Company: AHL
Filing Date: 2025-03-19
Form Type: 20-F
Source: 0001267395-25-000019
Chunk: 194

Company: ASPEN INSURANCE HOLDINGS LTD
Filing Date: 2025-03-19
Form: 20-F
Item: Item 4
Chunk 194
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 From Assumptions. Given the risks and uncertainties associated with the process for estimating reserves for losses and loss expenses, management has performed an evaluation of the potential variability in loss reserves and the impact this variability may have on reported results, financial condition and liquidity. Because of the inherent uncertainties discussed above, we have developed a reserving philosophy which attempts to incorporate prudent assumptions and estimates.

Management’s best estimate of the net reserve for losses and loss expenses as at December 31, 2024 was $3,950.6 million. The following tables show the effect on estimated net reserves for losses and loss expenses as at December 31, 2024 of a change in two of the most critical assumptions in establishing reserves: (i) loss emergence patterns, accelerated or decelerated by three and six months; and (ii) expected loss ratios varied by plus or minus five and ten percent. Accelerated loss emergence patterns indicates a higher development percentage of losses, therefore requiring lower IBNR than previously expected and hence resulting in a lower ultimate.

Management believes that these scenarios present a reasonable range of variability around the booked reserves using standard actuarial techniques. Loss reserves may vary beyond these scenarios in periods of heightened or reduced claim activity. The reserves resulting from the changes in the assumptions are not additive and should be considered separately. The following tables vary the assumptions employed therein independently. In addition, the tables below do not adjust any parameters other than the ones described above.

Net reserve for losses and loss adjustment expenses as at December 31, 2024 - Sensitivity to loss emergence patterns

  Change in assumption          Reserve for losses and loss adjustment expenses  
 ─────────────────────────────────────────────────────────────────────────────────
                                                                ($ in millions)  
  Six month acceleration                                               $3,712.6  
  Three month acceleration                                             $3,822.6  
  No change (selected)                                                 $3,950.6  
  Three month deceleration                                             $4,110.5  
  Six month deceleration                                               $4,304.6  

Table of Contents

Net reserve for losses and loss adjustment expenses as at December 31, 2024 - Sensitivity to expected loss ratios

  Change in assumption      Reserve for losses and loss adjustment expenses  
 ─────────────────────────────────────────────────────────────────────────────
                                                            ($ in millions)  
  10% favorable                                                    $3,575.2  
  5% favorable                                                     $3,762.9  
  No change (selected)                                             $3,