CGNU axes 325 jobs at claims centres

CGNU, Britain's biggest insurer, is to cut 325 jobs and shut 11 offices that deal with claims as part of a plan to reorganise its UK operations that operate under the Norwich Union name.

The company said it had identified 750 posts that would have to go but will create 425 new jobs by the end of 2003, creating a net loss of just over 300 jobs.

The move is part of a consolidation drive to improve efficiency at Norwich Union's network of 34 claims offices. The move will cost CGNU £11m.

The first phase of closures will take place by the end of September, with the other sites closing by the end of 2003. The company said it would try to redeploy employees where centres are being shut to areas where they are being expanded.

Centres to be closed include Bristol, Chelmsford, Edinburgh, Nottingham, Croydon and Leeds, while centres to be expanded include Exeter, Glasgow, Manchester, Bradford, Cardiff, Newcastle and Liverpool.

Simon Machell, Norwich Union's director of claims, said the cuts were "regrettable", but added the changes reflected the company's desire to create areas with specialist skills in handling claims, which would create more stability for Norwich Union.

CGNU's shares fell 2 per cent to 571p, one of the insurer's lowest points in recent years. The company, which is about to rename itself Aviva, and its UK rivals have been affected by the falling stock markets, which have depressed their own investments and put customers off from saving with them.

Insurers have also been plagued by uncertainty about their future, which may be shaken up by the imminent Government-sponsored review into long-term savings conducted by Ron Sandler. Mr Sandler's findings are due out in early July.