Aspen Insurance Holdings' chief executive says the insurer is reducing its earthquake and wind exposure in the U.S. Property insurance market due to the volatility of catastrophe risks.
During a conference call with financial analysts, Aspen CEO Chris O'Kane said that while the company has taken measures to eliminate unprofitable lines of business, the current pricing and economic environment requires additional measures to improve the bottom line.
O'Kane said the company plans “a significant and controlled reduction” in its U.S. wind and earthquake exposure over the next two years. He expects the move to free up $140 million in capital, which would be applied to the company's $500 million share buy-back program, announced earlier in the call, “unless other very compelling opportunities emerge.”
There is no change of strategy for the Aspen Insurance U.S. Marine or Programs units; and within Aspen's reinsurance segment, Aspen's risk appetite for catastrophe-related risk is unchanged.
O'Kane said the rest of Aspen's U.S. book remains highly profitable and that the carrier plans to improve its investment portfolio with high-yield investment securities.
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