Aspen’s third-party capital AuM grew to $550 million in 2017

by Artemis on February 13, 2018

Bermudian insurer and reinsurer, Aspen Insurance Holdings Limited, announced during its Q4 2017 earnings call that it grew its third-party capital assets under management (AuM) by more than 20% in 2017, taking the total to $550 million.

In fact, Aspen told Artemis that as well as its third-party reinsurance capital AuM of $550 million, as at December 31st 2017, co-investment from Aspen takes the total capital markets AuM to $600 million.

The re/insurer discussed throughout last year a desire to expand its third-party reinsurance capital activities in 2018, which includes its Bermuda-based collateralised reinsurance sidecar, Silverton Re, and its Peregrine Reinsurance Ltd. vehicle.

Aspen announced in early 2017 that it had expanded its capital markets activities through its Peregrine Reinsurance Ltd. vehicle., utilising it for segregated account re/insurance transactions for a wider set of risks.

This was followed by news roughly half-way through the year that it had ceded significantly more risk across its operations in the second-quarter of 2017, ultimately laying off more risk to its capital markets unit.

Speaking during the firm’s third-quarter 2017 earnings call, Aspen Chief Executive Officer (CEO) Chris O’Kane highlighted a desire to increase the size of its Silverton Re vehicle in the future, dependent on market conditions.

Following 2017 catastrophe events, reinsurance pricing increased at the January 1st, 2018 renewals after years of declines, and the CEO announced recently that it grew its third-party capital AuM in 2017.

“Our capital markets business continued to enhance its position through its established relationships with long-term capital allocators, and increased third-party capital under management by more than 20% to $550 million in 2017,” said O’Kane, speaking during the firm’s Q4 2017 earnings call.

Adding; “Our capital markets business continues to provide investors with direct access to our underwriting expertise, provides brokers and clients with additional capacity, and provides Aspen with flexibility in managing our exposures.”

The collateralised reinsurance capital that Silverton Re, Peregrine Reinsurance and other third-party investor backed transactions helps support Aspen’s international reinsurance operation, and, also provides the re/insurer with a way to bring fee income, from managing the capital, underwriting and claims services, into the group as well.

With the momentum of re/insurance price increases expected to persist throughout 2018, it will be interesting to see if Aspen continues to expand its third-party capital activities in the months ahead, taking advantage of market conditions and persistent and growing investor appetite to access re/insurance risks.

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