Most losses will be in broker division More Th>n and support services

Royal & SunAlliance (R&SA) is to slash 1,000 UK jobs over the next two years in a bid to save £70m.

Job losses are expected in the insurer's broker division, retail divisions such as More Th>n, and ancillary functions such as finance, and claims and support.

A spokeswoman admitted: "We can't be more specific than that." But she added: "There will not be any major impact in any one place."

It comes as R&SA unveiled ambitious plans to become the No 1 choice for UK brokers by 2010 (see box.)

One broker commented that job cuts would likely count against the insurer in the short term. The broker said: "It is disappointing to see jobs being cut... small brokers will suffer as a result of the fall in service levels."

The insurer said it would work with unions to ensure compulsory redundancies are kept to a minimum in favour of natural turnover, voluntary redundancies and unfilled vacancies.

An Amicus spokesman said: "We are disappointed at the numbers involved in this redundancy programme."

R&SA UK chief executive Bridget McIntyre said: "Decisions like these that affect our people are difficult, but it is the right thing for our customers and our business."

In the UK, the insurer is looking to make annualised expense savings of £70m by mid-2008 and reduce its expense ratio from 19% to less than 15%. As part of an aggressive drive for profits, R&SA is to grow its affinity business by over 50% in the next five years.

How to be the brokers' No. 1 choice
R&SA also flagged up its intention to be the major player in the broker market by 2010 by:

  • Specialising by industry segments, particularly in emerging sectors such as renewable energy
  • Using technology such as Imarket and R&SA's new fully web-enabled online policy administration system to drive more online broker business
  • Growing volumes via new distribution channels such as managed general agencies.