For the fourth quarter, net income was $75.2 million, or $1.01 per share compared with $54.5 million or 88 cents a share for the 2003 period. The result represented an annualized return on equity of 20 percent, Chief Executive Officer Chris O'Kane reported during a conference call this morning.

For the full year, income rose 28 percent to $195.1 million, or $2.74 per share.

Mr. O'Kane attributed the strong results to Aspen's diversified strategy and underwriting discipline.

He said that his company has witnessed more price competition in the insurance market than in the reinsurance market, noting that Aspen's portfolio is more weighted toward reinsurance. (Roughly 74 percent of Aspen's book was reinsurance in 2004, with reinsurance premiums accounting for $1.2 billion of a total of $1.6 billion in gross premiums.)

Mr. O'Kane added that Aspen has had the discipline to stay out of two of the most competitive sectors?large account property and directors and officers insurance for multinational Fortune 500 companies.

Offering further market commentary, he said that in the property reinsurance arena, there is more discipline in the U.S. market than in Europe.

"It could be described as a tale of two cities?the relatively disciplined and thoughtful American experience contrasting with the much more competitive European environment," Mr. O'Kane said.

Overall, Aspen's net written premiums grew 24 percent to $1.4 billion in 2004, and the combined ratio was 83.4.

The return on equity for the year was 14 percent, Mr. O'Kane reported, noting that the company's general guidance is for ROEs in the mid-to-high teens, absent major losses. Noting that 2004 was the most costly year in terms of catastrophe losses, he reported that Aspen matched its guidance in spite of recording $166 million in net catastrophe losses.

While Mr. O'Kane said that Aspen only had to increase its overall gross catastrophe loss estimates by 7 percent since the last quarter, he noted that, like other insurers and reinsurers, Aspen recorded increases for two events?Hurricane Ivan and Typhoon Songda.

The Ivan increase, he said, coincides with a three-times increase in market losses for offshore energy risks. Losses in this area, he said, have changed the market?stabilizing offshore energy rates in general and prompting significant hardening of insurance prices in the Gulf of Mexico where Ivan oil rig losses occurred.

Noting that Aspen exposures were "relatively modest at the time of the loss," he said, "we expect to increase them significantly to take advantage of this emerging market opportunity."