NU staff told jobs are safe
THOUSANDS of Norwich Union workers were assured last night their jobs were safe after the insurance giant revealed it made an �885m loss last year.One of the insurer's top executives said jobs in Norwich were "stable" and that no new redundancies were planned despite the losses.
THOUSANDS of Norwich Union workers were assured last night their jobs were safe after the insurance giant revealed it made an �885m loss last year.
One of the insurer's top executives said jobs in Norwich were "stable" and that no new redundancies were planned despite the losses.
The assurance was welcomed last night by union leaders, who warned that the business would be damaged by further job cuts.
But figures released by Norwich Union's parent company Aviva yesterday showed the full impact of last year's banking crisis and plunging stock markets on its business.
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Having made a �1.5bn profit in 2007, Aviva made an �885m net loss last year.
The Stock Exchange did not like the news, and Aviva saw more than �2 billion wiped off its value during another bleak session for the London market, finishing 95.1p down at 189.9p - a dip of 33 per cent on the day and in comparison to more than �6 a share a year ago.
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Chief executive Andrew Moss insisted Aviva was "in good shape" to withstand the global recession - and that a 4pc rise in operating profits to �2.2bn showed that the underlying business was "strong".
The insurer's sales around the globe also broke the �50bn mark for the first time last year.
Igal Mayer, chief executive of Aviva's general insurance arm said that the only job losses being planned had been announced last June.
At that time, Aviva said it would seek up to 1,800 redundancies nationwide to help cut costs by �500m and "streamline" its operations around the country.
But Norwich - which has about 6,700 Norwich Union employees - is likely to see a "modest" increase in staff numbers as work is moved to the city from Aviva offices elsewhere.
Last night Mr Mayer said: "We are not changing our goals or plans. “Plan A was to achieve �500m of cost savings and we're not announcing any changes to that plan or new job losses.
"The staff who are affected have been communicated with - we did that last June. There's nothing in the way of new news. You would expect me to say that. But why would I cut staff in Norwich? It's such a great hub of employment for us. In many ways it's still somewhat of a company town.
"We've got a stable workforce and the continuous ability to recruit in the area.
“What we've done in the community in the last three to four years demonstrates our commitment.
"If a company was planning on downsizing, they wouldn't build three new buildings in Broadland, they wouldn't invest �90m to refurbish their buildings in the centre of Norwich. That's what we've done."
Mr Mayer added: "Norwich is the headquarters of our general insurance business - the largest general insurance business in the UK. It's as safe as any place can be."
Andy Case of trades union Unite said: “We welcome the assurance and it will be well-received by staff.
“It is the case, though, that over the last few years there's been an awful lot of redundancies, offshoring and outsourcing - more than enough in our point of view.
“So I suspect that any more cuts would start to have a significant effect on the business.”
Aviva had moved to reassure the markets that it was financially strong by revealing that it now holds a capital buffer - the amount held in reserve above the minimum required to cover policy payouts - of �2bn.
Even if world stock markets fell by 40pc on their level at the end of 2008, Aviva would still have �1.2bn in reserve.
But under a new accounting measure intended to make it easier to compare financial results from the insurance industry - called "market consistent embedded value" - Aviva's net loss for 2008 would have been even higher at �7.7bn.
Mr Moss said: "Aviva remains financially strong. We've undertaken a thorough review of the value of our assets and liabilities, and have made cautious provision for future losses so that we are in good shape to withstand the ongoing volatility and uncertainty in world markets.”