Zurich announces 440 job cuts
Zurich today announced proposals to cut up to 440 jobs in its UK general insurance business as part of a programme to reduce costs in the organisation and simplify its operating structure.
The UK insurance market has become steadily more challenging and the drivers for this – including low investment returns and increasing loss trends – have accelerated in recent months.
Zurich is a financially robust organisation – both globally and in the UK. The nine month Results announced by Zurich Group last week however highlight the need for operational change – both to drive forward the UK business and to contribute to the success of Zurich globally.
Today the business has begun consulting its employees on the proposals and will be supporting them throughout this time of change.
There are two main drivers for these changes. Firstly, the organisation said it needs to become a less expensive operation in order to remain competitive, and aims to reduce costs by at least £40 million over the next two years in the UK. Also, feedback from customers and brokers suggests a more straightforward business model is necessary.
This is part of a global group-wide transformation programme which aims to deliver annual run-rate cost savings of US$300 million by the end of 2016, and of more than US$1 billion by the end of 2018.
One example of how the business can become more efficient is within its Commercial Broker division. It is proposing to introduce a simpler structure resulting in much faster decision times when it comes to writing new business, and therefore developing better outcomes for customers.
The plans put more underwriting decisions and transactions into the branches, where it is expected that most decisions will be made.
The drive for efficiency and lower cost will not however prevent Zurich from investing in improvements that will lead to better service for customers and brokers. An example of this is the continued investment to simplify the claims handling process across all customer sizes ensuring Zurich’s claims handling remains market-leading.
The proposals to cut jobs are underway and will continue until the end of March next year. At the moment it is not possible to announce the majority of the specific changes as they will be worked through over the course of this programme.
Zurich’s commitment is to its employees so the outcome of the proposals announced today will be shared with them before the wider market is made aware.
Other changes within Zurich
- The Global Corporate insurance business in the UK announced proposals last month to cut around 35 roles from the business. These plans also aim to reduce cost and simplify the structure of the organisation.
- The Life market in the UK is changing for all participants, and Zurich is gaining market share profitably. It will however continue to look to reduce costs and bring new propositions to the market.