Dutch financial services group ING, one of the largest integrated financial service organisations in the world, said it would cut 15% of jobs at its US insurance business.

The Amsterdam-based company said it planned to cut 1,600 positions in order to overcome the effects of the economic downturn.

The company employs 10,700 at its insurance branch in the US and more than 100,000 people worldwide.

The news comes on the heels of a warning in October when the company revised its profit targets down to 5% growth from 17% growth.

And 2,000 jobs have already been announced at its investment banking unit, which took over the UK's collapsed Barings Bank in 1995.

Insurance consolidation

ING hopes the cut will lead to almost $100m (�70.5m) in savings.

The jobs will go at its recently purchased American insurance companies Aetna and ReliaStar.

The company's chief financial officer said last month that the results from Aetna and ReliaStar had been below the expectations.

The company aims to cut its expenses in the US by $250-300m a year, resulting in incremental $150-180m of pre-tax profits from 2002.

Bleak outlook

Analysts, although welcoming the move, point out that a turnaround in US operations is unlikely to take place in the near future.

And ING itself does not expect an improvement before the second half of 2003.

As well as the job cuts, ING has announced other cost saving measures such as reduced spending on technology and travel expenses and a reduction in the use of consultants.

The market applauded the measures, with ING shares in Amsterdam rising 2.3% to 29.98 euros.