Benfield, a leading Lloyd's of London reinsurance broker, has told staff to cut down on expensive foreign trips to visit clients as part of a cost-cutting drive aimed at saving £15 million over the next two years.

The move by the broker, which racks up almost £20 million a year in travel and entertainment costs, represents the latest evidence of belt-tightening among City firms, under siege from the fallout effects of the credit crunch.

It will deal a further blow to British Airways, which complained in an update last month that its premium travellers, including business and first-class fliers, were tailing off as the economic downturn begins to take hold.

Benfield, whose brokers can spend as much as half the year visiting their customers across the globe, is telling staff to use video conferencing facilities to help broker deals instead of face-to-face meetings.

The reinsurer, which last month reported a fall in profits and gave warning that operating costs would also disappoint this year, is also cutting down on staff entertaining for the second successive year.

Last year, Benfield saved £5.5 million as a result of cutting down on travel and entertainment expenses and instituting a voluntary redundancy programme.

Today the firm, which employs some 2,000 staff worldwide, refused to rule out further job losses, although it suggested any cuts would be minimal.

"People and packages are always under review. However, no major redundancy programme is planned," it said.

Benfield is also aiming to save on property and IT costs.

Benfield has been among the most high-profile of the Lloyd's of London insurers over the past 12 months, not least in the wake of speculation that it held informal talks with Goldman Sachs over a £600 million takeover bid.

Benfield is also facing pressure from Deccan Value, a US hedge fund that has a stake of about 15 per cent.

Grahame Chilton, Benfield's chief executive, has declined to comment on the talks but has welcome Deccan as a shareholder.

In an interim management statement today, Mr Chilton, said Benfield "continues to face headwinds in the form of adverse currency trendds and the softening reinsurance market". But he said the broker would continue to pursue opportunities for "profitable growth".

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