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                     Aspen Insurance Holdings, Limited
                Third Quarter 2005 Earnings Conference Call
                             October 28, 2005
                               8:30 a.m. EST


OPERATOR: Good morning, ladies and gentlemen, and welcome to the Aspen
Insurance Holdings third quarter 2005 financial results conference call. At this time, all
participants have been placed on a listen-only mode, and the floor will be open for
questions following today's presentation.

I'd now like to turn the call over to Mr. Noah Fields, Head of Investor Relations. Please
go ahead, sir.

NOAH FIELDS, HEAD OF INVESTOR RELATIONS, ASPEN INSURANCE
HOLDINGS: Thank you and good morning. The presenters on this morning's call are
Chris O’Kane, Chief Executive Officer of Aspen Insurance Holdings, and Julian Cusack,
Chief Financial Officer of Aspen Insurance Holdings.

Before we get underway, I'd like to make the following remarks. Yesterday afternoon we
issued our press release announcing Aspen's financial results for the quarter ended
September 30, 2005. This press release, as well as corresponding supplementary
financial information, can be found on our Web site at www.aspen.bm.

Now a word about forward-looking statements. This presentation may contain, and
Aspen may make, from time to time written or oral forward-looking statements pursuant
to the safe-harbor provisions of the U.S. Federal Securities laws. Forward-looking
statements include all statements that do not relate solely to historical or current facts and
can be identified by words, such as "expect,” "intend,” "will,” and similar expressions of
a future or forward-looking nature.

All forward-looking statements will have a number of assumptions concerning future
events that are subject to a number of uncertainties and other factors, which could cause
actual results to differ materially from such statements. For more detailed descriptions of
these uncertainties and other factors, please see the risk factors section in Aspen's annual
report on Form 10-K for the year ended December 31, 2004, filed with the SEC and on
our Web site.

Finally, this presentation will contain non-GAAP financial measures, which we believe
are meaningful in evaluating the Company's performance. For a detailed disclosure on
non-GAAP financials, please refer to the supplementary financial data posted on the
Aspen website.


                                             -1-
Now, I'll turn the call over to Chris O’Kane.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS:
Thank you, Noah. Good Morning and welcome to Aspen’s third quarter earnings
conference call.

This year has been an exceptional year for natural catastrophes, with an unprecedented
level of activity in the North Atlantic, following on from 4 land-falling hurricanes in
Florida last year. Hurricane Katrina, the New Orleans Flood, Hurricanes Rita and Wilma
present a number of fundamental challenges for our industry and the magnitude of these
challenges is only gradually emerging.

In this morning’s call I intend to focus on the impact of Hurricanes Katrina and Rita on
Aspen’s third quarter results and capital position. I will also discuss the loss estimates in
relation to Hurricane Katrina the potential consequences of this year’s storm activity on
the insurance and reinsurance industries in general. I will comment on the likely effects
on pricing and market conditions for the remainder of the year and 2006 and the changes
we will be making to Aspen’s property reinsurance business model in response to these
events. Finally, I will comment briefly on the potential impact of Hurricane Wilma on our
results for the year.

On October the 3rd, we revised our estimate of the financial impact of Hurricane Katrina
on Aspen, after the effects of inward and outward reinsurance and net of tax, from
approximately $150 million to between $325 million - $400 million. This equates to
estimated gross losses to Aspen of between approximately $840 million and $925
million. We also stated that our retained losses from Hurricane Rita after recoveries from
our outwards reinsurance program and the impact of outwards and inwards re-instatement
premiums are likely to be between $50 million and $60 million after tax.

Our third quarter results reflect our revised estimate for Hurricane Katrina, having
recognized a charge against net income in the quarter of $360 million, with the balance
expected to affect the fourth quarter results.

On October 11th we announced the completion of the sale of approximately 17.5 million
shares which resulted in aggregate net proceeds to Aspen of about $400 million. We
have since contributed $390 million in capital to Aspen Insurance Limited, our Bermuda
subsidiary, which will be used to support our Bermuda business platform. The pro-forma
net assets of Aspen Insurance Limited after this injection of capital is $790 million.

I would like to give you a little more detail on the break-down of our revised Katrina loss
estimate and clarify the impact of these losses on our outwards reinsurance program.
Approximately 78% of our estimated Katrina losses result from our Property Reinsurance
segment, with energy physical damage, which we report in our Specialty lines segment,
contributing 11% and our Insurance segment, through our property facultative and E&S
accounts, accounting for the balance. We received a number of very tentative new



                                             -2-
indications from brokers suggesting that some major nationwide US cedants’ losses may
exceed their 1 in 100 year or even 1 in 250 year loss return period calculations for US
wind losses. Another way to think about this is that, whereas our original ground-up loss
estimate was consistent with a market loss of $40 billion, the new suggested trend would
lead us to conclude that the market loss would be in the region of $55 billion. To put this
in perspective, our modeling suggests that an insured wind loss of this cost in the USA
has a return period of just over 100 years.

At this level of loss, some elements of our reinsurance protections are exhausted as far as
Hurricane Katrina is concerned, which means that a given deterioration in the gross loss
will generate a much greater proportionate deterioration at the net level.

We do, however, have approximately $40 million of specific cover remaining for our
offshore energy insurance account and around $75 million in relation to our E&S Boston
based operation.

Should our loss from Hurricane Rita deteriorate at a gross level we have approximately
$200 million of additional retrocessional cover available and a further $50 million of
specific cover for energy physical damage insurance losses. For any subsequent loss this
year following Rita, and assuming no deterioration in our current Rita reserves, then we
have approximately $500 million of reinsurance and retrocessional cover remaining.

In addition to our outwards reinsurance program, we entered into a risk transfer contract
in 2004 which can provide further cover of up to $100 million under a fully collateralized
risk transfer swap placed with a non-insurance counterparty. This would provide Aspen
with recoveries if the level of industry losses from Hurricane Katrina as determined by
Property Claims Services 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. Our revised Katrina loss estimates do not include any recoveries under this cat
swap contract.

Turning now to market conditions and the impact of this year’s events on pricing and
terms and conditions I shall address each of our four business segments in turn.

Starting with our property reinsurance division, overall rates in 2005 have held up much
better than we initially expected. The remainder of 2005 will likely be an adjustment
period as insurers and reinsurers begin to take stock and assess the broader implications
of Katrina and the level of this year’s storm activity. We therefore do not expect that the
full impact of the post-Katrina market will be felt until the beginning of 2006, when we
expect a meaningful reduction in capacity, dramatic increases in rates and major changes
to policy terms and conditions. We have already seen some evidence of reduced capacity
with some carriers offering significantly smaller lines or non-renewing certain contracts.

Turning back to market conditions, we are expecting rate increases on US catastrophe
exposed business, in particular loss affected lines, to be very significant, in certain cases
we believe there will be increases in excess of 100%. Higher deductibles and a reduction



                                             -3-
in the availability of natural hazard cover are also likely to be a feature. We expect to
see modest rate increases elsewhere for property reinsurance with higher increases on
certain European business following the European Storms during the summer. In Mexico
we expect to see rate increases averaging 100% following the effects of Hurricane Wilma
in the Yucatan whilst elsewhere in Latin American prices are expected to rise by 50% for
the same reason.

In our Specialty Lines segment, we expect the effect on rates in energy physical damage
insurance to be equally far reaching. With industry losses from Hurricanes Katrina and
Rita for this line estimated to be in the region of $3 to $5 billion each, and following on
from Hurricane Ivan in 2004, we are expecting higher deductibles and very modest sub-
limits for windstorm on Gulf of Mexico exposed business. We expect rate increases in
excess of 125% for certain loss impacted insureds. There will also be a lesser level of
rate rises for non Gulf of Mexico exposed energy physical damage business. We
anticipate a reduction in capacity and significant restrictions in coverage terms offered for
business interruption and contingent business interruption insurance.

In marine liability and marine hull, we are expecting price increases to be less significant
but still up to 25% in certain areas. In our aviation insurance business, we expect modest
declines in prices for the remainder of this year, with rates leveling out at the beginning
of 2006 and modest increases thereafter.

Moving to our Insurance segment, the outlook is more mixed. We expect rates in our UK
Commercial Property account to stabilize and continued modest declines in UK Liability,
albeit it at a slowing pace.

