Aspen Updates Losses from Hurricanes Katrina, Rita and Wilma

December 6, 2005

Bermuda-based Aspen Insurance Holdings Limited has updated its assessment of estimated losses from Hurricanes Katrina, Rita and Wilma.

Based on the information available and evaluations to date, Aspen estimates that its retained losses from those hurricanes, after recoveries from its outwards reinsurance program and the impact of outwards and inwards re-instatement premiums, are likely to be between $470 million and $535 million on an after tax basis, which includes its loss estimate from Hurricane Wilma of between approximately $20 million and $35 million. These numbers include the charge of $46 million arising primarily in the fourth quarter of 2005 in relation to reinstatement premiums which was disclosed in Aspen’s third quarter Form 10-Q.

In addition to Aspen’s outwards reinsurance program, Aspen has further cover of up to $100 million under a fully collateralized risk transfer swap placed with a non-insurance counter-party. This would provide Aspen with recoveries if the level of industry losses as determined by Property Claims Services from Hurricane Katrina in the continental United States exceed $39 billion, with the maximum of $100 million recoverable, on a linear basis, if such industry losses reach $47 billion. Any potential recoveries under this catastrophe swap contract have been excluded from Aspen’s estimated net loss figures for Hurricane Katrina.

Aspen’s estimates discussed above involve the exercise of considerable judgment and reflect a combination of ground-up evaluations, information available to date from brokers, the application of Aspen’s catastrophe modeling systems, market intelligence, initial tentative loss reports and other sources.

In addition, due to the frequency and severity of the 2005 hurricanes and the scale of Hurricane Katrina in particular, including legal and regulatory uncertainty, the complexity of factors contributing to the losses and the preliminary nature of the information used to prepare these estimates, there can be no assurance that Aspen’s ultimate losses associated with these Hurricanes will remain within the stated ranges.

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