Norwich to merge with CGU
Norwich Union and CGU are to merge to form CGNU, the biggest British insurer, worth STG19 billion ($48.69 billion) and strong enough to compete on the interna-tional stage.
Norwich Union and CGU are to merge to form CGNU, the biggest British insurer, worth STG19 billion ($48.69 billion) and strong enough to compete on the interna-tional stage.
The companies say the merger would secure annual cost savings of STG250 million ($640.61 million) after 18 months, but would come at a cost of STG350 million ($A896.86 million) and some 5,000 jobs. Most of the job cuts will be made in Britain.
The merged group will have annual sales of STG26 billion ($A66.62 billion), which the partners hope will give the financial strength to compete internationally at a time of rapid consolidation in the industry.
The current chief executive of CGU, Bob Scott, who will move to the top of the merged group, says the global reach was the driving force for the deal.
CGU said that the link-up with Norwich Union would act as a "spring board" on to the international stage.
The business, if it wins shareholder and regulatory approval, will be the number one insurer in Britain, Ireland, Canada and New Zealand. It will be the third-biggest insur-ance group in Australia and the Netherlands.
Scott says that the merged company "will be an industry consolidator particularly in Europe and other international markets" but did not specify which markets would show the fastest change.
He predicted that the merger would be completed in early June.
As well as being the biggest provider of general insurance in Britain, the merged group will be the second largest underwriter of new life assurance and pensions busi-ness here. It will be the fifth-biggest life assurance company in Europe.
Scott said that given the combined workforce of 70,000, the 5,000 workers to lose their jobs represented a "relatively small number" of staff.
Jobs would likely go in asset management, public relations, information technology and technical divisions such as actuary and underwriting businesses, the companies said.
AUTHOR
Recommended for you
Wealth Data has revealed the top five licensees for financial adviser growth over the September quarter, with more than 150 advisers joining in Q3 overall.
Former Sydney financial adviser, David Valvo, has pled guilty in court to a charge of dishonest conduct.
Building a network of mentors and coaches with varied skill sets could help women achieve their career goals, according to an FBAA executive.
AMP has reported its Q3 results and provided a progress update on the divestment of its advice division to Entireti.