Regarding our Boston based excess and surplus lines operation, we expect rates in our
casualty account to continue to decline for the remainder of 2005 and at a slower rate in
2006. On the property side, Gulf exposed wind rates are beginning to move towards the
levels seen for Florida exposed business prior to this year’s hurricanes, and we expect
further upwards momentum as we move into 2006. On our Florida book, we have seen
rates harden in 2005 already and this trend is likely to continue into 2006.

Finally, turning to Casualty Reinsurance, both our US and International accounts are
likely to be largely unaffected by the hurricane activity this year. On the International
side we expect rates to continue to decline slowly for the remainder of this year and into
2006. On our US book, prices for workers compensation are likely to continue to fall
slightly for the remainder of this year and into next. However, we are continuing to see
rate increases in medical malpractice, which we expect to peak towards the end of 2006.

On that note, I will hand you over to Julian for a more detailed review of the third quarter
financial results.

JULIAN CUSACK,           CHIEF      FINANCIAL       OFFICER,       ASPEN      INSURANCE
HOLDINGS:




                                             -4-
Thank you, Chris. The results of the third quarter 2005 are dominated by the effects of
Hurricanes Katrina and Rita. Our combined ratio for the quarter was 207% and our
combined ratio for the nine months to September 30th was 121%.

Diluted book value per share was $17.53 at September 30 compared to $22.17 at June 30,
2005 reflecting the severe loss in the quarter, and shareholders’ equity fell to $1.22
billion. Subsequent to the quarter’s end the Company raised approximately $400 million
through a block trade. Our pro forma shareholders equity taking into account the new
shares increases to $1.62 billion and our pro-forma diluted book value per share to
$18.59.

As at September 30, 2005 the total cost before tax for these two hurricanes reflected in
the financial statements was some $454 million. There will be a further charge, primarily
arising in the fourth quarter of 2005, of some $46 million in relation to the reinstatement
premiums that have to be recognized in accordance with their period of cover. The total
cost of the two hurricanes to the Company is within the range set out in our press release
of October 3rd, with the amount booked, net of tax as at September 30, 2005, being $360
million for Katrina and $46 million for Rita.

Within our earnings release supplement we have shown for each segment the results for
the quarter and the nine months to date, the impact of the hurricanes on the results for the
quarter and for the nine months, by that we mean the impact of hurricanes Katrina and
Rita, and we have shown what the claims, expense and combined ratios would have been
excluding these two events. We have also provided the analysis of the corresponding
periods in 2004 showing the impact of last year’s storms losses and the claims, expense
and combined ratios excluding those events. This is provided to assist in the
understanding of the underlying results.

I will now give some background to the process we have adopted in establishing our loss
estimates for Hurricanes Katrina and Rita. The scale of the disaster following these
hurricanes has been unprecedented for the people of the region. It has also led to
exceptional difficulties in assessing the expected losses to Aspen’s clients and in
producing an overall loss assessment for the Company. By far the most difficult segment
to assess has been the property reinsurance segment, and in particular, within this our
catastrophe excess of loss account. In establishing an estimate for this account we have
made an assessment on a client by client basis of the expected losses to each layer of their
reinsurance program that we participate on. In making this assessment we have taken
into account all available information, including information from brokers and where
possible directly from clients, the application of Aspen’s catastrophe modeling systems,
market intelligence and initial tentative loss reports. However, much of this information
can best be described as very preliminary, as to date we have still seen relatively few
formal loss advices. This area continues to pose the most uncertainty in our overall
estimate.

I will now turn to our underwriting results on a segmental basis. The combined ratio for
the property reinsurance segment in the quarter was 441% mainly driven by Katrina and



                                            -5-
Rita. Excluding these hurricanes, the combined ratio was a disappointing 91%. This is
higher than in previous quarters for this segment reflecting that there have been a number
of other, albeit smaller, events in the period that have given rise to losses. These include
losses in the quarter from Hurricane Dennis of $8 million, the European and Indian floods
of $4 million and a fire loss at a school in the US of $4 million. Taken together, these
losses amount to some 13% on the property reinsurance combined ratio for the quarter.
In addition, we have also observed an increase in attritional loss activity in our risk
excess account and have taken the appropriate reserving action in the current quarter.

The Casualty Reinsurance segment has not been materially affected by the hurricanes in
the quarter. There has been a small reduction in the loss ratio which relates to continuing
favorable development on the business written in 2002 in our international casualty
account. The losses on this account take a long time to be notified and to develop, but we
are now seeing favorable trends that have enabled us to make a small reduction in the
held reserves for 2002. Casualty reinsurance loss reserves at the end of the quarter have
risen to over $600 million.

The Specialty Lines segment has a combined ratio for the quarter of 129%. This segment
includes both a direct energy account and a marine reinsurance account which together
have suffered net losses of $24 million from the hurricanes Katrina and Rita.

Excluding the impact of these hurricanes, the loss ratio for the period is 65.9% compared
to 29% in the previous quarter. The primary driver for this increase is the loss experience
of our aviation insurance unit following a quarter with a high frequency of aviation
losses. In the quarter, we suffered losses on the Helios Airways and the West Caribbean
Airlines crashes and a claim from Air India arising from the floods in that country. These
amounted to $14 million in total.

The property and casualty insurance segment has a combined ratio of 114% in the
quarter. Within this account are our worldwide property account and our US excess and
surplus lines account written out of our Boston office. These accounts have both suffered
losses from Hurricanes Katrina and Rita, contributing 43.8% to the combined ratio.
Excluding the effect of the two hurricanes the segment would have produced a favorable
combined ratio of 70.6%.

Net investment income in the quarter of $29.4 million was 51% higher than the third
quarter of 2004 due to both rising portfolio book yield from favorable movements in
interest rates and positive cash flow. Cash and invested assets increased by 41%
compared to the corresponding period last year. The invested portfolio yield to maturity
at the end of the quarter was 4.34%. During the quarter the invested portfolio book yield
increased by 16 basis points from 3.68% to 3.84%. The duration of our invested portfolio
at September 30, 2005 was 2.72 years versus 2.40 years as of June 30th, 2005.

At September 30, 2005, our gross reserves for losses and loss adjustment expenses were
approximately $2.75 billion, of which 75% represented estimates for losses incurred but




                                            -6-
not reported. This is up from the 58% at June 30, 2005 mainly as a result of the third
quarter hurricanes.

Reinsurance recoverables have increased significantly to around $893 million at
September 30, 2005 from $198 million at the end of last calendar year. This increase is
driven by the reinsurance recoveries in relation to the hurricane events. We have
presented an analysis of this amount by both AM Best and S&P current ratings in our
financial supplement. In addition I can tell you that approximately 57% of the balance is
due from four companies, being GE, Montpelier, National Indemnity and MunichRe with
a further 10% being fully collateralized.

I would like to now turn to guidance for the remainder of 2005 in respect of investment
income and combined ratio. We have previously projected investment income for the
year in the range of $110 million to $125 million. Based on our current book yield of
3.84% and taking into account the $400 million we raised earlier in the month, I now
expect the outcome for the year to be towards the upper end of that range.

Our combined ratio for the year-to-date excluding the charges for Katrina and Rita in the
third quarter is 82%, which is in-line with our earlier guidance that we would be in the
lower end of our 80% to 90% range which excludes major losses. But due to the
expected charges for additional reinstatement premiums in the fourth quarter arising from
the hurricanes, we now expect the combined ratio for the year, excluding the third quarter
hurricane charges, to be towards the upper end of the range. That is in the range of 85%
to 90%.

I would now like to turn the call back to Chris.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS
Thank you Julian. I would now like to take the relatively unusual step of sharing with
you some of our internal thinking about the challenges and opportunities facing us as we
survey the insurance and reinsurance markets in late October 2005. As last weekend’s
Hurricane Wilma reminded us, this continues to be an active hurricane season and it
seems to us that most of the underlying causes of hurricane formation will continue to be
with us for another 4 to 6 weeks. This represents a very late end to the traditional
hurricane season. It is too early to offer any reliable guidance on the market impact of
hurricane Wilma. Early indications are that on the US mainland Wilma will produce
losses comparable to last year’s Hurricane Charley, but the really dramatic impact has
occurred in an area where Aspen has very little exposure indeed, namely the Yucatan
Peninsula of Mexico. It appears to us that more or less all catastrophe programs in
Mexico will sustain total losses as will all of the event limits on the Mexican proportional
treaties. This represents up to $4 billion of insured loss in Mexico which is an
extraordinary large number when you think about the size of the Mexican economy. We
also expect more than 90% of this $4 billion figure will be reinsured, so this actually is a
major loss for certain international reinsurers.




