WORKERS at two of the UK's largest insurers were reeling last night following news that nearly 1,350 jobs are to be lost.

The majority of the redundancies will be at Norwich Union, which announced it was cutting 700 IT jobs - including 150 in York - and 250 contract posts in an overhaul of its business services division.

Some of the jobs are expected to go to India.

Another 380 workers at Royal London are to lose their jobs after the mutual life insurer announced plans to axe its direct sales force.

Norwich Union, which is owned by Aviva, said the job losses would help it maintain competitiveness amid tough conditions in the UK long-term savings market.

The company said: ''While difficult for the staff concerned, the restructuring is necessary to reduce costs further and increase flexibility in response to changing market conditions.''

The restructuring will see 250 jobs go in Norwich, 150 in York and Bristol, 100 in Stevenage and 50 in Croydon. The process is due to be completed by the end of next year.

Unions vowed to oppose the job losses, which come only six months after Aviva announced it was cutting 2,350 jobs under plans to outsource work to Delhi and Bangalore, in India.

Amicus, which represents Norwich Union workers, said employees would be devastated by yesterday's announcement, which affected half of the total staff in the business services division.

National officer David Fleming said: "We will vigorously oppose compulsory redundancies and any offshoring of these jobs abroad."

Norwich Union said the work currently done by staff affected by the cuts would be outsourced to other companies.

It said it had set aside £1m to give career advice and support to affected staff.