As Norwich Union announces plans to cut up to 1800 UK staff, we take a look at Insurance Times' interview with Director of Trading, George Berrie, at this year's Biba conference.

See also: NU to slash up to 1800 jobs

While other market sources wax lyrical about consolidation and commission discolsure, George Berrie makes no bones about the abiding issue of the day - profit margins.

"We're happy with our model so long as we can make a return," he says.

Barely a month later, his company has announced plans to axe up to 1800 back office staff in a bid to improve operating efficiency.

"We’ve had four years of the market sliding, while commissions have been rising. Eventually that maths will have to play out."

So what steps is the company taking to improve the bottom line? Berrie has a number of ideas - but at the time, makes no mention of a reduction in head count.

Despite the insurer signing a blockbuster deal with Willis, he expresses scepticism about the market-wide move toward MGA agreements.

"I'm not sure if MGA’s are the right way forward. They are not a panacea. They don’t solve the problems we’ve got."

“We’re looking at commissions overall," he adds. "Our spend has been creeping up in line with other players. It comes straight through the bottom line.

"It also means that when rates harden, they will have to harden more to make up for the past four years of extra spend; I'd say by two, three or four per cent. That’s going to be difficult.

"We’re trying to maintain our resolve and have put up rates by up to 5 per cent for our smaller business. It’s harder above the £10,000 mark. It’s very difficult In parts of the UK, like Northern Ireland and Scotland, where the market has not moved much at all. Elsewhere in the UK, it is patchy. [But] we need to keep that momentum going."

"The good thing is everyone is in the same boat."

Assuming he is right - and given the enduring pressures of the soft market, claims inflation and rising commissions - other insurers look likely to set sail over the coming weeks, and throw back office staff overboard.

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