                                             -7-
The 2004 and 2005 hurricane seasons have caused all thoughtful observers of and
participants in the reinsurance industry to question some of the fundamental assumptions
concerning three issues: first, the total amount of insurable value exposed to cat risk, this
is a function essentially of more people and more buildings on the coast of America. This
is growing much more rapidly than other aspects of the US economy; second, the
frequency and severity of hurricane activity; and thirdly, the reliability of catastrophe
pricing and accumulation models currently in use.

There is a widespread view that the so-called cat models are defective and need to be
overhauled, replaced or even abandoned all together. In our view some of these concerns
are overstated. One of the biggest problems we see in the market place is unsophisticated
use of the catastrophe models. I have often remarked that if you want to participate in the
cat business and you don’t use a cat model then you have a problem. On the other hand if
all you have is a cat model then you have an even bigger problem and in our view there
can sometimes be an over reliance on “black box techniques” to solve complex issues
which the model designers have not yet addressed or offer only very imperfect solutions
for. Within Aspen, we constantly remind our underwriters to price for non-model perils
such as winter weather or inadequately modelled perils such as brush fire or fire
following earthquake.

Another problem in the use of models stems from inputting out of date or inaccurate
exposure data – you’re not going to price next year’s exposure correctly if you just use
last year’s data.

Having said that, we do see significant defects in the approaches to catastrophe modelling
used up until now. In early summer this year we began commissioning research to help
us gain a better understanding of the apparent upturn in hurricane frequency and severity
in the recent past. We believe that we have now succeeded in recalibrating our model to
reflect this change while the standard models continue to base annual loss expectancy
assumptions on the long term average. We have also addressed the surprisingly complex
phenomenon known as demand surge and we believe that we have now established a
better correlation between the degree of demand surge and the size of the loss. I am not
going to bore you with an exhaustive list but another key issue revisited has been the
different and more dangerous damage characteristics of commercial versus residential
structures.

We believe that these insights and initiatives will give Aspen significant competitive
advantage in the months and years ahead. Put simply, we expect to be able to achieve
significantly better price adequacy, superior risk selection and a lesser downside risk – in
short, a more profitable portfolio with reduced volatility. And this volatility question is
one of increasing importance as rating agencies appear inclined to require increased
amounts of capital to cover these risks. One of the primary drivers of the capital
requirements is volatility and by reducing our risk tolerances, which we are doing, and
continuing to develop our non-correlated risks in the context of our diversified
underwriting model we believe that we offer both clients and our investors an
increasingly attractive vehicle.



                                             -8-
I would also like to share my thoughts with you on the offshore energy physical damage
line of business. Aspen has a highly respected team of underwriters in this line and we
are experiencing increased demand for our product, and a willingness to pay price
increases sometimes greater than double and very significant reduction in exposure to
natural hazard. In this context I believe Aspen can approach the coming renewal season
with well placed confidence.

Now in the market place there is considerable speculation that the current upturn in
property rates resulting from recent hurricanes will be short-lived, perhaps only one or
two years. Well this may be right, but I have to tell you that if this is true, then the
industry will be ignoring some important fundamentals. If our analysis is correct, then
we are facing a long term if not permanent change in catastrophe loss expectancies and
this will require a permanent solution.

We are now   ready to open the line for questions.

OPERATOR

Thank you. [OPERATOR INSTRUCTIONS] Your first question comes from Charles
Gates with CSFB.

CHARLES GATES - CREDIT SUISSE FIRST BOSTON

What is the appropriate tax rate that we should apply against the losses resulting from the
two large storms?

JULIAN CUSACK,            CHIEF     FINANCIAL        OFFICER,    ASPEN      INSURANCE
HOLDINGS

Yes. Charles that would be about 10% on a marginal tax basis.

CHARLES GATES - CREDIT SUISSE FIRST BOSTON

And that would be true for both of them.

JULIAN CUSACK,            CHIEF     FINANCIAL        OFFICER,    ASPEN      INSURANCE
HOLDINGS

Yes.

CHARLES GATES - CREDIT SUISSE FIRST BOSTON

Okay.




                                             -9-
JULIAN CUSACK,            CHIEF     FINANCIAL         OFFICER,      ASPEN      INSURANCE
HOLDINGS

The figures I quoted in the text were net of tax when I gave them for the individual
hurricanes.

CHARLES GATES - CREDIT SUISSE FIRST BOSTON

My second question -- I realize Chris spoke to this to some extent but with regard to this
change in regime on the part of A.M. Best with regard to the rating of companies
seemingly in your industry. If you were to go back to say 1/1/05, what would that imply
as far as additional capital that might be required?

JULIAN CUSACK,            CHIEF     FINANCIAL         OFFICER,      ASPEN      INSURANCE
HOLDINGS

I don’t think that we can quantify that at the moment. The thoughts of the rating agencies
and A.M. Best in particular on the implications for capitalization are still emerging and I
still think we don’t know enough about it yet to be able to put a number on that.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Charlie, I’d add to that, that obviously we have been having some conversations and will
in the next couple of weeks have more detailed conversations with the rating agencies.
Our approach is going to put prices up for these property cat exposed risks, but also in an
absolute sense to reduce our exposure. And I think one of the things that concerns rating
agencies is this volatility, we’re going to be saying there is less volatility. I think the new
regime, as you called it, holds perhaps unequally, I could be wrong here, but my
expectation is implications are greater from mono line versus diversified plans. And as
you know very well, Aspen has always endeavored to write a diversified account. I
expect that that diversification trends away from property exposures is going to continue
next year.

CHARLES GATES - CREDIT SUISSE FIRST BOSTON

What is the status of the ILW?

JULIAN CUSACK,            CHIEF     FINANCIAL         OFFICER,      ASPEN      INSURANCE
HOLDINGS

I think, Charlie, you’re referring to our cat swap and the current status of that is the
current PCS estimated loss is less then the trigger point on the contracts and therefore we
are not taking any credit for it.

CHARLES GATES - CREDIT SUISSE FIRST BOSTON




                                             -10-
So if it reaches $39 billion, I guess it’s now $34.6, then at that point you can take in a
portion of that?

JULIAN CUSACK,           CHIEF      FINANCIAL       OFFICER,      ASPEN      INSURANCE
HOLDINGS

That is correct. If and when that happens, then we would be able to begin to recognize it
and would be required to recognize that as a fair value of the contract.

CHARLES GATES - CREDIT SUISSE FIRST BOSTON

I’ll let others ask a question. Thank you guys.

OPERATOR

Thank you. Our next question is coming from Dan Johnson with Citadel Investment
Group. Please go ahead.

DAN JOHNSON - CITADEL INVESTMENT GROUP

Thank you very much. I have a few questions please. You said you’ve made some
changes to your – the way you’re utilizing your cat model, can you go into a little more
specifics in terms of what variables and factors you’ve changed? And then can you talk a
little more about the reinstatement premiums to be recorded in the fourth quarter? Seems
that most everyone else has booked both inward and outward in the third quarter and just
wondering what the difference for you might be? Thanks.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Okay Dan. This is Chris, and I’ll deal with the first question. I’ll hand over to Julian for
the second one. Think about the model in terms of addressing hazard as the number of
hurricanes, how big the hurricanes are, whether the hurricanes go to different places,
maybe more northerly latitudes where the building standards are weaker, and that’s where
they’re going to cause more destruction, and whether there’s a cluster theory of
hurricanes. It used to be assumed that hurricanes were independent. I think increasingly
there is a body of scientific thought that says, once you get one, there’s an underlying
cause, which is warm weather, so you might have more. So on this hazard aside, we have
made some assumptions about increased severity. And our working assumptions and
we’re working with some external scientific consultants here, but at the moment, with the
Gulf of Mexico we’re suggesting to expect 20% more frequency, for Florida 25% more
frequency and for the East Coast 43% more frequency.

Now you need to think about severity. Not just more often, but that they can be bigger.
Now I think there’s less concern of that then of the frequency. And our current working
assumption, also capable of being reviewed before we start pricing next year’s business,
is for on average 7.5% more severity.



