Attached files
| file | filename |
|---|---|
| EX-99.2 - EXHIBIT 99.2 - ASPEN INSURANCE HOLDINGS LTD | a992-ahlq117.htm |
| EX-99.1 - EXHIBIT 99.1 - ASPEN INSURANCE HOLDINGS LTD | a991-ahlq117.htm |
| 8-K - 8-K - ASPEN INSURANCE HOLDINGS LTD | form8-kq12017.htm |
AHL: NYSE
INVESTOR PRESENTATION
FIRST QUARTER 2017
Aspen Insurance Holdings Limited
Exhibit 99.3
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
by Aspen Insurance Holdings Limited (the “Company” or “Aspen”) with the United States Securities and Exchange Commission (the "SEC").
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 financial 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 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.co.
Application of the Safe Harbor of the Private Securities Litigation Reform Act of 1995: This presentation contains 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,” “assume,” “objective,” “intend,” “plan,” “believe,” “do not believe,” “aim,” “project,” “anticipate,” “seek,” “will,” “likely,” “estimate,” “may,” “continue,”
“guidance,” “outlook,” “trends,” “future,” “could,” “would,” “should,” “target,” "on track" 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:
our ability to successfully implement steps to further optimize the business portfolio, ensure capital efficiency and enhance investment returns; the possibility of greater frequency or severity of claims and loss activity,
including as a result of natural or man-made (including economic and political risks) catastrophic or material loss events, than our underwriting, reserving, reinsurance purchasing or investment practices have
anticipated; the assumptions and uncertainties underlying reserve levels that may be impacted by future payments for settlements of claims and expenses or by other factors causing adverse or favorable development,
including our assumptions on inflation costs associated with long-tail casualty business which could differ materially from actual experience; the political, regulatory and economic effects arising from the vote and
resulting negotiations as a result of the vote by the U.K. electorate in favor of a U.K. exit from the European Union in the June 2016 referendum; the reliability of, and changes in assumptions to, natural and man-made
catastrophe pricing, accumulation and estimated loss models; decreased demand for our insurance or reinsurance products; cyclical changes in the insurance and reinsurance industry; the models we use to assess our
exposure to losses from future natural catastrophes contain inherent uncertainties and our actual losses may differ significantly from expectations; our capital models may provide materially different indications than
actual results; increased competition from existing (re)insurers and from alternative capital providers and insurance linked funds and collateralized special purpose insurers on the basis of pricing, capacity, coverage
terms, new capital, binding authorities to brokers or other factors and the related demand and supply dynamics as contracts come up for renewal; our ability to execute our business plan to enter new markets, introduce
new products and teams and develop new distribution channels, including their integration into our existing operations; our acquisition strategy; changes in market conditions in the agriculture industry, which may vary
depending upon demand for agricultural products, weather, commodity prices, natural disasters, and changes in legislation and policies related to agricultural products and producers; termination of, or changes in, the
terms of the U.S. Federal Multiple Peril Crop Insurance Program or the U.S. Farm Bill, including modifications to the Standard Reinsurance Agreement put in place by the Risk Management Agency of the U.S.
