Norwich Union, the UK's largest insurer, yesterday axed 1,600 jobs by shutting down its high street broking business, blaming the growing popularity of using the internet and telephone to arrange cover.
The company has owned the broker Hill House Hammond since 1991 but Patrick Snowball, the chief executive of Norwich Union Insurance, said the days of the high street insurance broker arranging travel, home and motor policies were all but over.
"We have seen significant changes in the way customers buy their insurance. Between 2000 and 2002 there has been a 17 per cent drop in people choosing to sort out their insurance through a high street broker. Many people now prefer to deal with insurers by phone or the internet. We got to the situation where the demand for the service Hill House Hammond provides wasn't there," Mr Snowball said.
HHH has 240 branches across the UK. About 500 jobs will be lost in Bristol, where the broker is based. It is hoped that about 400 jobs can be redeployed within the Norwich Union group, but there will be at least 1,200 compulsory redundancies. Aviva, Norwich Union's parent company, has already caused controversy with job cuts by outsourcing 2,350 jobs to India.
HHH's 800,000 customers will be offered Norwich Union quotes when their policies come up for renewal. If they reject the quote, Norwich Union will arrange for a broker to find another deal elsewhere. About 40 per cent of HHH customers already have policies with Norwich Union.
The company wants to increase sales through its own direct business, which it launched in 1996. This has grown strongly, with about 17 per cent of its home, motor and travel insurance business now through this direct channel. This compares with 8 per cent from HHH.
Norwich Union said it was creating 450 new jobs in its call centres to handle the increased business from HHH customers. HHH also has a commercial arm, which has been put up for sale.Reuse content