Lloyd's of London is planning to cut 10% of itsstaff in the U.K. as the world's oldest insurance market looks tostreamline operations and reduce costs amid continued pricingpressure on its members.

Lloyd's plans to introduce a new organization structure in thefourth quarter and the job cuts will be part of that change,Chief Executive Officer Inga Beale wrote in herhalf-year email to members. The insurance market currently employsaround 800 people in Britain, a spokesman said on Monday.

Voluntary severance program

"We are seeking to minimize the impact on our people by openingup a voluntary severance program and through redeployment withinthe organization," the CEO wrote.

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The cuts come as Lloyd's insurers battle to protectprofitability, which is being squeezed by low interest rates.They've also faced pricing pressure from hedge funds following fiveyears with below-average catastrophe claims. Distribution andadministration costs are "unsustainable at current rates" andmanaging agents and brokers need to look to reduce internal costsand work more efficiently, Beale wrote in the letter.

The insurance market should shrink in 2017 and 2018 asunderwriters maintain strong discipline, she wrote. Lloyd's plansto submit its application to set up a unit in Brussels in September,according to the letter.