spen Insurance Holdings Ltd. reported a slight fall in net income against last year as the company attributed reserves of $18.6 million to claims arising from the loss of the Deepwater Horizon oil rig in April.

Net income for the second quarter was $108.9 million, Aspen announced last Wednesday, compared to $110.4 million in the same period last year.

Operating earnings, which strip out investment gains and losses, were $1.23 per share, compared to $1.14 per share in the April through June period.

Aspen wrote more re/insurance business [EmDash] gross premiums written were up 2.1 percent for the quarter to $545.4 million and 6.6 percent for the first half of the year, compared to 2009.

Investment income of $57.5 million for the quarter was down 20.4 percent from last year's $72.2 million, which included $16.2 million of gains from a fund of hedge funds investment that Aspen no longer holds.

Aspen's chief executive officer Chris O'Kane said: "I am pleased to report that our diversified portfolio of insurance and reinsurance business generated an annualised operating return on equity of 15.6 percent for the second quarter notwithstanding challenging market conditions. We do not expect rating pressure to abate and underwriting discipline remains our watchword."

Losses from February's Chilean earthquake remained unchanged from the $100.3 million booked by Aspen in the first quarter.

The company's combined ratio [EmDash] the percentage of premium dollars spent on claims and expenses [EmDash] improved to 86.9 percent from last year's second-quarter ratio of 87.7 percent.

The half-year combined ratio, which was hit by earthquake losses in the reinsurance segment, was 98.4 percent, compared to 86 percent in 2009.

The increase in gross premiums written was due an increase of $26 million year over year in Aspen's reinsurance segment. The company it chose to write more property catastrophe business early in the year "ahead of expectations of further declining rates", as well as new business in specialty reinsurance lines.

n its outlook commentary, Aspen reduced its full year gross written premium estimate to approximately $2.1 billion, from $2.2 billion.

The statement added: "In light of the catastrophe losses associated with the earthquake in Chile, and general market conditions, the Company anticipates the combined ratio for the full year to be in the range of 92 percent to 98 percent, including a catastrophe load of $110 million for the remainder of the year, assuming normal loss experience.

Diluted book value per share was $36.96 as of June 30 [EmDash] up 21.3 percent in the space of a year and up 6.8 percent from the end of the first quarter of this year. In New York Stock Exchange trading on Friday, Aspen's share price closed at $27.35, 26 percent below second-quarter book value.

Early this year, Aspen announced an accelerated share repurchase programme to repurchase $200 million of its ordinary shares, a transaction that was completed during the second quarter.