SEC Company Response from ASPEN INSURANCE HOLDINGS LTD (AHL, AHL-PD, AHL-PE, AHL-PF) (CIK 0001267395) (AHL-PD) — Mar 3, 2006
ASPEN INSURANCE HOLDINGS LTD (AHL, AHL-PD, AHL-PE, AHL-PF) (CIK 0001267395)
Date: March 3, 2006 · CIK: 0001267395 · Accession: 0000950136-06-001596
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-31909
Referenced dates: December 20, 2005, February 24, 2006
Letter
Your Ref: 001-31909 (File No. 001-31909)
Re: Aspen Insurance Holdings Limited (the ‘‘Company’’) Review of Form 10-K for the fiscal Year Ended December 31, 2004 Filed March 14, 2005
Dear Mr. Rosenberg,
Further to our response letter dated February 24, 2006 and the discussion between the Company and Ms. Dana Hartz on February 28, 2006 and March 2, 2006, we have set out below our proposed additional response to Comment #2 and for your convenience, we set forth in this letter (the ‘‘Response Letter’’) Comment #2 from your letter dated December 20, 2005, in bold typeface and include the Company’s response below such comment.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Critical Accounting Policies – Premiums, page 68
2. We believe your disclosure in Management’s Discussion and Analysis regarding the estimate of assumed premium on your reinsurance business could be improved to better explain the judgments and uncertainties surrounding this estimate and the potential impact on your financial statements. Accordingly, please provide us the following information in disclosure-type format to help us evaluate the adequacy of your disclosure:
a. Please disclose the assumed premium estimate for each line of business, including the amount of any estimate for commissions and related expenses and the amount included in premium receivable related to the estimate.
b. Discuss the key assumptions used to arrive at management’s best estimate of the assumed premium estimate and what specific factors led management to believe that this amount is the most realistic. Please include quantified and narrative disclosure of the impact that reasonably likely changes in one or more of the variables (i.e. methodology and/or assumptions used) would have on reported results, financial position and liquidity.
c. Disclose the provision for doubtful accounts that is recorded related to the assumed premium estimate. If no provision is recorded, please discuss why management believes all amounts recorded are collectible.
In our Annual Report on Form 10-K, we propose to provide the following additional disclosure:
The most likely drivers of change in the estimates in decreasing order of magnitude are:
• changes in the renewal rate or rate of new business acceptances by the cedent insurance companies leading to lower or greater volumes of ceded premiums than our estimate; such changes could result from changes in the relevant primary market that could affect more than one of our cedents or could be a consequence of changes in marketing strategy or risk appetite by a particular cedent;
• changes in the rates being charged by cedents; and
• differences between the pattern of inception dates assumed in our estimate and the actual pattern of inception dates.
We anticipate that ultimate premiums might reasonably be expected to vary by up to 5% as a result of variations in one or more of the assumptions described above, although larger variations are possible. Based on gross written premiums of $168.1 million in our property reinsurance treaty pro rata account as of December 31, 2005, a variation of 5% could increase or reduce net income before taxation by approximately $4 million.
Thank you for your consideration of the responses. If you have any further questions or comments, please contact me at 1-441-297-9371, Michael Groll of LeBoeuf, Lamb, Greene & MacRae at 1-212-424-8616 or Joe Ferraro of LeBoeuf, Lamb, Greene & MacRae at 011-44-207-459-5125.
Yours sincerely,
/s/ Julian Cusack Julian Cusack Chief Financial Officer Aspen Insurance Holdings Limited
Cc: Dana Hartz Lisa Vanjoske U.S. Securities and Exchange Commission
Ian Campbell David Curtin Patricia Roufca Aspen Insurance Holdings Limited
Richard Bennison Robert Lewis David Greenfield KPMG Audit Plc
Michael Groll Joseph Ferraro LeBoeuf, Lamb, Greene & MacRae
Show Raw Text
CORRESP
1
filename1.htm
March
2, 2006
VIA FAX
Jim B.
Rosenberg
Senior Assistant Chief Accountant
Division of
Corporate Finance
United States Securities and Exchange
Commission
100 F Street N.E.
Washington D.C.
20549
Our
Ref:
JC040106
Your
Ref:
001-31909
Re:
Aspen
Insurance Holdings Limited (the
‘‘Company’’)
Review of Form 10-K for
the fiscal Year Ended December 31, 2004 Filed
March 14, 2005
(File No.
001-31909)
Dear Mr.
Rosenberg,
Further to our response letter dated
February 24, 2006 and the discussion between the Company
and Ms. Dana Hartz on February 28, 2006 and
March 2, 2006, we have set out below our proposed
additional response to Comment #2 and for your convenience, we set
forth in this letter (the ‘‘Response
Letter’’) Comment #2 from your letter dated
December 20, 2005, in bold typeface and include the
Company’s response below such comment.
Item 7.
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
Critical Accounting Policies
– Premiums, page 68
2.
We believe
your disclosure in Management’s Discussion and Analysis
regarding the estimate of assumed premium on your reinsurance business
could be improved to better explain the judgments and uncertainties
surrounding this estimate and the potential impact on your financial
statements. Accordingly, please provide us the following information in
disclosure-type format to help us evaluate the adequacy of your
disclosure:
a.
Please disclose the assumed
premium estimate for each line of business, including the amount of any
estimate for commissions and related expenses and the amount included
in premium receivable related to the
estimate.
b.
Discuss the key assumptions
used to arrive at management’s best estimate of the assumed
premium estimate and what specific factors led management to believe
that this amount is the most realistic. Please include quantified and
narrative disclosure of the impact that reasonably likely changes in
one or more of the variables (i.e. methodology and/or assumptions used)
would have on reported results, financial position and
liquidity.
c.
Disclose the provision for
doubtful accounts that is recorded related to the assumed premium
estimate. If no provision is recorded, please discuss why management
believes all amounts recorded are collectible.
In our Annual Report on Form 10-K, we
propose to provide the following additional disclosure:
The most
likely drivers of change in the estimates in decreasing order of
magnitude are:
•
changes in the renewal
rate or rate of new business acceptances by the cedent insurance
companies leading to lower or greater volumes of ceded premiums than
our estimate; such changes could result from changes in the relevant
primary market that could affect more than one of our cedents or could
be a consequence of changes in marketing strategy or risk appetite by a
particular cedent;
•
changes in
the rates being charged by cedents;
and
•
differences between
the pattern of inception dates assumed in our estimate and the actual
pattern of inception dates.
We anticipate that ultimate
premiums might reasonably be expected to vary by up to 5% as a
result of variations in one or more of the assumptions described above,
although larger variations are possible. Based on gross written
premiums of $168.1 million in our property reinsurance treaty
pro rata account as of December 31, 2005, a variation of
5% could increase or reduce net income before taxation by
approximately $4 million.
Thank you for your
consideration of the responses. If you have any further questions or
comments, please contact me at 1-441-297-9371, Michael Groll of
LeBoeuf, Lamb, Greene & MacRae at 1-212-424-8616 or Joe Ferraro of
LeBoeuf, Lamb, Greene & MacRae at
011-44-207-459-5125.
Yours sincerely,
/s/
Julian Cusack
Julian Cusack
Chief Financial Officer
Aspen
Insurance Holdings Limited
Cc:
Dana Hartz
Lisa
Vanjoske
U.S. Securities and Exchange
Commission
Ian Campbell
David Curtin
Patricia
Roufca
Aspen Insurance Holdings
Limited
Richard Bennison
Robert Lewis
David
Greenfield
KPMG Audit Plc
Michael
Groll
Joseph Ferraro
LeBoeuf, Lamb, Greene &
MacRae