L&G and RSA to wield the jobs axe as crisis spills over into the insurers

My Account
Logout

Create an Evening Standard Account

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Welcome! Sign in here

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Forgot your password ?

Registration

* indicates fields that are mandatory

Email *

Password *

Confirm Password *

First name *

Surname *

Postcode *

Country *

Mobile phone number

Username *

Gender *

Year of birth *

When you sign up...

You will have access to all our online competitions, discounted offers and can post comments on our site.

You will also receive The Weekender newsletter sent every Thursday - it’s full of fantastic offers and ideas for the weekend. You can update your email preferences in your account page when you log in.

Other newsletters and emails

Homes & Property Newsletter - Yes I want to receive the weekly email with all the latest news on property in the capital

Occasionally we would also like to send you relevant emails detailing specific offers either from ourselves or carefully selected partners. If you would prefer not to receive these then please tick the appropriate boxes below. We will never pass on your details.

I do not want to receive additional offers and information from the Evening Standard

I do not want to receive additional offers and information sent by Evening Standard on behalf of carefully selected partners

Terms and Conditions

* I have read, understood and agree to be bound by the terms and conditions of Evening Standard

Registration

Mail Sent for Registration Confirmation.

A confirmation email has been sent. Please activate your account by clicking on the activation link sent in your mail box.

Legal & General is getting rid of up to 450 people, while RSA is to lose 1200 positions in the UK - 14% of its total. The job losses at RSA look particularly brutal, coming on the day the insurer unveiled excellent results and bragged about its financial strength. It is also increasing the dividend by 10% to 4.98p.

Chief executive Andy Haste said the job cuts are necessary.

"These are never easy decisions to make but the UK arm isn't in the place it needs to be. It is the right decision," he said.

The cuts should lead to savings of £70 million. Unions are likely to react with anger. The decision to raise the dividend may also raise eyebrows at the Financial Services Authority, which is desperate not to see the banking crisis spill into the insurance sector and has been asking insurers to act with caution.

RSA said premiums rose 11% to £6.5 billion in 2008. Profits jumped 13% to £759 million. Haste reckons 2009 could be a bumper year. With insurance rates hardening and rivals lacking capital, he should be able to expand the business.

L&G's job cuts come as it grapples with a plunging share price and questions about its finances.

The insurer is under attack from short-sellers who are betting that the shares will keep falling.

It is also faces scepticism about its financial health despite recently reassuring the market it has a healthy surplus and no immediate need for an injection of cash.

It is in talks to get rid of between 250 and 450 staff. A spokesman said: "L&G has entered into consultation with collective representatives over potential redundancies within its support functions. L&G will keep any potential redundancies to a minimum and will try to find suitable alternative employment for staff affected."

L&G, which employs 8500 people, said it faced "changing business demand and operational efficiencies".

Its main offices are in London, Cardiff, Brighton and Kingswood, Surrey.

Unite union said: "We are extremely disappointed and saddened at this announcement."