Equity to cut 200 jobs and go broker-only

Lloyd’s motor insurer Equity Red Star has unveiled plans to cut 200 jobs and become a broker-only insurer as part of an overhaul to restore profitability.

The company will close six regional offices and focus on three locations in Brentwood, Swansea and London.

The closed offices are in Leeds, Manchester, Birmingham, Bristol, Glasgow and Ireland.

It will sell or exit its home and personal accident lines of business to focus solely on motor. The home business brings in annual gross written premium of £15m, while the personal accident business is “even smaller”, according to Equity chief executive Ian Parker.

It is also reviewing possible sales of its Equity Insurance Partnerships affinity broker and its 25% stake in underwriting agency Arista.

As well as the cuts, Equity is investing £20m in a new IT and service infrastructure, which it says will result in annual cost savings of £10m.

The overhaul follows private equity house Aquiline Capital Partners’ acquisition of Equity in December last year from former Australian parent IAG.

Equity is consulting with employees about the job cuts, and expects to complete the consultation by 12 July. It also expects to complete the sale of its home and personal accident books, close its regional offices and have the claims component of its new IT system fully embedded by the end of this year.

Parker told journalists this morning that the full earnings potential of Equity would start to be seen by 2015.

The company has a meeting today with Lloyd’s to approve the business plan, and its relationship team is contacting key brokers today to explain the changes. Staff were informed of the changes on Friday.