                                            -11-
Now I’m going to turn to the next thing. Not the hazard, but the vulnerability side. That’s
given a hurricane, how much damage will it do? There are a couple of things that are
going on there, this phenomenon called ‘demand surge’, that’s the increased price of the
cost of goods and services that occurs after a hurricane. And when the models were built,
demand surge was calibrated around North Ridge and around Hurricane Andrew, that’s
’92 and 1994, so it’s out of date data. Now we always assume that, let’s take an economy
like New Zealand, which is a long way from anywhere. We’ve always assumed that if
there was a serious earthquake affecting New Zealand because everything needs to be
shipped in from abroad and very little can be produced internally that demand surge
would be absolutely huge. But there’s been a tendency given the size of the U.S.
economy, to assume that for normal cat losses, that increased cost of business services
will be relatively modest. I would say relatively modest might be up to 20%. What we’re
actually seeing with the four hurricanes in Florida last year, which is about $30 billion,
was that the demand surge impact was much bigger. And what I think we have the chance
to do following really 2005 and 2004 experience is to start looking at correlation between
the size of the loss and the demand surge following. A cat one hurricane may be costing
$2 or $3 billion and may have almost no demand surge implications at all. While in an
event like Katrina, which is probably $50 to $60 billion of insured loss. Here the demand
surge could be 30%, 40%, even more. We’re getting increasing amounts of good
empirical data to help us recalibrate that.

Those are the two key things to think about. No, I think there’s one more to say, which is
on the commercial risk side, as opposed to the residential risk side. The model is weaker
and we’re making some corrections. So under the two headings of hazard and
vulnerability we make a series of corrections, which implies more loss potential and we
price accordingly.

And with that, I’m going to hand you over to Julian, for the other part of your question.

JULIAN CUSACK,           CHIEF     FINANCIAL        OFFICER,      ASPEN      INSURANCE
HOLDINGS

Okay. The treatment of reinstatement premiums is quite a complex subject. But the
essence of it is that what we do on the charge arising on our outwards program, is to earn
or charge the reinstatement premium from the date of loss to the date of expiry of the
original contract. On the basis that the economic purpose of the reinstatement is to secure
the limits available on a second or subsequent loss depending on the terms of the
contract. And we adopt a similar approach on inwards reinstatements, which again are
earned from the date of loss to the expiry of the relevant inwards contract. This does
mean that although a substantial amount of the charge for additional reinstatement
premiums and including the acceleration of the first loss premium to the date of loss
occurs in the third quarter there will be some that will still be earning through to the
fourth quarter, most of these expire by the end of the year.

DAN JOHNSON - CITADEL INVESTMENT GROUP



                                            -12-
So you’ll have both additional inward and outward in the fourth quarter?

JULIAN CUSACK,            CHIEF     FINANCIAL        OFFICER,      ASPEN       INSURANCE
HOLDINGS

The figure I quoted was the net of those two.

DAN JOHNSON - CITADEL INVESTMENT GROUP

Ah, great. Now the last question is, in terms of your own reinsurance or retrocession
purchases, do you have a thought about how you will respond to the market environment
in changing the structure, size, limits, etc.? In general.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

As you can imagine we’ve had a lot of conversations with our existing reinsurers and
retrocessionaires and with our reinsurance brokers in the last month or two. A lot of our
cover is concentrated with four players, who I think are very, very strong players, some
of the strongest in the world. Preliminary conversations with them suggest that they want
to go forward on a more or less unchanged basis. I think they want to attach a bit higher
and they probably want some more money from us to recognize more hazard and maybe
some kind of the depth of the position of the contracts, but they’re there. Our working
assumption is that there will be less retro available and it will cost a bit more. And our job
then is to really judge the cost of retrocession, which is effectively a form of contingent
capital against the cost of other forms of capital. And to buy less or more depending on
price of retro versus the price of the incoming reinsurance. I think that’s the core
expertise for this company and I feel fairly confident that we will be going forward next
year with a broadly similar approach to those issues.

OPERATOR

Thank you. Our next question is coming from Alain Karaoglan from Deutsche Bank.
Please go ahead.

ALAIN KARAOGLAN - DEUTSCHE BANK

Morning Chris and Julian. Julian, could you repeat the after tax numbers from Katrina
and Rita? I didn’t catch them when you first mentioned them.

JULIAN CUSACK,            CHIEF     FINANCIAL        OFFICER,      ASPEN       INSURANCE
HOLDINGS

Yes. Certainly I will. $360 million for Katrina and the figure for Rita is $46 million.

ALAIN KARAOGLAN - DEUTSCHE BANK



                                             -13-
Okay. And the other question that I have relates to the significant growth in property
reinsurance premium in the third quarter of this year. Could you speak to that and what
does it mean for you going forward and what does it mean for your exposure to Wilma,
even though Wilma may be as big as Charley, relatively speaking, should you have more
losses from it because you wrote more property reinsurance?

JULIAN CUSACK,           CHIEF     FINANCIAL        OFFICER,      ASPEN      INSURANCE
HOLDINGS

Okay. Well $74 million of the additional GWP in the property reinsurance segment in the
quarter is directly related to the Katrina and Rita claims inwards reinstatement premiums
and other premium adjustments related to the losses. The underlying increase is not as
large as it appears.

ALAIN KARAOGLAN - DEUTSCHE BANK

But am I correct that at the beginning of the third quarter you had thought that the
property business was becoming more attractive and were willing to write more?

JULIAN CUSACK,           CHIEF     FINANCIAL        OFFICER,      ASPEN      INSURANCE
HOLDINGS

What we thought and still do think is that the rate environment even before the third
quarter storm as far as property reinsurance was more attractive then we had thought in
front of our original business planning. Rates were falling much more modestly than we
had thought and therefore we have seen opportunities for new business or retained higher
shares then we might otherwise had done in other circumstances. Chris might be able to
add something to this...

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Yes Alain, I do need to add it’s just too early to be quoting loss estimates for Wilma. But
one of the things that happened in Florida this year was that the Florida Hurricane
Catastrophe Fund is providing a bigger limit of cover and is attaching in a different place.
Most of our exposures are in excess of that, so if you compare this year with last year in
Florida, I would anticipate more of the loss falling to the primary retentions and to the
FHCF, as opposed to the reinsurance market in general. That’s one important
phenomenon and I’m not going to put numbers on it this morning. I think the other thing
is, this will now be the third cat of this year. And the way our reinsurance programs work
is that according to the number of losses that there are in a year they can attach rather
lower down. We buy lower for subsequent losses then we do for first loss. I would also
expect the gross to net to shift, meaning that even if Wilma on a gross basis were
comparable to Charlie, which is not a statement I can make, I’d expect the net to be much
less then was the case with Charlie. Because Charlie was the first loss last year.




                                            -14-
ALAIN KARAOGLAN - DEUTSCHE BANK

Chris, could you speak to the results of the new teams that you’ve hired and how they’ve
performed and how has the business performed relative to your expectations?

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

I think you’re talking about aviation and Marine teams?

ALAIN KARAOGLAN - DEUTSCHE BANK

Marine and energy, yes.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Yes. Okay. Well, let me take aviation first. A tremendous amount of that business renews
in October. So they’re really only getting going now. The amount of premium written is
quite small. The amount of earned premium is even smaller, so I’m not sure what we
have is really indicative of the future performance. There have, as you know, been a
tremendous number of minor aviation losses in recent months, in places like Indonesia.
We’ve had some small losses on those. I think the combined ratio looking at aviation
earned premium to date as result of those losses is over 100%. But not, I think sort of,
worrying me and concerning me over that, I think we just need to wait for the earned
premium to build and we’ll get a better read on that. Essentially I think they’re doing the
job they came to do and I’m pretty happy with the aviation team’s performance.

