Move follows review announced last month.

See also: Trimming the fat
Guy Munnoch interview

Zurich has confirmed that it is cutting 870 jobs, or a sixth of its total UK workforce.

The news, revealed on insurancetimes.co.uk this morning, will see cuts made across all parts of the business. In a statement the insurer said that due to vacancies, the total number of redundancies would be around 570.

None of the company's sites will be closed, quelling fears that the insurer was set to follow Norwich Union, which recently announced plans to rationalise its UK office network by closing 13 of its 52 UK offices and reduce its headcount by up to 1,800, or 10 per cent of its UK personnel.

In a statement last month, Zurich said that all aspects of the business were being reviewed, including processes and technology and the number of its locations across the UK.

The job losses, which will take effect from September, will be made at the following locations:

  • Belfast, 30
  • Birmingham, 70-90
  • Bristol, 10
  • Cardiff, 50-70
  • Cheltenham, 20
  • Fareham, 170
  • Farnborough, 50
  • Glasgow, 10
  • Leeds, 30-40
  • London, 10
  • Manchester, 10
  • Southampton, 20
  • Sutton, 10
  • Swindon, 15

Zurich staff were briefed on the changes this morning.

The losses are at the upper end of the company's estimates, after it announced plans to axe between 700 and 900 jobs last month. It laid off 40 staff in October last year.

UK chief Guy Munnoch said the latest move was part of plans to shave 10 per cent off the insurer's expense base by the end of the year.

Zurich's UK performance in recent years stands in contrast to the group's global business. In 2007, Zurich UK's combined operating ratio deteriorated over twelve points from 92.1% to 104.8%, while operating profits were slashed three-fold from £323m to £91m after it paid £325m in claims stemming from the summer floods.

The insurer's UK GWP has fallen each of the past two years from £2.18bn to £2.06bn.

In a related move, personal lines broker Endsleigh, which Zurich acquired in 2002, announced plans to close its branch network of 119 offices in May. Hundreds of staff have subsequently been made redundant.

Munnoch said: "Market conditions remain tough and look likely to remain challenging throughout 2008. To ensure we remain in a strong, competitive position for the future, we have decided to act swiftly and reduce our cost base, enhance our effectiveness, whilst maintaining our customer focus.

"Decisions that impact people are always tough; that is why we wish to move with pace and sensitivity while keeping a clear focus on maintaining our position as the multi-segment, multi-distribution insurer in the UK."

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