Aspen Insurance Holdings Limited (Aspen), through its subsidiaries, engages in marketing and underwriting specialty insurance and reinsurance on a global basis.
The company’s business is consisted of underwriting operations, including its risk-bearing insurance and reinsurance operations; investing activities, which are primarily related to and support its underwriting operations; and the company’s ACM (Aspen Capital Management, Ltd. (ACML) and other related entities) operations, which earn man...
Aspen Insurance Holdings Limited (Aspen), through its subsidiaries, engages in marketing and underwriting specialty insurance and reinsurance on a global basis.
The company’s business is consisted of underwriting operations, including its risk-bearing insurance and reinsurance operations; investing activities, which are primarily related to and support its underwriting operations; and the company’s ACM (Aspen Capital Management, Ltd. (ACML) and other related entities) operations, which earn management and performance fees from the company and other third-party investors primarily through the management of insurance linked securities (ILS) funds and other offerings.
The company’s principal operating subsidiaries are Aspen Insurance U.K. Limited (Aspen U.K.), Aspen Bermuda Limited (Aspen Bermuda), Aspen Specialty Insurance Company (Aspen Specialty), Aspen American Insurance Company (AAIC) and Aspen Underwriting Limited (AUL) (as corporate member of the company’s Lloyd’s operations, which are managed by Aspen Managing Agency Limited (AMAL), each referred to herein an Operating Subsidiary and collectively referred to as the Operating Subsidiaries). References to Aspen Capital Markets means business conducted by the company’s subsidiaries that participate in alternative reinsurance markets, including Peregrine Reinsurance Ltd (Peregrine), Aspen Cat Fund Limited (ACF), and related management entities, including Aspen Capital Advisors Inc. (Aspen Advisors) and Aspen Capital Management, Ltd (ACML).
Segments
The company operates through two business segments, Aspen Insurance and Aspen Reinsurance (Aspen Re).
Aspen Insurance segment
This segment offers a variety of insurance products consisting of first party and specialty insurance, casualty and liability insurance, and financial and professional lines insurance. In this segment, these products are written in the London Market primarily by Aspen U.K. and via the Lloyd’s platform and, in the United States, by AAIC and Aspen Specialty (on an admitted and excess and surplus lines basis, respectively). The company also writes casualty and financial and professional lines business through Aspen Bermuda and financial and professional lines business in the Asia Pacific region through Aspen Singapore Pte. Ltd. (Aspen Singapore), which binds business for Syndicate 4711.
First Party and Specialty Insurance
The company’s first party and specialty insurance line consists of the U.S. and the U.K. commercial property, specie, inland and ocean marine, marine and energy liability, onshore energy physical damage, offshore energy physical damage, credit and political risks, crisis management, accident and health and surety risks written on a primary, excess, quota share, program and facultative basis.
The U.S. and the U.K. Commercial Property
Property insurance provides physical damage and business interruption coverage for losses arising from weather, fire, theft and other causes. The U.S. commercial property team covers mercantile, manufacturing, municipal and commercial real estate business. The U.K. commercial team’s client base is predominantly U.K. institutional property owners, small and middle market corporates and public sector clients.
Specie
The specie business line focuses on the insurance of high value property items on an all risks basis, including fine art, general and bank related specie, jewelers’ block and armored car.
Inland and Ocean Marine
The inland and ocean marine team writes business principally covering builders’ construction risk, contractors’ equipment, and global transportation exposures, such as marine cargo and hull, inland transit, warehousing and war, in addition to exhibition, fine arts and museums insurance. The book also includes business generated by the company’s subsidiary, Blue Waters Insurers, Corp., which acts as its managing general agent in Puerto Rico and produces inland, ocean marine and cargo business in Puerto Rico.
Marine and Energy Liability
In February 2020, the company made the decision to cease writing marine and energy liability business and the business was put into runoff. Prior to that, the marine and energy liability business was based in the U.K. and included marine liability cover mainly related to the liabilities of ship-owners and port operators, including reinsurance of Protection and Indemnity Clubs. It also provided liability cover globally (including the U.S.) for companies in the oil and gas sector, both onshore and offshore; and in the power generation sector. This class also included commercial construction liability for the U.S. companies in the oil and gas sector, which is being written under the company’s global excess casualty line.
Onshore Energy Physical Damage
The company’s marine, energy and construction property unit underwrites a variety of worldwide onshore energy and construction sector classes of business with a focus on property covers.
