Cover Image: Bjorn Copeland Color Slide 4/16, 2006 Courtesy the Artist ASPEN INSURANCE Annual Report HOLDINGS LIMITED AN INSPIRED MINDSET 1 THIS IS MORE THAN A GROWTH STORY. ASPEN INSURANCE HOLDINGS LIMITED 2 AN INSPIRED MINDSET 3 DURING THE PAST SEVERAL YEARS, ASPEN HAS BEEN SETTING THE FOUNDATION FOR ITS FUTURE, SO THIS IS A STORY OF CONSIDERED GROWTH. YET, IT IS ALSO A STORY OF ORIGINAL THINKING, BOLD CHOICES AND A DISCERNING EYE— the story of Ellen Berkenblit Berkeley Mews, 2013 Courtesy the Artist and Susan Inglett Gallery AN INSPIRED MINDSET Victor Pasmore The Space Within, 1982 Victor Pasmore Estate, Courtesy Marlborough Fine Art We have never been bound by make the most sense for our convention. Original thinking is clients and shareholders and what has brought us this far. continued to build on our In 2015 we studied our oppor- brand strength and expand tunities, selected those that our geographic reach. THINKING BOLD \ Our success is built on the In 2015 we strengthened deep technical expertise and further our team by tapping insight of our underwriters, some of the industry’s most industry veterans known for talented underwriters and their discerning eye, their ability executives as we move to the to see what others may not. next phase of our expansion. AN INSPIRED MINDSET 8 CHOICES Ati Maier Icelandic Clouds, 2009 Courtesy the Artist V DYNAMIC S CHRISTOPHER O’KANE Chief Executive Officer ION GLYN JONES Chairman of the Board AN INSPIRED MINDSET 15 WE HAVE BUILT ASPEN ON A WILLINGNESS TO THINK DIFFERENTLY. 56% 42% REINSURANCE REINSURANCE 44% 58% INSURANCE INSURANCE 1,120 EMPLOYEES WORLDWIDE AN INSPIRED MINDSET 12 37 OFFICES WORLDWIDE 10 COUNTRIES WORLDWIDE Dynamic vision and bold choices, together with a clear focus on long-term value creation for our shareholders, have transformed Aspen into a leading global specialty insurer and reinsurer. To Our Fellow Stakeholders, Clients and Brokers: We have built our U.S. and International softness, excess capital, increased The global economy and investment Insurance platforms into a recognized participation from alternative capital, markets remained volatile in 2015. We brand increasingly sought out by our and consolidation among insurance remained committed to our investment brokers and clients. With these platforms companies. The insurance rate environ- philosophy of delivering investment now of similar size, we are ready to ment was more mixed, with greater yield through a diversified portfolio move to the next stage of develop- pressure in certain global markets. consisting of high-quality fixed income ment—becoming a truly integrated, and equity securities. We remained focused on our strategy global enterprise. to diversify our business by products The hard work of our talented employees At Aspen Re, in the face of a rapidly and geography, a move that will serve in 2015 resulted in gross written evolving reinsurance environment, us well as we align Aspen to better premiums increasing to approximately we have diversified the business, serve clients worldwide. $3 billion. The diversification of the deepened relationships with clients business is demonstrated in the business We expanded our Reinsurance opera- and created new opportunities by mix, with around 58% of gross written tions into Australia, China and the consistently demonstrating the value premium coming from Aspen Insurance Middle East. Within Insurance, we of our Reinsurance team’s creativity and 42% from Aspen Re. Our operating moved into Singapore, grew our property and innovative solutions. return on equity for the year was 10% operations in Bermuda and Chicago, and diluted book value per share was While the solutions that clients are look- and launched Aspen Starr Property, $46.00 at the end of 2015, up 1.9% ing for are increasingly diverse, we a joint venture with Starr Companies from the previous year. believe that a high-value provider such that began underwriting European as Aspen Re, through superior client property business in the second half REINSURANCE relationships and excellent technical of 2015. PERFORMS STRONGLY expertise, has a vital future in providing Our willingness to think creatively while As our business grows and evolves, solutions that continue to be valued remaining disciplined in our approach so do the processes needed to support by clients. to growth has helped Aspen remain a that business. In recognition of our need significant competitive force in specialty to operate more efficiently and grow DIVERSIFICATION lines. This is particularly true for our REMAINS ESSENTIAL revenue faster than expenses, we began Reinsurance business. 