Years ago it was said if you want to go where the money is you need to be in banking or insurance, and it seems that still is true. Aviva, one of the larger insurance firms in the UK, has revealed profits of £1 billion. This profit has been revealed after just a couple of months ago announcing they were cutting 2,000 jobs. I am guessing the job cuts could not have made that huge a difference in profits that quickly.
Many of the workers losing their jobs are obviously not to happy with the fact such a huge profit is announced as they face being unemployed. Unions are calling the job losses “callous and disgraceful”.
The insurer has cut its spending/outgoings by nearly £150 million, in the first half of the year. The goal is to save £400 million in total.
This is a tricky thing to do, cut costs, increase profits, etc, especially when you have investors, the bottom line is to make money. Wages can be a huge part of expenditures for a business, and the cutting of 2,000 jobs was to save Aviva a considerable sum. I would question how the loss of staff may affect customer service.
Studies have shown insurers are making profits, some earning record profits. So why not reduce premiums? Especially with car insurance.
Insurer Royal and Alliance showed a £39 million increase over their profits from last year.
Insurance companies are required to keep reserves and savings for claims, but the profits are still growing. I would imagine in part by the increase in premiums.