INSURANCE company Zurich Financial is to cut 4,500 jobs as part of sweeping changes announced in the wake of large half-year losses.

Zurich, which owns the brands Allied Dunbar and Eagle Star, has not yet detailed where the jobs will be lost, although it has confirmed that the group's fledgling online banking operation will shut.

A spokesman said it was likely that 2,000 positions would go in the UK and Asia division by the end of 2004, although most cuts should be achieved through the non- replacement of staff.

Union leaders condemned the decision and said Zurich - Europe's third largest insurer - had acted in haste.

Amicus general secretary Roger Lyons called on the company to meet unions to look at alternatives.

"They have decided to slash and burn instead of standing back and looking at the longer-term picture," he said.

Zurich's life operations are based in Swindon, with general insurance run from Portsmouth and Fareham.

The group's online bank employs 270 people in Cheltenham, but will close next spring as part of the group's new focus on core insurance markets in the US, UK and continental Europe.

Zurich, which launched the business in January and attracted 70,000 formal applications, said it would endeavour to redeploy banking staff.

Normal services will continue for customers until spring, but Zurich said it would no longer accept new business. Customers will receive a goodwill payment of at least £200 to cover potential inconvenience.

The job losses were announced as Zurich reported bottom-line losses of £1.3bn after profits of £550.3m a year earlier.