Company: AHL
Filing Date: 2025-05-08
Form Type: 424B4
Source: 0001628280-25-023859
Chunk: 251

Company: ASPEN INSURANCE HOLDINGS LTD
Filing Date: 2025-05-08
Form: 424B4
Chunk 251
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 translate the risk appetite into measurable criteria and provide the primary control for accumulated risk exposures;

• the cascading of risk appetite and key risk limits for material risks to each risk-assuming operating subsidiary;

• measuring, monitoring, managing and reporting risk positions and trends;

• the use, subject to an understanding of its limitations, of the internal model to test strategic and tactical business decisions and to assess compliance with the risk appetite statement; and

• stress and scenario testing, including reverse stress testing, designed to help us better understand and develop contingency plans for the potential effects of extreme events or combinations of events on capital adequacy and liquidity.

Risk Appetite Statement

The risk appetite statement is a central component of the Aspen Group’s overall risk management framework and is approved by the Board. It sets out, at a high level, how we think about risk in the context of our business model, Aspen Group objectives and strategy, and provides the foundation for decision making during the implementation of our strategy and business plans. It sets out boundary conditions and limits for the level of risk we assume, together with a statement of the reward we aim to receive for this level of risk. Our risk appetite statement comprises the following components:

• Risk preferences: a high level description of the types of risks we prefer to assume and those we prefer to minimize or avoid;

• Return objective: a description of the return on capital we seek to achieve, subject to our risk constraints;

• Volatility objective: a description of earnings volatility tolerance;

• Capital objective: a description of the target level of risk adjusted capital; and

• Liquidity objective: a description of the target level of liquidity.

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Risk Components

The main types of risks that we face are summarized as follows:

Insurance risk — The risk that underwriting results vary from their expected amounts, including the risk that reserves established in respect of prior periods differ significantly from the level of reserves included in the Aspen Group’s financial statements.

Investment/Market risk — The risk of variations in the valuation of investments due to changes in macroeconomic factors and the general uncertainty related to any investment decision.

Credit risk — The risk of diminution in the value of insurance receivables as a result of counter-party default. This principally comprises default and concentration risks relating to amounts receivable from intermediaries, policyholders and reinsurers.

Liquidity risk — The risks of failing to maintain sufficient liquid financial resources to meet liabilities as they fall due or to provide collateral as required for commercial or regulatory purposes.

Oper