London and US jobs to go as Aspen embarks on cost cutting and efficiency initiative
Global (re)insurer Aspen is planning to cut jobs in high-cost locations such as London and the US as part of a cost cutting and efficiency improvement programme.
Aspen chief executive Chris O’Kane told analysts following the release of Aspen’s third quarter results last week that the programme would cut around $160m (£122) of costs cumulatively over the next two years, and will deliver $80m of annual cost savings from 2021 onwards.
Aspen’s full-year 2016 general and administrative cost base was $480m.
The programme, which will include outsourcing of some suport functions, will cost Aspen $95m to implement. Of this, $50m will be for employee severance, benefits and related expenses.
O’Kane did not put a number on the job cuts but told analysts that the company was expecting to make “significant headcount reallocations and reductions, primarily from higher cost locations”.
He added: “These changes obviously affect people, they are difficult to make, they need to be made sensitively and they need to be made in accordance with local requirements. But they are absolutely necessary to strengthen the competitive position of our company.”
O’Kane said he was talking about London and the US when referring to higher cost locations. The company employs around 630 people in London, and O’Kane described London’s EC3 postcode as “one of the most expensive postcodes in England and the world”.
Aspen said that while the cost and efficiency initiative will affect the entire company, 70% of the benefit from the programme to be enjoyed by the insurance side of the business.
Under the initiative, Aspen plans to reduce spending on procurement and premises. It is also streamline its processes and activities, for example by reducing re-keying of data and using advanced analytics.
It will also outsource selected support functions.
Aspen announced the cost and efficiency programme alongside a pre-tax loss of $86.7m for the first nine months of 2017, largely because of heavy catastrophe losses in the third quarter.