Re/insurer Aspen has launched what it describes as a comprehensive program to drive greater effectiveness and efficiency across the company, which has a substantial presence on Bermuda, and enhance its market position.
“Aspen is a diversified, global company with a strong balance sheet and specialty underwriters across many lines of business,” said Chris O’Kane, chief executive officer. “Over the past 15 years, we have developed an underwriting-focused culture that provides creative solutions to our clients and brokers. Today we are announcing a program that will elevate the effectiveness and efficiency of our operating platform and position us for continued success in the future.”
According to Aspen through actions that optimise work processes and increase operational efficiency, the program is expected to deliver cumulative total expense savings of around $160 million over the next three years. The company expects to achieve $30 million of the savings in 2018, $55 million in 2019 and $75 million in 2020, after which run-rate savings are expected to be approximately $80 million per year.
The company said that it expects to incur pre-tax charges of approximately $95 million to implement the program and achieve the savings. Aspen expects to incur the majority of this charge in 2018 and 2019. Aspen also expects to spend a total of approximately $55 million in incremental capital expenditure, primarily information technology, in 2018 and 2019 that is expected to be amortised over a period of three to five years from the start of 2020.
O’Kane added: “The program is the result of a rigorous bottom up operational review of our organisation which balanced both risks and rewards. The planned actions are highly achievable and will enable our underwriters to focus more of their time on client and broker facing activities rather than on routine and duplicative tasks. The majority of the expected savings will benefit our Insurance segment where we continue to build on the business line assessment we conducted in 2016 and the drive to improve profitability. As a result of this program, we believe Aspen will be a more nimble organisation with faster decision-making ability, a competitive expense ratio and the ability to serve our clients even better than we do today.”
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