The pressure on life assurers was starkly laid out with the announcements yesterday of another 1,330 job cuts in the industry, the FT reports.
The cuts, at Royal London and Norwich Union, are the result of a need to run a “more flexible model”, according to the latter company.
Royal London’s decision to cut its direct sales staff just makes it the next in a line of firms that have taken similar decisions.
The Daily Telegraph adds RL had a direct sales force of about 2,000 people some ten years ago, but this route to clients added just 7% to the group’s turnover last year.
”Door-to-door sales forces have been abolished by most of Britain's life insurers, including Pearl, which closed its 1,000-strong sales force last year. Co-operative Insurance Services and Zurich Financial Services still operate direct sales forces in Britain,” the Telegraph adds.
Meanwhile, The Times runs with a warning from NU linked to its actions yesterday that “thousands” of additional jobs could be under threat because of price caps on savings products.
“If the 1 per cent price cap stays, we will be withdrawing and reshaping the business, and we will have to re-size our business in the UK. We know as an industry and as a company we need to become more efficient and we’ve been trying to get costs down. But 1 per cent would cause a much higher level of restructuring to take place, and that is not just a Norwich Union issue,” The Times quotes NU chief executive Gary Withers.
About 13,500 jobs have been lost in the insurance sector in the past year, the paper says.
COMPETITION IN the healthcare market has forced Bupa to cut its prices and fees paid to consultants, writes the FT.
The change comes as some 250,000 patients treatment contracts have been won by foreign providers, undercutting existing Bupa prices.
Bupa will sell or close 10 of its 35 hospitals, spend some £100m on upgrading its remaining facilities, and ensure its IT systems are capable of interacting with the new patient records system being introduced by the NHS.
THE MPC VOTE on interest rates later today is likely to go for another hike in rates because of a flurry of economic data published recently, The Scotsman writes.
Manufacturing, export and GDP data all currently point to strong growth, and inflationary pressures, which the Bank of England will want to tame in order not to overshoot its own two-year target.IFAonline
What made financial headlines over the weekend?
To promote 'long-term investment'
Switching 'hard and expensive'
Smaller funds still packing a punch