Aspen Launches Program to Enhance Operating Effectiveness and Efficiency
October 25 2017 - 4:30PM
Business Wire
Expected Cumulative Savings of Approximately
$160 Million by End of 2020
Expected Run Rate Savings of Approximately
$80 Million Starting in 2021
70% of Expected Savings to Benefit the
Insurance Segment
Aspen Insurance Holdings Limited (“Aspen” or the “Company”)
(NYSE:AHL) launched today a comprehensive program to drive greater
effectiveness and efficiency across the Company and enhance its
market position.
Chris O’Kane, Chief Executive Officer, commented “Aspen is a
diversified, global company with a strong balance sheet and
specialty underwriters across many lines of business. 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.”
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. 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.
Aspen 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 amortized over a period of
three to five years from the start of 2020.
Chris O’Kane added, “The program is the result of a rigorous
bottom up operational review of our organization 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 organization with faster
decision-making ability, a competitive expense ratio and the
ability to serve our clients even better than we do today.”
Aspen intends to provide updates on the program implementation
on a semi-annual basis.
About Aspen Insurance Holdings Limited
Aspen provides reinsurance and insurance coverage to clients in
various domestic and global markets through wholly-owned
subsidiaries and offices in Australia, Bermuda, Canada, France,
Germany, Ireland, Singapore, Switzerland, the United Arab Emirates,
the United Kingdom and the United States. For the year ended
December 31, 2016, Aspen reported $12.1 billion in total assets,
$5.3 billion in gross reserves, $3.6 billion in total shareholders’
equity and $3.1 billion in gross written premiums. Its operating
subsidiaries have been assigned a rating of “A” by Standard &
Poor’s Financial Services LLC (“S&P”), an “A” (“Excellent”) by
A.M. Best Company Inc. (“A.M. Best”) and an “A2” by Moody’s
Investors Service, Inc. (“Moody’s”).
Application of the Safe Harbor of the Private Securities
Litigation Reform Act of 1995
This press release may contain written “forward-looking
statements” within the meaning of the U.S. federal securities laws.
These statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include all statements that do not
relate solely to historical or current facts, and can be identified
by the use of words such as “expect,” “intend,” “plan,” “believe,”
“do not believe,” “project,” “anticipate,” “seek,” “will,”
“estimate,” “may,” “likely,” “continue,” “assume,” “objective,”
“aim,” “guidance,” “outlook,” “trends,” “future,” “could,” “would,”
“should,” “target,” “on track” and similar expressions of a future
or forward-looking nature.
All forward-looking statements rely on a number of assumptions,
estimates and data concerning future results and events and are
subject to a number of uncertainties and other factors, many of
which are outside Aspen’s control that could cause actual results
to differ materially from such statements. All forward-looking
statements address matters that involve risks and uncertainties.
Accordingly, there are or will be important factors that could
cause actual results to differ materially from those indicated in
these statements. Aspen believes these factors include, but are not
limited to: our ability to successful develop and execute the
program to create operating and cost efficiencies through focus on
improving several operational levers; charges relating to the
program being different from those initially estimated, including
changes in the size and components of different aspects of the
program; changes in the planned timing of the program; the result
and timing of employee consultation processes and related
regulations in certain of the jurisdictions where we operate;
disruption in our business associated with the program and related
activities; whether or not the program provides a sufficient return
on our intended investment over time; whether or not new IT and
data tools enable intended results; the impact of loss of one or
more of our senior underwriters or key personnel; a failure in our
operational systems or infrastructure or those of third parties,
including those caused by security breaches or cyber attacks; the
risks related to litigation; and our reliance on information and
technology and third-party service providers for our operations and
systems. For a detailed description of these uncertainties and
other factors, please see the “Risk Factors” section in Aspen’s
Annual Report on Form 10-K for the year ended December 31, 2016 and
Quarterly Reports on Form 10-Q for the quarters ended March 31,
2017 and June 30, 2017 as filed with the U.S. Securities and
Exchange Commission. Aspen undertakes no obligation to publicly
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the dates on which they are
made.
For further information:
Please visit www.aspen.co:
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version on businesswire.com: http://www.businesswire.com/news/home/20171025006367/en/
InvestorsAspenMark Jones, +1 (646) 289-4945Senior Vice
President, Investor Relationsmark.p.jones@aspen.coorMediaAspenSteve
Colton, +44 20 7184 8337Group Head of Communicationssteve.colton@aspen.co
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