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
HAMILTON, Bermuda--(BUSINESS WIRE)--
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:
View source version on businesswire.com: http://www.businesswire.com/news/home/20171025006367/en/
Investors
Aspen
Mark Jones, +1 (646) 289-4945
Senior
Vice President, Investor Relations
mark.p.jones@aspen.co
or
Media
Aspen
Steve
Colton, +44 20 7184 8337
Group Head of Communications
steve.colton@aspen.co
Source: Aspen Insurance Holdings Limited