Aviva to outsource some Norwich Union administration to Swiss Re
by Elaine Frei
The UK’s largest insurer will outsource administration of nearly 3 million life and pensions policies to reinsurer Swiss Re in a move meant to cut costs. The move will allow Aviva (LSE: AV) to close down half of the 550 IT systems it currently operates for various products. The proliferation of systems is partly a relic of previous mergers.
Swiss Re will begin administration of the policies, sold under the Norwich Union name beginning in October, although customers, policies and funds will remain under the Norwich Union umbrella. However, around 1,000 Norwich Union employees will be working for Swiss Re as part of the deal, which will see the reinsurer paid a set fee per customer and per policy. The amount of the fee and details of the deal have not been announced.
Aviva has said that it wants to save £250 million in its domestic operations by the end of 2008, and that it expects half of that savings to come from its life insurance business in the UK.
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