In an effort to cut costs and improve efficiency, Insurance major Aviva [Get Quote] on Thursday announced that it would reduce its staff in the United Kingdom by 4,000 from the existing 36,000 and offshore 1,000 of them to India by 2008.

Aviva, which owns Norwich Union, hopes to reduce duplication and improve efficiency to deliver annual cost savings of �250 million by 2008.

"Aviva's headcount in the UK of 36,000 will reduce by 4,000 by 2008 with up to 1,000 roles being off-shored to India (in line with previous announcements that 7,800 roles will be located offshore by the end of 2007) and a further 500 roles being outsourced to third party IT suppliers," Aviva, the world's fifth-largest insurance group, said in a statement.

"The company will seek to minimize the number of compulsory redundancies through natural staff turnover and voluntary measures. The savings primarily arise from cost efficiencies and reducing duplication in marketing, human resources, finance, and information technology, as well as applying a single approach to procurement and supplier management."

The company said the savings and costs would be evenly spread between the life and general Insurance businesses and in the life business, "our expectation is that it will principally benefit shareholders. These initiatives will further strengthen the group's ability to meet its current financial objectives and deliver growth for shareholders.

"The savings are in addition to the planned RAC integration savings of 130 million pounds per annum by 2008."

"We have to ensure that Norwich Union remains a highly efficient and effective company in what is an increasingly competitive and dynamic environment. Customers' buying habits are changing rapidly as technology becomes more accessible," Patrick Snowball, Norwich Union Executive chairman, said.

"Already half our new direct motor insurance policies are purchased over the internet. Consumers, IFAs and brokers are increasingly operating in a self-service world," he said.

"Norwich Union, with its strong and trusted UK market brand will continue to lead the industry by adapting to these shifting dynamics. We will do this by leveraging the scale of our life and general insurance businesses and we have a proven record of delivering change.

"The integration and efficiency measures we are announcing today are part of a programme which will result in an increase in customer focus across our UK businesses along with better and more efficient use of technology."

Aviva's worldwide total sales amount to �36 billion and has assets under management of �322 billion as on December 31, 2005.

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