Aspen Insurance Holdings Ltd. (AHL) Reports Q1 EPS of $1.66

Aspen Insurance Holdings Ltd. (NYSE: AHL) reported Q1 EPS of $1.66, may not compare to the analyst estimate of $1.04.

utlook

Aspen continues to expect to achieve an operating return on equity of 10% in 2014, assuming a pre-tax catastrophe load of $185 million, normal loss experience and the current interest rate curve and insurance pricing environment.

We expect operating return on equity to increase in each of 2015 and 2016. The building blocks for the expected acceleration of ROE are growth in our U.S. Insurance business, portfolio optimization initiatives, rising interest rates and capital management. We expect to achieve premium scale in our U.S. Insurance business in 2015 and for that business to be a strong contributor to overall results as Aspen gains greater premium leverage over time. Our U.S. Insurance business net earned premiums grew 25% in the first quarter over a year ago and we are experiencing continued growth momentum with attractive loss ratios. Further, we expect our portfolio optimization initiatives, including the restructuring of our reinsurance and retrocession program, combined with a rising interest rate environment, to be a more positive contributor to operating income.

In the aggregate, assuming pretax catastrophe load of $200 million, normal loss experience, our expectations for rising interest rates and a less favorable insurance pricing environment, we would expect operating return on equity in 2015 to increase over 2014 on the order of 100 basis points, and beyond 2015 we expect to obtain additional continued benefits to our ROE from increasing operating leverage.

For earnings history and earnings-related data on Aspen Insurance Holdings Ltd. (AHL) click here.

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