Gloomy CBI survey highlights optimism in insurance sector
by Gill Montia
According to a new survey from the Confederation of British Industry (CBI) and PricewaterhouseCoopers, job losses in the financial sector will rise sharply during the first quarter of 2009.
The industry employs around one million people and in the three months to the end of December, approximately 10,000 posts were cut.
The CBI expects the rate of the cull to accelerate and between 12,000 and 15,000 financial services workers to lose their jobs in the first quarter of 2009, as business activity and profitability fall at record rates.
However, the research shows that while in the general insurance sector business volumes fell for the third consecutive quarter at the end of last year, the level of business was considered to be just above normal.
In addition, insurers questioned were confident that volumes will rebound in the weeks ahead and that profit trends are looking positive because of higher volumes, reduced costs and higher premiums.
Excluding general insurance, sentiment across the industry remained at 18-year lows during the final months of 2008.
The CBI’s director general, John Cridland, comments that as income and profitability tumble, there will be more job losses and cuts in investment across the financial services industry, adding that this has stark implications for the rest of the UK economy.