CIMB Aviva offers VSS

 

Insurance group CIMB Aviva Malaysia has offered a voluntary lay-off scheme to its permanent employees, one of the earliest to do so since the economic slowdown.

An industry source said that about 200 of the group's conventional insurance and takaful unit employees had accepted the voluntary separation scheme (VSS), offered last month.

It is learnt that CIMB Aviva has about 550 employees.

News of the VSS scheme is a worrying sign amid the global financial crisis. Already, there are rumours that a similar scheme may be offered at another local insurer as the slowing economy hurts business.

CIMB Aviva told Business Times that the VSS was part of a restructuring exercise. This will lead to its focusing on the life and family takaful business, distributed through a bancassurance partnership with CIMB Bank.

"This VSS is a a direct component of the business restructuring exercise, which will give CIMB Aviva much greater focus and efficiency in the future," it said in an e-mail reply.

Effectively, its Islamic insurance unit, CIMB Aviva Takaful Bhd, will now stop all motor and commercial lines business.

"This will see CIMB Aviva focusing its general insurance business on personal accident and retail fire," it said.

CIMB Aviva Takaful said that existing policyholders should not worry.

"Customers can rest assured that CIMB Aviva will continue providing coverage on existing policies until the end of their current contract period, and claims for covered services will continue to be processed according to the contract terms."

CIMB Aviva is a partnership between CIMB Group, the country's second biggest banking group, and Aviva plc, the UK's largest insurer.

In July last year, Aviva paid RM500 million to buy a 49 per cent stake in CIMB Group's subsidiaries, Commerce Takaful Bhd and Commerce Life Assurance Bhd.

It resulted in Aviva holding its first takaful unit, CIMB Aviva Takaful, along with a life unit, CIMB Aviva Assurance Bhd.

Since it started business in July last year, takaful has accounted for about two-thirds of CIMB Aviva's total gross premium income.