Lloyd’s of London is planning to cut 10 percent of its staff in the UK as the world’s oldest insurance market looks to streamline operations and reduce costs amid continued pricing pressure on its members.
Lloyd’s plans to introduce a new organization structure in the fourth quarter and the job cuts will be part of that change, Chief Executive Officer Inga Beale wrote in her half-year email to members. The insurance market currently employs around 800 people in Britain, a spokesman said on Monday.
“We are seeking to minimize the impact on our people by opening up a voluntary severance programme and through redeployment within the organization,” the CEO wrote.
The cuts come as Lloyd’s insurers battle to protect profitability, which is being squeezed by low interest rates. They’ve also faced pricing pressure from hedge funds following five years with below-average catastrophe claims. Distribution and administration costs are “unsustainable at current rates” and managing agents and brokers need to look to reduce internal costs and work more efficiently, Beale wrote in the letter.
The insurance market should shrink in 2017 and 2018 as underwriters maintain strong discipline, she wrote. Lloyd’s plans to submit its application to set up a unit in Brussels in September, according to the letter.
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