2015 was a productive year for Aspen, the roll out of a target operating model despite continuing challenges facing our aimed at streamlining our business The continuing availability of alternative industry. The reinsurance landscape processes and providing our underwriters capital and insurers retaining more risk reflected challenges from continued rate with the resources necessary to service on their own balance sheets creates clients globally. $8.8B $3.4B TOTAL CASH AND TOTAL INVESTMENTS SHAREHOLDERS’ (2014: $8.6B) EQUITY (2014: $3.4B) pressure in this market. Yet, the ability years and that we acquired in early 2016. marketplace, always mindful of local of our underwriters to sustain deep A specialist crop insurance business and regional practices. We expect this relationships with clients and design with an integrated agricultural consul- will result in greater product and innovative products resulted in an excel- tancy, AgriLogic has highly respected underwriting consistency, and superior lent performance in 2015. The ongoing intellectual capital and a unique position service for clients. Over time, we diversification and regionalization of in its marketplace—very similar to believe it will bring us closer to our our Reinsurance business has served Aspen Re. brokers and clients, help us deploy us well as clients consolidated panels, products more broadly and grow our choosing reinsurers capable of delivering INSURANCE ENTERS NEW Insurance business globally. GROWTH PHASE a broad range of products with local Within Insurance, our U.S. operations Leadership and execution are key to distribution reach. exceeded our targets for both net earned accomplishing these goals. We are Aspen Capital Markets continues to offer premiums and operating expense ratio fortunate to have exceptional expertise us flexibility in the way we manage and were profitable for the third consec- in-house and promoted several our reinsurance exposures. It allows us utive year, attesting to the strength of key Insurance executives last year. to offer investors access to diversified our vision for growing this business. Where necessary, we recruited natural catastrophe risk backed by Internationally, we entered new markets, highly qualified professionals with Aspen Re’s existing underwriting franchise opening a new operation in Singapore outstanding performance records and grow our use of third-party capital through Lloyd’s. We also chose to pull and specialized knowledge. and alternative reinsurance structures. back in several areas, including within We have begun to implement a global the marine, aviation and energy sub- The value clients place on our reinsurance product head structure aimed at unifying segment, where returns were inadequate. expertise was evidenced again in the our platforms and facilitating the roll January 2016 renewal season where we Aspen’s standing in the insurance out of global product lines. Several achieved growth, primarily from increased marketplace as a significant specialty global product heads were appointed shares on established relationships, in insurer is well established, as both toward the close of 2015 and we expect addition to new lines from existing clients. U.S. and international platforms pro- the process to be completed this year. duced total gross written premiums Aspen Re continues to bring innovative of $1.7 billion. MANAGING CAPITAL EFFICIENTLY solutions and bold thinking to clients by Our goal is always to provide outstanding providing capital, technical know-how To build on this success and become service to our clients and create value or a combination of both. This was cer- a truly global specialty insurance firm, for our shareholders. A strong financial tainly the case with AgriLogic, a company we have begun to realign our organiza- foundation is the best way to accomplish that Aspen Re has worked with for many tional structure with the global insurance ASPEN INSURANCE HOLDINGS LIMITED 16 We are neither the company we were five years ago, nor the one we will be five years hence. Yet, we must remain true to the entrepreneurial spirit and inspired mindset that is our hallmark. this goal. We continue to be disciplined added lines and geographies, invested Strategy alone cannot bring success. in deploying capital, putting it to work in our U.S. Insurance platform and in Execution is key, and we are fortunate in the existing operations, using it to add our Lloyd’s platform to further expand to have a wealth of talented and dedi- to our portfolio of businesses, or return- our reach in the international markets. cated employees who demonstrate ing it to shareholders through dividends their commitment and creativity every Within Reinsurance, we have diversified or share repurchases. day, as well as skilled directors whose by product line, growing our specialty vision and experience are invaluable. All of this was evidenced through and other property lines, while managing 2015 and into the early part of 2016. our exposure to property cat, particularly As we evolve, change is inevitable. While we increased the dividend and through Aspen Capital Markets. We’ve We are neither the company we were repurchased $84 million of ordinary also diversified geographically through five years ago, nor the one we will shares in 2015, we also continued to expansion in Asia, Latin America, and be five years hence. Yet, we must see opportunities for growth in our non-coastal regions of the U.S. remain true to the entrepreneurial Insurance and Reinsurance businesses, spirit and inspired mindset that is We are risk aware but poised now allocating capital accordingly.