Aviva cuts 1,800 insurance jobs at Norwich Union

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Aviva is cutting up to 1,800 British jobs at its Norwich Union business as it seeks to streamline its general insurance operations. Britain's biggest insurer will cut the administration jobs by 2010 as it slashes its customer service and back office centres for general insurance from 22 to seven.

Igal Mayer, the chief executive of Norwich Union, is getting to grips with its sprawling operations, which have undergone little restructuring since the merger of Norwich Union and CGU to form Aviva eight years ago. Andrew Moss, the group's chief executive, is combining businesses, stripping out costs and dropping the Norwich Union brand to present a more dynamic company to investors.

Mr Mayer, who moved to head Norwich Union from Aviva's Canadian business last year, said: "We are a very strong business that has grown over the years into a complex organisation. We want to deliver excellent, consistent and reliable customer service with market-leading effic-iency. To achieve this, we will need to fundamentally simplify our business." Aviva also said it had to revamp its operations because customers and brokers increasingly wanted to do business over the internet.

The reduction of administration centres does not mean that Aviva will exit the towns where it is based, which include Dundee, Leeds and Southampton. The company said that in some cases it would close buildings and move staff to smaller accommodation. Aviva pledged to try to find people other jobs locally.

Aviva said in October that it planned to make savings at its UK business but did not put numbers on possible job cuts. The insurer has infuriated unions by moving backroom jobs to India.

Graham Goddard, deputy general secretary of Unite, said: "The Aviva workforce from the general insurance arm now faces uncertainty about their future. Aviva general insurance is rapidly withdrawing their commitment to local communities and isolating themselves in a small number of cities. The suggestion that employees will be able to relocate appears to be inconceivable for most of those affected."

The efficiency drive comes as general insurance rates soften, putting pressure on growth in the UK's fiercely competitive market. Aviva's non-life business suffered a 39 per cent drop in profit last year because of massive flood-related claims.

Aviva has struggled to convince investors about its growth prospects since its failed approach to buy Prudential in 2006.

The seven "centres of excellence" will be in Norwich, Perth, Bishopbriggs, Stretford, Manchester, Leicester and Southend.

Earlier this week, Zurich announced plans to cut 900 gen-eral insurance jobs in the UK.