THE Belgian owners of Kwik Fit insurance are set to provide a vote of confidence to its Scottish operation although the company recorded a sharp fall in profits last year.
Ageas has proposed to transfer the operations of its Express Insurance arm from a site in Birmingham to Uddingston where Kwik Fit Insurance already employs 1000 staff.
The Belgian company bought Kwik Fit Insurance for £215 million in 2010.It wants to consolidate the operations of Kwik Fit Financial Services, Express Insurance and Green Insurance on the South Lanarkshire site.
Subject to the completion of a 90-day consultation with staff in Birmingham, the closure plan would lead to the loss of up to 170 jobs from the English centre.
Some of the staff concerned may be able to transfer to Uddingston.
Founded in 1995 as part of Sir Tom Farmer's Kwik Fit car maintenance empire, Kwik Fit Insurance Services is a major employer in South Lanarkshire.
The latest accounts for Kwik Fit Insurance suggest the proposed reorganisation follows a downturn in trading at that company amid fierce competition in the insurance market.
Operating profits fell 28% in the year to December, to £9.4m, compared with £13m in 2010. Turnover fell 17%, to £56.5m from £68.2m in 2010.
The Kwik Fit Financial Services operation, which also includes Express Insurance and Green Insurance, reported operating profits fell 14% annually in 2011 to £8.8m. Sales fell 11% to £85m.
June Lynch, managing director of Kwik-Fit Financial Services, said: "The impact of fraud on insurers is well documented, and we have made a strategic decision to combat this and realign our customer profile to improve our competitiveness in a very tough market. These factors have combined to impact on profits in the short term with a view to providing a solid foundation for future growth."
The chief executive of Ageas, Bart de Smet, said last month that the Kwik Fit insurance business has not yet achieved the level of profit expected. However, he indicated that Ageas is pleased with the results of the acquisition.
In a conference call with analysts, Mr de Smet said the company values the profits the UK units like Kwik Fit Insurance make but also the additional business they generate for other Ageas operations and the cost synergies it can achieve through owning them.
Kwik Fit Financial Services launched the 90-day consultation process with staff at the Birmingham site on May 29.
Ageas developed from the remains of Fortis, which joined with part-nationalised Royal Bank of Scotland in the ill judged acquisition of ABM Amro in 2007.
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