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It may be a truism, but the notion of cutting costs seems to have come to some businesses (and industries) much quicker than others.

Insurers and brokers, once the subject of vehement criticism for their lack of willingness to embrace technological change, are increasingly adopting the language and the systems that suggest a seismic shift toward electronic forms of trading and documentation has begun.

The corollary of technological change, however, is that something is inevitably left obsolete.

The reality of the marketplace is, in the face of increasing competition and prolonged market cycles, assets have become increasingly expendable. In the case of insurance, this means overlapping back office functionalities – and unfortunately, the staff who occupy them.

“Companies avoid any discussion of redundancies like the plague. Publicity of that sort tends to be taken as a sign that businesses are failing.

For good reason, companies avoid any discussion of redundancies like the plague. Publicity of that sort tends to be taken as a sign that businesses are failing.

The point that insurers and brokers are keen (or at least able) to emphasize is that most cutbacks are due to “natural attrition”; that is, people leaving of their own accord and not being replaced. It is the perfect antidote to accusations that insurers look at nothing but the bottom line.

Ultimately, however, the bottom line talks. GHL, having decided to close its King's Hill office by the end of this year, has attributed the move (which follows other closures last year) to “manual serving requirements...leading to pressure from a profitability point of view.”

This has led the company to conclude that maintaining personnel for such purposes is "not convincing in terms of [our] future operating model."

“As insurers and brokers move increasingly toward electronically administered points of shopping, sale and processing, the space for administrative staff will continue to shrink.

It is a line that will be repeated ad infinitum over the next few years.

Despite paying lip service to servicing local clients locally, many of the larger players already appear to be scaling back their regional networks, moving instead to more centralised forms of organisation. This is not necessarily at odds with a broader strategy to develop regional business, but entirely in keeping with keeping a lid on unnecessary overheads.

HSBC, having already reduced their staff numbers by around 600 over the last year, have recently outlined further moves to rationalise their business. This necessarily will entail job losses, as call centre and processing functions are consolidated in one central office.

R&SA, meanwhile, accompanied the release of its first half results with the announcement that it would be trimming its staff numbers by the noticable sum of 500. Co-op financial services has recently announced plans to shed 1,000 staff, while Norwich Union announced that 4,000 jobs would go last year.

In a wider context, the point of interest will come where the bottom and technological lines intersect. There can be no doubt that, as insurers and brokers move increasingly toward electronically administered points of shopping, sale and processing, the space for administrative staff will continue to shrink.