Department of Agriculture; the recent consolidation in the (re)insurance industry; loss of one or more of our senior underwriters or key personnel; our ability to exercise capital management initiatives, including capital
available to pursue our share repurchase program at various levels or to declare dividends, or to arrange banking facilities as a result of prevailing market conditions, the level of catastrophes or other losses or changes
in our financial results; changes in the availability, cost or quality of reinsurance or retrocessional coverage; changes in general economic conditions, including inflation, deflation, foreign currency exchange rates,
interest rates and other factors that could affect our financial results; the risk of a material decline in the value or liquidity of all or parts of our investment portfolio; the risks associated with the management of capital on
behalf of investors; a failure in our operational systems or infrastructure or those of third parties, including those caused by security breaches or cyber attacks; evolving issues with respect to interpretation of coverage
after major loss events; our ability to adequately model and price the effects of climate cycles and climate change; any intervening legislative or governmental action and changing judicial interpretation and judgments
on insurers’ liability to various risks; the risks related to litigation; the effectiveness of our risk management loss limitation methods, including our reinsurance purchasing; changes in the total industry losses or our share
of total industry losses resulting from events such as catastrophes, that have occurred in prior years or may occur and, with respect to such events, our reliance on loss reports received from cedants and loss adjustors,
our reliance on industry loss estimates and those generated by modeling techniques, changes in rulings on flood damage or other exclusions as a result of prevailing lawsuits and case law; the impact of one or more
large losses from events other than natural catastrophes or by an unexpected accumulation of attritional losses and deterioration with loss estimates; the impact of acts of terrorism, acts of war and related legislation;
any changes in our reinsurers’ credit quality and the amount and timing of reinsurance recoverables; the continuing and uncertain impact of the current depressed lower growth economic environment in many of the
countries in which we operate; our reliance on information and technology and third-party service providers for our operations and systems; the level of inflation in repair costs due to limited availability of labor and
materials after catastrophes; a decline in our operating subsidiaries’ ratings with S&P, A.M. Best or Moody’s; the failure of our reinsurers, policyholders, brokers or other intermediaries to honor their payment obligations;
our reliance on the assessment and pricing of individual risks by third parties; our dependence on a few brokers for a large portion of our revenues; the persistence of heightened financial risks, including excess
sovereign debt, the banking system and the Eurozone crisis; changes in government regulations or tax laws in jurisdictions where we conduct business; changes in accounting principles or policies or in the application
of such accounting principles or policies; increased counterparty risk due to the credit impairment of financial institutions; and Aspen or Aspen Bermuda Limited becoming subject to income taxes in the United States or
the United Kingdom. For a more detailed description of these uncertainties and other factors, please see the “Risk Factors” section in Aspen's Annual Report on Form 10-K as filed with the SEC on February 22, 2017.
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.
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. The actuarial range of reserves and management's best estimate represents a distribution from our internal capital model for reserving risk based on our then
current state of knowledge and explicit and implicit assumptions relating to the incurred pattern of claims, the expected ultimate settlement amount, inflation and dependencies between lines of business. 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.
2
AHL: NYSE
AGENDA
3
Overview │
Value Creation Approach │ 4
Background and Strategy │ 5
Financial Performance │ 12
Operating Segments │
Insurance │ 14
Reinsurance │ 16
Appendix │ 19
AHL: NYSE
Levers to Higher RO
E
1. Optimizing risk and reward by allocating capital to products and geographies
where underwriting expertise is rewarded, and higher, more stable returns are
achieved over time
2. Return capital to shareholders if it creates more value than deploying in the
business
3. Generating operational efficiencies through investments in technology and
effective processes
4. Strong risk management framework, with a particular focus on underwriting,
claims, systems and technology, and financial controls
5. Experienced management team and strong corporate governance structure
ASPEN’S APPROACH TO CREATING SHAREHOLDER VALUE
Focused on markets that reward innovation, technical expertise and underwriting skill –
and on delivering superior value through operational and capital efficiency
4
AHL: NYSE (1) AgriLogic is reported within the Reinsurance segment. Reinsurance GWP of 46% for TTM Q1 2017 is comprised of 40% Reinsurance and 6% AgriLogic.
(2) TTM refers to trailing twelve months through March 31, 2017.
Insurance
Reinsurance
AgriLogic
54%40%
6%
STRONG AND DIVERSIFIED FRANCHISE
▪ Global, underwriting expertise-led company writing
complex and diversified insurance and reinsurance
risks
▪ Proven financial results through well-balanced
business portfolio, stable investment returns, and
capital efficiency
▪ Entrepreneurial underwriting with exceptional
quantitative and analytical capabilities to deliver
best-in-class solutions and services
▪ High quality, industry-respected, experienced
executive management team
▪ Strong balance sheet built upon robust reserve
position backed by prudent reserving philosophy
▪ Financial strength ratings/outlook of A/Stable
(S&P), A2/Stable (Moody’s) and A Excellent/
Stable (A.M. Best) for Aspen’s operating
subsidiaries
5
Insurance
Reinsurance
44%
56%
INCREASINGLY DIVERSE BUSINESS MIX
TOTAL 2009 GROSS PREMIUMS
WRITTEN: $2.1 BN
]
TOTAL TTM Q1 2017(2) GROSS
PREMIUMS WRITTEN: $3.2 BN
(1)
AHL: NYSE
Diluted Book Value Per Share Accumulated Dividends per Ordinary Share
Q1 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1 2017
$22.93
$28.19
$34.14
$38.90 $38.21 $40.65 $40.90
$45.13 $46.00 $46.72 $47.89$1.47
$2.52
$3.12
$3.72 $4.32
$4.98 $5.70
$6.50 $7.34
$8.21
$8.43
▪ Achieved 8.7% CAGR in total value creation over last 10 years
▪ Aspen is larger and more diverse than ever
▪ With product lines and regional networks in place, Aspen is able to:
• Identify and capture opportunities as they arise
• Focus on portfolio optimization
• Achieve greater consistency in marketing and distribution
WELL POSITIONED TO INCREASE VALUE CREATION
6
CAGR: 8.7
%(1
)
(1) Compound Annual Growth Rate calculated to reflect total equity and accumulated dividends per ordinary share from 3/31/2007 through 3/31/2017.