On the Marine side, it’s good to make a distinction between the marine hull and the
marine liability versus the Marine energy. And the marine energy has obviously been
affected by Rita and by Katrina and we came into the business, if you remember, after
Ivan last year in the face those increasing rates. Rate increases may be in the order of
20%, 25%, 30%. There was a fair amount of natural hazards cover out there, so the
performance there is not good as the consequences of those two hurricanes. We do buy
reinsurance. It keeps our net loss per event to about $10 million and our gross losses in
both of those storms on the marine-energy account of the order of $40 to $50 million
currently reserved. The net is perhaps the more important number to work with. What I
think about that business is that we still are in the right place at the right time. We expect
rates to double in the Gulf of Mexico. And we expect the amount of natural hazard cover,
which has been driving the losses to reduce typically $100 million per rig, maybe $50
million per rig. And I do not mean that is what Aspen’s providing, I mean that is what the
whole market provides per rig. And then Aspen might take a 5%, 10%, 15% share of it.
So I think that the thing that has been causing the problem is largely going to be sub-
limited or excluded, but price is going to go up along with it. I am pretty bullish as you
can tell on the Marine energy. In fact I would probably say I am more bullish about that
line than any other line of business in the P&C world today.




                                             -15-
Finally marine hull is performing very well indeed, exactly according to plan. Marine
liability is performing fairly well. We did have a loss earlier in the year called Kinder
Morgan, which on that same phenomena when you have a loss, is very modest earned
premium and it can kind of distort the true picture. I think that if we look at that year in
total we look forward I do not have any cause for concern there.

ALAIN KARAOGLAN - DEUTSCHE BANK

And then the last question relates to the shelf that you just filed. Can you tell us if you
filed this with any expectations or just to replenish and have a shelf ready?

JULIAN CUSACK,           CHIEF      FINANCIAL        OFFICER,      ASPEN      INSURANCE
HOLDINGS

I would describe the filing the shelf as a house keeping measure. We had drawn on the
original shelf for the equity issuance we did earlier this month and we wanted to make
sure that should it become appropriate at sometime in the future to raise additional capital
that we would not be held up from a process point of view.

OPERATOR

Thank you and our next question is coming from Charles Gates of CSFB.

CHARLES GATES - CREDIT SUISSE FIRST BOSTON

My first question, I thought Chris, in your prepared remarks, you made reference to a
$500 million outward reinsurance program in the fourth quarter. What was that? Could
you elaborate on it?

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Our reinsurance program is mostly purchased on the 1st of January and it is for 12
months and we buy with most of the covers with one reinstatement and then we also buy
some covers that only come in for the second loss of the year or maybe the second or
third loss of the year, and then some covers that might require two previous losses. Now
if we look at the cover we have used, which was essentially Katrina and Rita there is
quite a lot of cover left. So that number of $500 million represents what our reinsurance
recovery could be if there were another big cat this year. To put it very simply, we have a
lot of un-impaired reinsurance covers continuing to protect our balance sheet against any
further big event that could happen in the next couple of months.

CHARLES GATES - CREDIT SUISSE FIRST BOSTON

So all other things being equal is that protection in effect specific to Wilma?

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS



                                            -16-
Yes, I guess it is. I mean, I do not think that Wilma is going to need that sort of size of
limit, I would be very surprised if it did. In theory, yes it is there for Wilma.

CHARLES GATES - CREDIT SUISSE FIRST BOSTON

 The only other question I have, some companies, I am looking at the page in the IPC Re
10K that basically shows their breakdown of business, number of contracts in percentage
of sales by geographic zone. Is the closest thing that you can always provide page number
8 on 10K that basically shows the breakdown of sales by country, Australia, Asia,
Caribbean, whatever?

JULIAN CUSACK,           CHIEF     FINANCIAL        OFFICER,      ASPEN      INSURANCE
HOLDINGS

Yes, that is the geographical exposure that we make in our 10K.

CHARLES GATES - CREDIT SUISSE FIRST BOSTON

But you have not elected to go the same route with regard to zonal exposures?

JULIAN CUSACK,           CHIEF     FINANCIAL        OFFICER,      ASPEN      INSURANCE
HOLDINGS

No we have not shown, in our publications to-date shown geographic exposures.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Charlie I would just say that we are not sort of holding anything back there. I think if you
find it useful we will take a look for future quarters in making that type of disclosure. In
general, I would say that we have tended to focus our underwriting on the areas that offer
the best prices relative to what we think the risk exposure is. And in our case, we tend to
believe that, that is California earthquake, US hurricanes, to some extent European storm,
and Japanese wind and quake. So our exposure, our sales as you put it in those areas, tend
to be relatively large. And in some of those smaller territories, like Southeast Asia,
Africa, South America, our view of pricing there is that of being rather inadequate. We
tend to write very little business there. One of the reasons I mentioned the impact of
Wilma in Mexico is I think that is about to change. I think that there is every chance that
Latin American business in 2006 is going to become a write-able proposition for us and
so you will see potentially a change in the pattern there.

OPERATOR

Thank you our next question is coming from Kevin Shield with Philadelphia Financial.
Please go ahead.




                                            -17-
KEVIN SHIELDS - PHILADELPHIA FINANCIAL

Good morning. Could you quickly characterize what percent of Katrina property
reinsurance losses are subject to potential revision upwards and what percent is capped
out or maxed out at this point? And in Katrina energy losses, maybe give us a sense of
what percent is physical damage as opposed to business interruption.

JULIAN CUSACK,           CHIEF      FINANCIAL       OFFICER,       ASPEN      INSURANCE
HOLDINGS

I think that on the property reinsurance side, on the catastrophe excess of loss program, I
can’t give you percentages, but there are a number of programs where we have already
reserved the maximum. There are others where, we have not done so because we’ve
taken the view that that are not exposed all the way up. On the energy accounts, the
offshore energy insurance account, our net loss is effectively contained with significant
headroom within our specific marine outwards reinsurance program.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Just to amplify that, Kevin if it helps, we do not write very many local companies. I do
not think that we had a single Louisiana company for example as a reinsurance client. If
we did have those local Louisiana companies I think that you could assume the whole
program is gone. But most of our exposure is from the nation wide writers. Therefore, we
need to look at their market share by zone. If we go to a company, and we do as many for
example who are California based and maybe have one or two policies in the Gulf, or
Northeast based, then it does not make sense to presume that all of our limits are going to
be subject to this loss – they won’t be. So I am often asked that question. I can understand
why it is the thing to know. But I think the answer tells you a lot less than you really want
to know. You really need to relate it to exposures in the relative zone. In which case most
of the limits are indeed reserved now.

KEVIN SHIELDS - PHILADELPHIA FINANCIAL

That is helpful. Could you also restate the Aspen’s exposure to the Yucatan loss
situation?

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Because we have regarded prices in Latin America as being really quite inadequate, we
wrote very, very few specific contracts in Mexico itself. That has just not been our game.
However, there are a couple of worldwide or worldwide ex-USA contracts of multi-
national writers that could pick up shares in some of those US-owned hotel chains. Early
impressions are this is not a big deal for us. That the losses will not be big enough to get
into the worldwide programs in general. But that would be our area of vulnerability if
there is one. To be frank, I am talking about Mexico because I think it is a huge loss for a




                                            -18-
small economy and I think it as an opportunity going forward. I am not talking about it
because I think I have got a big loss there. I really do not think that is true.

KEVIN SHIELDS - PHILADELPHIA FINANCIALS

Thank you, that is helpful.

Operator

Thank you, our next question is coming from Bob Sales with LMK Capital Management.
Please go ahead sir.

BOB SALES - LMK CAPITAL MANAGEMENT

Hi, a couple questions. Could you just quantify one more time the net reinstatement
charge for Q4?

JULIAN CUSACK,           CHIEF    FINANCIAL         OFFICER,   ASPEN     INSURANCE
HOLDINGS

Yes, we expect that to be around $46 million.

BOB SALES - LMK CAPITAL MANAGEMENT

An expense?

JULIAN CUSACK,           CHIEF    FINANCIAL         OFFICER,   ASPEN     INSURANCE
HOLDINGS

As an expense, yes.

BOB SALES - LMK CAPITAL MANAGEMENT

And what was the inward and outward gross figures, if you do not mind?

JULIAN CUSACK,           CHIEF    FINANCIAL         OFFICER,   ASPEN     INSURANCE
HOLDINGS

I can ask my colleague Ian Campbell to answer that question.

BOB SALES - LMK CAPITAL MANAGEMENT

Yes, while you are looking that up, let me just…

IAN CAMPBELL,           GROUP     FINANCE          DIRECTOR,   ASPEN     INSURANCE
HOLDINGS



                                          -19-
Outwards reinstatement premiums are at approximately $120 million and our inwards
reinstatement premiums in total are about $60 million.

