500 jobs to go in York at Norwich Union

11:00am Thursday 31st July 2008

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UP to 500 Norwich Union jobs in York are to go.

The insurance giant has announced it is outsourcing two key departments based at the company’s Monks Cross offices, where 750 staff work.

As revealed last night, the firm said it was entering a strategic partnership with the Scottish Friendly group, under which back office administration for its “Lifetime wrap” department would be carried out in Scotland.

It revealed it was also outsourcing the administration of its collective investments department to International Financial Data Services (IFDS), based in Basildon, Essex.

About 300 York people work in Lifetime wrap – an IT system which allows customers to look online at their Norwich Union products – with another 200 working in collective investments.

Mark Hodges, chief executive of Norwich Union Life, said it was too early to give an indication of the likely number of redundancies for both of the new partnerships.

“We understand that this causes uncertainty for staff,” he said. “Our priority will be to keep employees fully informed throughout this process and we will do everything we can to minimise the impact of this decision.

“We have built up valuable experience and knowledge in these areas and will seek to minimise any impact through natural turnover, not filling vacancies and redeployment where possible.”

The company said the transfer to IFDS would be phased and was due to be completed towards the end of 2009.

It anticipated that the number of compulsory redundancies will be less than the 200 jobs at Monks Cross, partly because of the phased approach and partly through natural staff turnover and redeployment.

It said the two deals with Scottish Friendly and IFDS – which were signed on Tuesday – formed part of an overall strategy to simplify operations, reduce costs and focus on new opportunities for growth.

It said the outsourcing of collective investments would significantly reduce operating costs, provide greater flexibility and make it simpler to quickly launch new products. “It is a low-cost, scaleable solution that will significantly enhance Norwich Union’s presence in this market.

“The administration of collectives is currently spread across several platforms, creating high operational overheads and difficult administrative challenges.”

Mr Hodges said the company would be making significant investments in its IT infrastructure over the next three to five years to recognise the changing needs of the “mass affluent customer who wants to do business with us online. This will focus on delivering more online solutions and product features”.