Wednesday 13 December 2017

Aviva's general insurance staff to be worst hit by job cuts

Anne-Marie Walsh Industry Correspondent

STAFF at Aviva's general-insurance business will be worst affected by plans to axe 950 jobs here.

The Irish Independent has learned that 530 workers will go at the division, which currently has a workforce of slightly over 1,000 catering for home and car-insurance clients.

Just over 200 are to go at the life-and-pensions division, which employs 660 people -- but 200 to 300 of the remaining positions in this division may be outsourced.

The proposals tabled by the insurance giant to drastically downsize its operations say jobs at the health-insurance division, which employs up to 300 staff, are safe. It had already been revealed that all 180 jobs will go at the Aviva Europe operation, which is moving to the UK.

The breakdown of proposed redundancies at Aviva Ireland has not been previously revealed to staff, although the insurer announced 950 job losses last month.

Senior managers briefed them yesterday on the divisions that have suffered the most drastic fall in business.

They were told the collapse in the economy had led to a 36pc fall in the life market, while general-insurance premiums had slumped by 25pc.

An internal document says the amount of new business in the life-and-pensions market is about half what it was four years ago.

"The costs we have in managing our 600,000-plus existing policyholders are much higher than they need to be and we are seeing more customers either stopping premiums because of affordability or surrendering, which means that our unit costs will rise further unless we reduce the fixed element of our costs," it said.

In contrast, the number of people employed in the health division is set to grow as the insurance giant plans to increase its 18pc market share to 25pc over the next two years.

Newly-appointed chief executive Sean Egan told staff that Aviva Ireland would merge with Aviva UK to form a new UK and Ireland region.

He said the company would retain a presence in Dublin, Galway and Cork, where a five-year lease has just been agreed on a property at Cork Airport Business Park.

Redundancy

Mr Egan also said any outsourcing would be to contractors based in the Republic.

The total Aviva Ireland workforce will be reduced from 1,770 to between 1,000 and 1,200, but no redundancy notices will be issued to staff before March next year.

Staff will be consulted on the changes, but a major battle is brewing over the terms of the exit package that will be offered.

The company has said it wants as many of the redundancies to be voluntary as possible, but UNITE has warned staff will only volunteer if they get a generous package.

The union wants a deal "substantially above" a package of six weeks per year of service, including statutory redundancy, which has been offered in the past.

It is understood it may seek a package similar to one it negotiated at Bank of Scotland Ireland last year, which was 7.25 weeks per year of service.

The union will also push for an early-retirement deal to allow staff in their 50s to draw down a pension immediately.

Irish Independent

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