Sign in Subscribe
Insurance industry

Thousands of Jobs at Risk as Norwich Union and CGU Announce Merger

Strategic Insights

— 1 min read

The planned merger between insurance groups Norwich Union and CGU could result in the loss of up to 4,000 jobs in the UK, with over 3,000 employees in Glasgow, Perth, and Dundee facing uncertainty. The new company, CGNU, will be the fifth largest insurer in Europe, worth £19 billion, but aims to cut costs by at least £250 million per year.

Key Takeaways:

  • The merger between Norwich Union and CGU could lead to the loss of up to 4,000 jobs in the UK, with over 3,000 employees in Glasgow, Perth, and Dundee facing redundancy.
  • The new company, CGNU, will have its head office in London, with its life insurance division based in York and UK general insurance operations centered on Norwich.
  • The highest job cuts are expected in Perth, CGU's current base, and Norwich, where Norwich Union is a major employer.
  • The job losses are likely to come in areas of duplication between the two firms, including asset management, public relations, information technology, and actuarial and underwriting.
  • Voluntary redundancies and natural staff turnover will be used where necessary, but compulsory redundancies cannot be ruled out.
  • The merger is planned to take place over the next 18 months, with the new company, CGNU, becoming the fifth largest insurer in Europe, worth £19 billion.
  • CGNU will be Britain's largest insurance group, with worldwide premium income and retail investment sales of £26bn.
  • CGNU's head, Bob Scott, has dismissed the possibility of a foreign insurance group coming in to snap up one of the pair and break up the planned merger.

Statistics:

  • 4,000 jobs at risk in the UK
  • 3,000 employees in Glasgow, Perth, and Dundee facing redundancy
  • 35,000 staff in the UK, including employees in Exeter and Inverness
  • £250 million in annual cost cuts planned by CGNU
  • £19 billion worth of CGNU
  • £26 billion in worldwide premium income and retail investment sales for CGNU
  • 4000 jobs to be cut worldwide
  • 18 months for the merger to take place
  • 1998: Jobs axed when CGU was formed by a £5.8bn between General Accident and Commercial Union

Sources:

  • "Thousands of jobs in Scotland could be axed under plans to merge insurance groups Norwich Union and CGU."
  • Norwich Union and CGU Announce Merger

Read more