Norwich Union plans 20% cut in costs in boost efficiency

 

NORWICH Union is preparing to dramatically cutcosts in a drive to improve efficiency and boost sales.

The insurer has told staff that operating costs are to be cut by 20 per cent.

Speaking to The Irish Times yesterday, Norwich Union's Irish chief executive, Mr Vincent Sheridan, said it would be seeking to "minimise" any impact of the cost savings on staff.

A voluntary redundancy package will be introduced, according to Mr Sheridan, while other savings will be achieved through more efficient work practices throughout the group.

Senior management at the company met the Manufacturing, Science and Finance union this week to discuss its proposed cost cutting plans. MSF represents most of Norwich Union's 550 staff.

Mr Sheridan described the meeting as a "scenesetter" at which the company broadly outlined its plans to the union. "We have gone from a general overview of our operations to now defining areas where savings can be made," he said.

The group is understood to be focusing on reducing staff and administrative costs at its general and life assurance businesses and at the Norwich Irish building society.

Norwich Union is also examining its branch network operations and will be looking to introduce more efficient ways of providing its services to customers.

Mr Sheridan said its latest plans were part of a "constant process of trying to become more efficient and trying to do a better job".

The cost saving package follows a lengthy examination of Norwich Union's Irish operations by management consultants Coopers & Lybrand, who spent eight weeks at the company earlier this year.

The restructuring of the group's Irish business comes as its parent company in Britain has indicated it is considering a stock market flotation. Norwich Union, one of the biggest mutually owned insurance companies in Britain, is understood to be now close to changing its status.