Lloyd’s to cut jobs and spending in 2012

The Corporation of Lloyd’s is planning to reduce spending by £17m in 2012 and is mulling 60 job cuts.

The cuts are being made in recognition of the difficult 2011 year and little sign of improvement next year, according to a joint letter from Lloyd’s chief executive Richard Ward and new chairman John Nelson to Lloyd’s managing agent CEOs.

“High levels of claims coupled with continued pressure on rates and low investment returns have put the market under some strain,” the letter said. “While the Lloyd’s market is strongly capitalised and well able to meet its claims commitments, it is only right the Corporation looks hard at where it can find efficiencies and provide better value for money to the market.”

Despite the spending cuts and job losses, Lloyd’s is removing its performance and risk management levy in 2012, which it says will save the market £14m.

In addition, Lloyd’s has decided to freeze the market service charges paid by managing agents at 2011 levels - even those the corporation had previously said it planned to increase in 2012.