Apollo opens doors on Aspen Insurance IPO
Aspen Insurance launched marketing early Tuesday of an up to US$341m NYSE IPO to allow Apollo Global Management to cash out a portion of its seven-year investment.
Goldman Sachs, Citigroup and Jefferies lead a syndicate of banks in marketing the all-secondary sale of 11m shares at US$29-$31 for pricing after the market close Wednesday, May 7.
Apollo, which acquired the property and casualty reinsurer in 2018 for US$2.6bn, is reducing its stake to 86.7%. The top of the IPO marketing range targets a fully diluted market capitalization of US$2.9bn.
The Bermuda-based specialty insurer focuses on underwriting and reinsuring niche specialty lines, such as credit and political risk, cyberattacks, environmental and professional, areas that are benefiting from heightened geopolitical uncertainties.
In 2024, Aspen increased the amount of insurance policies underwritten by 16% to US$4.6bn, with the biggest areas of growth coming from other insurance lines under a new partnership with Lloyd’s of London, specialty insurance, and casualty and liability insurance.
For the year, the insurer generated a net profit of US$431.2m, down from US$484.8m, as higher operating expenses contributed to a modest increase in the adjusted combined ratio to 87.9% in 2024 – combined ratio is a measure of losses paid out and expenses, the lower the better.
One motivation behind the deal launch was to go public before the onset of the US hurricane season in June, bankers told IFR. Another, they say, is the ability to market the deal using year-end audited financial results before those results go stale on May 15 and Q1 financial results would need to be included in marketing an IPO.
While under Apollo’s ownership, Aspen has streamlined operations by exiting 12 insurance and five reinsurance lines of business and significantly improved profitability, with a 15.9bp decline in the combined ratio from 2018 to 2024.
Apollo is cashing out at modest profit with the potential to extract larger gains following the expiry of the standard 180-day lockup.