Insurance broker 123.ie shed 60 staff last year on the way to a €9m profit
The firm is planning to pay out a major dividend to its parent company, RSA.
ONLINE INSURANCE BROKER 123.ie shed almost 60 staff last year in a cost-cutting move that helped push the firm to a €9 million annual profit.
The company behind the website also said that it intends to pay out a dividend of almost the same sum to its parent company, UK insurance giant RSA.
Turnover at 123 Money Ltd dropped from €31.2 million in the year to the end of December 2015 to €29.1 million in 2016, however the business delivered a healthier return for its owner after slicing its expenses.
A note on the firm’s accounts said that “as in the previous period, management took corresponding action to reduce costs through tight expense management automation and efficiency”.
This resulted in the company’s outgoings falling, and its operating profit rising from €9.8 million in 2015 to €10.4 million.
Staff
One of the biggest reductions was for “administrative expenses”, which fell from €10.4 million to €8.5 million.
This cost cutting largely referred to staff expenses. The company employed an average of 246 people in 2015, however this dropped to 187 in 2016.
The firm listed two categories of workers, those in selling and distribution and those in administration.
The bulk of the reductions came from those in the latter group. 123.ie’s number of administrative workers dropped from 106 to 54 during the year.
A spokesman for 123.ie said that the staff reductions “are about achieving greater efficiencies across the business that can be passed onto customers in the form of lower premiums”.
He said that all staff redundancies were voluntary, and added that they were offered redundancy packages.
The logo for 123.ie
After paying €1.3 million in taxes on its operating profit of €10.4 million, 123.ie was left with a full-year profit of €9.1 million, up from the €8.6 million reported the year before.
The insurance broker didn’t pay out a dividend during the year to the end of December 2016 in contrast to 2015, when it paid out €15 million.
However, a note in 123.ie’s accounts said that on 8 December 2016, the company’s board approved an €8.5 million dividend payout to RSA Insurance Ireland.
It also said that the company’s directors were “satisfied with the results of the year”.
RSA
British insurer RSA acquired 123, which was Ireland’s first major online insurance broker, in 2010 in a deal worth more than €65 million.
Once the largest provider of motor and property coverage in Ireland, RSA Insurance Ireland has struggled in recent years.
While RSA had a decent financial year in 2016, its Irish arm reported an underwriting loss of £49 million during the period, up from £35 million in 2015.
RSA looked like it was set to be acquired in 2015 by Zurich in a £5.6 billion deal last year, however the move was called off when Zurich suffered losses of $275 million following an explosion at the Chinese port of Tianjin.
This article was updated to include a statement from 123.ie.
