MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of our financial condition and results of operations for the three and nine months ended September 30, 2008 and 2007. This discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and related notes contained in this Form 10-Q and the audited consolidated financial statements and related notes for the fiscal year ended December 31, 2007, as well as the discussions of critical accounting policies contained in our Financial Statements in our 2007 Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on February 29, 2008 (File No. 001-31909).

Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-Q, including information with respect to our plans and strategy for our business and in "Outlook and Trends" below, includes forward-looking statements that involve risk and uncertainties. Please see the section captioned "Cautionary Statement Regarding Forward-Looking Statements" in this report and the "Risk Factors" in Item 1A, of our 2007 Annual Report on Form 10-K for more information on factors that could cause actual results to differ materially from the results described in or implied by any forward-looking statements contained in this discussion and analysis.

Recent Developments

Where we assess unrealized losses on securities to be temporary at the balance sheet date, we incur no impairment charge, as we maintain the ability and intent to hold these securities until their market values recover to amortized cost. However, following the publication of our earnings release and financial supplement on October 29, 2008, the impairment charge for the quarter and nine months ended September 30, 2008 increased from the reported $44.5 million to $55.8 million due to the sale of certain bonds in financial institutions after the quarter-end.

Subsequent to September 30, 2008, we sold a portion of our holdings in the bonds of certain financial institutions, receiving $87.5 million in proceeds from the sales. As at September 30, 2008, we recognized impairment charges on these holdings of $11.3 million, based on their value at that date. As the fair value of these bonds appreciated between September 30, 2008 and the dates of their disposal, we will recognize a realized gain of $6.7 million, pre-tax, in the fourth quarter of 2008, in relation to such holdings and in accordance with the current accounting standards. This reflects the reversal of a portion of the $11.3 million impairment charge accounted for at September 30, 2008.

The timing and intent of these sales were influenced by a combination of factors including a decision to reduce our exposure to financial institutions as part of our investment risk strategy and the reduction in unrealized losses associated with these bonds since September 30, 2008, which benefited from the creation of the Troubled Assets Relief Program ("TARP") under the Emergency Economic Stabilization Act of 2008, together with other factors specific to each security.

We continue to assess our investment policy in respect of our funds of hedge funds. We have issued a redemption notice for approximately $200 million (or approximately 40% of our funds of hedge funds balances) at the end of the third quarter of 2008. These redemptions are scheduled to take effect in December 2008. We aim to be flexible and respond to market opportunities, as appropriate and consistent with our overall investment guidelines.

We expect our Singapore office to start writing property treaty reinsurance in addition to property facultative risks currently being written. We have also hired a team to write credit risk and surety reinsurance business out of our Zurich branch.

On October 29, 2008, Aspen Bermuda extended its letter of credit facility with Citibank Europe Plc from $300 million to $450 million.

Overview

We are a Bermudian holding company. We provide property and casualty reinsurance in the global market through Aspen U.K. and Aspen Bermuda. We provide property and liability insurance principally in the United Kingdom through Aspen U.K. and we provide marine and specialty liability, hull, energy, non-marine transport, aviation, professional liability, U.K. commercial property, U.K. commercial liability, financial and political risk, excess casualty, and financial institutions insurance and specialty reinsurance worldwide principally through Aspen U.K. We have also recently established Syndicate 4711 at Lloyd's, which commenced for business incepting

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May 1, 2008. Syndicate 4711's business plan for 2008 is to renew certain participations on selected classes of business previously written by Aspen U.K. These classes include energy, hull, marine liability, transportation-related liability, aviation and certain specialty reinsurance lines.

The most significant features of our results for the three and nine months ended September 30, 2008 were:

• Diluted book value per ordinary share at September 30, 2008 was $26.21, an increase of 2.1% compared to $25.68 at September 30, 2007.1

• A net loss after tax for the three months ended September 30, 2008 of $126.1 million, compared with a net profit after tax of $117.2 million for the third quarter of 2007.

• A combined ratio of 123.3% for the three months ended September 30, 2008 versus 84.5% for the three months ended September 30, 2007.

• Other-than-temporary impairment charges of $55.8 million for the third quarter and nine months of 2008.

• Net investment income of $19.3 million, reduced by 73.3% from the third quarter of 2007 due to the adverse performance of funds of hedge funds.

• $155.0 million of net after tax losses following Hurricanes Ike and Gustav.2

Shareholders' equity and ordinary shares in issue at the end of the periods were: