Cuts, changes will save XL Catlin $250 million
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The CEO of XL Catlin is “delighted” with the state of the combined entity recreated by XL P.L.C.'s $4.28 billion acquisition of Catlin Group Ltd. a month after the deal closed.
The deal, originally proposed last December, officially closed on May 1. The acquisition of London-based Catlin by Dublin-based XL created an insurance powerhouse writing nearly one-tenth of Lloyd's of London business.
In a conference call Thursday, XL Catlin CEO Mike McGavick said the “synergy benefits” of the acquisition should lead to about $250 million in savings, up from an original $200 million estimate. The savings will be achieved through reducing personnel overlap, process improvement, systems-related actions, such as the ability to retire existing systems or to end investment in new systems that are being replaced by legacy systems, and in the areas of facilities. He added that the savings have tended to arise from process and systems-related actions.
He said that “everything for us is about speed” in completing the transition and becoming entirely outwardly focused. “The next couple of months is when we start to see colleagues leave — that's a painful experience,” he said.
Nonetheless, “we are delighted with where we stand,” he said.
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