Workers’ fears allayed by management message

8:33am Tuesday 30th September 2008

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BOSSES at Fortis Insurance, one of Eastleigh’s biggest employers with more than 900 staff, moved to reassure workers that their jobs were safe after the banking arm of the company had to be rescued by massive bailouts from three governments.

Fortis – Belgium’s largest retail bank and the UK’s third largest car insurer – was handed an £8.9 billion cash injection by the governments of Belgium, Luxembourg and the Netherlands in return for a 49 per cent stake in the company.

Fortis must also now sell its stake in Dutch bank ABN, which it bought as part of the £50 billion RBS-led consortium’s takeover last year.

Fears that the fall-out from the financial crisis could hit the Eastleigh headquarters of Fortis’ UK insurance operation were allayed by managers in a message to staff, saying they had a “robust business”.

Barry Smith, chief executive of Fortis UK, pictured, said: “The UK insurance operations have not been affected by the recent events at the Group level and it is very much business as usual.

“By way of background, Fortis UK operates as a separate legal entity from Fortis Group and is a robust business with a strong capital position and with continued growth in profitability.

“Fortis Insurance Limited, based in Eastleigh, has more than 2.5 times the minimum capital required by the UK regulator.

“We have reassured our staff that their employment at Fortis remains totally unaffected by the developments with Fortis Group.

“We remain confident in Fortis as a strong employer and are committed to our people, who are integral to the ongoing success of our business.”

He pointed to recent business wins with major chains like the John Lewis Partnership and Marks & Spencer as evidence of the group’s health.

The bail-out was rushed through before stock markets opened yesterday morning, after Fortis shares slumped 20 per cent on Friday, to their lowest level in 15 years.

The bank said that the deal with the governments ensured the “financial strength and stability of our company going forward”.

Fortis is the largest European financial institution to be bailed out as a result of the turmoil in the credit markets.

As part of the rescue package, its chairman, Maurice Lippens, will be forced to resign.

In the UK it offers travel, car and house insurance under the Fortis brand, as well as commercial insurance for businesses.