Offshore Energy Physical Damage
Offshore energy physical damage provides insurance cover against physical damage losses in addition to operators’ extra expenses for companies operating in the oil and gas exploration and production sector.
Credit and Political Risks
The credit and political risks team writes business covering the credit and contract frustration risks on a variety of trade and non-trade related transactions, as well as political risks (including multi-year war on land cover). The company provides credit and political risks cover worldwide but with concentrations in a number of countries, such as China, Brazil, the Netherlands, and the United States.
Crisis Management
The Crisis Management team writes insurance designed to protect individuals and corporations operating in high-risk areas around the world, including covering the shipping industry’s exposure to acts of piracy. It also writes terrorism and political violence insurance, providing coverage for damage to property (largely fixed assets, such as buildings) resulting from acts of terrorism, strikes, riots, civil commotion, or political violence. This book is written on a global basis, although capacity is selectively deployed. In December 2020, the company sold the renewal rights to its U.S. food and beverage product recall business to a third party.
Accident and Health
In March 2020, the company made the decision to exit its global accident and health line of business and began winding down the business. Prior to that, the global accident and health team focused on insurance and reinsurance products, which help protect individuals, groups, and companies from the consequences of accidental death or disability whether resulting from accident or sickness. This included single or multi-person losses, as well as major catastrophic events, such as air crashes, earthquakes, or terrorist attacks. Coverage written included whole account treaty and facultative reinsurance protection for insurance companies.
Surety Risks
In July 2020, the company sold its renewal rights to its surety insurance book of business to a third party and executed a loss portfolio transfer transaction for the transfer of prior-year liabilities. Pursuant to the terms of the sale transaction, the company continues to underwrite only a small portion of surety business on a fronted basis to the purchaser in the transaction, which is subject to a 100% quota share reinsurance agreement back to the purchaser.
Casualty and Liability Insurance
The company’s casualty and liability line consists of commercial liability, the U.S. primary casualty, excess casualty, environmental liability and railroad liability, written on a primary, excess, quota share, program and facultative basis.
Commercial Liability
Commercial liability is primarily written in the United Kingdom and provides employers’ liability coverage, products and public liability coverage for insureds domiciled in the United Kingdom and Ireland. The U.K. regional team also covers directors’ and officers’ (D&O) and professional indemnity, predominantly to small and medium corporates.
The U.S. Primary Casualty
The U.S. primary casualty account consists primarily of lines written within the primary insurance sectors. The company focuses on delivering expertise to brokers and customers in hospitality, real estate, construction, and products liability.
Excess Casualty
The excess casualty line comprises medium and large, sophisticated and risk-managed insureds worldwide; and covers broad-based risks at lead/high excess attachment points, including general liability, commercial and residential construction liability, life science, railroads, trucking, product and public liability and associated types of cover found in general liability policies in the global insurance market, written from the United Kingdom, the United States, and Bermuda.
Environmental Liability
The environmental account primarily provides contractors’ pollution liability and pollution legal liability across industry segments that have environmental regulatory drivers and contractual requirements for coverage, including real estate and public entities, contractors and engineers, energy contractors and environmental contractors and consultants. The business is written in both the primary and excess insurance markets in the United States, Canada, and the United Kingdom.
Railroad Liability
The company’s railroad liability business consists of primary and excess liability business for freight, commuter and excursion railroads. It also provides general liability coverage to the railroad support industry (contractors, repair shops and products manufacturers), as well as contingent liability for railcar fleet owners/managers and railroad protective liability in the United States.
Financial and Professional Lines Insurance
The company’s financial and professional lines consist of financial and corporate risks, professional liability, management liability, and cyber liability, written on a primary, excess, quota share, program and facultative basis.
Financial and Corporate Risks
The company’s financial institutions business is written on both a primary and excess of loss basis and consists of professional liability, crime insurance and D&O (directors’ and officers’) cover, with the largest exposure comprising risks headquartered in the United Kingdom, followed by Australia, the United States, and Canada. The company covers financial institutions, including commercial and investment banks, asset managers, insurance companies, stockbrokers, and insureds with hybrid business models. This account also includes a book of D&O insurance for commercial insureds located outside of the United States and a worldwide book of representations and warranties and tax indemnity business.
