Aspen Insurance Holdings Ltd · NYSE:AHL/PE
Aspen Insurance — Q1 2017 Earnings Presentation
20 slides from Aspen Insurance's earnings presentation, Apr 26, 2017
Slide 1: Investor Presentation First Quarter 2017
AHL: NYSE INVESTOR PRESENTATION FIRST QUARTER 2017 Aspen Insurance Holdings Limited Exhibit 99.3
Slide 2: Safe Harbor Disclosure
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 “Compa
Slide 3: Agenda
AHL: NYSE AGENDA 3 Overview │ Value Creation Approach │ 4 Background and Strategy │ 5 Financial Performance │ 12 Operating Segments │ Insurance │ 14 Reinsurance │ 16 Appendix │ 19
Slide 4: Levers to Higher ROE
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
Slide 5: Strong and Diversified Franchise
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 ▪ G
Slide 6: Well Positioned to Increase Value Creation
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% C
Slide 7: Sustained Record of Proactive Capital Management
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 ordinar
Slide 8: Multiple Levers to Improve Financial Performance
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 contrac
Slide 9: Prudent Reserving Philosophy
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
Slide 10: Strong and Consistent Investment Returns
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 ap
Slide 11: Agenda
AHL: NYSE AGENDA Overview │ Value Creation Approach │ 4 Background and Strategy │ 5 Financial Performance │ 12 Operating Segments │ Insurance │ 14 Reinsurance │ 16 Appendix │ 19 11
Slide 12: Financial Performance Metrics
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 FINANCIA
Slide 13: Agenda
AHL: NYSE AGENDA 13 Overview │ Value Creation Approach │ 4 Background and Strategy │ 5 Financial Performance │ 12 Operating Segments │ Insurance │ 14 Reinsurance │ 16 Appendix │ 19
Slide 14: Insurance Segment
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
Slide 15: Aspen Insurance Transformation
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 regi
Slide 16: Reinsurance Segment
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
Slide 17: Aspen Re Growth & Diversification – AgriLogic
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 too
Slide 18: Agenda
AHL: NYSE AGENDA 18 Overview │ Value Creation Approach │ 4 Background and Strategy │ 5 Financial Performance │ 12 Operating Segments │ Insurance │ 14 Reinsurance │ 16 Appendix │ 19
Slide 19: Reduction in Natural Catastrophe Exposures
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
Slide 20: Superior Risk Management Culture
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 interna
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