Insurance firm Norwich Union is targeting £200 million in savings this year, including £33 million through IT rationalisation.
The savings form a major part of a cost reduction programme by parent company Aviva, called One Aviva, through which the group is attempting to save £350 million by the end of 2009.
Exact details of the IT changes have not been disclosed, but Aviva said money will be saved through a more efficient IT set-up, including switching off legacy technology and sharing IT platforms.
Savings in Norwich Union, are crucial as it represents 42 percent of group sales and is “the bedrock of the group’s success”, according to Aviva chief executive Andrew Moss.
The £33m IT savings, alongside a reduction in marketing costs, mark the first of a three stage programme. In the second and third stages, which are still in planning, the company will “re-engineer” its service and processing centres, and remove layers from its business structure.
Last year, Norwich Union switched off 100 legacy systems, following an agreement for reinsurer Swiss Re to administrate three million life and pensions policies on its behalf. It plans to decommission another 230 systems, leaving 120 running.
Moss said Norwich Union was on track to save £200m by the end of the year, and a further £100m by the end of 2009.
In 2007,Aviva generated £3.3bn operating profits, as group-wide costs were reduced by 6.5 percent. The budget for the cost reduction programme is £330m overall.