Norwich Union is to close its national broker subsidiary, Hill House Hammond (HHH), by the end of 2004. The closure of the business will be phased over the year, but entails the closure of over 240 HHH branches and offices across the UK and the head office in Bristol; the transfer of the motor, home and travel insurance business to Norwich Union Direct; and the sale of the commercial insurance division.
As a result of the decision, around 1,600 jobs will be lost from the HHH operation. Of these, around 400 staff will be found alternative roles through Norwich Union’s UK-wide redeployment process, which matches an individual’s skills to internal vacancies in the event of redundancy. But there will be around 1,200 compulsory redundancies.
The Norwich says it is creating over 450 new jobs in its Norwich Union Direct call centres in the UK to help handle the business transferred from HHH. These roles will be created in Norwich, Sheffield, Liverpool, Perth and Bishopbriggs, near Glasgow, during 2004 and most staff will be in place by the end of the year. The insurer said the HHH announcement was not connected with recent offshoring plans in India.
“We are operating in an extremely competitive environment and have seen significant changes in the way customers buy their insurance,” explains Patrick Snowball, chief executive, Norwich Union Insurance. “Many customers now understand their motor or home insurance needs and will shop around themselves for the best deal. The number of customers who shop on the high street to arrange their insurance has also fallen significantly as many prefer to deal directly with insurers by phone or over the internet. Making decisions that affect our staff is always difficult, but we believe these changes are needed for us to remain competitive and adapt to changing market conditions. Norwich Union Direct is already well established in the direct insurance market, offering a wide range of products and services to millions of customers. We believe it will provide us with the best platform to strengthen our direct relationships with customers and better understand their needs. We are writing to all HHH customers to inform them of these changes as well as giving our reassurance that any impact will be kept to a minimum.”
The changes announced today follow a strategic review of the Hill House Hammond operation, which looked at the structure of the business and opportunities to reduce costs and achieve greater efficiency. The closure of HHH reflects the decision to increase motor and home insurance through the company’s direct insurance arm, Norwich Union Direct, in line with changing customer demand.
Norwich Union is in advanced discussions with a potential purchaser for ‘Hill House Hammond Business’ – the commercial insurance division of HHH – and a further announcement will be made shortly.