Aspen Insurance - 10-Q quarterly report FY

intermediary and is a wholly-owned subsidiary of Aspen. Its New Jersey office focuses on casualty facultative reinsurance written on behalf of Aspen Re.

Brian Boornazian, who is heading up Aspen Re America's property reinsurance unit as President and Chief Underwriting Officer, will direct this team of longtime insurance industry veterans to underwrite U.S. domestic proportional and risk excess treaty reinsurance on behalf of Aspen Re. Mr. Boornazian joined Aspen from XL Reinsurance America Inc., where he most recently served as Chief Property Officer, responsible for all property lines of business as well as ocean marine and multi-line business.

Results of Operations

The following is a discussion and analysis of the Company's consolidated results of operations for the three months ended March 31, 2004 and 2003.

Gross Premiums Written. For the three months ended March 31, 2004, gross premiums written were $640.2 million, a 10.8% increase over the $577.7 million written for the three months ended March 31, 2003. The main cause of the increase was our decision to increase our casualty reinsurance book and the development of our U.K. insurance division. The increase in premium in the three months ended March 31, 2004 was reduced in part due to our decision not to renew our quota share reinsurance with Wellington Syndicate 2020 and to cease writing U.S. property and casualty reinsurance produced by Wellington Underwriting Inc.

Reinsurance ceded. Reinsurance premiums ceded for the three months ended March 31, 2004 were $130.8 million compared to $168.6 million for the three months ended March 31, 2003. The $37.8 million reduction was due in part to our retentions on the 2004 program being higher than those in 2003 which reduces the exposure of our reinsurers and hence the premiums due. In addition, the reinsurance associated with the Wellington Underwriting Inc. account was not renewed following our decision to cease underwriting this business in 2004.

Net premiums written. Net premiums written for the three months ended March 31, 2004 were $509.4 million. This represents a 24.5% increase over the equivalent period in 2003 and is due to the increase in gross premiums and more significantly the reduction in outwards reinsurance premiums payable.

Gross premiums earned. Gross premiums earned for the three months ended March 31, 2004 were $358.0 million, which represented 55.9% of gross premiums written. For the three months ended March 31, 2003, gross premiums earned were $161.4 million which represented 27.9% of gross premiums written. The significant increase in the ratio of earned premium to written premium is due to the relatively low level of 2002 premiums earning in 2003 as compared to 2003 premiums earning in 2004.

Net premiums earned. Net premiums earned for the three months ended March 31, 2004 were $305.8 million, representing 60% of net premiums written. Net premiums earned for the three months ended March 31, 2003 were $121.6 million, representing 29.7% of net premiums written. The increase is due to the proportion of prior year premium earning out in 2003 being much lower than the 2003 premium earning out in 2004 as the Company only commenced underwriting in June 2002.

Insurance losses and loss adjustment expenses. Insurance losses and loss adjustment expenses for the three months ended March 31, 2004 were $124.1 million including paid claims of $19.8 million, which was an increase of 76% compared to the three months ended March 31, 2003. This increase was due to the increase in the business written between the two periods. Of the total gross reserves for unpaid losses of $643.4 million at the balance sheet date of March 31, 2004 a total of $443.0 million or 69% represented IBNR claims. The only material claims incurred and reported during the three months ended March 31, 2004 arose from an Algerian energy plant explosion ($8.5 million). The charge for the period has been reduced by $15.2 million due to a reduction in prior year loss provisions as further explained below.

Policy acquisition expenses. Policy acquisition expenses for the three months ended March 31, 2004 were $59.0 million representing 19.3% of net premiums earned. We expect this percentage to decrease during the year as the effect on earnings of our outwards reinsurance program reduces as more inwards premium is earned. Policy acquisition expenses for the three months ended March 31, 2003 were $26.3 million. The increase in policy acquisition expenses as compared to the three months ended March 31, 2003 was due to the greater volume of premium earned.

