Aspen Insurance Holdings Group Chief Executive Officer Chris O’Kane plans to step down in the 2019 first half, after investment manager Apollo Global Management LLC closes its $2.6 billion deal to takes the company private.
O’Kane, who founded the Bermuda-based specialty insurer and reinsurer in 2002, disclosed the pending change in an Oct. 1 letter to employees included in a regulatory filing. Brit Ltd. Chairman and ex-CEO Mark Cloutier will replace him, with plans to depart his current position in December and become an Apollo consultant until he assumes the Aspen top spot after O’Kane leaves.
O’Kane used his letter, in part, to reassure employees about the transition ahead. He referred to Cloutier – CEO of Brit from 2011-January 2017 – as “a highly accomplished insurance executive with an outstanding track record and a collaborative working style.” He also told employees that Apollo likes what it is seeing from Aspen’s rank-and-file, and that the remaining executive team will remain for the foreseeable future.
“You are important to their business plan and investment [Aspen],” O’Kane said. “Apollo has no current plans to replace other members of the Aspen senior management team after closing.”
The Work Ahead
O’Kane spoke of “many opportunities in the next few months for us to reminisce and look back on everything we have accomplished together,” but urged employees for now to look at the work ahead through the privatization process.
“We still need to complete the transaction, which is a substantial task and will include, among other things, holding a successful shareholder vote and acquiring all necessary regulatory approvals,” O’Kane wrote.
Beyond that, in a reference toward improving Aspen’s overall financial performance, O’Kane urged employees to keep focusing on improving Aspen’s performance and stability.
“We have a big “business as usual” work agenda to accomplish. This includes continuing to underwrite to the highest standards and to improve overall profitability,” O’Kane wrote. “We are now at the point of the year where there are a number of insurance and reinsurance conferences and we need to carry a message of reassurance to our brokers and clients that Aspen will continue to serve them in the future as we have in the past: by being a trusted, responsive and helpful partner in whatever way we can, by presenting them with creative risk solutions, and by paying claims in a timely and responsible manner.”
O’Kane also reminded Aspen’s employees that the insurer needs to develop its business plan for 2019, and that Apollo will be part of that process.
“We will also be working with Apollo to review a number of initiatives which they are considering in the areas of our investment and outwards reinsurance strategy,” O’Kane noted.
Longstanding Struggles/New CEO
There is plenty to work on. Aspen lost $266.4 million in 2017. In its most recent quarter (Q2), Aspen reported a bottom-line net loss of $14.7 million though O’Kane at the time tried to put a positive spin on things, noting that the company was “actively and aggressively executing our plan to deliver improved results.” At that time, he noted changes in areas including Aspen’s Lloyd’s insurance book, with plans to drop lines in areas including international, professional indemnity and marine hull. While aviation is also likely to go, O’Kane said that the company would focus more of its investment on lines including cyber, transaction liability, financial institutions and management liability, and also some broader marine lines.
Cloutier, the new Aspen CEO designate, is credited with transforming Brit into a leading Lloyd’s insurer, Brit said in a statement announcing his pending move to Aspen.
Cloutier “has played a pivotal role in Brit’s recent history, driving the establishment of Brit as a top-quartile Lloyd’s insurer and leading the business through its return to the public markets and subsequent acquisition by Fairfax,” Matthew Wilson, CEO of London-based Brit, said in prepared remarks.
Sources: Aspen, Brit Ltd.