Research Update: Bermuda-Based Aspen Insurance Affirmed At 'A'; Outlook Remains Negative On Performance Pressure

Aspen's underwriting performance remains under pressure particularly when compared to 'A' rated peers. We note that Aspen has taken several corrective actions to maintain its 'AA' level risk-based capital and reduce its exposure to natural catastrophes, which had affected its capital and earnings in 2017 and 2018. Further, in 2018 and the first half of 2019, we have seen positive signs resulting from corrective underwriting actions including expense reduction. That said, we recognize the execution risk associated with improving underwriting performance to levels similar to 'A' rated peers. We are affirming our 'A' ratings on Aspen's core subsidiaries. The outlook remains negative, indicating that we could lower the ratings by one notch if Aspen does not post results that demonstrate

...- Aspen's underwriting performance remains under pressure particularly when compared to 'A' rated peers. - We note that Aspen has taken several corrective actions to maintain its '##' level risk-based capital and reduce its exposure to natural catastrophes, which had affected its capital and earnings in 2017 and 2018. - Further, in 2018 and the first half of 2019, we have seen positive signs resulting from corrective underwriting actions including expense reduction. That said, we recognize the execution risk associated with improving underwriting performance to levels similar to 'A' rated peers. - We are affirming our 'A' ratings on Aspen's core subsidiaries. - The outlook remains negative, indicating that we could lower the ratings by one notch if Aspen does not post results that demonstrate that its underwriting performance is likely to be in line with that of 'A' rated peers over the next two years....

Research Update