Operating and administrative expenses. Operating and administrative expenses for the three months ended March 31, 2004 were $18.1 million, as compared to $7.4 million for the three months

13

ended March 31, 2003, which included higher provisions for fixed and performance-related staff compensation due to larger staffing levels as we expanded our operations.

Net investment income. Net investment income of $12.0 million for the three months ended March 31, 2004 was mainly derived from bank deposits, our portfolio of fixed interest securities and money market funds. Net investment income for the three months ended March 31, 2003 was $4.9 million. The increase in net investment income was due to the significant rise in invested funds arising from both positive operating cashflows and the increase in share capital.

Income before tax. Income before tax for the three months ended March 31, 2004 was $115.1 million, including underwriting income of $104.6 million, investment returns of $11.7 million and interest on loans of $0.4 million.

Income tax expense. Income tax expense for the three months ended March 31, 2004 was $30.1 million. Our consolidated tax rate for the three months ended March 31, 2004 was 26.2%, (2003 — 31.8%). The higher rate for the three months ended March 31, 2003 reflects the fact that the Bermudian operations, which are not subject to tax, were loss making at the time. We consider that the tax rate reported for the three months ended March 31, 2004 is more representative of future performance although it may decline to some degree in the future if the contribution of Aspen Bermuda to total pre-tax earnings increases.

Net income. Net income for the three months ended March 31, 2004 was $85.0 million, equivalent to $1.23 earnings per basic share and $1.18 fully diluted earnings per share on the basis of the weighted average number of shares in issue during the three months ended March 31, 2004. Net income for the three months ended March 31, 2003 was $15.2 million. The material increase in net income was due to the factors described above under the heading "— Overview".

Underwriting Results by Operating Segments

Our business segments are based on how we monitor the performance of our underwriting operations. Management measures segment results on the basis of the combined ratio, which is obtained by dividing the sum of the losses and loss expenses, acquisition expenses and general and administrative expenses by net premiums earned. As a newly formed company, our historical combined ratio may not be indicative of future underwriting performance. We do not manage our assets by segment; accordingly, investment income and total assets are not allocated to the individual segments. General and administrative expenses are allocated to segments based on each segment's proportional share of gross premiums written.

14

---

The following table summarizes gross and net written premium, underwriting results, and combined ratios and reserves for each of our two business segments for the three months ended March 31, 2004 and March 31, 2003.

SEGMENTAL ANALYSIS (in US$ millions)				Three Months Ended March 31,
				2004												2003
				Reinsurance				Insurance				Total				Reinsurance				Insurance				Total
Gross premiums written				$	558.9			$	81.3			$	640.2			$	532.9			$	44.8			$	577.7
Net premiums written					454.9				54.5				509.4				375.8				33.4				409.1
Gross premiums earned					267.0				91.0				358.0				131.7				29.7				161.4
Net premiums earned					229.4				76.4				305.8				93.7				27.9				121.6
Expenses:
Losses and loss expenses					(81.6	)			(42.5	)			(124.1	)			(53.8	)			(16.9	)			(70.7	)
Policy acquisition, operating and administrative expenses					(57.8	)			(19.3	)			(77.1	)			(29.2	)			(4.5	)			(33.7	)
Underwriting profit before investment income					90.0				14.6				104.6				10.7				6.5				17.2
Investment income													12.0												4.9
Other net income/(expense)													(1.5	)											0.2
Income before tax													115.1												22.3
Net reserves for loss and loss adjustment expenses				$	392.8			$	199.9			$	592.7			$	106.8			$	43.0			$	149.8
Ratios
Loss ratio					36	%			56	%			41	%			58	%			61	%			58	%
Expense ratio					25	%			25	%			25	%			31	%			16	%			28	%
Combined ratio					61	%			81	%			66	%			89	%			77	%			86	%

Reinsurance

We write reinsurance for both property and casualty risks. Our property reinsurance line of business is all written on a treaty basis and includes catastrophe, risk excess and pro rata, including retrocession.

