Insurer plans to cut jobs by a third

United Assurance, the product of last year's merger between Refuge Assurance and United Friendly, will cut its staff by a third, at the cost of 2,200 jobs, and close more than half its branches.

The cuts go deeper than the estimates made last August when it was expected that a quarter of the staff would go.

Some jobs would go through natural wastage, but there would be widespread redundancies, the chief executive, George Mack, admitted yesterday. The group is providing pounds 27m to cover the cost of redundancies, which are expected to average around pounds 15,000 a head. Closing branches, mostly small local offices, will cost an additional pounds 7m.

Most of the cuts will be implemented before the end of the year, and the balance by the autumn of 1998, by which time the sales staff will be down to 4,200 from a peak of 6,400 in December 1995. Branch numbers will be cut from 279 to just 116.

The merged group will operate from the former Refuge head office in Wilmslow. The former United Friendly head office in Southwark, south London, will close by the end of the year and the first job relocations are taking place this month.

The group is also spending pounds 42m to cover the cost of integrating the computer systems of the two companies, bringing total merger costs to an estimated pounds 76m. Annual savings from the rationalisation are said to be around pounds 37m, including pounds 31m worth of salary costs. The move would pay for itself in two years, Mr Mack claimed.

He expects to harmonise the range of policies sold, and launch a range of products to appeal to the group's traditional clientele among families on less-than-average incomes.

Mr Mack wants to revamp the group's image, increase the value of policies sold and reduce the cost of sales. Sales staff will make greater use of palm-top mini-computers, and new sales methods will be considered.