Aspen Insurance Holdings reports second-quarter net income aftertax of $130.8 million, up from $40.1 million reported in Q22013.

The specialty insurer and reinsurer saw a jump in gross writtenpremiums to $779.3 million in the quarter, compared to $687.3million for the same period a year ago. The corresponding jump innet earned premiums—to $616.2 million from $544 million—more thanoffset a slight up tic in losses and loss-adjustment expenses($337.1 million compared to $333.4 million in Q2 2013), andunderwriting income was reported at $66.7 million compared to $15.7million.

Net investment income inched up to $46.1 million from $45.9million, and all told, operating income before tax jumped to $107.5million from $54.7 million.

Aspen's combined ratio improved to 90.1 compared to 97.1 in2013's second quarter. Net favorable development on prior-year lossreserves of $31.8 million (compared to $27.4 million a year ago)shaved 5.2 points off of the combined ratio.

Net catastrophe losses dropped to $22.1 million compared to$58.7 million in last year's second quarter.

For the first half of the year, Aspen reports net income aftertax of $251.2 million, up from $131.9 million in the first half of2013.

Chris O'Kane, CEO, says in a statement, “Aspen's strong,high-quality results fort he second quarter and first half of 2014demonstrate the benefits of the investments we have made in ourbusiness, our operating focus and our successful strategy to managea dynamic market.”

He credits the results to “top-line growth, sound underwriting,impressive performance in our reinsurance business and increasingscale” in the company's U.S. insurance platform.

Stern Agee analysts Dan Farrell and Nitin Chhabra say Aspen'sunderwriting results are in line with guidance, and that Aspen'sreported operating earnings per share of $1.40 is slightly aboverecent guidance range.

Gross written premiums were within the company's guidance, SternAgee adds, but net written premium was lower.

Aviation war-risk rates should rise

In a conference call, O'Kane noted headwinds in the market,namely continued low investment returns and rate pressure in someinsurance and reinsurance lines. He said, “Within insurance,aviation and energy property are the most profoundly affected.” Buthe noted the recent Malaysia Airlines losses should put “meaningfulupwards pressrue on the aviation war accounts.” He says Aspen willpush for increases of 100% for primary aviation war risks. Forreinsurance, aviation war risk rate increases could be in the200%-300% range.

But O'Kane said he doesn't expect the rate increases for warrisks to spread to primary avation hull risks.