Insurance group Zurich Financial is to cut 4,500 jobs as part of a restructuring move announced today.

About 2,000 jobs will go in the UK and Asia by the end of 2004, although the company hopes most of the cuts can be achieved through normal staff turnover.

The announcement came after the Swiss-based company, which owns Allied Dunbar and Eagle Star in the UK, announced half-year losses of £1.3 billion.

Zurich said the restructuring would sharpen its strategic focus by concentrating on core insurance markets in the United States, UK and continental Europe.

The company, which has not said how many jobs could be affected in the UK, has life operations in Swindon, general insurance operations in Ports-mouth and Fareham and runs Zurich Bank from Cheltenham.

It has offices in about 60 countries and employs more than 70,000 people.

The loss, by Europe's third biggest insurer, comes after volatile equity markets hit the group's investment returns.

It also included special provisions of £1.72 billion to cover an increase in its reserves and wrote off £609.7 million from its accounts.

Prior to those one-off costs net profits for the six months to June 30 were £436.5 million, compared with £550.3 million a year earlier.

Zurich said it would further look to strengthen its balance sheet through the issue of new shares worth up to £1.6 billion.

Despite the bottom-line losses, Zurich recorded 18 per cent growth in premium income to £13.23 billion in the first half.

Chief executive James Schiro said the moves followed a thorough three- month review of the group's strategy and operations.

He said: "The initiatives we announced today should create a sound financial and operational platform for Zurich from which to deliver strong earnings growth. We believe this to be in the best interest of the group, its shareholders, customers and employees."