Company: AHL
Filing Date: 2025-03-20
Form Type: F-1/A
Source: 0001628280-25-014149
Chunk: 53

Company: ASPEN INSURANCE HOLDINGS LTD
Filing Date: 2025-03-20
Form: F-1/A
Chunk 53
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We may be adversely impacted by economic or social inflation.

Our underwriting results, loss reserves and investment income, like those of other (re)insurers, are susceptible to the effects of economic inflation because premiums are established before the ultimate amounts of losses and loss expenses are known. Although we consider the potential effects of economic inflation when setting premium rates,

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premiums may not properly contemplate the effects of inflation and thereby essentially result in underpricing the risks we insure and reinsure. Loss reserves include assumptions about future payments for settlement of claims and claims-handling expenses, such as the cost of replacing property, associated labor costs and litigation costs for the property business we write. To the extent inflation causes costs to increase above loss reserves established for claims, we will be required to increase loss reserves with a corresponding reduction in net income in the period in which the deficiency is identified, which may have a material adverse effect on our underwriting results or financial condition. Unanticipated higher inflation could also lead to higher interest rates, which would negatively impact the value of our fixed income securities and potentially other investments.

Since 2022, economic inflation reached and has remained unusually high in many parts of the world, and central banks in the United States and other countries aggressively raised interest rates to counter inflation by slowing economic activity; however, the U.S. Federal Open Market Committee lowered its benchmark overnight borrowing rate over the course of 2024 and there have been signs of easing economic inflation. The long-term impact of ongoing monetary policy actions on financial markets and the real economy is still uncertain. Uncertainty and market turmoil has affected and may in the future affect, among other aspects of our business, the demand for and claims made under our products, the ability of customers, counterparties and others to establish or maintain their relationships with us, our ability to access and efficiently use internal and external capital resources and our investment performance and portfolio.

In addition, steps taken by central banks to control inflation and/or governments to stabilize financial markets and improve economic conditions may be ineffective, and actual or anticipated efforts to continue to unwind some of such steps could disrupt financial markets and/or could adversely impact the value of our investment portfolio. Any further increases in interest rates could decrease unrealized gains or increase unrealized losses on our debt securities portfolio. Higher inflation could lead to even higher interest rates, which would negatively impact the value of our existing fixed income or other investments.

We monitor the risk that the principal markets in which we operate could continue to