Royal & Sun Alliance, the insurer, has unveiled plans to axe 1,500 jobs - 1,000 of them in the UK - as part of its aim to cut annual costs by £130 million over the next two years.
The group said the cost-cutting drive follows an earlier programme to trim costs by £270 million a year, completed six months ahead of schedule.
The market welcomed the news, sending RSA shares up 4p to 127p. For further details on the shares click here
Andy Haste, RSA’s chief executive, said: “The decision to reduce headcount is always a difficult one, but necessary to ensure we remain as competitive as possible and to continue to deliver on our objective of sustainable profitable performance.”
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The insurer currently has a global workforce of about 23,000. The cuts will be split between the group’s claims, retail and broker businesses.
The insurer has 10,000 staff in the UK including sites in Liverpool and Manchester. It has said it hopes to limit the number of compulsory redundancies.
In 2004, RSA cut around around 1,100 jobs in the UK as it outsourced work to India.
A spokesman for Amicus, the union, said: “Amicus is disappointed at the numbers involved in this redundancy programme and we will be working closely with the company to try and reduce the number of redundancies.”
RSA, which provides motor and home insurance policies to consumers in the UK and Scandinavia, has been hit by falling premium prices amid fierce competition.
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Britain’s second-largest commercial insurer has also been surrounded by takeover rumours - stoked further when rival Aviva dropped a proposed bid for Prudential earlier this year.
However, last month RSA surprised the market with a 30 per cent rise in first-quarter operating profits and an improved underwriting position.
Operating profits in the three months to the end of March rose to £207 million, up from £160 million in the same quarter last year and compared with market expectations of £193 million.
Today, the company also said that Jens Erik Christensen, the chief executive of its Danish unit Codan, is to retire at the end of this year.
Codan plans to buy back shares worth up to £100 million.