In 2004 our casualty reinsurance line of business is written mainly on a treaty basis with a small proportion of facultative risks. The casualty treaty reinsurance is primarily excess of loss basis and includes coverage for claims arising from automobile accidents, employers' liability, professional indemnity and other third party liabilities. It is written in respect of cedents located mainly in the United States, the United Kingdom, Europe and Australia. The casualty facultative business written in 2003 by Wellington Underwriting Inc. was restricted to automobile liability business in the United States with a focus on liability relating to commercial vehicles, but was not renewed in 2004.

Our specialty reinsurance line of business includes aviation, contingency and marine reinsurance. In 2003 we also included under this heading our quota share reinsurances of Syndicates 2020 and 3030 in respect of the lines of business that we do not write under our own name, including marine, energy, accident and health and aviation risks. Our quota share reinsurance of Syndicate 2020 did not continue into 2004 and the quota share of Syndicate 3030 was discontinued after 2002.

15

---

The following table summarizes gross and net written premiums and underwriting results for each of the lines of business within our reinsurance segment for the three months ended March 31, 2004 and 2003:

REINSURANCE (in US$ millions)				Three months Ended March 31,
				2004																2003
				Property				Casualty				Specialty				Total				Property				Casualty				Specialty				Total
Gross premiums written				$	284.1			$	235.5			$	39.3			$	558.9			$	310.8			$	146.9			$	75.2			$	532.9
Net premiums written					190.2				227.0				37.7				454.9				170.5				136.9				68.4				375.8
Gross premiums earned					157.0				75.4				34.6				267.0				71.3				22.2				38.2				131.7
Net premiums earned					122.6				74.2				32.6				229.4				38.5				20.2				35.0				93.7
Losses and loss expenses					(17.2	)			(49.9	)			(14.5	)			(81.6	)			(19.2	)			(14.9	)			(19.7	)			(53.8	)
Policy acquisition, operating and administration expenses					(36.5	)			(16.1	)			(5.2	)			(57.8	)			(16.4	)			(5.1	)			(7.6	)			(29.2	)
Underwriting profit before investment income				$	68.9			$	8.2			$	12.9			$	90.0			$	2.8			$	0.2			$	7.7			$	10.7
Ratios
Loss ratio					14	%			67	%			44	%			36	%			50	%			74	%			56	%			58	%
Expense ratio					30	%			22	%			16	%			25	%			43	%			25	%			22	%			31	%
Combined ratio					44	%			89	%			60	%			61	%			93	%			99	%			78	%			89	%

For the Three Months Ended March 31, 2004 versus the three months ended March 31, 2003

Premiums.    Gross premiums written in the reinsurance segment for the three months ended March 31, 2004 were $558.9 million, an increase of 5.2% over the equivalent period in 2003. Gross premiums written for our casualty reinsurance line of business increased by 60% compared to the three months ended March 31, 2003. This increase in our casualty reinsurance line reflected that in 2003 our U.S. casualty team only commenced underwriting during the first quarter of 2003 which therefore included a small contribution in 2003 but a full contribution in 2004. This increase was offset partly by a decrease of 9% in our property reinsurance and a decrease of 48% in our specialty reinsurance line of business, as compared to the three months ended March 31, 2003. The decrease in specialty reinsurance was primarily due to the non-renewal of the Syndicate 2020 quota share contract.

Losses and loss adjustment expenses.    Losses and loss adjustment expenses were $81.6 million for the three months ended March 31, 2004, representing 35.6% of net earned premiums for the three months ended March 31, 2004. The only material claim incurred during the three months ended March 31, 2004 arose from an Algerian energy plant loss of $8.5 million. This has been offset by favorable development on the Philips factory loss in Normandy, France. The low level of catastrophe events in the first quarter of 2004 has contributed significantly to achieving the low loss ratio of 14% for property reinsurance. The casualty loss ratio was reduced marginally from 74% for the three months ended March 31, 2003 to 67% for the three months ended March 31, 2004 as a result of the increase in premium rates for the three months ended March 31, 2004. Due to the increase in earned premiums in our casualty reinsurance line, the actual loss expense was increased significantly by $35.0 million for the three months ended March 31, 2004 as compared to the three months ended March 31, 2003.

