Company: AHL
Filing Date: 2025-03-19
Form Type: 20-F
Source: 0001267395-25-000019
Chunk: 262

Company: ASPEN INSURANCE HOLDINGS LTD
Filing Date: 2025-03-19
Form: 20-F
Item: Item 5
Chunk 262
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 a corresponding reduction in earnings. 
The actual effects of the current and potential future increase in inflation on our results cannot be accurately known until, among other items, claims are ultimately settled. 
In addition to general price inflation, social inflation has increased, and, accordingly, we may be exposed to a persisting long-term upwards trend in the cost of judicial awards for damages. We seek to take this into account in our pricing and reserving of our lines of business, notably casualty business. 
We also seek to take into account the projected impact of inflation on the likely actions of central banks in the setting of short-term interest rates and consequent effects on the yields and prices of fixed interest securities. A potentially prolonged high inflationary environment poses a risk to the performance of our investment portfolio or have other adverse effects. In particular, rising inflation, interest rates and bond yields may result in a decrease in the market value of certain of our fixed interest investments. Refer to Item 3D, “Risk Factors — Market and Liquidity Risks — Our investments are subject to interest rate, credit, and real estate related risks, which may adversely affect our net income and may adversely affect the adequacy of our capital” and also to “Risk Factors — Market and Liquidity Risks — We may be adversely impacted by economic inflation and social inflation.”
H. Reconciliation of Non-GAAP Financial Measures
In presenting Aspen’s results, management has included and discussed certain measurements that are considered “non-GAAP financial measures” under SEC rules and regulations. Management believes that these non-GAAP financial measures, which may be defined differently by other companies, help explain and enhance the understanding of Aspen’s results of operations. However, these measures should not be viewed as a substitute for those determined in accordance with GAAP. 
Average equity, a non-GAAP financial measure, is used in calculating ordinary shareholders return on average equity. Average equity is calculated by taking the arithmetic average of total shareholders’ equity on a quarterly basis for the stated periods excluding the average value of preference shares less issue expenses. Operating return on average equity is calculated by dividing operating income by average equity.

                                                                                                                                                As at December 31,
                                                                                                  2024                          2023                          2022
                                                                                                                                                   ($ in millions)
Total shareholders’ equity                                                                $3,371.9                      $2,908.5                      $2,358.0    
Preference shares less issue expenses                                                      (970.5)                       (753.5)                       (753.5)    
Average adjustment