Professional Liability
The company’s professional liability business is written out of the United States (including errors and omissions (E&O)), the United Kingdom and Bermuda; and is written on both a primary and excess of loss basis. The company insures a wide range of professions, including lawyers, accountants, architects, engineers, doctors and medical technicians. This account may also extend coverage for cyber liability and data protection insurance. The cyber liability and data protection insurance covers firms for first party costs and third-party liabilities associated with cybersecurity breach and breach of contractual or statutory data protection obligations.
Management Liability
The company’s management liability business is written out of the United States, the United Kingdom and Bermuda. The company insures a diverse group of commercial and financial institutions predominantly on an excess basis. The company’s products include D&O liability, fiduciary liability, employment practices liability, fidelity insurance and blended liability programs, including E&O liability. The focus of the account is predominantly on risks headquartered in the U.S. or risks with a material U.S. exposure.
Cyber Liability
This account is written globally and consists of the company’s privacy and network security liability (cyber liability) products, as well as technology liability. The company’s privacy and network security liability products provide first party costs and third-party liabilities associated with privacy and cybersecurity breaches. The company’s technology liability product provides coverage for technology, media and telecommunications firms offering protection for damages and legal defense expenses associated with financial loss claims from third parties and various forms of intellectual property breaches. The company also incorporates data protection indemnity insurance against costs and liabilities that may arise when a company breaches its data protection obligations.
Aspen Reinsurance segment
This segment provides reinsurance to ceding companies, also referred to as cedants or reinsureds. Aspen Re’s offerings include, but are not limited to, property catastrophe reinsurance, other property reinsurance, casualty reinsurance, and specialty reinsurance. The company offers reinsurance on both a treaty and facultative basis, and on both a proportional (or quota share) and non-proportional (or excess of loss) basis.
The company’s reinsurance business is sourced principally through brokers and reinsurance intermediaries, with whom it aims to maintain strong relationships, having become a valued risk management partner to the leading insurers with whom the company does business. The company writes various excess of loss contracts and proportional treaties through Aspen Bermuda, a Class 4 insurer incorporated under the laws of Bermuda, and licensed under the Insurance Act of 1978 of Bermuda, as amended (the ‘Insurance Act’).
Aspen Bermuda maintains branch offices in Switzerland and Singapore. The excess of loss contracts are principally property catastrophe policies reinsuring non-affiliated insurers located mainly in the United States, Europe, and the Asia Pacific. The proportional treaties principally cover property risks reinsuring non-affiliated insurers located in the United States, Europe, and the Asia Pacific. The company writes property catastrophe, property, casualty and specialty reinsurance business through Aspen U.K. and its branches in Canada, Singapore, and Australia, as well as through Aspen Bermuda and its branches in Singapore and Switzerland. Syndicate 4711 is managed by AMAL and AUL is the corporate member. The company also accesses Lloyd’s Brussels through Lloyd’s Insurance Company, S.A. stamp 5383. Since 2017, AAIC also underwrote crop reinsurance business in the United States through a strategic partnership with CGB Diversified Services, Inc. (CGB DS). On December 14, 2020, the company sold its ownership interest in the strategic partnership. The sale has resulted in a material diminution of the company’s U.S. agricultural business in 2021.
Property Catastrophe Reinsurance
Property catastrophe reinsurance is generally written on a treaty excess of loss basis where the company provides protection to an insurer for an agreed portion of the total losses from a single event in excess of a specified loss amount. In the event of a loss, most contracts provide for coverage of a second occurrence following the payment of a premium to reinstate the coverage under the contract, which is referred to as a reinstatement premium. The coverage provided under excess of loss reinsurance contracts may be on a worldwide basis or limited in scope to selected regions or geographical areas.
Other Property Reinsurance
Other property reinsurance includes property risks written on excess of loss and proportional treaties, facultative or single risk reinsurance. Risk excess of loss reinsurance provides coverage to a reinsured where it experiences a loss in excess of its retention level on a single ‘risk’ basis. A ‘risk’ in this context might mean the insurance coverage on one building or a group of buildings for fire or explosion or the insurance coverage under a single policy which the reinsured treats as a single risk. This line of business is generally less exposed to accumulations of exposures and losses but can still be impacted by catastrophes, such as earthquakes and hurricanes. Proportional treaty reinsurance provides proportional coverage to the reinsured, meaning that, subject to event limits where applicable and ceding commissions, the company pays the same share of the covered original losses as it receives in premiums charged for the covered risks. Proportional contracts typically involve close client relationships, which often include regular audits of the cedants’ data.