Policy acquisition, operating and administration expenses.    Total expenses were $57.8 million for the three months ended March 31, 2004, equivalent to 25.2% of net earned premiums. The increase in policy acquisition expenses reflected the significant increase in earned premium for the three months ended March 31, 2004 as compared to the three months ended March 31, 2003.

Insurance

We write both commercial property and commercial liability insurance. Our commercial property line of business is primarily composed of U.K. commercial property insurance. No major claims have been notified in respect of this business. Commercial property also includes our U.S. excess and surplus lines property business written through Aspen Specialty.

The commercial liability line of business consists of U.K. employers' and public liability insurance. We have not received notice of any individually material claims with respect to this business but this is

16

---

normally the case for this class of business at this early stage in its development and it may take many years before all claims are reported, assessed and paid. Commercial liability also includes our U.S. excess and casualty business written through Aspen Specialty.

The following table summarizes gross and net written premiums and underwriting results for each of the lines of business within our insurance segment for the three months ended March 31, 2004 and 2003:

INSURANCE (in US$ millions)				Three months Ended March 31,
				2004												2003
				Commercial Property				Commercial Liability				Total				Commercial Property				Commercial Liability				Total
Gross premiums written				$	23.9			$	57.4			$	81.3			$	15.4			$	29.4			$	44.8
Net premiums written					6.0				48.5				54.5				12.0				21.4				33.4
Gross premiums earned					21.1				69.9				91.0				6.3				23.4				29.7
Net premiums earned					14.3				62.1				76.4				5.6				22.3				27.9
Losses and loss expenses					(9.2	)			(33.3	)			(42.5	)			(3.9	)			(13.0	)			(16.9	)
Policy acquisition, operating and administration expenses					(4.1	)			(15.2	)			(19.3	)			(1.3	)			(3.2	)			(4.5	)
Underwriting profit before investment income				$	1.0			$	13.6			$	14.6			$	0.4			$	6.1			$	6.5
Ratios
Loss ratio					64	%			54	%			56	%			70	%			58	%			61	%
Expense ratio					29	%			24	%			25	%			23	%			15	%			16	%
Combined ratio					93	%			76	%			81	%			93	%			73	%			77	%

For the Three Months Ended March 31, 2004 versus the three months ended March 31, 2003

Gross Premiums Written.    Gross premiums written in the insurance segment for the three months ended March 31, 2004 were $81.3 million, a 81.5% increase from the three months ended March 31, 2003. This increase was due to a decision to expand both the property and liability books of business in 2004 as we consider the current premium rates to be attractive.

Losses and loss adjustment expenses.    Total loss and loss adjustment expenses were $42.5 million. The increase in loss and loss adjustment expenses by $25.6 million from the three months ended March 31, 2003 was due to the increase in the level of earned premium.

Policy acquisition, operating and administration expenses.    Total expenses were $19.3 million for the three months ended March 31, 2004, equivalent to 25.3% of net earned premiums. The increase from $4.5 million for the three months ended March 31, 2003 reflected the increase in the level of earned premiums.

Reserves for losses and loss expenses

As of March 31, 2004, the Company had accrued losses and loss adjustment expense reserves of $643.4 million. This amount represents the Company's actuarial best estimate of the ultimate liability for payment of losses and loss adjustment expenses. During the three months ended March 31, 2004, the Company paid losses and loss adjustment expenses of $19.8 million.

