Prudential U.K. confirmed reports which first appeared last week that it has reached an agreement to sell its general insurance business to Switzerland’s Winterthur, the insurance arm of Credit Suisse/First Boston, for £353 million ($516 million) in cash and other consideration. (See IJ Website Nov.1)
The move, initiated after a strategic review by new CEO Mark Wood, is part of a major restructuring aimed at focusing the Pru’s efforts on more profitable lines in the U.K. Winterthur will take over an estimated 1.9 million policies, mainly automobile and homeowners, resulting in the immediate release of $292 million in capital. Pru also will receive an estimated $345 million on future business through a profit sharing arrangement with Winterthur .
The job losses are in addition to the 2000 already announced; they’ll affect 25 percent of Pru’s workforce by 2004. While Winterthur plans on retaining employees in its sector, Pru plans to drop its Scottish Amicable Brand, amalgamating its products with Prudential’s, and will make other job cuts in its regional offices. It expects to eventually save around $256 million annually.
Winterthur will retain the Prudential brand on its policies, but is expected to fold operations into its present U.K. subsidiary, Churchill Group.
Topics Profit Loss Talent Uk
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