AHL: NYSE
▪ Continued focus on responsible capital stewardship: return capital to shareholders when it is financially
more attractive to do so than deploying elsewhere
▪ Aspen has generated approximately $4.6 BN of capital since inception
▪ Returned over $2.1 BN of cumulative repurchases and ordinary dividends to shareholders through
March 31, 2017, including all ordinary shareholder funds raised at our Initial Public and Secondary
Offerings
▪ 8.0% average dividend increase over the last five years; 9.1% dividend increase from $0.22 to $0.24
in April 2017
▪ Returned a cumulative 70% of operating income to shareholders since inception through Q1 2017
>$2.1 BN of Total Capital Returned through Q1 2017
($, MM)
SUSTAINED RECORD OF PROACTIVE CAPITAL MANAGEMENT
7
Cumulative Repurchases Cumulative Dividends
2011 2012 2013 2014 2015 2016 Q1 2017
$1,172 $1,282
$1,639
$1,870 $2,005
$2,133 $2,146
AHL: NYSE 8
MULTIPLE LEVERS TO IMPROVE FINANCIAL PERFORMANCE
Financial Optimization
▪ Outward Reinsurance
▪ 2014-2015: restructured ceded reinsurance and retrocession programs, utilizing internal reinsurance vehicle; achieved
$23 MM net income improvement in each year
▪ 2016: shifted outward contracts to multi-line quota share and aggregate covers; expected to reduce income statement
volatility and improve total expense ratio in 2017 and beyond(1)
▪ Investment Strategy
▪ 2011-2016: opportunistic adjustments to investment portfolio have enhanced net investment income return, consistent
to book value per share growth.
▪ Late 2016: sold $200 MM in equity securities; realizing gain on the sale and reinvested in fixed income securities in
rising interest rate environment
▪ Business Optimization
▪ Through Year-End 2014: lowered U.S. Wind probable maximum losses (“PMLs”), freeing up approximately $140 MM of
capital
Operational Optimization
▪ 2015-2016: implemented group Targeted Operating Model (“TOM”), aimed at building scalable operations to support the
business as it grows and address process efficiencies
▪ 2016: announced newly created position of Group Chief Operating Officer to add strategic vision and ensure
operational activities are developed further and effectively aligned to our overall strategy and business plans
(1) See "Safe Harbor Disclosure" slide 2.
AHL: NYSE
2011 2012 2013 2014 2015 2016 Q1 2016 Q1 2017
$92
$137
$108 $104
$157
$129
$21.6 $26.2
PRUDENT RESERVING PHILOSOPHY
• Achieved consistent favorable prior year reserve releases every year since inception; over $1.1 BN net
favorable reserve development since inception
• Independent actuarial review conducted annually
• Build in margin over MBE(1) when booking reserves with no legacy issues
• 57% of gross reserves are IBNR(2)
Prior Year Reserve Releases ($ in MM)
(1) Mean best estimate.