BOB SALES - LMK CAPITAL MANAGEMENT

Okay. Last year you quantified Charley, Francis, Ivan, and Jeanne of a $135 million.
What specifically, how much was Charley last year? Do you have that?

JULIAN CUSACK,            CHIEF      FINANCIAL        OFFICER,       ASPEN      INSURANCE
HOLDINGS

I am sorry, we do not have that figure with us, but we can get it to you after the call.

BOB SALES - LMK CAPITAL MANAGEMENT

By what you offered so far, if Rita was the same loss amount as Charley, given your
higher attachment points, are you suggesting that your loss for, excuse me, I mean
Wilma, loss for Wilma would then likely turn out to be less than your loss for Charley?

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Yes, I think that is right. Essentially what we are saying is that this stage in the year, after
this loss frequency, we have reinsurance attaching lower than before, so I would say that
the net loss in Wilma is likely to be less than the net loss in Charley. But I do not want to
go too far on this Bob, because nobody knows exactly what the Wilma loss is. But,
certainly there is an awful lot more reinsurance available in Aspen’s programs and you’ve
got the Florida hurricane catastrophe fund reducing the loss to the private enterprise
insurance market in any case in the US.

BOB SALES - LMK CAPITAL MANAGEMENT

And can you just help us understand because there have been some other calls where it
has not been clear to the company exactly how the Florida fund, when it kicks in, and the
impact under individual exposure. Can you explain how that will impact your exposure in
Florida with Wilma?

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Yes. Last year, the Hurricane Fund in Florida, provided $4 billion of limit, I am sorry; it
provided $15 billion excess of $4 billion last year.

JAMES FEW,          CHIEF      UNDERWRITING           OFFICER,       ASPEN      INSURANCE
HOLDINGS




                                              -20-
Last year the scheme provided 90% of $15 billion, excess of $4 billion…excess of 4 and
a ½ billion. The scheme this year attaches down at $4 billion, so therefore there is ½ a
billion of reinsurance availability therefore covered by the FHCF instead of in the private
market.

BOB SALES - LMK CAPITAL MANAGEMENT

Was Charley the biggest hit last year of the four hurricanes, Charley, Frances, Ivan, and
Jeanne? I am just trying to get a comp here, and I am not trying to pencil this in too
precisely but I, you know where I am going in terms of understanding what the Charley
loss was.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

I think the biggest event last year was actually Ivan, but I think a lot of the Ivan losses
were off shore. For us, I think Charley was the biggest hit. But for the market, I think it
was Ivan.

BOB SALES - LMK CAPITAL MANAGEMENT

Oh no, I meant for you.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Yes, Charley was the biggest.

BOB SALES - LMK CAPITAL MANAGEMENT

Yes. And then…

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

That was partly a function of the size of the gross Charley lost and it was partly because it
was the first loss of the year and so those reinsurance’s that attach for, second or third
losses of the year obviously did not operate, so it is complicated.

BOB SALES - LMK CAPITAL MANAGEMENT

When I look at your estimate for Rita, $50 to $60 million, and I think about that in terms
of the four hurricanes that came ashore last year, and I realize, and where Rita came
ashore, help me to understand why your losses on Rita at $50 to $60 million appear at
first glance to me to be higher than what you would have realized with the individual
hurricanes that hit in ‘04.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS




                                            -21-
Well, I think the difference between this year and last year is last year we had not started
writing offshore energy. So although there was a big offshore energy loss, we had a very
tiny part of it. Then we started writing that business earlier this year and so a lot of our
loss in Rita this year comes from the offshore energy. So, if you were just thinking about
property reinsurance, I think you would get a different picture and I think you get the
picture that you would sort of expect i.e. Rita is quite a small on-shore loss, and so the
on-shore bit of Rita is going to be less than the on-shore bit of Charley last year.

BOB SALES - LMK CAPITAL MANAGEMENT

Yes. Help us with your capital structure. What, I know I have it in front of me, but I will
just, I will use your figure for now, what was the debt to capital ratio at the end of Q3?

JULIAN CUSACK,           CHIEF     FINANCIAL        OFFICER,      ASPEN      INSURANCE
HOLDINGS

Well, on a pro-forma basis including the new capital that we raised?

BOB SALES - LMK CAPITAL MANAGEMENT

Yes.

JULIAN CUSACK,           CHIEF     FINANCIAL        OFFICER,      ASPEN      INSURANCE
HOLDINGS

It will be 13.3%.

BOB SALES - LMK CAPITAL MANAGEMENT

Debt to cap is 13%. So, we are looking probably at a loss in Q4. Although, albeit perhaps
with the reinstatements and in Wilma, nothing the magnitude of Q3. I guess the question
is where – when you think about your debt to capital ratio, and I know this is a fluid
figure given the changes in the rating agencies, what do you look at as kind of a ceiling in
terms of where you would maintain the debt to capital ratio in order to keep the ratings
that you required to do business?

JULIAN CUSACK,           CHIEF     FINANCIAL        OFFICER,      ASPEN      INSURANCE
HOLDINGS

Well, I think you are right to say that that may be a fluid situation. I think that general
guidance is that a debt to total capital ratio of up to 20% is generally regarded as an okay
situation by most of the rating agencies and if you use hybrid equity instruments with
sufficient equity credits you can go higher than that. We have yet to have those dialogues
with rating agencies to see whether that view prevails in the present environment.

BOB SALES - LMK CAPITAL MANAGEMENT



                                            -22-
When you did your fundraising earlier in October, I am curious as to what your thoughts
were. You went with straight equity and I have seen some other fundraising efforts that
have used some preferred equity in lieu of common with the obvious effort to save on the
dilution to the common shareholders. Can you help us think through what your
fundraising strategy, it might have been just you needed it when you needed it, right, but
help us think through what your fundraising strategy was at that point and what your –
whether or not it has changed in terms of different levers you might use going forward.

JULIAN CUSACK,           CHIEF      FINANCIAL       OFFICER,       ASPEN      INSURANCE
HOLDINGS

I would say to that, our thinking about our target capital structure over time has not
changed. We have been researching, since at least the beginning of this calendar year, the
availability to companies like Aspen of various different hybrid structures. I still think
that in the fullness of time we will develop a capital structure, which has a greater
complexity and hopefully a lower cost of capital than the current capital structure. In the
circumstances that we were in this month, the equity market seemed to us to be the right
place to be going at that time, it was something we could execute very quickly, and that is
what we wanted to do.

BOB SALES - LMK CAPITAL MANAGEMENT

Do you have more flexibility if indeed you decide you have the need to raise money in
Q4? With the shelf registration that was filed? I have not glanced at it closely.

JULIAN CUSACK,           CHIEF      FINANCIAL       OFFICER,       ASPEN      INSURANCE
HOLDINGS

The shelf registration has not gone effective yet, but even without it we would still have, I
think, around a $200 million of available headroom within the existing shelf. The issues
around access to the debt capital markets will be around pricing and execution risk.

BOB SALES - LMK CAPITAL MANAGEMENT

Got you. Okay, thank you very much.

JULIAN CUSACK,           CHIEF      FINANCIAL       OFFICER,       ASPEN      INSURANCE
HOLDINGS

Also, whether or not we need to do that in terms of use of proceeds.

OPERATOR

Thank you. Our next question is coming from Stephen Hughes with Clariden Bank.




                                            -23-
STEPHEN HUGHES – CLARIDEN BANK

I have two questions really. The first is some – if you could refresh my – refresh what my
memory at what you said at the beginning of the call to the effect that you had made
certain industry loss assumptions about Katrina, in producing the figures for the third
quarter? Did I understand that right to the extent that there was a higher overall industry
loss than you assumed you may actually have to put more charges by Katrina? Is that
right?

