250 more jobs axed at insurance giant Homeserve

HOMESERVE is axing another 250 jobs as it revealed today the UK's finance watchdog is launching a probe into controversial sales tactics at the household insurance giant.

The job cuts come on top of 200 redundancies in February with staff levels at the Green Lane headquarters now dropping to around 1,000 as customer numbers fall.

In October HomeServe temporarily suspended UK sales and marketing after evidence emerged that some customers did not understand what policies they were buying.

It has also announced compensation for tens of thousands of customers whose complaints were mis-handled during the severe winter of 2010-11.

HomeServe has worked closely with the Financial Services Authority watchdog since October, but chairman Barry Gibson said today: "The FSA has informed us that they intend to investigate certain historic issues. That investigation will take a number of months to complete."

Jonathan King, chief executive of HomeServe's UK business, said the FSA probe would be into how policies were sold, the complaints handling problems and the way the company was being run at the time.

He stressed it was a "backward-looking investigation into past failings".

Since HomeServe had suspended sales in October "we have effectively rebuilt the business" with guidance from the FSA, said Mr King.

But customer numbers are down nine per cent to 2.3 million and policy numbers down 12 per cent to 6.7 million. Mr King said customer numbers were likely to fall further, with the job losses a direct result of fewer UK customers.

But he added that HomeServe remained "absolutely committed to Walsall" as its base and the international group's has been buoyed by overall sales rising 14 per cent to £534m.