(2) Incurred but not reported as of December 31, 2016. 9
AHL: NYSE
40% IG Credit
16% US
Treasury
10% Cash &
Short-Term
14% Agency
MBS
7% Equities
6% Sovereign
3% Non US
Agency
2% US
Agency
1% ABS
1% Non US
Govt
Guaranteed
0.1% CMBS
0.3% Munis
STRONG AND CONSISTENT INVESTMENT RETURNS
100% = $8.5 BN(1)
• Dynamically manage the risk asset portfolio
◦ Sold approximately $200 MM of equities in
the fourth quarter of 2016
• 11.5% of the portfolio invested in risk assets
(including 7.3% in equities, and 3.9% in BBB
emerging market debt)
• Fixed income portfolio duration: 3.89 years
(1) Excludes amounts attributable to variable interest entities; may not add to 100% due to rounding. 10
• Conservative approach to investment management
• Achieve high quality, non-volatile investment income and total return that contribute significantly to operating ROE
and BVPS growth through all market cycles
• Overall portfolio strategy focused on high-quality fixed-income investments in multiple jurisdictions and currencies;
tactically invest in liquid risk assets to build total return
• Maintain adequate liquidity to meet operational, claims paying, and capital management needs
PORTFOLIO ALLOCATIONS
As at March 31, 2017
AHL: NYSE
AGENDA
Overview │
Value Creation Approach │ 4
Background and Strategy │ 5
Financial Performance │ 12
Operating Segments │
Insurance │ 14
Reinsurance │ 16
Appendix │ 19
11
AHL: NYSE
2012 2013 2014 2015 2016 Q1 2017
87.0% 86.9% 86.7% 88.3% 82.4%
68.8%
2012 2013 2014 2015 2016 Q1 2017
8.5%
9.7%
11.5%
10.0%
4.8%
6.8%
2012 2013 2014 2015 2016 Q1 2017
59.4%
56.3%
54.4%
55.2%
59.8%
56.5%
2012 2013 2014 2015 2016 TTM Q1 2017
$2,583 $2,647
$2,903 $2,997
$3,147 $3,169
FINANCIAL PERFORMANCE METRICS
Gross Written Premiums
($, MM)
Loss Ratio
12
Operating ROE
(1) TTM refers to trailing twelve months through March 31, 2017. (2) Excluding the 4.1% impact of the Ogden Rate change in Q1 2017, annualized operating
ROE was 10.9% bringing the average annualized operating ROE from 2012 through Q1 2017 to 9.2%. (3) See "Safe Harbor Disclosure" slide 2.
CAGR: 4.2%
Average: 56.9%
Average: 8.6%
Aspen is well-poised to achieve strong results(3)
Retention Ratio
Average: 83.4%
10.9%(2)
(1)
AHL: NYSE
AGENDA
13
Overview │
Value Creation Approach │ 4
Background and Strategy │ 5
Financial Performance │ 12
Operating Segments │
Insurance │ 14
Reinsurance │ 16
Appendix │ 19
AHL: NYSE
U.S. Regional
U.K. Regional
Professional
Lines and
Management
Liability
Marine
Excess
Casualty
Energy
Other Global
Specialty
Products (3)
23%
14%
16%
12%
7%
6%
21%
• Specialty insurer offering creative, customized solutions to complex risks, deep underwriting expertise, and superior
claims handling abilities
• Robust and globally-aligned marketing and distribution model that empowers experienced leaders to actively engage
key broker partners to drive optimal results
• Business transformed over last five years through organic growth, primarily in the U.S., and expansion of product lines
and strong underwriting teams
• Global presence with 12 global products lines, complemented by strong regional businesses (predominantly Property
and Casualty business in the U.S. and U.K.)
• New leadership reviewed and repositioned portfolio in 2016
◦ Repositioned lines and exited accounts; added new products and deployed existing products in new markets
◦ Increased use of outwards (pro-rata) reinsurance, which is expected to enhance underwriting stability over time(1)
◦ Expect further improvement in underwriting profitability(1)
TTM Q1 2017(2) GWP $1.71 BN
BY BUSINESS LINE
ASPEN INSURANCE: LEADING SPECIALTY INSURER
(1) See "Safe Harbor Disclosure" slide 2. (2) TTM refers to trailing twelve months through March 31, 2017. (3) Other Global Specialty Products include: Aviation,
Environmental Liability, Credit & Political Risk, Cyber, Surety, Accident & Health, Crisis Management and Railroad. (4) Certain U.S. offices have more than one
office in each state.
