Bermuda-based Aspen Insurance Holdings Limited reported first quarter net income fell 33 percent at $81.2 million compared with $121.9 million for the period last year
The company said it had lower written premiums due to the soft market, and lower net investment income.
Aspen said that its net earned premium for the quarter was $391.6 million, compared to $439 million in the first quarter of 2007. The combined ratio deteriorated by six points rising from 79.4 in the first quarter of 2007 to 85.4.
In a conference call, Aspen Chief Executive Officer Chris O'Kane said that the lower earned premium was a result of the continuing decline in pricing in the market. He noted that the company non-renewed 19 percent of its insurance and reinsurance books. This, he added, was partially offset by $24 million in premium from new lines established in 2007.
Mr. O'Kane also said during the conference call that although the quarter saw few catastrophe losses, the company's combined ratio was impacted by an "unusually high volume" of single risk losses.
Aspen reported that net investment income declined 42.1 percent, from $67.5 million in the first quarter of 2007 to $39.1 million in 2008. Mr. O'Kane attributed this mainly to losses associated with the investment in funds of hedge funds.
In a statement, Mr. O'Kane said, "Book value per share at the end of the first quarter was $29.22, which is up 23.7 percent year-over-year and the eighth consecutive quarterly increase in book value. Underwriting results were strong with a combined ratio of 85.4 percent, which is well within our plan. Cash flow from operating activities also remained strong at $163.5 million for the quarter, up 27 percent. However, net income and EPS (earnings per share) were impacted by disappointing returns from our investment in funds of hedge funds."
During the conference call, Aspen chief financial officer Richard Houghton said that the quarter was defined by strong underwriting performance that met or improved upon expectations, tempered by reduced investment income due to the losses in hedge funds.
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