Casualty Reinsurance
Casualty reinsurance is written on an excess of loss, proportional and facultative basis and consists of the U.S. treaty, international treaty, and casualty facultative reinsurance. The company’s U.S. treaty and facultative business comprises exposures to workers’ compensation (including catastrophe), medical malpractice, general liability, auto liability, professional liability, and excess liability, including umbrella liability. The company’s international treaty business reinsures exposures mainly with respect to general liability, auto liability, professional liability, workers’ compensation, and excess liability.
Specialty Reinsurance
Specialty reinsurance is written on an excess of loss and proportional basis and consisted of credit and surety reinsurance, agriculture reinsurance, mortgage reinsurance and insurance, marine, aviation, terrorism, engineering, cyber and other specialty lines. The company’s credit and surety reinsurance business consists of trade credit, surety (mainly European, Japanese and Latin American risks) and mortgage reinsurance and insurance and political risks. In 2019, the company ceased writing credit and surety reinsurance and sold its renewal rights to that book of business to a third party. The mortgage reinsurance and insurance on political risks was not included in the transaction and the company continues to underwrite this coverage. The company’s specialty agricultural reinsurance business covered crop and multi-peril business. Other specialty lines include reinsurance treaties and some insurance policies covering policyholders’ interests in marine, energy, aviation liability, space, contingency, terrorism, engineering, nuclear and personal accident.
Aspen Capital Markets
The company participates in the alternative reinsurance market through ACM, which focuses on developing alternative reinsurance structures and products to leverage the company’s existing underwriting franchise and increase its operational flexibility in the capital markets. ACM provides investors direct access to the company’s underwriting and analytical expertise and earns management and performance fees from the company and other third-party investors primarily through the management of ILS (insurance linked securities) funds and other offerings. It operates two distinct strategies, namely, building insurance risk portfolios tailored to investor objectives through managed funds, such as Aspen Cat Fund Limited, and structuring and placing a defined Aspen portfolio aligned with capital markets investors through the use of sidecars, including Peregrine Reinsurance Ltd. (Peregrine), a special purpose insurer.
Distribution
The company’s business is produced principally through brokers and reinsurance intermediaries. The brokerage distribution channel provides it with access to an efficient, global distribution system without the significant time and expense, which would be incurred in creating wholly-owned distribution networks.
Regulatory Matters
The Bermuda Monetary Authority (the ‘BMA’) acts as the group supervisor of the company and has named Aspen Bermuda (Aspen Bermuda Limited) as the designated insurer. The Insurance Act and related group supervision regulations (collectively the ‘Group Supervision Regime’) set out provisions regarding group supervision and the responsibilities of the designated insurer. The Group Supervision Regime is in addition to the regulation of the company’s various Operating Subsidiaries in their local jurisdictions.
Aspen Bermuda is licensed as a Class 4 insurer and is subject to the Insurance Act, which imposes solvency and liquidity standards, as well as auditing and reporting requirements on Bermuda insurers and reinsurers, and it empowers the BMA to supervise, investigate, require information, and intervene in the affairs of Bermuda registered insurance companies.
In addition, the company’s Bermuda companies, including the company and Aspen Bermuda, must comply with the provisions of the Bermuda Companies Act 1981, as amended (the ‘Companies Act’), regulating the payment of dividends and distributions.
Peregrine Reinsurance Ltd (Peregrine) is registered as a special purpose insurer (SPI) under the Insurance Act and licensed to carry on special purpose business. Peregrine is also registered as segregated accounts company under the Bermuda Segregated Accounts Companies Act 2000, as amended.
The company and certain of its Bermuda-domiciled subsidiaries are also subject to the Economic Substance Act 2018, as amended; and the Economic Substance Regulations 2018, as amended (together the ‘ESA’).
Aspen U.K. is authorized by the Prudential Regulation Authority (PRA) to effect and carry out (re)insurance contracts in the U.K. in classes of general (non-life) business and is regulated by both the PRA with respect to prudential matters and by the FCA with respect to the conduct of its business. AMAL is authorized by the PRA and regulated by the PRA with respect to prudential matters and the FCA with respect to the conduct of its business. Aspen UK Syndicate Services Limited (AUKSSL) is authorized and regulated by the FCA with respect to prudential and conduct of business.
Under the Solvency II Directive regime, Aspen U.K. is required to submit quarterly and annual filings with the PRA, including an annual Solvency and Financial Condition Report (SFCR), which must also be posted on Aspen’s website. Aspen U.K. must submit an annual ORSA to the PRA.
