Seeking Alpha: Aspen Insurance Making Its Case To Stand Alone

If nothing else, Aspen Insurance (NYSE:AHL) doesn't lack for confidence. While Endurance Specialty Holdings (NYSE:ENH) has made an offer for the company that values it more highly than any of its peer group companies except Arch Capital and RenRe, management has remained steadfast in its rejection of Endurance's overtures. Likewise, management continues to project an ROE evolution that is meaningfully more bullish than the sell-side's projections.

While I'm still not willing to go 100% with Aspen's projections, the recent improvement in operating results is pushing me more in that direction. Although I do think management may be too bullish with its expectations for interest rates, cat losses, and reserve developments, the underwriting has been looking better and the company may be on the cusp of some significant margin leverage after years of investments to build out the insurance business. My new base-case of 11% ROE in 2018 suggests the shares should trade around $46, but even a half-point improvement offers some noteworthy upside.

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Aspen Insurance Making Its Case To Stand Alone