Aspen Capital Markets grows assets to $1.3bn, lifts fee income 71%

Aspen Capital Markets, the third-party and alternative reinsurance capital management unit of global re/insurer Aspen, had a successful year in 2022, growing its assets under management by 42% to reach $1.3 billion over the course of the year.

At the same time, Aspen said that its Capital Markets fee income increased by a particularly significant 71% over the 12 months of 2022.

It’s testament to a differentiated strategy at Aspen, when it comes to insurance-linked securities (ILS) investments.

The company has focused on areas outside of property catastrophe risk as well, developing a name for itself in being able to transfer primary and non-cat risks, in classes of business including longer-tailed lines such as casualty, to its third-party investors.

A year ago, the company had grown its third-party and insurance-linked securities (ILS) assets under management to almost $918 million, while earning $61.4 million in fees from those activities in 2021.

A year on and the assets under management (AUM) figure stands at $1.3 billion, some 42% higher, while the fee income has been reported to have reached $104 million in 2022, an increase of 71%.

Aspen reported that the increase in fee income was driven by the increase in assets under management to $1.3 billion.

The re/insurer further explained that the fee income gets largely reflected as an offset to its acquisition costs and so benefits the firms underwriting results.

Mark Cloutier, Group Executive Chairman and Chief Executive Officer at Aspen said, “Given the challenges facing the insurance-linked securities market in raising capital, this is testament to the innovative team we have and our track record of delivering for our investors.”

Over the course of 2022, Aspen reported that its acquisition costs as a percentage of net earned premiums improved from 17% in 2021 to 16% in 2022.

This was primarily recorded within the Aspen insurance segment and the company highlighted that it is “due to a greater proportion of our business being ceded to Aspen Capital Markets businesses.”

Also read: Third-party reinsurance capital is central to Aspen’s strategy: Philip Hough.

Aspen Capital Markets is just one of the dedicated insurance-linked securities (ILS) fund managers, and reinsurers offering ILS-style investment opportunities, listed in our Insurance-Linked Securities Investment Managers & Funds Directory.