A.M. Best Affirms Rating of Aspen Insurance Limited; Revises Outlook to Positive.

OLDWICK, N.J. -- A.M. Best Co. has affirmed the financial strength rating of A- (Excellent) of Aspen Insurance Limited (Aspen) (Bermuda) and has revised the outlook to positive from stable. At the same time, A.M. Best has assigned an issuer credit rating (ICR) of "a-" to the company with a positive outlook. The outlook for both ratings reflects a likely improvement in the company's business profile and earnings.

The ratings reflect Aspen's excellent risk-adjusted capitalisation, which is likely to be supportive of the company's plans to grow its property reinsurance portfolio in 2005. This factors a USD 200 million capital injection from its ultimate parent, Aspen Insurance Holdings Ltd. (AHL), in November 2004. Overall earnings are likely to be excellent in 2004 and 2005 despite potential exposure to the series of major catastrophes in the second half of 2004. Early indications of potential losses lead A.M. Best to believe it is unlikely these events will have any significant impact on prospective operating performance, with a forecast return on capital and surplus of approximately 10% in 2004 based on a combined ratio of approximately 90% (in the absence of any further catastrophe events).

Aspen's gross premium income from property reinsurance is likely to grow substantially in 2005 (by approximately 250%) as a result of its access to the U.S. and Japanese business currently written by Aspen Insurance UK Limited (Aspen Re). This portfolio has an excellent track record of profitability within Aspen Re and is likely to strengthen Aspen's business profile, although business concentration will significantly increase (property reinsurance is forecast to account for approximately 70% of 2005 gross premium income).

An offsetting factor is the high net retention (approximately 90% of premiums). Aspen largely writes business on a gross basis, although the company will benefit from additional catastrophe excess of loss and risk excess cover from 2005 relating to the expansion of the property reinsurance business.

For a list of A.M. Best's debt ratings, please visit http://www.ambest.com/debtratings/.

For current Best's ratings, independent data and analysis on more than 3,000 individual property/casualty companies, groups and industry composites, please visit http://www.ambest.com/pc.

A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at http://www.ambest.com.