Royal Bank of Scotland says it will merge IT, claims and central functions at its Direct Line insurance subsidiary with those of £1.1 billion acquisition Churchill Insurance.
RBS announced the acquisition of Churchill from Credit Suisse early this morning.
Commenting, Fred Goodwin, group chief executive of RBS, says: "In direct channels, Churchill's strength in home insurance will balance Direct Line's strong position in motor insurance."
Churchill also owns NIG, which offers home and motor insurance through brokers and has a strong presence in commercial insurance products for SMEs, broadening the general insurance offering of RBS.
The acquisition will make RBS the third-largest general insurer in the UK. Goodwin says the bank will retain both Direct Line and Churchill brands and "will deliver transaction benefits by combining IT, claims and central functions".
The combined groups will have more than 20,000 employees. Goodwin says job ucts will be inevitable but he expects losses to be in the hundreds rather than thousands.