Workers' Compensation News

Royal & Sun Alliance to cut 1,500 jobs

LONDON: U.K. insurer Royal & Sun Alliance Insurance Group Plc. is cutting some 1,500 jobs, nearly 1,000 in U.K. alone, as part of a 130-million-pound cost-cutting program through mid-2008. The redundancies in Britain represent 9.3 per cent of the total headcount of the firm. The job cuts will cost the company around 100 million pounds, but it said it will not impact its profits as it proposes to fund the expenditure through the planned cost cuts over the next two years. The company is in talks with the employees unions in the U.K. and in Scandinavia, where it expects to reduce the staff by 350. In addition, the company will also reduce staff in its international and corporate units.

Royal & Sun Alliance, which is the U.K.'s second largest commercial insurer, said it will expand its businesses. In Britain, it has already finalized several new deals, which are expected to bring in premiums worth nearly 200 million pounds. The company is also buying the personal lines business of Shillington Insurance Brokers, which will add 20 million pounds in premium to its Canadian subsidiary, Johnson. The company is also looking to expand its Baltic insurance business. Royal & Sun Alliance's Scandinavian subsidiary Codan is buying out the minority shareholders in its Latvian and Lithuanian businesses for 53 million pounds and it will set up business in the Estonian market.

The company has returned to profits in 2005 after it had sold off assets in the U.S. and reduced liabilities for workers compensation and asbestos-related illness. Its operating profits in the three months ending March 2006 had risen to 207 million pounds, from 160 million pounds in the corresponding previous year quarter. The insurer's chief executive officer Andy Haste said the decision to reduce headcount is always a difficult one but it is necessary to ensure that the company remains as competitive as possible and to continue to deliver on the objective of sustainable profitable performance. According to the company's 2005 annual report, it had employed 25,292 people during the 2005, including 10,781 in the U.K. The company, which is into motor and home insurance policies has been hit by falling premium prices amid fierce competition. 

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	Did You Know?
	FECA protects three million Federal workers A COST-EFFECTIVE SELF-INSURANCE SYSTEM FECA protects three million Federal workers from economic hardship due to work injury and illness. Included among the executive, legislative and judicial branch employees covered by FECA are civilian Defense workers, medical workers in Veterans' hospitals, and the 800,000 workers of the Postal Service, the country's largest civilian employer.