Life and pensions business in Ireland to have subsidiary status

NORWICH Union's life and pension business in Ireland will be converted from a branch to a subsidiary when the firm becomes a public company, general manager Mr Vincent Sheridan has stated. The general insurance business already operates as a subsidiary.

In Ireland, Norwich Union's life business last year had premium income of £110 million, investment income of £65 million and £1.2 billion funds under management. The general side of the business had premium income of £65 million, investment income of £14 million and £200 million funds under management. Norwich employs 530 people in Ireland - 351 in life assurance/pensions and 209 in general insurance.

Mr Sheridan said that the new corporate structure would reinforce Norwich Union's commitment to Ireland. "The structure we are getting is the one we want."

He added, however, that the conversion to plc and the change in the Irish operation's status to a subsidiary did not necessarily mean that the group would expand into other financial services. "There are plenty opportunities in our core business for expansion," Mr Sheridan stated.

"The proposed flotation will enable members to continue to participate in the ownership of Norwich Union while establishing the most effective corporate structure to serve our customers and achieve our business objectives," said Mr Sheridan. He emphasised that policyholders'interests would be protected and that policy benefits would be not reduced as a result of the flotation.

Norwich Union, which has life and general insurance interests in the UK, Ireland, France, Spain, Canada, Australia and New Zealand, is one of Britain's largest insurance groups, with gross premium income of £4.7 billion sterling last year and funds under management of around £40 billion.

Of the five million customers worldwide, three million are classified as members of the society for the purposes of the flotation, of whom 150,000 are in Ireland. Irish members will account for about 5 per cent of Norwich Union's shareholders following the flotation.

When Norwich Union is floated, it will allow the general insurance business to be transferred out of the life fund and will eliminate the exposure of with-profits policyholders to these volatile businesses. Norwich will also raise new capital on flotation, and about £2 billion of the expected £4 billion market value is expected to come from new investors.