14
Strong Global Product Offering via Key Locations(4)
Singapore
California
Georgia
Florida
Chelmsford
Croydon
Manchester
Glasgow
Birmingham
London
Bristol
Dublin
Illinois
Massachusetts
Connecticut
New York
New Jersey
Pennsylvania
Maryland
Bermuda
Puerto Rico
Texas
AHL: NYSE 15(1) See "Safe Harbor Disclosure" slide 2.
ASPEN INSURANCE TRANSFORMATION
• Investment to bring U.S.
insurance business with U.S.
expertise through U.S. brokers,
to scale
• $150 MM invested through 2014
Appointed new
leadership
Investment in build out of
teams, product offerings, and
regional distribution channels
in U.S. and internationally
Set 2015 targets for U.S.
business of $600 MM net
premiums earned and
operating expense ratio of
~16%
• New leadership appointed – CEO and
CUO
• Established global products strategy,
appointed global product heads
• Further targeted investment in
underwriting teams ($20 MM in
2015-2016, now complete)
• Undertook complete review of portfolio,
repositioned lines and exited accounts
that no longer meet risk appetite
Results
Global insurance operation with:
• U.S. insurance business at scale, achieving 2015 net premiums earned
of $654 MM and operating expense ratio of 14.9%
• International insurance business at scale, focusing on opportunistic
growth regionally while bringing innovative approach and deep expertise
to all clients
Results(1)
• Short-term: Decrease volatility through optimization of portfolio, revised
reinsurance arrangements, and change in business mix under new
global leadership; expanded margins and attractive rate of profitable
growth
• Medium term: Lower loss ratio driven by superior risk selection; lower
total expense ratio resulting from increased use of pro-rata reinsurance
arrangements
• Long-term: Consistent and sustainable top quartile returns
Phase 1: Investment 2015 LATE 20152009 2017
Phase 2: OptimizationPhase 1: Investment
AHL: NYSE
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1 2017
82.7% 88.2%
70.4%
88.2%
125.4%
85.4%
76.4% 77.6% 80.4%
90.0% 88.8%
Specialty AgriLogic
Other Property Casualty
Property Cat
21%
13%
24%
23%
19%
16
• Significant industry experience and focused on providing expertise and
exceptional solutions to clients
• Maintaining scale and relevance in chosen major products and regions allows us
to better access regional business and benefit quickly from localized market
changes; our regional strategy has driven top-line growth and consistent, superior
profitability
• Most recently, we have
◦ Established presence in Middle East and Africa through opening of a hub in Dubai
◦ Further expanded in Asia, with offices in Shanghai and Beijing through Lloyd’s
and in Sydney
• Ongoing diversification of product offerings, such as the acquisition of AgriLogic, a
U.S. crop insurer and agricultural consultancy
• Utilize multi-line capabilities and Aspen Capital Markets to leverage third-party
capital
Strong Global Product Offering via Key Locations Consistent, Strong Combined Ratio
Shanghai
Sydney
Singapore
Dubai
California
BermudaGeorgiaFlorida
London Cologne
Zurich
Paris ConnecticutNew York
Illinois
TTM Q1 2017(1) GWP $1.46 BN
BY BUSINESS LINE
ASPEN RE: AN ESTABLISHED INDUSTRY LEADER
Average: 86.7%
Dublin
Beijing
Hub Office
100%
(1) TTM refers to trailing twelve months through March 31, 2017.
