Scotland’s largest insurer will be eliminating its U.K. unit as it moves away from the sector.
Standard Life Plc, the biggest insurer in Scotland, will be leaving the life insurance industry, leaving 139 people from its United Kingdom unit out of a job.
The majority of the positions will be lost in Scotland, within several different divisions.
Standard Life insurance jobs will be lost in the marketing and advising divisions, as well as in information technology, according to a statement from the company. The insurer has said that it has been selling a smaller number of those products and that it now wishes to place its focus on other products that have greater potential.
Instead of life insurance, it will now be concentrating on employee savings and self-invested personal pensions.
In these sectors, unlike life insurance, it is the customers who takes on the investment risks, should money be lost, instead of the insurer. The company, based in Edinburgh, has been cutting its costs by approximately $800 million since 2010. It has primarily focused on cutback in technology. It also said in its insurance news announcement, that it will be working to increase its fee-based savings products inflows.
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According to the chief executive officer for the United Kingdom and Europe at Standard Life insurance, Paul Matthews, “Our current model and structure has to change to meet the changing demands of this new world where customers will want to interact in different ways for different products.”
The stock for the firm fell by 0.1 percent following the insurance news announcement, at approximately 11:15am (London Trading Time) on Thursday. This valued Standard Life insurance at approximately 7.3 billion pounds. The company is currently the fifth highest performing insurer in the United Kingdom, as per the benchmark FTSE 100 Index (UKX). It has held this position throughout 2012, and has increased by 50 percent when compared to the overall climb of the index, which has been 3 percent.
The insurer feels that by shaking off its underperforming life insurance business, it will only help itself to continue this growth and highly positive performance well into the future.