Swinton Hires, Norwich Fires - A Tale of Two Cities

NCD News: Swinton & Norwich Union Insurance - 26.06.08

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Swinton Hires, Norwich Fires - A Tale of Two Cities: Historically, insurance was a local business and proud to show its local allegiance. The Lloyds of London insurance market was formed in, and named after, the London coffee shop of Edward Lloyd where ship-owners met in the 1680s. Norwich Union was founded in Norwich in 1797 as a mutual society owned by local people for the "insurance of houses, stock and merchandise from fire". Even as recently as the 1950s, it was still appropriate for a new insurance company to name itself after the local town ‚Äì as Swinton Insurance did.

But when Swinton Insurance announces that it is creating new jobs in the city of Norwich while Norwich Union is cutting jobs in the same location, then one suspects all local allegiances are put aside in the current business world where buy-outs and hidden overseas parent companies dominate the insurance industry. Indeed the famed sketch show catchphrase "this is a local shop for local people" could certainly identify the current view large corporations have of, what they consider to be, an outdated philosophy regarding community over profit.

Last month Swinton said it would create 50 new jobs in its Rosary Road offices in Norwich, where its internet operation has been located since a merger with Its4me, an internet-based motor insurance broker, in December 2006. In its announcement Swinton made pointed reference to Norwich Union, saying that Swinton was bucking the trend of an industry in turmoil and taking on staff while rivals were doing the opposite.

It's true that Norwich Union (NUI) is laying off some staff ‚Äì but not in Norwich the company claims. NUI, now a division of Aviva issued a lengthy press release on 6th June detailing a "major operational transformation". A consolidation of operations into "centers of excellence" requires that "the NUI Operations function will be withdrawing from Dundee, Glasgow City Centre, Leeds, Sheffield, Liverpool, Cheadle, Birmingham, Bristol, Southampton, Basildon, Ipswich, Exeter and Worthing. This will happen carefully over the next two years as NUI aims to minimise customer disruption and be as supportive as possible for its employees as they go through the transformation." The new plan includes about 1,800 redundancies nationwide as recent mergers are digested. But NUI predicted there would actually be a modest increase in its Norwich-based workforce by 2010, as a result of the consolidation.

In October last year, NUI rocked the industry with an announcement that it would cut £300 million in costs. At the time, Aviva chief executive Andrew Moss said "It would be naive to say there will not be any further job reductions," although he would not be more specific. The cost cutting plan was part of Mr. Moss's "Aviva Vision" plan, following his elevation from Chief Financial Officer to CEO in July 2007.

Norwich Union's staffing record has been controversial since 2002, when it first started closing positions in the UK and extending operations in India. Unions have repeatedly opposed the moves. In December 2003, when NUI told staff it would cut 2,350 UK jobs, the move was described as "despicable" by the Amicus trade union. After the October 2007 staff cuts, Andy Case, national secretary of the Unite union, said his union was "angry and disappointed". †