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

No. I think we just need to distinguish cause and effect here. Essentially our approach to
setting reserves is, was, always has been to start contract by contract, client by client and
try to make an assessment of what the loss of that portfolio is based on our understanding
of the exposures in it. But behind that, we had to review how serious the event was, you
know, a given contract might have no loss in a $5 billion event or a $15 or $20 or $30
billion event would have been a lot more. So contract by contract, by talking to clients or
their brokers or benchmarking what one portfolio might have against facts we have on a
different one, we have reached a ground-up view and we added all of that up, and when
we add it all up, we said in our first press release, it looks like it is consistent with a $40
billion market loss. We did not think it was based on, it wasn’t a top-down estimate. It
looked like that implied originally around $40 billion. Then what happened rather later
was a couple of – I think I used the word ‘intimations’, they were not loss advices. But
there were a couple of sort of views from brokers that some of their clients were very
shaken because in terms of those clients own internal views, they were getting loss
amounts that they equated to perhaps 100-250 or even more than 250 years market loss.
That caused us to say that 250 year market loss is not $40 billion. It is much more. These
companies were I think pretty sane, sober, sensible companies. We went back
immediately when we heard that and revisited all our reserving, and if you like, we now
said, “hey this could be worse. Let’s put is through a more pessimistic prism” and we did
the whole ground-up thing again. This time when we completed it, it looked to be
consistent with something more like about a $55, $56, $57 billion market loss rather than
the previous $40 billion loss.

STEPHEN HUGHES – CLARIDEN BANK

And that is what is in your numbers that you quote – what you put in your third quarter
numbers?

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

What I am quoting is the process that led to the establishment of our accounts in the third
quarter, absolutely.

STEPHEN HUGHES – CLARIDEN BANK




                                             -24-
The 2nd question I had was, I realize what sort of liabilities you have – you want to put
on your books is a function of price, but is there something in your thinking that you
really do not want a single loss event, say more than 10% of your equity capital, or
whatever it is that you want to put a specific limit down to a single event loss.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

That is absolutely right. I think your question is spot on. What we are saying is, we are
going to charge an awful lot of more money for this, and I think the demand for
catastrophe risk on the insurance and reinsurance. It is going to be absolutely huge for
many kinds of reason. There are many, many more buyers, many more to sell to, and I
think we’ll have better technical models, we’ll have learned the lessons of this year, and
the prices will be much, much better.

In spite of that, we are going to say there are more unknowns in this business than we
thought there were, and it seems to us appropriate to reduce the proportion of our overall
enterprises dependent on it. So even though I think it is much more attractive, we are still
going to do a bit less of it and our measure, in fact, is not 10% as you said, I think you
used that just as an illustration. But whatever that measure is in 2005. Going forward, we
are going to be moving it down to reduce the volatility of potential outcomes for our
company.

OPERATOR

Our next question is coming from Charles Gates with CSFB. Please go ahead.

CHARLES GATES - CREDIT SUISSE FIRST BOSTON

How big is the excess and surplus lines business? I am in the statistical supplement – I am
having trouble finding this. I guess that is comment number one. Then comment number
two, you say that pricing there was under some pressure in the liability area. Could you
just expand on that?

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

You are asking – how much surplus lines business does Aspen write, is that right?

CHARLES GATES - CREDIT SUISSE FIRST BOSTON

Yes, sir, and I was in your statistical supplement and I was just having trouble figuring
out where that business was here.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS




                                            -25-
Well, why don’t I deal with the second question first, and the final question to get the
exact answer to your questions. If not, I will give you an approximate number, which I
have.

The point of the liability, I think we are talking about employers’ liability and public
liability in the UK. That is basically the British version of Worker’s Comp and GL. We
have had a great run at that business, very attractive rates and very, very good
performance for us. We have that partly because some of the bigger players, the bigger
companies in the UK and Europe, got badly burned in the late ’90’s and kind of exited it.
What we have really found the last 12 months or so, is that they have been gradually
coming back in. What it means is that if a contract goes out to tender, some of those guys
are cheaper than us, so we lose it. If it doesn’t go out to tender, the price tends to be more
stable and we can keep it. So, it isn’t the sort of disaster area, but it is an area where I
think rate adequacy is edging downwards. What I am really saying is because it is edging
downwards, we are going to write a bit less of it. There are still good opportunities in
there, a bit more challenging, but good opportunities.

CHARLES GATES - CREDIT SUISSE FIRST BOSTON

Thank you.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Now on the surplus lines, how much is that totally gross premium question?

JULIAN CUSACK,            CHIEF     FINANCIAL         OFFICER,      ASPEN        INSURANCE
HOLDINGS

From the year to date, from the nine month period, the earned gross premium and for that
business is just under $70 million Charlie.

CHARLES GATES - CREDIT SUISSE FIRST BOSTON

Is that the business – or some of that business is written in Boston isn’t it?

JULIAN CUSACK,            CHIEF     FINANCIAL         OFFICER,      ASPEN        INSURANCE
HOLDINGS

That figure I just quoted is in its entirety the earned premium on the business written in
our Boston office.

CHARLES GATES - CREDIT SUISSE FIRST BOSTON

I think you have done a real good job on your conference call. I have no more questions.

OPERATOR



                                             -26-
Thank you. Our next question is coming from Ron Bobman with Capital Returns.

RON BOBMAN - CAPITAL RETURNS

Good morning, I apologize I got on the call late so I may have missed this topic, but as
you put in your Katrina and Rita loss press release, you have, I guess it is an ILW or
some sort of retro cover, I think it was $100 million. Could you, if you have not covered
it yet, could you go over the specifics just as far as what the current PCS number is,
which I think is a trigger, and where the cover trigger is at, and I know PCS came out
with their number. Has there been any info that you have gleaned from market –
company losses since the PCS that gives you more confidence, less confidence that
industry losses will get to the point where this thing might get triggered and hopefully we
collect some more money. Thanks a lot.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Okay. Well I will give you the facts first, then I might indulge in a tiny bit of speculation.
If PCS declare a market loss of $39 billion, than that contract starts paying. The limit is
$100 million, and if the market loss gets to $47 billion, the $100 million is exhausted.
That’s just how it is. It is on a linear basis. Those are the facts. Because of that, and the
current PCS number is $34.4 billion, so it does not attach and therefore, we are not
presuming any recoveries at all.

The more speculative side is what PCS is saying is what they are including to-date versus
what they do not include. What they are including is, in their view, losses that are paid
within a strict interpretation of policy limits. That would presume that in general flood is
excluded. Certainly on ordinary residential business and in simple commercial risks.
There are some big commercial risks where flood is covered and automobile flood is
covered. So, making that presumption, this is one of the big debates in this question - to
what extent will there be what some people are calling the term ‘political risk’. So, I
would say that is the big swing factor in this. I am not going to try to put you a number on
it because I can’t – there is no basis to do that. But if you think that the industry will pay
losses that are not within strict policy terms and conditions, than you will be adding to the
PCS number.

Then there are other things, things in there like inadequate recognition of demand surge.
There is a tendency for some of these losses to creep anyway. So, I think the PCS view is,
I think I’m right in saying 60 days or so after the first release, based on what the member
companies told them. They will produce a second release; most people probably expect
that to move upwards. I think they will carry on producing numbers until such a time that
they are satisfied that they are within a few percentage points of the right number. So, I
think as prudent people we should not take any credit for that today, but we should
monitor the situation with regards to the PCS view of the market loss. Of course that is
what we are going to do.




                                             -27-
RON BOBMAN - CAPITAL RETURNS

I think I got you right. They are at 34.4 today and our payout is linear from a 39 to a 47?

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Yes.

RON BOBMAN - CAPITAL RETURNS

 Okay. Okay. And obviously they excluded certain things like offshore losses, you know
offshore losses and what have you, but your – our coverage is tied to whatever they
define as paid market losses?

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Yes. Thanks right.

OPERATOR

Thank you. Our next question is coming from David Pickering with Noonday Asset
Management. Please go ahead.

DAVID PICKERING - NOONDAY ASSET MANAGEMENT

A couple of questions. One is the pricing expectation that you mentioned early on in the
call. Are those based on sort of preliminary discussions or more detailed discussions at
Baden-Baden and Chicago?

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

They are the most up-to-date views that we have so they go right back to Monte Carlo.
They are based on conversations with a lot of clients we have seen in our offices in the
last month or two, and we do have representatives at both Baden-Baden and in Chicago. I
guess that’s our up to the minute view, yes.

DAVID PICKERING - NOONDAY ASSET MANAGEMENT

Okay. Some of your competitors have pointed to unexpected correlations in damages
from Katrina, I wonder if you had experienced any similar views or had any opinion on
that?

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Unexpected correlations, what exactly do you mean by that?




