Norwich Union seeks to make savings in review

by Ed Kemp, Marketing 08-Aug-07

Financial-services group Aviva is to review the direct business for its entire Norwich Union Insurance portfolio as part of wide-ranging cost-cutting measures.

The insurance brand has told existing agencies to cut fees or risk
losing the business, according to insiders.

The UK's biggest insurer, Norwich Union had been in the midst of a pitch
for its NU Life business, but that now hangs in the balance as the firm

plans to draw up a roster of direct shops for its other insurance

brands, including Motoring, Life, Home and Healthcare.

The company overhauled its direct roster last May as part of a statutory
review. Its current agencies include TDA, Tri-Direct, Fox Murphy and
Kitcatt Nohr Alexander Shaw.

Earlier this month, Norwich Union announced that it was to raise its
insurance premiums following last month's floods, which cost parent firm
Aviva about £340m. However, the company said rising prices were
also driven by the increasing costs of home repair.

The increase followed last year's decision by Norwich Union to hike its
motor insurance premiums by an average of 16%.

The company recently launched an £8m ad campaign through Abbott
Mead Vickers BBDO. It shows a series of accidents, including a hailstorm
smashing a greenhouse, with a voiceover explaining that it can't stop
bad luck, but can make it easier to cope with whenever it happens.

Calls to Norwich Union were not returned.