TIG to Lay Off 500 of Its Workers Nationwide : Transamerica: Of the job cuts, 149 will be from the San Fernando Valley.

In the first step in its promised restructuring, TIG Holdings Inc., the parent of troubled Transamerica Insurance Group in Woodland Hills, said on Monday that it is laying off 500 of its 4,022 employees nationwide.

Of that, 149 of the layoffs are at operations in the San Fernando Valley, primarily at the Woodland Hills offices but also at smaller facilities in Chatsworth, Glendale and Camarillo.

TIG said the layoffs follow the loss of 228 jobs since December, through attrition and the company’s recent decision to shut down its Completion Bond Co. subsidiary that guaranteed independently produced movies will be finished on time and within budget.

The company said it expects to decide where to relocate its insurance business by the fall.

TIG said it will maintain a “significant presence” in California, but does not expect to retain the current Transamerica Insurance headquarters at Warner Center in Woodland Hills. TIG, the holding company, is based in New York.

Also as part of its consolidation, TIG said, it will reduce its 70 current locations nationwide to about 20 over the next two years.

Jon Rotenstreich, TIG’s chairman and chief executive, said in a statement that the moves are necessary because the company’s rate of expenses is substantially higher than the industry average. “These changes are necessary to improve operating profitability and to maintain our solid financial strength.”

TIG, which was spun off in an initial public stock offering in April from its former parent, financial services giant Transamerica Corp., said it expects to record a restructuring charge of up to $75 million in the second quarter ending June 30.

The charge would cover the costs of employee separations, terminating leases, relocation expenses and other costs, it said.

After losing $126 million on $2.02 billion in revenue in 1992, TIG’s recently reported first-quarter results were even worse than some analysts had expected.

In the three months that ended March 31, TIG lost $44.8 million, compared to a $2.6-million loss a year before. It wrote $378.9 million in net premiums in the quarter, down 4% from $394.2 million. But its total revenue--helped by investment gains--rose slightly, to $499.4 million from $486.9 million.

The company said it adopted a more conservative approach to its loss reserves in the first quarter, resulting in an $81.2 million increase in its estimated loss expenses.

TIG also set aside $17 million in the quarter to refund to policyholders as part of its Proposition 103 settlement with the state. Its catastrophe-related expenses were $18.1 million in the first quarter--up from $1.3 million a year earlier.

Without investment gains and an accounting change, TIG’s first quarter loss would have been $82.4 million.

TIG’s problems stem from its more pedestrian life, auto, house and workers’ compensation insurance businesses, which are beset by industrywide price wars, cyclical swings in the economy and huge claims for catastrophes like Hurricane Andrew. To restructure, analysts say, TIG is left with few options.

TIG’s restructuring is like “rearranging deck chairs on the Titanic,” said Ira L. Zuckerman, vice president of SBS Financial Group Inc., a Westport, Conn. insurance industry research firm.

William Bitterli, an analyst at investment research firm Northington Partners in Avon, Conn., said he expects TIG to “review each operation and decide if the problem of each operation” can be fixed or sold. If not, TIG will probably “jettison the division.”

Despite TIG’s financial problems, the chief beneficiary of TIG’s public stock offering was its former parent, San Francisco financial services giant Transamerica Corp. TIG’s net proceeds from the stock sale were $296.4 million. Transamerica’s proceeds from the stock sale were $650 million, and it still owns 27% of TIG’s stock.

Nonetheless, TIG’s stock has been holding up. It went public at $22.63 a share, and closed Monday at $23.25.

Despite the closure of Completion Bond, it is TIG’s remaining entertainment-related business that is thought to be relatively healthy.

TIG still insures many parts of movie production, including cast, equipment, lighting, sound, film negatives and errors and omissions. It also insures events, such as the Tournament of Roses parade, concerts, auto racing tracks and professional sports franchises.

The company’s entertainment insurance “has been one of the few areas where they do have some competitive advantage,” said Zuckerman.

But that business accounts for less than 10% of TIG’s total revenues. Another bright spot at TIG is its reinsurance business, which assumes some of the risks of insurance policies held by other carriers in exchange for part of the premiums. That division accounts for less than 25% of TIG’s total business.

TIG had ordered Completion Bond to stop writing new insurance policies on March 31, just before the stock offering. The movie unit contributed only a tiny portion of TIG’s $2 billion in annual revenues, and while Completion Bond was the movie industry’s biggest guarantor, it had also been plagued by industrywide price cutting and losses on a few key films.

Fred Milstein, a Completion Bond vice president, said that firm’s 25 employees would leave over the course of the next several months as work on films currently in production winds down.

He said the Century City firm has about 40 films in the pipeline, including Sir Richard Attenborough’s “Shadowlands” and “House of the Spirits” with Meryl Streep and Jeremy Irons.

Completion Bond’s founder and president, Bette L. Smith, could not be reached for comment. Milstein said that Smith would stay on to supervise the remaining projects but he was unaware of her plans beyond that.

Milstein said that Completion Bond’s absence from bidding on new films has helped rates rebound for its rival film guarantors, including Film Finances Inc. and International Film Guarantors.

When Completion Bond entered the business in 1981, rates charged for guarantees were typically 3% of a film’s budget but in recent years fees fell below 2%.

Completion Bond also had some highly publicized losses on a few films, including “Malcolm X” and the animated “The Thief and the Cobbler.”

Milstein said that Completion Bond’s demise is “having a real chilling effect on the market” because independent filmmakers can’t secure financing without a guarantee. “Some pictures won’t get made because they won’t be able to find a guarantor.”