UK insurance group Aviva is to close its UK broker subsidiary, Hill House Hammond (HHH) by the end of the year, leading to the loss of 1600 jobs, including 1200 compulsory redundancies.
Just 400 HHH staff will be found alternative roles at the group's Norwich Union subsidiary.
The company says the closure of the HHH business will be phased over 2004 and will involve shutting down over 240 branches across the UK, as well as the head office in Bristol.
All motor, home and travel insurance business will be transferred to Aviva's online insurance subsidiary Norwich Union Direct. The company will sell off HHH's commercial insurance division.
As a result, 450 call centre jobs will be created at sites in Norwich, Sheffield, Liverpool, Perth and Bishopbriggs near Glasgow, to handle the business transferred from HHH.
Commenting on the branch closures, Patrick Snowball, chief executive, Norwich Union Insurance, says the number of customers who shop on the high street for insurance has fallen significantly as many now deal directly with insurers by phone or over the Internet.
"We believe these changes are needed for us to remain competitive and adapt to
changing market conditions," says Snowball.
Nowrwich Union adds that the closure of HHH reflects its decision to increase motor and home insurance through the its direct insurance arm, in line with changing customer demand.
Aviva announced plans in December to close 12 operations in the UK and shift a further 2500 jobs to India in 2004. The group says the HHH job cuts are not connected to its offshoring plans.