17

---

(in US$ millions)				As at March 31, 2004
				Gross				Reinsurance Recoverable				Net
Property Reinsurance				$	120.0			$	(14.9	)		$	105.1
Casualty Reinsurance					184.1				(3.6	)			180.5
Specialty Reinsurance					115.9				(8.7	)			107.2
Total Reinsurance					420.0				(27.2	)			392.8
Commercial Property					53.3				(9.7	)			43.6
Commercial Liability					170.1				(13.8	)			156.3
Total Insurance					223.4				(23.5	)			199.9
Total Losses and loss expense reserve				$	643.4			$	(50.7	)		$	592.7

For the three months ended March 31, 2004, there was a reduction of our estimate of the ultimate claims to be paid in respect of the 2002 accident year of $5.3 million and $9.9 million in respect of the 2003 accident year. An analysis of this reduction by line of business is as follows:

				As at March 31, 2004
				($ in millions)
Property Reinsurance				$	6.7
Casualty Reinsurance					(0.2	)
Specialty Reinsurance					2.5
Total Reinsurance					9.0
Commercial Property					0.3
Commercial Liability					5.9
Total Insurance					6.2
Total reduction in prior year loss reserves				$	15.2

The key elements which gave rise to the favorable development during the three months ended March 31, 2004 of $15.2 million in respect of losses incurred were as follows:

Property reinsurance: The net reserves of the property reinsurance line of business as at December 31, 2003 included a provision of $16.2 million in relation to a Philips factory loss in Normandy, France. Subsequent information from loss adjusters has provided support for a $10 million reduction in this reserve for this loss. Partly offsetting this release was a $3.3 million strengthening of reserves due to late advices from brokers of 2003 claims.

Specialty Reinsurance: 14% of the net reserves as at December 31, 2003, amounting to $90.5 million, were in respect of business underwritten by way of the two quota share contracts under which we reinsured part of the portfolio of risks written in 2002 by Syndicates 2020 and 3030 (the "Wellington quota share arrangements"). The level of information we receive in respect of the business ceded under these arrangements has been more limited than that in respect of business written directly by the Company, and is on an underwriting year basis which means that the cedents do not allocate estimates of IBNR losses to accident years. During the twelve months ended December 31, 2003, we requested and were given more information by the cedents which enabled us to make a reduction in the 2002 accident year reserves for this business. The provision of additional information has continued in 2004 and this has enabled us to make a further $2.5 million reduction in the reserves for this class of business.

Commercial Liability: The $5.9 million reduction in the net reserves of the commercial liability insurance line of business is due to better than expected development of incurred claims for business written in 2002 and 2003.

Other than the matters described above, the Company did not make any significant changes in assumptions used in our reserving process. However, because the period of time we have been in operation is short, our loss experience is limited and reliable evidence of changes in trends of numbers

18

---

of claims incurred, average settlement amounts, numbers of claims outstanding and average losses per claim will necessarily take years to develop.

For a more detailed description see "Management's Discussion and Analysis — Critical Accounting Policies — Reserves for Losses and Loss Expenses," included in our 2003 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Liquidity and capital resources

Aspen is a holding company that does not have any significant operations or assets other than its ownership of the shares of its direct and indirect subsidiaries, including Aspen Re, Aspen Bermuda and Aspen Specialty. Aspen relies primarily on dividends and other permitted distributions from these insurance subsidiaries to pay its operating expenses, interest on debt finance and dividends, if any, on its ordinary shares. There are restrictions on the payment of dividends by Aspen Re, Aspen Bermuda and Aspen Specialty to Aspen, which are described in more detail in the Regulatory Matters section of the 2003 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Our aggregate invested assets as of March 31, 2004 totalled $1.87 billion compared to aggregate invested assets of $1.62 billion as of December 31, 2003. The increase in invested assets since December 31, 2003 resulted from collections of premiums on insurance policies and reinsurance contracts and investment income, offset by policy acquisition expenses paid, reinsurance premiums paid, operating and administrative expenses paid.

Total net cash flow from operations from December 31, 2003 through March 31, 2004 was approximately $209 million, an increase from approximately $63 million from the prior year period. For the three months ended March 31, 2004, our cash flows from operations provided us with sufficient liquidity to meet our operating requirements. We declared our initial cash dividend of $0.03 per share to shareholders of record on March 23, 2004, payable on March 31, 2004.

Under our the three-year credit facility, $40 million is due and payable by August 29, 2006. The interest rate is three-month LIBOR plus 42.5 basis points. A facility fee, currently calculated at a rate of 17.5 basis points on the average daily amount of the commitment of each lender, is paid to each lender quarterly in arrears.

