Profits up, but NU jobs still go

Insurance giant Norwich Union faces fresh criticism after confirming plans to slash hundreds of jobs, despite bumper sales and rising profits in its life and pensions business.

Insurance giant Norwich Union faces fresh criticism after confirming plans to slash hundreds of jobs, despite bumper sales and rising profits in its life and pensions business.

NU's parent company Aviva last week announced plans to cut costs by £350m a year, on top of 850 job losses in Norwich this year and additional cuts in the firm's IT and marketing departments.

The cut backs are part of a new vision for the business by new chief executive Andrew Moss under the tagline “One Aviva, twice the value.” That has been dubbed “One Aviva, twice the value, half the staff” by NU staff angry about the plans.

Yesterday Aviva revealed sales of life and pensions across the globe were up 26pc, with performance strongest in the USA, Asia Pacific and Europe.

Worldwide sales were £28.2bn in the nine months to the end of September, up from £22.7bn. In the UK sales rose £10.9bn from £10.4bn a year earlier.

In the UK the insurance giant increased both sales and profit margins - a performance which Mr Moss described as very encouraging.

Most Read

NU currently employs around 7,000 staff in Norwich, but this figure is set to reduce over the next two years under the programme of cost reductions.

Mr Moss said: “Under our One Aviva, twice the value agenda we'll continue to improve the profitability of our businesses and accelerate the pace of our international development.”

Norwich Union Life chief executive Mark Hodges said the company's improved performance was being achieved by a combination of reducing costs and increasing sales.

He said improvements in technology and changes in customer habits meant staffing numbers were likely to reduce over time.

“We do see people wanting to make more use of the internet to communicate with us and that has consequences that we have to prepare for,” he said.

“Over time we would expect fewer staff if we are using more modern technology and better processes. Staying stable and static is not an option.

“Technology and consumer trends have a major impact on the coast base of our business.

“To an extent that has meant we've been through a decade of making ourselves more efficient and that is likely to be the same going forward.”

Aviva's cutbacks have been condemned by the unions who condemned the “culture of cuts” at the insurance giant.

Andy Case national secretary of the Unite union, said: “In September 2006 Norwich Union cut 4,000 jobs in the UK. Staff are still reeling from the effects.

“Across the company as a whole there is just a culture of uncertainty. It is very difficult for there to be any stability.

“We haven't been told there will be any job cuts, but it's quite obvious there will be. It's inevitable, and it's a big concern for us.”

“Unite officials have requested an urgent meeting with senior management. Unite will be looking for a commitment of no compulsory redundancies.”

But investors were happier with the news, with Aviva shares closing up 18p at 722p.

Barrie Cornes, an analyst at Panmure Gordon stockbrokers, said: “We remain positive about Aviva's prospects in all of its key operating areas. In addition the recently announced cost savings in UK and Europe will add further momentum.”

Become a Supporter

This newspaper has been a central part of community life for many years. Our industry faces testing times, which is why we're asking for your support. Every contribution will help us continue to produce local journalism that makes a measurable difference to our community.

Become a Supporter