Folgate Insurance, one of the few remaining broker-only insurers, has announced that it is cutting up to 30 personal lines staff, but it has plans to create 60 new jobs down the line, writes Mike Cooper.
The deadline for staff to apply for voluntary redundancy passed on Monday, and the insurer is now considering compulsory job cuts.
German-owned Folgate made a similar round of redundancies two years ago, when it withdrew from the motor insurance market.
One employee who declined to give his name said: "The company has told staff it needs to cut costs, but they are looking at the short-term in making some of us redundant. At the same time, the company is creating new jobs but is seeking to fill these with external staff. It says existing staff don't have the experience."
He said he found it difficult to reconcile why the company was cutting jobs when it had achieved its best financial results in five years. Folgate's gross written premium last year was £69.5 million.
And he went on to say the cutbacks may affect service standards.
He added: "We are a broker-only company and staff have worked hard to get brokers on board. But these redundancies are likely to have an adverse impact on the broker market."
Peter Moody, director of insurance brokers E.Colman & Co, which like Folgate is based in Poole, said: "Any job losses in our industry is serious. But in this area of the South Coast the insurance industry has almost vanished. Folgate is the only major insurer remaining."
Company spokesman Aaron Rollinson-Payne confirmed the jobs would go but said that the insurer was planning to expand massively its commercial lines business, creating 60 new jobs over the next three years.
The move will be led by David Drew, former deputy managing director at Lombard Insurance.
Georg Mehl, joint chief executive of Folgate's German bankassurance parent, Wustenrot & Wurttembergische Group, said: "We are serious in our objective to strengthen the commercial lines business at Folgate. David Drew has an impressive track record in this field and his experience is vital to ensure its profit and growth targets are achieved."
n Axa is closing its Bournemouth office next week, following its merger with Guardian. Staff will transfer to Axa's Southampton office.