Our contractual obligations other than our obligations to our policyholders and employees consist mainly of amounts outstanding under our credit facilities, as discussed above, and operating leases. Note 7 to the unaudited condensed consolidated financial statements summarizes amounts outstanding under operating leases as of March 31, 2004.

Currency

The functional currencies of the Company's operations are U.S. Dollars and British Pounds. Other foreign currency amounts are remeasured to the appropriate functional currency and the resulting foreign exchange gains or losses are recorded in the statement of operations. Functional currency amounts of assets and liabilities are then translated into U.S. Dollars. The unrealized gain or loss from this translation, net of tax, is recorded as part of shareholders' equity. The change in unrealized foreign currency translation gain or loss during the period, net of tax, is a component of comprehensive income. Both the remeasurement and translation are calculated using current exchange rates for the balance sheets and average exchange rates for the statement of operations.

Effects of inflation

The effects of inflation could cause the severity of claims from catastrophes or other events to rise in the future. Our calculation of reserves for losses and loss expenses includes assumptions about future payments for settlement of claims and claims-handling expenses, such as medical treatments and litigation costs. We write liability business in the United States, the United Kingdom and Australia, where claims inflation has grown particularly strong in recent years. To the extent inflation causes these costs to increase above reserves established for these claims, we will be required to increase our loss reserves with a corresponding reduction in retained earnings.

Cautionary statement regarding forward-looking statements

This Form 10-Q contains, and the Company may from time to time make other verbal or written, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as

19

---

amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act") that involve risks and uncertainties, including statements regarding our capital needs, business strategy, expectations and intentions. Statements that use the terms "believe," "do not believe," "anticipate," "expect," "plan," "estimate," "intend" and similar expressions are intended to identify forward-looking statements. These statements reflect our current views with respect to future events and because our business is subject to numerous risks, uncertainties and other factors, our actual results could differ materially from those anticipated in the forward-looking statements and the differences could be substantial. The risks, uncertainties and other factors set forth in the Company's 2003 Annual Report on Form 10-K filed with the Securities and Exchange Commission and other cautionary statements made in this report, as well as the following factors, should be read and understood as being applicable to all related forward-looking statements wherever they appear in this report:

•	our short operating history;

•	the impact of acts of terrorism and acts of war;

•	greater frequency or severity of claims and loss activity, including as a result of natural or man-made catastrophic events, than our underwriting, reserving or investment practices have anticipated;

•	the effectiveness of our loss limitation methods;

•	changes in the availability, cost or quality of reinsurance or retrocessional coverage;

•	loss of key personnel;

•	the inability to maintain financial strength or claims-paying ratings by one or more of our subsidiaries;

•	changes in general economic conditions, including inflation, foreign currency exchange rates, interest rates and other factors that could affect our investment portfolio;

•	increased competition on the basis of pricing, capacity, coverage terms or other factors;

•	the effects of terrorist-related insurance legislation and laws;

•	decreased demand for our insurance or reinsurance products and cyclical downturn of the industry;

•	changes in regulations or tax laws applicable to us, our subsidiaries, brokers or customers; and

•	Aspen Holdings or Aspen Bermuda becomes subject to income taxes in the United States or the United Kingdom.

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise or disclose any difference between our actual results and those reflected in such statements.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we projected. Any forward-looking statements you read in this report reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. All subsequent written and oral forward-looking statements attributable to us or individuals acting on our behalf are expressly qualified in their entirety by the points made above. You should specifically consider the factors identified in this report which could cause actual results to differ before making an investment decision.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There have been no material changes in market risk from the information provided in our 2003 Annual Report on Form 10-K filed with the Securities and Exchange Commission. For further information, please see "Management's Discussion and Analysis of Financial Condition and Results of Operations — Quantitative and Qualitative Information about Market Risk" included in our 2003 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

20

---

Item 4. Controls and Procedures

The Company, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, has evaluated the design and operation of the Company's disclosure controls and procedures as of the end of the period of this report. Our management does not expect that our disclosure controls or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. As a result of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons or by collusion of two or more people. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. As a result of the inherent limitations in a cost-effective control system, misstatement due to error or fraud may occur and not be detected. Accordingly, our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the disclosure controls and procedures are met. Based on the evaluation of the disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures were effective in ensuring that information required to be disclosed by the Company in this report is recorded, processed, summarized and reported in a timely fashion.

