Bermuda-based AXIS Capital has announced it will shut its retail insurance operations in Australia, which will result in 100 job losses, primarily from the firm’s corporate and select insurance operations.
The closing of Axis’s Australian retail operations is “designed to support profitable growth and enhance shareholder value by better aligning and deploying its resources to focus on attractive opportunities”, according to the firm.
It will result in a pre-tax reorganisation charge of approximately $51 million, or $0.51 per share during the third quarter of 2015, with anticipated annual run-rate pre-tax cost savings of approximately $30 million to be substantially realised in 2016.
This charge in the quarter includes staff severance and related costs, the write-off of certain information technology assets and lease cancellation costs.
The Australian market will continue to be served by Axis through its international wholesale insurance and global reinsurance platforms.
Albert Benchimol, president and chief executive officer of AXIS Capital, said: “We are fully committed to the hybrid model under which insurance groups have both primary insurance and reinsurance activities because this approach provides flexibility, balance and diversification in opportunities and risks, leading to more stable growth and profitability.
“We are confident of our ability to deliver increasing shareholder returns through the pursuit of high-return growth opportunities, including attractive external growth prospects where appropriate."
A number of other initiatives designed to drive its profitability and growth were revealed by Axis last year, including investments in greater resources to support improved data and analytics and strategic IT sourcing relationships.
Benchimol added: “We look forward to continuing our success to date in delivering solutions to our clients in partnership with third party capital providers and to carrying forward our track record of managing our shareholders’ capital responsibly, returning excess capital through dividends and share repurchases.”
AXIS Capital, Albert Benchimol, Asia-Pacific, Bermuda