AHL: NYSE
• Aspen acquired AgriLogic in January 2016
• High quality, diversifying business for Aspen, strong prior relationship with Aspen Re and product
expertise within Aspen Re to help manage the business and provide market wide experience
• Significant intellectual capital, strong analytical tools and capabilities
◦ Leading technology to model and understand behavior of different perils and crops, geographically precise
underwriting approach and targeted risk selection
◦ Growing consulting business with expertise in policy development, strategic planning, and rate development
services for private and public sector entities
• Enhanced marketing, combined with larger Aspen balance sheet, offers excellent growth opportunity(1)
• Strong long-term potential financial benefits(1)
2016 GWP $179 MM
BY CROP
2016 GWP $179 MM
BY STATE
ASPEN RE GROWTH & DIVERSIFICATION – AGRILOGIC
(1) See "Safe Harbor Disclosure" slide 2. 17
Corn
Soybeans
Wheat
Cotton
Pasture,
Rangeland
& Forage
All Other
28%
13%
10%7%
6%
36%
California
Texas
Kansas
Illinois
Indiana
All Other
24%
21%
14%
14%
4%
23%
AHL: NYSE
AGENDA
18
Overview │
Value Creation Approach │ 4
Background and Strategy │ 5
Financial Performance │ 12
Operating Segments │
Insurance │ 14
Reinsurance │ 16
Appendix │ 19
AHL: NYSE
$0 $100 $200 $300 $400
100 year return period as $, MM of Total Shareholder Equity
U.S. Eastern Quake
Cascadia Quake
Japan All Perils
European Wind
Northeast and MidAtlantic WS
Texas and Gulf WS
California EQ
Florida and Southeast WS
$55
$93
$118
$154
$167
$273
$333
$348
$0 $100 $200 $300 $400 $500 $600
250 year return period as $, MM of Total Shareholder Equity
U.S. Eastern Quake
Cascadia Quake
Japan All Perils
European Wind
Northeast and MidAtlantic WS
Texas and Gulf WS
California EQ
Florida and Southeast WS
$294
$210
$136
$202
$362
$456
$475
$521
FURTHER REDUCTION IN ASPEN’S NATURAL CATASTROPHE EXPOSURES IN
MAJOR PERIL ZONES REFLECTS CURRENT VIEW OF RISK-ADJUSTED
RETURNS (AS AT APRIL 1, 2017)
100 YEAR RETURN PERIOD AS % OF TOTAL
SHAREHOLDERS’ EQUITY AND IN $, MM(1)
250 YEAR RETURN PERIOD AS % OF TOTAL
SHAREHOLDERS’ EQUITY AND IN $, MM(1)
1 in 100 year tolerance:
17.5% of total shareholders’ equity
1 in 250 year tolerance:
25.0% of total shareholders’ equity
PMLs are net of reinsurance and Aspen Capital Markets' third-party capital
(1) Based on Shareholders' equity of $3,592.9 million (excluding non-controlling interest as at March 31, 2017. The estimates reflect Aspen's view of the modelled maximum
losses at the return periods shown which include input from various third party vendor models, Aspen's proprietary adjustments to these models, and planned reinsurance
purchases. The U.S. regional WS PMLs reflect the outward reinsurance structures in place. Catastrophe loss experience may materially differ from the modelled PMLs due
to limitations in one or more of the models or uncertainties in the application of policy terms and limits.
See "Safe Harbor Disclosure" slide 2. 19
1.5%
2.6%
3.3%
4.3%
4.7%
7.6%
9.3%
9.7%
8.2%
5.9%
3.8%
5.6%
10.1%
12.7%
13.3%
14.5%
AHL: NYSE
Risk management is genuine differentiator for Aspen
SUPERIOR RISK MANAGEMENT CULTURE
Aspen’s internal capital
model was one of very few
approved by the U.K.
Prudential Regulation
Authority to operate under
Solvency II regulatory
framework
Risk-Return Optimization
• Extensive use of internal capital model to make risk-
return tradeoffs
• Approach deeply embedded in decision making
processes, including:
◦ Portfolio optimization
◦ Outward reinsurance purchase
◦ Investment strategy
◦ Pricing
◦ Performance management
Enterprise Risk Management (ERM)
• We invest significant resource in managing our
accumulations
• Effort goes beyond natural catastrophe to risks such
as:
◦ Terror (both U.S. and non-U.S.)
◦ Nuclear, Biological, Chemical and Radiological
◦ Cyber
◦ Credit (across Insurance and Reinsurance
segments & Investments)
◦ Liability clash
Aspen is one of very few peers to gain “Very Strong”
ERM assessment from S&P
S&P ERM Rating(1)
Stron
g
Ver
y
Stron
g
(1) Source: S&P Global Ratings’ Global Reinsurance Highlights 2016. Peer companies include AWH, ACGL, AXS, ENH, PRE, RE, RNR, VR, XL. 20
AHL Peer A Peer B Peer C Peer D Peer E Peer F Peer G Peer H Peer I