THE MSF union is to seek urgent talks with management over the implications of the merger of Royal Insurance and Sun Alliance. Worldwide the two companies expect to lay off up to 5,000 employees, 11 per cent of their combined workforce.
Compulsory redundancies have not been ruled out, although the companies said they would prefer redundancies to be voluntary, and a recruitment freeze will be announced.
Mr Harold Wann, chief executive of Sun Alliance Ireland, also refused to rule out redundancies. "I would prefer to concentrate on the positives", he said. "We have not made any decisions yet."
Sun Alliance employs 380 people in Ireland but 80 are on temporary contract to install a new computer system while 35 are involved in sales. Royal employs 300 in the Republic and 90 in Northern Ireland.
A spokesman for Royal insisted that the size of the enlarged company would also provide new opportunities for staff. "It's not a one way street", he said.
MSF has about 250 members in each company in Ireland, or 90 per cent of the non managerial white collar employees.
The union is used to negotiating rationalisation deals in the Irish insurance industry. It agreed a two year "integration and harmonisation programme" when GRE and PMPA merged, under which there were no compulsory redundancies.
The newly merged insurance businesses will form one of the biggest insurance groups in Britain, worth about £5.38 billion sterling. In Ireland the two groups have around 13 per cent of the non life insurance business. Of that, Sun Alliance counts for 9 per cent and Royal 4.3 per cent. The merger will allow them to grow this substantially, according to Mr Wann.
Based on 1995 figures, the merged company would have worldwide premium income of £9.39 billion and pre-tax profits of £1.03 billion. Of that, Ireland took in £150 million in premiums, £100 million from Sun Alliance and around £50 million from Royal.
Sun Alliance does not sell life insurance in the Republic while Royal has been winding down its life operation over the last couple of years and is no longer writing any business.
Under the merger plans, the current Royal Insurance chief executive, Mr Richard Gamble, would take the helm of the new company and will become group chief executive. There is no decision yet who will take over the Irish operation. However, the initial choice is likely to be between Mr Wann and Mr Malcolm McCamley, who runs Royal in Ireland.
Pending regulatory and shareholder approval, the business would begin trading in August.
. Meanwhile, sales managers at Irish Life will meet on Tuesday to consider new terms for settling their dispute over redeployment. The company has extended its deadline for acceptance of the new terms from May 1st to May 13th.
