St. Paul Cos. may jettison more jobs Minimal impact expected at Mount Washington

Baltimore force already cut

Profits are down in commercial insurance business

November 18, 1998|By Robert Little | Robert Little,SUN STAFF

St. Paul Cos., the Minnesota property and casualty insurer that acquired USF&G, announced yesterday that it might cut 500 to 600 more jobs by the end of next year, a move that could include some job losses in Baltimore.

The reductions were billed as a way to offset the company's falling profits in its commercial insurance business, and would be in addition to 2,000 job cuts already announced when St. Paul Cos. bought USF&G for $3.5 billion in April.

Before it was acquired, USF&G employed about 2,500 people at its Mount Washington complex. A St. Paul Cos. spokeswoman said the Baltimore operation is expected to employ about 1,700 people by the end of next year. Most of those lost jobs already have been eliminated, however, so the impact of yesterday's announced cuts should be minimal in Baltimore, she said.

"It will impact our underwriting operations and support units across the board and across the country," said Barbara Reynolds, a company spokeswoman. "I expect it will have some impact in Baltimore, but not of any great substance."

The job losses will be spread throughout all of St. Paul's operations nationwide and would be achieved as much as possible through voluntary departures and attrition, she said.

St. Paul Cos. is the eighth-largest insurer in the country, employing about 16,500 people nationwide. Company Chairman and Chief Executive Officer Douglas W. Leatherdale, who addressed investors at a conference yesterday, linked the additional job cuts to the USF&G acquisition and to a decision to reduce the company's commercial insurance business.

The company's commercial premiums during the first nine months of the year fell 18 percent to $1.11 billion. The division accounted for 22 percent of the total written premiums for the period. The company's third-quarter earnings fell 74 percent this year as policy claims rose because of storms such as Hurricane Georges.

Pub Date: 11/18/98

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