Insurer Royal and Sun Alliance is set to axe jobs at its Birmingham office as part of scheme to shed 1,000 staff in the UK by June 2008.

R&SA, which currently has 10,000 staff in the UK, said the programme was part of a wider plan to cut 1,550 staff.

A spokesman yesterday said the business employs 600 people at its Colmore Gate office "a medium-sized operation" which carried out a full range of the company's services.

He said negotiations would be carried out with the unions and job losses would be exam-ined for all areas of the business, but it was too soon to say where they would fall.

It is understood some are l ikely to be shed in Birmingham.

The company said the job cuts would help deliver savings of £70 million in the next two years in the UK and £130 million across the group.

R&SA external communications manager Jon Sellors said: "We are laying out some growth plans for our global business and our UK business.

"We have set out some pretty ambitious growth targets and key to that is going to be reducing our expenses to make us easier for people to do business with.

"We will reduce our UK workforce by 1,000 roles by the end of June 2008. That is part of a wider group reduction programme of 1,550.

"It is too early to say where the jobs will be going and we will be working with our union partners to develop that.

"We expect over half to go through natural turnover and redeployment to minimise redundancies."

A spokesman for the union Amicus said: "Amicus is disappointed at the numbers involved in this redundancy programme and we will be working closely with the company to try and reduce the number of redundancies.

"We will also be pushing the company to achieve the cuts through natural wastage and voluntary redundancy without resorting to making compulsory redundancies."

R&SA, which operates More Than, is the second largest commercial insurer in the UK and the third largest personal motor and household insurer.

It set out a major restructuring of the group in 2003 with a focus on the UK, Scandinavia and an International arm.

Yesterday, the company outlined the next stage of its growth, including plans to grow the UK affinity business by more than 50 per cent.

R&SA chief executive Andy Haste said: "We have a clear strategy of running general insurance businesses with strong market positions to deliver sustainable profitable performance.

"The decision to reduce headcount is always a difficult one but necessary to ensure we remain as competitive as possible and to continue to deliver on our objective of sustainable profitable performance.

"Over the last three years we have built an excellent platform for growth with exciting opportunities. We have developed a strong track record of delivery and we will be pursuing these new opportunities with the same drive, energy and ambition as we have applied to the restruc-turing of the business.

"We are confident that we will deliver on our plans and that we will strengthen our position as one of the best general insurers."

R&SA provides general insurance products to more than 20 million customers in 130 countries. It has 24 offices in the UK, including Liverpool, where it employs 1,500 staff, Halifax, where it has just over 900, and at its head-quarters in Horsham, West Sussex, where 1,000 employ-ees are based.

Last month, R&SA posted better-than-expected first-quarter figures after a strong performance in the UK. The group said operating profits rose to £207 million, a gain of 29 per cent on a year earlier and higher than the £200 million forecast by City analysts.

Shares in R&SA lifted more than three per cent after the announcement.