Aspen Program To Increase Efficiency, Savings

October 30, 2017

Aspen Insurance announced a “comprehensive program to drive greater effectiveness and efficiency across the Company and enhance its market position.”

Chris O’Kane, Chief Executive Officer, said, “Through actions that optimize work processes and increase operational efficiency, the program is expected to deliver cumulative total expense savings of approximately $160 million over the next three years.”

Aspen Insurance Holdings has assets of $12 billion at the year ended 31 December 2016, and over 1,600 employees across 11 countries – including Bermuda.

During a recent earnings conference call, CEO Chris O’Kane said, “In total, we expect that the program will deliver around $160 million of cumulative savings over the next two years.

” We expect to achieve $30 million of savings in 2018, $55 million in 2019 and $75 million in 2020 after which the run rate savings are expected to be approximately $80 million per year. We will take a charge of approximately $95 million to implement the program and achieve the expected savings.

“Around $50 million of this charge is for employee severance, benefits and related expenses, $30 million for business transformation and program costs, and $15 million for outsourcing and premises.

“The headcount of the organization at the end of this process will be lower,” Mr O’Kane added.

Speaking about Bermuda, the CEO said, “In terms of what are the functions, some functions you do them in Bermuda because Bermuda is the best place in the world to do it and we’re very committed in that market and that is not going to change and I’m thinking from our point of view certain lines of business probably catastrophe which is the most obvious one.

“We do a lot of casualty particularly Excess Casualty. Bermuda is a great place to be and I see no change in the underwriting appetite would be expected for example that offers.”

“We have about 630 people in London EC3,” he added.”London EC3 is the most expensive postcode or one of the most expensive postcodes in England in the world and it clearly we need a lot of people there because that’s where Lloyd’s of London is, that’s an insurance center.

“But there are an awful lot of other functions where we have to ask ourselves, do you need to do them in the most expensive place in the world or could you do them somewhere else?”

Mr O’Kane said, “The effectiveness of the efficiency program is really about building a better operating model for the company. So it’s premises, it’s procurement, it’s outsourcing, it’s use of technology. It’s better ways of working and streamlining the organization.”

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  1. Free Willy says:

    Lose a bunch of capital due to poor underwriting and spin job cuts as an ‘efficiency program’.