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 £15million over the next two years.

The move by the broker, which racked up almost £20million last year in travel and entertainment costs, represents the latest evidence of belt-tightening among City firms.

It will deal a further blow to British Airways, which complained last month that its premium travellers, including business and first-class flyers, were tailing off as the economy turns.

The airline said that premium traffic dipped 5 per cent in March and that the market for luxury short-haul trips continued to be weak.

Benfield, whose brokers can spend as much as half the year visiting clients across the globe, is telling staff to use video conferencing. The reinsurer, which last month reported a fall in profits and gave warning that operating profits would disappoint this year, is also cutting staff entertaining for the second year.

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

The reinsurer employs about 2,000 staff worldwide.

As the company told investors it was implementing the cost-cutting drive yesterday, Benfield refused to rule out further job losses. It is aiming to save £15 million a year by 2009 and will also look to prune property and IT costs.

“People and packages are always under review. However, no major redundancy programme is planned,” a spokesman said.

Benfield shares fell 15 per cent last month when the broker reported annual pre-tax profits fell from £53 million to £50.9 million. Yesterday, shares rose 3p to 268p.

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