21

---

PART II
OTHER INFORMATION

Item 1.   Legal Proceedings

Similar to the rest of the insurance and reinsurance industry, we are subject to litigation and arbitration in the ordinary course of business. We are not currently involved in any material pending litigation or arbitration proceedings.

Item 2.   Changes in Securities, Use of Proceeds and Issuer Purchase of Equity Securities

(e)   Repurchase of Equity Securities

Period

(a) Total Number of Shares Purchased

(b) Average Price Paid Per Share

(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs

(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may yet be Purchased Under the Plans or Programs

February 2004

5,000 (1)

$26.49 (1)

N/A

N/A

(1)	During the first quarter of 2004, the Company repurchased 5,000 ordinary shares in a private transaction from a previous employee of the Company. The ordinary shares were "restricted" securities under the Securities Act. The purchase price was calculated based on the closing price of the Company's ordinary shares on the NYSE of $26.49 on January 22, 2004.

Item 3.   Defaults Upon Senior Securities

None.

Item 4.   Submissions of Matters to a Vote of Security Holders

No matters were submitted to a vote of the Company's shareholders during the first quarter of 2004.

Item 5.   Other Information

None.

Item 6.   Exhibits and Reports on Form 8-K

	(a)	The following sets forth those exhibits filed pursuant to Item 601 of Regulation S-K:

	Exhibit Number				Description
	3.1				Certificate of Incorporation and Memorandum of Association (incorporated herein by reference to Exhibit 3.1 to the Company's Registration Statement on Form F-1 (Registration No. 333- 110435)).
	3.2				Amended and Restated Bye-laws (incorporated herein by reference to Exhibit 3.2 to the Company's Registration Statement on Form F-1 (Registration No. 333- 110435)).
	4.1				Specimen Ordinary Share Certificate (incorporated herein by reference to Exhibit 4.1 to the Company's Registration Statement on Form F-1 (Registration No. 333- 110435)).
	4.2				Amended and Restated Instrument Constituting Options to Subscribe for Shares in Aspen Insurance Holdings Limited (incorporated herein by reference to Exhibit 4.2 to the Company's Registration Statement on Form F-1 (Registration No. 333- 110435)).

