Royal & Sun Alliance is to shed a further 500 jobs in the UK as it pushes on with a major cost-cutting programme, the insurer has said.
R&SA yesterday reported a 2% drop in pre-tax profits to £338m in the first half, hit by the bad weather, but helped by a strong performance in emerging markets.
The results were better than the market had expected and came with a promise of a new round of cost cuts.
Chief executive Andy Haste unveiled a programme to save £70m by the middle of 2008. This will include 700 job losses, about 500 in Britain, as well as improvements to procurement and IT systems.
The company did not give specific locations for the job losses and said it would work with unions to ensure as many as possible could come from "natural attrition" rather than laying people off.
R&SA's latest cuts come on top of the completion of cutting £130m from its cost base, delivered ahead of schedule, partly through the loss of 1,500 jobs, 1,000 of which were in the UK, closing two sites.
R&SA revealed it was facing costs of £120m from the recent floods and admitted the UK market was "challenging". The cost was estimated as £55m from Yorkshire, while the hit from the July floods in Gloucestershire was even worse at £65m.
The floods mean R&SA is not expected to reach its target of a "combined ratio" of 95% or better. Instead, 96% is expected this year.
Despite this, Haste did not commit to increasing consumers' premiums.
"We don't see the event as a reason to raise prices on a blanket basis. It is possible individual premiums will rise, but not inevitable," Haste said.
