Axis to cut 100 jobs as it closes Australian retail insurance division

Re/insurance provider AXIS Capital has revealed it will shut its retail insurance operations in Australia, resulting in the loss of 100 positions.

These job losses will come primarily from the firm’s corporate and select insurance operations, according to Axis.

The firm said the winding down of its 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”.

The action 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.

Axis will continue to serve the Australian market 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.

The firm announced a number of other initiatives last year that were designed to drive its profitability and growth, 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.”