With insurers facing squeezed margins and pressures to cut costs, the industry will be asking who is going to be next
Is the industry on the verge of a cost-cutting crusade? It’s a question on the minds of broker bosses right now as Aviva this week announced plans to slash 800 jobs across the UK.
As part of his plan to overhaul the business, executive chairman John McFarlane has been busy removing unnecessary layers of fat from the company. He has already removed a handful of middle management roles and identified underperforming businesses for the chop.
But it is the potential for a ripple affect across the market that most concerns brokers, with many asking ‘who’ and ‘what’ will follow. As their margins are squeezed even tighter, insurers will make savings where they can. Over the next 12 to 18 months, brokers should expect the following from insurers:
- continued pressure on broker commissions;
- tighter credit terms with brokers; and
- offices closed and resources centralised
With all cost-cutting comes unsettlement and brokers will be looking for reassuring messages from insurers that their actions will improve trading relationships and not vice-versa. Because now is not the time to be messing around.
- A new name has pushed its way to the number one spot in the Top 50 Brokers rankings. This year’s supplement, published with this week’s issue of Insurance Times, reveals that Marsh has overtaken Aon to first place, with JLT a close second. Grab your copy for an exclusive interview with Marsh Europe chief executive Martin South.
- Our annual Broker Service (Commercial Lines) Survey is now open. We’d like your help in answering some questions relating to the service you have received from commercial lines insurers over the past 12 months. You can take part in the survey at goo.gl/dLQs1 and receive an early copy of the headline results. Thank you for your input.