                                           -28-
DAVID PICKERING - NOONDAY ASSET MANAGEMENT

For example, one of your peers have pointed to concentrations of exposure and knock-on
effect that have been unmodeled and unexpected.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

I’m not sure that I fully understand the question. I suppose the way I think about this loss,
which I think is probably a $55 billion loss when all is said and done, is you’d expect a
loss, a wind loss in America that costs that much to happen maybe once every hundred
years. But you wouldn’t expect it to happen in New Orleans, Louisiana and Mississippi.
In fact, in our model, given a loss of that size is actually only about a 3% or 4% chance of
a loss of that cost would happen over there. And why is that? Because the big values are
perhaps in Houston, Galveston and more particularly in Miami and Palm Beach. So the
unusual thing is not the wind speed – not of the hurricane of the wind speed striking the
American coast somewhere, that’s probably every 40 or 50 years or something like that,
but that it costs so much loss. And why is it costing so much? And that has to do, I think,
with the floodwater damage issues being mixed up with wind issues. And maybe that’s
what their saying. I know that that’s what we call an unexpected correlation, but I guess,
everybody knew that New Orleans could flood but did they expect the flooding to
represent such a big part of the total. Yes, I think there’s really not a great deal of light on
that issue yet. And I think there won’t be until more policies claims are notified and more
get settled and so on and so forth.

The only other thing I’d say, it wasn’t an unexpected correlation, a very much expected
one is, you’ve got some big – the biggest area of offshore rigs in the world in the Gulf of
Mexico and clearly there’s going to be a potential clash between the offshore energy
losses and the onshore losses. But that we knew about and always modeled for.

DAVID PICKERING - NOONDAY ASSET MANAGEMENT

Right. And just to come back to a prior comment of just two questions ago, there was a
question about single event limits and your comment about there now being more
unknowns, therefore, if I heard you right, in terms of reducing exposures. I don’t know if
that’s what you said. But I had a question in general on your approach to aggregate limits,
concentrations and so on, whether it’s by line or by geography and so on. Maybe to just
revisit that, has your approach on aggregate limits changed as a result of these events?

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Yes. I think that the most important method, is the probabilistic based method that given
a hurricane – let’s just limit the conversation to a basic hurricane and not earthquake.
Given a hurricane that can follow a track that can give Florida, North Carolina, Florida
Northeast or Florida then Texas, whatever, what would you lose in that? And it’s the
simulation based on characteristics of the storm of the losses to the exposures that we
have assumed. That, I think, has been our primary method of assessing it and, the



                                              -29-
challenge there is to improve it, not to abandon it, not to say it’s faulty and throw it away
but to make it do a better job.

Now side by side with that, I think there are other things you can do and essentially what
you can do is divide the United States into zones, look at all the limits that are exposed
and within those zones, add them up and you can’t lose – well it’s very difficult to lose
more then the limit that you’ve issued. Actually not – probably not – it’s not impossible
but it’s pretty hard. So, what you have there is not so much a probabilistic based tool,
you’ve just got a view of what you could lose – it’s a useful piece of information but to
do something with it, you need to know, you know, is that a one in a million year chance
or is it a one in a 20 year chance, cause you’re going to act very differently. And that’s
the weakness of just using the aggregate exposure approach. The wise answer and the
answer that we’re using here is to do both. One acts as a sense check on the other.

OPERATOR

Thank you. Our next question is coming from Bob Sales with LMK Capital Management.

BOB SALES - LMK CAPITAL MANAGEMENT

Yes. I just wanted to extend that last question. Observationally, I think that when you
look at where your damage was in - 78% property, which was the bulk of the losses
you’ve had and you had in Katrina, it appears. It just strikes – you know, given that the
flood damage is still by in large, at least from a residential standpoint, by in large not a
significant part of the total insured cost – insured loss. I’m just trying to understand how
– given -- if you look at the losses you incurred, and I think it’s hard to disagree that
somewhere along the lines your models – what you would limit your losses – the model
kind of broke down. Cause I would expect a cat 5 through Miami to wipe out 20-25% of
your equity. But something up through Mississippi kind of touching on Louisiana – what
I’m getting at, is I’m trying to understand where you think the internal models and
thinking broke down with respect to the losses you incurred on this type of hurricane and
how you might compare it that – what your expected of losses would be if you had a cat 5
or cat 4 go through Miami or if Rita was a cat four or cat five through Houston?

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Let me try and address that. I think it comes back to the view of taking a probabilistic
view and, as I said earlier, if you look at smaller storms that might land anywhere, but if
you look at the big ones, the storms that might cost the industry $50 or $60 or $70 billion,
increasingly they are Miami storms. There are quite a lot of potential storms that could
happen. And $55 billion is round about 1 in 100 years – for wind in the U.S. So what you
have said and it tells me it couldn’t happen in Florida, I’m sorry in the Gulf States. I
mentioned only about a 3% chance, and if there is a storm of that size, that it’s going to
cause most or all of its damage in the Gulf States. In other words, what might be a 1 and
100 possibility anywhere in the U.S. becomes a 1 in several thousand possibility,
specifically in Louisiana and Mississippi. Now that’s if you’re talking about U.S. wind.



                                            -30-
But – and remember the models basically are wind models. It recognizes accompanying
downpour, for rain damage coming with the hurricane and, I think less perfectly, they
recognize an element of storm surge. But as far as I know there is no ordinary flood
model in the U.S. And I think one of the reasons why our loss estimates were what they
are, is we were trying to estimate, not what’s being advised to date, which is really quite
small, but what the ultimate cost is going to be. And when thinking about the ultimate
cost of what it’s going to be, we have to take a look at reinsurance, what do we think our
cedants are going to have to pay and we’re having to set reserves on not what we know
today but what we think it’s ultimately going to amount to and it’s going to amount to
that great number of $55 billion of which I can’t give you a split between the water
damage element and the wind damage element but I think that implies a lot of water
damage. And so if it’s failing in the model it would merely be a failure to recognize the
political risk and the consequences of political risk is more cover of water damage then a
correct and strict interpretation of what the conditions would suggest.

BOB SALES - LMK CAPITAL MANAGEMENT

Are you suggesting then that if the State of Mississippi fails in their efforts to -- flood
coverage with the implication that wind caused storm surge and therefore should be paid,
that your reserves could in fact be overstated or -- as opposed to if they’re successful that
they could up. I’m just trying to understand which side of the fence do you come down
on with the fulcrum point being that particular lawsuit.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Tremendous number of our unknowns in this, Bob. I would say we have tried to be
realistic rather than legalistic in establishing our reserves so it could swing either way.
But, you know, I can’t tell how much. It’s just – I’m not a lawyer, there are too many
unknowns. I mean it could be even worse then we thought that more and more policies
get drawn in when they shouldn’t or it could be less. I don’t think I can say anything
more that would be useful or informative.

BOB SALES - LMK CAPITAL MANAGEMENT

I’m just suggesting that with the argument that there’s a confliction in your argument is
that there will be $55 billion worth of coverage - implies that there will be coverage of
surge and flood damage.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Well, I don’t think I’ve got anything more to add. I think I’ve told you what I know, what
I’ve told you what I think and beyond that is just not useful. We’re just going to have
wait and see.

BOB SALES - LMK CAPITAL MANAGEMENT




                                            -31-
 Really, I’m just trying to understand your thinking as you’ve thought through this, I’m
trying to get you to reflect a little bit on it, that’s all.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Sure. That’s fine.

OPERATOR

Our next question is coming from Ron Bobman with Capital Return.

RON BOBMAN - CAPITAL RETURNS

I just have one follow up. The reserves you set last year for the four storms, has there
been any increase in the reserves that you had to incur for that. Thanks a lot.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

In the third quarter of this year there was a small increase in the reserves, mainly around
Hurricane Charlie of some $3 million.

RON BOBMAN - CAPITAL RETURNS

Okay. Thanks a lot.

OPERATOR

There are no further questions at this time. I’ll turn the floor back over to you for any
further closing remarks.

CHRIS O'KANE, CHIEF EXECUTIVE OFFICER, ASPEN INSURANCE HOLDINGS

Okay. Well just to thank you very much indeed for your attention for listening to our call
this morning. We hope we’ve provided some useful color and explanation of what’s
going on in the last quarter and some views of what’s to come. Thank you all very much
indeed. Good-bye.

Operator

Thank you. This does conclude today’s teleconference. You may disconnect your lines at
this and have a wonderful day.

END




                                           -32-

				
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