In February 2021, Aspen Bermuda received approval from the Monetary Authority of Singapore (MAS) and established a reinsurance branch in Singapore. The activities of this branch are regulated by the MAS pursuant to The Insurance Act of Singapore. Aspen Bermuda is also regulated by the Accounting and Corporate Regulatory Authority (ACRA) as a foreign company in Singapore.
Aspen U.K. has a reinsurance branch in Singapore that is regulated by the MAS and pursuant to The Insurance Act of Singapore and by ACRA as a foreign company in Singapore.
AMAL set up a subsidiary company, Aspen Singapore Pte. Ltd. (ASPL), to access insurance business in Singapore and regulatory approval for ASPL to act as an intermediary was received from MAS in 2015. ASPL was incorporated by ACRA in 2015 as a local company regulated by the Companies Act of Singapore. ASPL went into run-off in September 2021.
Aspen U.K. established a Canadian branch in 2006 whose activities are regulated by the Office of the Superintendent of Financial Institutions (OSFI). OSFI is the federal regulatory authority that supervises Canadian and non-Canadian insurance companies operating in Canada pursuant to the Insurance Companies Act (Canada). In addition, the branch is subject to the laws and regulations of each of the provinces and territories in which it is licensed.
In 2008, Aspen U.K. received authorization from the Australian Prudential Regulation Authority (APRA) to establish a branch in Australia. The activities of the Australian branch are regulated by APRA pursuant to the Insurance Act of Australia 1973. Aspen U.K. is also registered by the Australian Securities and Investments Commission as a foreign company in Australia under the Corporations Act of Australia 2001.
AUKSSL is authorized and regulated by the FCA and is subject to a separate prudential regime and other requirements for insurance intermediaries under the FCA Handbook.
The operations of Syndicate 4711 are subject to regulation and supervision of the PRA, FCA, and the Council of Lloyd’s. AMAL is the managing agent for Syndicate 4711 and AUL provides underwriting capacity to Syndicate 4711 and is a Lloyd’s corporate member. The FCA and PRA both regulate insurers, insurance intermediaries, and Lloyd’s itself.
Lloyd’s Brussels (Lloyd’s Insurance Company, S.A.) is authorized and regulated by the National Bank of Belgium (NBB) and regulated by the Belgium Financial Services Markets Authority (FSMA). Lloyd’s Brussels is an authorized insurance company licensed to write non-life risks across the European Economic Area (EEA) and the U.K. and also maintains 19 branches across Europe. The use of Lloyd’s Brussels provides AMAL with access to the European market to write non-life insurance risks.
In 2010, the company purchased APJ Asset Protection Jersey Limited (APJ Jersey), a Jersey registered insurance company, which is subject to the jurisdiction of the Jersey Financial Services Commission (JFSC). The JFSC sets the solvency regime for insurance companies under its jurisdiction. APJ Jersey holds funds in excess of the minimum requirement. APJ Jersey ceased underwriting new and renewal business in April 2020 and was placed into run-off in June 2020.
The company’s U.S. operations are subject to extensive governmental regulation and supervision by the states and jurisdictions in which insurance entities operating in the U.S. are domiciled, licensed and/or eligible to conduct business. AAIC is licensed to write insurance on an admitted basis in all 50 U.S. states, the District of Columbia, Puerto Rico, Guam and the U.S. Virgin Islands. Aspen Specialty is licensed in North Dakota and is eligible to write surplus lines policies in all 50 U.S. states, Puerto Rico and the District of Columbia. Aspen U.K. and Syndicate 4711 are not licensed to write insurance on an admitted basis in any state in the U.S., but are alien insurers eligible to write surplus lines business in all 50 U.S. states, the District of Columbia, Puerto Rico and other U.S. jurisdictions based on their listing in the Quarterly Listing of Alien Insurers of the International Insurers Department (IID) of the National Association of Insurance Commissioners (NAIC), the organization that works to promote standardization of best practices and assists state insurance regulatory authorities and insurers in the U.S. by promulgating model insurance laws and regulations for adoption by the states.
The company’s subsidiary, Aspen Capital Advisors Inc. (Aspen Advisors), is registered with the SEC as a registered investment adviser. Aspen Advisors is subject to regulation as an investment adviser by the U.S. Securities and Exchange Commission (SEC).
History
Aspen Insurance Holdings Limited was founded in 2002. The company was incorporated in 2002.
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