UK broker Swinton to close 84 branches as customers go digital
UK insurance broker Swinton is set to lay off another 900 staff and close 84 branches as customers abandon it for online carriers. The company, which shed 130 branches last year, is also discussing the future of a Norwich call centre that employs 183 people. The company is now focused on upgrading its digital offering. 
Swinton is planning to close a another 84 branches and cut as many as 900 jobs because the vast majority of its customers prefer to buy insurance online or over the phone.

The second wave of closures in just over a year means the company’s branch network will more than halve to 111, although it says it will still be the biggest insurance broker on the high street.

Swinton, which started selling insurance door to door 60 years ago and has 2 million customers, said it was reviewing the size and structure of its branch network. It pointed to a shift in consumer behaviour, with 90% of its customers no longer going into a branch.

The firm said the fate of a call centre in Norwich that employs 183 people was also under review, and that it would begin formal consultations with all staff to be affected by the cuts. It also said that where possible they would be moved to other parts of the business.

The cuts come on top of 130 branch closures announced in February last year. The closures will affect all parts of the country but most branches are in northern England. The branches employ and average of seven to eight people each.

Hannah Maundrell, the editor-in-chief of money.co.uk, said: “It’s sad but not surprising that Swinton are joining the many high street banks in shrinking their branch network to focus on digital and phone customers. It’s not only more cost efficient for them, but it reflects how many of us are now comparing and buying insurance.

“This pattern is worrying for those who aren’t digitally savvy. The reality is they may end up with nowhere to turn for face-to-face help with switching insurance and end up paying more for sticking with the same policy year after year.”

Swinton is investing £45m in its IT systems, digital and phone platforms at its new head office and call centre in Manchester to keep up with technological and regulatory changes. The firm sells motor, taxi, caravan, home and business insurance and made a pre-tax profit of £18.2m in 2015, the latest accounts show.

Gilles Normand, the firm’s chief executive, said: “Ever since Swinton started selling insurance door to door 60 years ago, this business has always evolved – first via branches, then contact centres and increasingly online. Our approach today, which is based on a high contact strategy, no longer meets our customers’ needs.

“While branches continue to be an important part of our multichannel business model, we need to ensure that we can interact with customers whenever, and however, they choose.”

The business began in 1957 when Ken Scowcroft sold his first car insurance policy for £5 in Swinton near Manchester. At the time people bought motor insurance from salespeople at their door, but Scowcroft offered a different service by comparing prices from various insurance companies. In the first year, he sold more than 100 policies.

He opened a high street branch in 1964 and by 1987 Swinton had become a well-known brand with 220 branches around the UK.

More recently, the firm was embroiled in a mis-selling scandal, for which it was fined £7.4m and had to pay more than £11m in compensation to customers. This was followed by a £928,000 fine for three former directors.