Insurer to Axe 4000 Jobs

Britain's largest insurer, Aviva Plc, plans to cut 4,000 jobs at its UK Norwich Union business and deliver annual cost savings of 250 million pounds. With this move, Aviva’s headcount in the UK will stand at 32,000 by 2008. The plan entails moving 1,000 roles to India and outsourcing 500 roles to third party IT suppliers.

Ironically, life insurance growth of Aviva lags behind in the home market vis-à-vis in the international market. The retrenchment plan is to help reduce costs and increase profitability. Mikir Shah, an analyst at Fox-Pitt, Kelton Ltd said, ``These cost cuts are aggressive, but I'm sure they think they are achievable…There is definitely potential for greater efficiency.''

The company said it would seek to minimize the number of compulsory redundancies through natural staff turnover and voluntary measures.

Norwich Union Executive Chairman, Patrick Snowball assigned logic to the move and said, "We have to ensure that Norwich Union remains a highly efficient and effective company in what is an increasingly competitive and dynamic environment…The integration and efficiency measures we are announcing today are part of a programme which will result in an increase in customer focus across our UK businesses along with better and more efficient use of technology.”

According to Norwich Union chief executive Patrick Snowball, the company was operating in an increasingly competitive and dynamic environment due to change in consumer habits. More and more consumers, independent financial advisers and brokers are now increasingly operating in a self-service world, leaving many jobs redundant.

As expected, workers called the move disappointing and termed their view on cuts as one of “extreme anger". David Fleming of Amicus went on to say that the union had "a zero tolerance of off-shoring jobs leading to compulsory redundancies".