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Barclays changes General Insurance business
Source:http://www.barclays.co.uk, Source date:
Barclays announces that it plans to consolidate its core general insurance business from two suppliers to one. Discussions are well advanced with Norwich Union to provide services across the home, motor and travel insurance portfolio. This move will optimize future revenue growth and cost reduction opportunities. It underpins a drive to increase the presence of the Barclays Group in the UK general insurance market, an integral element of the bank’s retail banking strategy, as outlined in the UK Banking Seminar for investors in October 2004.
Barclays currently distributes motor and travel insurance products sourced from Norwich Union and home insurance sourced from Legal & General.
Commenting, Mike Rogers, managing director, Retail Banking, Barclays, said. “This is an important step in the delivery of our UK retail banking strategy. We have 14 million customers and we know that six in ten of them buy general insurance products, but currently only a fraction buys from us, which gives us a great deal to play for.
“As a single supplier, Norwich Union will bring scale and expertise in underwriting, product, marketing and claims servicing across all three areas of insurance. This brings Barclays a more efficient structure and a lower cost of operation which will include the outsourcing of Barclays insurance sales and service centre in Croydon. Planned new products will be distributed through our distribution network of more than 2,000 branches, via telephone and through on-line banking, which alone has more than five million users.”
Commenting, Mark Hodges, finance director, Norwich Union, said, “A closer association with Barclays will be excellent news for Norwich Union and its staff, and will further strengthen Norwich Union’s market position. Our strategic focus on mutually beneficial partnerships for the distribution of insurance products continues to be a real strength for us. Our aim is to work collaboratively with our partners to help them maximise the value of their general insurance portfolio.”
In support of this strategy Barclays has today agreed in principle to purchase 90% of Gresham Insurance, from Legal & General at a modest premium to net asset value. Barclays currently owns the remaining 10% of the company. At the same time negotiations are underway for the sale of Gresham Insurance to Norwich Union.
Barclays will continue to have a close and strong working relationship with Legal & General in other parts of its business.
Notes to Editors:
1. The transactions relating to the purchase and sale of Gresham Insurance are subject to contract, FSA approval, and where relevant, due diligence.
2. Gresham Insurance is currently 90% owned by Legal & General and 10% owned by Barclays. Its business is solely the underwriting associated with Barclays and Woolwich household insurance.
For further information, journalists should contact the relevant press office.
