Job losses likely as changes to insurer’s operating model bring distribution into a single unit
Norwich Union Insurance (NUI) has shaken up its executive team as part of sweeping changes to its operating model, aimed at cutting costs and streamlining processes.
The changes will see RAC become further integrated into NUI, although it will retain its brand, and NUI’s distribution channels brought under the management of a single business unit led by John Kitson, currently intermediary business director.
NUI chief executive Igal Mayer said the move would make the business less complex, more able to adapt quickly to rapidly changing market conditions, and more connected to its customers.
A spokesman for NUI said the changes would affect the whole of the organisation and that job losses were “likely”.
The new structure for the 350 directors and heads of department would be determined by the end of the month.
The new working arrangement for the rest of the workforce would also be decided as the new operating structure filtered down the organisation, the spokesman said.
“In some cases there will be a reduction of roles, but we cannot say how many will be affected.”
The changes follow the announcement two weeks ago by Norwich Union’s parent company Aviva of its vision for ‘One Aviva, twice the value’, focusing on growth and efficiency targets.
Mayer said: “We have strong consumer brands, we are the number one insurer in the UK, and we have superb expertise in underwriting and managing risk.
“These changes will enable us to exploit fully those advantages and make sure we are offering the right products at the right price and getting them to market via the best channel.
“We have made tremendous strides in customer service but we want to get even better, by simplifying our products, streamlining our service and making it easier for customers, clients and our staff to do business.
Meanwhile, Norwich Union has shelved plans to create a joint venture with banking giant HSBC.
The insurer said this week that it had extended its current distribution agreement with the bank for personal lines product for a further five years.
NU and HSBC had originally planned to form a new insurance company in a joint venture (News 17 May).
A spokesman for NU would say only that it had been decided that a joint venture was not appropriate. “After prolonged discussion it was decided that it was not the right way to go now.”
The three key business areas of NUI’s new business structure
Sales and marketing
This will include management of all distribution channels – corporate partners, direct, RAC and intermediary business – as well as customer and marketing strategy. It will be led by sales and marketing director John Kitson. The current marketing director, Sean Meadows, will move to Aviva’s Singapore, Middle East and Hong Kong business. The role of Aviva distribution director Angela Seymour-Jackson has yet to be determined.
RAC managing director Debbie Hewitt will leave Aviva next year.
Underwriting, pricing and products
John Seaton, the current director responsible for this area, will retire on 30 April 2008. His replacement will be announced in due course.
Operations, including claims and customer service
To be led by David McMillan.
The new management structure will be effective from 3 December.
