Munich Re’s ERGO insurance unit is planning to axe 1,800 jobs as part of a cost-cutting drive.
The job cuts have been dubbed “ruthless” by a union representative.
The job losses will fall in Germany as the insurer tries to lower its gross annual cost base by €540m (£412m). This will translate into a net annual saving of €280m.
The company said it would make the savings by “consolidating sales organisations and paring down administration costs.”
German services trade union Verdi’s ERGO representative Frank Fassin told Reuters: “These plans are so ruthless that a socially acceptable implementation of them is hardly possible,”
ERGO announced the cuts alongside a €1bn investment between now and 2020, which will largely be spent on modernising its IT systems.
The insurer also announced that it would be launching a “purely digital” insurance company in 2017, and that its first product would be a motor insurance policy.
Because of the investment being made in 2016, ERGO expects its 2016 financial results to be “slightly negative”, but expects results to return to a “distinctly positive level” in 2017.
ERGO said it expects to contribute more than €500m to Munich Re’s profits annually starting from at least 2021.
Munich Re chief executive Nikolaus von Bomhard (pictured) said: “The strategy programme of ERGO’s CEO Markus Rieß will ensure that ERGO can once again become a strong source of earnings for Munich Re.”
Hosted by comedian and actor Tom Allen, 34 Gold, 23 Silver and 22 Bronze awards were handed out across an amazing 34 categories recognising brilliance and innovation right across the breadth of UK general insurance.
No comments yet