The bosses at major insurance provider Aviva have revealed plans for mass job cuts in an effort to boost profits. These parasitic firms should be taken into public ownership.
On 6th June, CEO Maurice Tulloch announced that 1,800 jobs at the insurance company Aviva, Norwich’s largest private sector employer, are to be cut. This move is designed to reduce costs for the company, as part of a plan to make Aviva “simpler, more competitive and more commercial”.
With a significant section of their UK workforce based in Norwich, this will be the largest loss of jobs for the firm since 2013, when 2,000 workers were made redundant under the pretext of keeping the company “more agile and efficient”.
The Unite the Union officer for Aviva, Andy Case, has unfortunately adopted a so-called ‘roundtable approach’. He has concentrated his efforts on trying to minimise compulsory redundancies, remarking that the union has a “managed relationship” with Aviva.
For workers furious at Aviva’s mass sackings, Unite’s talk of “feeling positive” about their situation feels not like a bang but a whimper. These job losses must be fought, not managed into oblivion.
Serving big business first
Insurance companies make their profits from premiums charged to their customers, most of whom are working-class households. However, over time insurance companies have begun to target wealthier shareholders. As such, their primary interests have become ever more closely entwined with finance capital, rather than their customers who they claim to serve.
For instance, when Aviva found itself strapped for cash after the 2008 financial crisis, deputy chairman John MacFarlane announced closures of “unprofitable” working units to stave off an investor revolt.
Although Aviva boasts that 98% of claims are compensated for, such a rate comes at a huge cost for its employees. The company has shed huge numbers of workers to stay ahead of the competition.
In a period of economic crisis, insurers will always bailout business investors first. This was seen with the American International Group (AIG) in 2008. AIG was the largest provider of commercial and industrial insurance in the USA. The crash dragged the company to the point of bankruptcy. But there was no talk of compensating the millions of small-scale customers.
The big private insurance companies suck up money by charging ever-higher premiums to households and ordinary customers, in order to cover the losses of reckless free-market gamblers. Despite the job losses, Aviva intend to keep their “progressive “ (i.e. lucrative) dividends policy in place.
Private insurance companies are nothing but a parasitic symptom of the capitalist system. Cutting staff numbers to hold up profits only shows the reality of how insurance firms operate today under capitalism: raising prices whilst reducing services at the expense of the working class.
Instead of propping up these parasites, a socialist Labour government should nationalise the big insurance firms, along with the banks and major monopolies. There should be no compensation for the current fat cat owners.
With public ownership and workers’ control of these important economic levers, as part of a socialist plan of production, we could provide genuine protection, quality services, social housing, and a safety net for all.