22

---

	Exhibit Number				Description
	10.1				Amended and Restated Shareholders' Agreement, dated as of September 30, 2003 among the Company and each of the persons listed on Schedule A thereto (incorporated herein by reference to Exhibit 10.1 to the Company's Registration Statement on Form F-1 (Registration No. 333- 110435)).
	10.2				Third Amended and Restated Registration Rights Agreement dated as of November 14, 2003 among the Company and each of the persons listed on Schedule 1 thereto (incorporated herein by reference to Exhibit 10.2 to the Company's Registration Statement on Form F-1 (Registration No. 333- 110435)).
	10.3				Service Agreement dated June 21, 2002 between Christopher O'Kane and Aspen Insurance U.K. Services Limited (incorporated herein by reference to Exhibit 10.3 to the Company's Registration Statement on Form F-1 (Registration No. 333- 110435)).
	10.4				Service Agreement dated June 21, 2002 between Julian Cusack and the Company Limited (incorporated herein by reference to Exhibit 10.4 to the Company's Registration Statement on Form F-1 (Registration No. 333- 110435)).
	10.5				Service Agreement dated June 21, 2002 between Sarah Davies and Aspen Insurance UK Services Limited (incorporated herein by reference to Exhibit 10.5 to the Company's Registration Statement on Form F-1 (Registration No. 333- 110435)).
	10.6				Service Agreement dated June 21, 2002 between David May and Aspen Insurance UK Services Limited (incorporated herein by reference to Exhibit 10.6 to the Company's Registration Statement on Form F-1 (Registration No. 333- 110435)).
	10.7				Aspen Insurance Holdings Limited 2003 Share Incentive Plan (incorporated herein by reference to Exhibit 10.7 to the Company's Registration Statement on Form F-1 (Registration No. 333- 110435)).
	10.8				Three-Year Credit Agreement dated as of August 26, 2003 among the Company, Barclays Bank plc and the Lenders named therein (incorporated herein by reference to Exhibit 10.8 to the Company's Registration Statement on Form F-1 (Registration No. 333- 110435)).
	10.9				364-Day Credit Agreement dated as of August 26, 2003 among the Company, Barclays Bank plc and the Lenders named therein (incorporated herein by reference to Exhibit 10.9 to the Company's Registration Statement on Form F-1 (Registration No. 333- 110435)).
	10.10				Quota Share Agreement between Syndicate 3030 and Aspen Insurance UK Limited, dated October 21, 2003 reflecting the slip agreement entered into on June 12, 2002 therein (incorporated herein by reference to Exhibit 10.10 to the Company's Registration Statement on Form F-1 (Registration No. 333- 110435)).
	10.11				Slip agreement for quota share entered into June 6, 2002 between National Indemnity Company and Aspen Insurance UK Limited (incorporated herein by reference to Exhibit 10.11 to the Company's Registration Statement on Form F-1 (Registration No. 333- 110435)).
	10.12				Qualifying Quota Share Agreement between Wellington Underwriting, Syndicate 2020 and Aspen Insurance UK Limited dated April 15, 2003 (incorporated herein by reference to Exhibit 10.12 to the Company's Registration Statement on Form F-1 (Registration No. 333- 110435)).

23

---

	Exhibit Number				Description
	10.13				Slip Agreement for Property Risk Excess of Loss Reinsurance Quota Share Treaty between Aspen Insurance UK Limited and Montpelier Reinsurance Ltd., dated June 20, 2002 (incorporated herein by reference to Exhibit 10.13 to the Company's Registration Statement on Form F-1 (Registration No. 333- 110435)).
	10.14				Slip Agreement for Quota Share Treaty of Wellington Underwriting Inc. Property Business between Aspen Insurance UK Limited and Montpelier Reinsurance Ltd., dated June 20, 2002 (incorporated herein by reference to Exhibit 10.14 to the Company's Registration Statement on Form F-1 (Registration No. 333- 110435)).
	10.15				Slip Agreement for Quota Share Treaty of Wellington Underwriting Inc. Auto Liability Business between Aspen Insurance UK Limited and Montpelier Reinsurance Ltd., dated June 20, 2002 (incorporated herein by reference to Exhibit 10.15 to the Company's Registration Statement on Form F-1 (Registration No. 333- 110435)).
	10.16				Service Agreement dated June 21, 2003 between Peter Coghlan and Aspen Insurance U.S. Services Inc. (incorporated herein by reference to Exhibit 10.15 to the Company's Annual Report on Form 10-K for the year ended December 31, 2003).
	31.1				Officer Certification of Christopher O'Kane, Chief Executive Officer of Aspen Insurance Holdings Limited, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed with this report.
	31.2				Officer Certification of Julian Cusack, Chief Financial Officer of Aspen Insurance Holdings Limited, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed with this report.
	32.1				Officer Certifications of Christopher O'Kane, Chief Executive Officer of Aspen Insurance Holdings Limited, and Julian Cusack, Chief Financial Officer of Aspen Insurance Holdings Limited, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, submitted with this report.

	(b)	Current Report on Form 8-K filed on February 20, 2004, under Items 7 and 12 thereof, announcing the Company's results for the fourth quarter and full year ended December 31, 2003.

24

---

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 14, 2004				By:  /s/ Christopher O'Kane   Christopher O'Kane   Chief Executive Officer
Date: May 14, 2004				By:  /s/ Julian Cusack   Julian Cusack   Chief Financial Officer

25

---