LARGE-scale mergers are notoriously difficult to achieve, as progress is undermined by disgruntled staff worried about their jobs or concerned about having a different employer.

Tensions can emerge years after the event.

However, General Accident's merger with Commercial Union appears to have made a good start.

Perhaps insurance executives are inherently nice people or the arguments have gone on strictly behind closed doors, but the pecking order at the top appears to have been established

remarkably smoothly. This first step is the most vital.

CGU maintains that its staff are enthusiastic about the merger. This must surely be an exaggeration, and management will have done well if it avoids antagonising the rank and file.

The likely absence of compulsory redundancies will work wonders for morale, although the merger is bound to lead to disruption for some. Apart from getting staff on board, the greatest challenge is in rebranding the business, and CGU will have to tread warily if goodwill is not to be lost.

The fact that CGU will start married life with lower profits is really neither here nor there, as they merely reflect the vagaries of the weather.

However, it does underline the fact that becoming bigger will not of itself reduce volatility of earnings.

General insurance is recognised as a low-growth business and hopes lie in the life side, which is a genuine long-term growth business. But it will be years before the life ''tail'' wags the general insurance dog.

The weather is something the insurance industry has to take in its stride, but the first-quarter result also highlights the damage that could quickly occur should management take its eye off the ball while working on the

merger.

The risks of something going wrong are real, but there is a good chance that this merger will continue as it has started.