Up to 70 per cent of Aon’s staff will be taking a temporary pay cut of 20 per cent.

Aon, a global insurance broker and risk adviser, has a substantial operation in Bermuda, and is a major captive insurance manager on the island.

As part of the company’s response to the Covid-19 crisis, top executives and directors, including Gregory Case, the group chief executive, have agreed to a 50 per cent cut in base salary.

In a message sent to staff yesterday, Mr Case emphasised that “we have committed to you that no one at Aon is going to lose their job because of this Covid-19 outbreak”.

The pay cuts were based on an analysis aimed at applying salary cuts as equitably as possible to its employees across the world.

“Based on that analysis, we have set a floor in each country,” Mr Case said. “This means that approximately 30 per cent of our colleagues will see no reduction.

“We are working with local leaders and planning for the remaining 70 per cent of our colleagues to take a reduction of approximately 20 per cent of salary, which will be implemented in accordance with local practices.”

The pay cuts will take effect on Friday.

The proportion of staff to be impacted in Bermuda was not clear.

“Some might argue it would simply be easier to lay off a subset of our colleagues, but that would put our ability to serve clients at risk,” Mr Case said. “We are taking a more complex and difficult step because we believe that all of us are critical to delivering on the full potential of Aon. At a time when our clients need us most, we need the full force of Aon united behind them.”

The measures are a clear sign that international business will not be immune from the impact of the crisis that has already hit the local economy hard.

Mr Case said: “The economic analysis is daunting, but if it were simply a case of marginal revenue declines, we could counter with further expense discipline. Those are fundamentals that we know how to manage.

“Unfortunately, this downturn is not that simple. This is an immediate, global lockdown of major segments of our economy.”

He added: “In some sectors, organisations have seen nearly all their business disappear in an instant. Airlines have idled most of their fleets. Hotels are all but empty. Retailers have shuttered their storefronts and resorted to layoffs on a massive scale.

“Energy companies are pressured as demand plummets. Banks are bracing for a torrent of clients unable to repay debt, with the top five US banks alone expanding their loan loss reserves to five times greater than normal.”

All of these trends pointed to a significant economic downturn ahead and that is why the company had chosen to act, he added.

Aon also said it had paused its stock buyback plan and set aside those funds. However, it will continue making dividend payments to shareholders because “paying a regular dividend is consistent with maintaining an investment grade rating and fundamental to accessing the capital markets”, Mr Case said.