tax
Retained
Income
$ms
2006
2007
Underwriting Revenues
Underwriting Expenses
Income
Income Contribution
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Results by Business Segment – Q4
NWP
53
55
145
26
71
53
135
20
0
40
80
120
160
200
Property Re
Casualty Re
International
Insurance
US Insurance
$ms
Underwriting Income
23
18
56
-1
33
5
44
6
-10
0
10
20
30
40
50
60
70
80
Property Re
Casualty Re
International
Insurance
US Insurance
$ms
8
GWP
58
50
145
34
80
51
150
24
0
40
80
120
160
200
Property Re
Casualty Re
International
Insurance
US Insurance
$ms
AHL: NYSE
2006
2007
Results by Business Segment – 12 Months
NWP
477
474
607
106
495
425
590
91
0
100
200
300
400
500
600
700
800
Property Re
Casualty Re
International
Insurance
US Insurance
$ms
Underwriting Income
103
81
123
-12
152
26
115
2
-50
0
50
100
150
200
Property Re
Casualty Re
International
Insurance
US Insurance
$ms
9
GWP
623
486
683
154
602
432
663
123
0
100
200
300
400
500
600
700
800
Property Re
Casualty Re
International
Insurance
US Insurance
$ms
2006
2007
AHL: NYSE
Govt*(incl.
GNMAs), 15%
Agency* (incl.
Agency MBS),
20%
AAA, 34%
AA, 8%
A, 12%
BBB, 2%
FOHF, 9%
Portfolio Credit Ratings
(as at December 31, 2007)
Aggregate Investment Portfolio
Asset Class Allocation
6%
13%
21%
6%
3%
22%
19%
6%
21%
25%
4%
9%
16%
29%
0%
5%
10%
15%
20%
25%
30%
35%
Govt
Agency
MBS
Corp
ABS
FOHF
Cash/ST
Dec 06
Dec 07
Sub-Prime Exposure:
• No direct sub-prime exposure
• Currently have less than $51,000 (fifty-one thousand dollars) of fixed income investments that are wrapped by financial guarantors
• No investment losses requiring an impairment charge at the year end
89% of Portfolio ‘A’ or Better, Overall Fixed Income ‘AA+’
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* Govt rated securities include 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 Fixed Income Book Yield
3.0%
3.5%
4.0%
4.5%
5.0%
Q404
Q105
Q205
Q305
Q405
Q106
Q206
Q306
Q406
Q107
Q207
Q307
Q407
Fixed Income
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2008 Guidance
ROE of 14% - 17% assuming normal loss experience
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$135 million
13% to 16%
$290 - $320 million
88% - 93%
8% - 10% of GEP
$1.8 billion ± 5%
February 7, 2008
$77 million
Cat-Load
14.8%
Tax Rate
$299 million
Investment Income
83.0%
Combined Ratio
8.9%
% Earned Premium Ceded
$1.82 billion
GWP
Actual 2007
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Market Conditions
2008 Outlook: Property Reinsurance
and Casualty Reinsurance
Market
Trend
Casualty
Facultative
US Casualty
Intl. Casualty
Aspen 2007
Performance
Market
Conditions
Line
Casualty Reinsurance
Property Reinsurance
Property
Facultative
Pro Rata
Market Trend
Risk Excess
Treaty
Catastrophe
Treaty
Aspen 2007
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
Satisfactory
Improvement Required
As of February 7, 2008
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Market Conditions
2008 Outlook: US Insurance and International
Insurance
Aspen 2007
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 2007
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
14
Strong
Satisfactory
Improvement Required
As of February 7, 2008
US Insurance
E&S Casualty
Market
Trend
E&S Property
Aspen 2007
Performance
Market
Conditions
Line
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