The company said the jobs would be "outsourced" to other companies over the next 12 months.

A spokesman said: "This isn't a question of redundancies, this is a question of looking at outsourcing options."

It said staff would be re-employed by a third party on the same wages and conditions.

But it refused to offer any guarantees on their future once they had left its employment.

Cost savings

A spokesman for the Amicus trade union, which represents staff at RSA, said there had been a "mood of insecurity" among the workforce for the past three years.

But Thursday's announcement would give grounds for "a small amount of optimism" that there would not be widespread redundancies.

The company also launched a deeply discounted rights issue, which sent its share price plummeting.

RSA shares finished the day down 13% at 134.5 pence.

Last year, RSA slashed 1,200 posts as part of a cost cutting drive.

It said the latest round of cuts would help it increase its cost saving targets to �270m a year.

The group said 500 posts will go from RSA's Information Support division - with the losses split evenly between its sites in Liverpool and Horsham, West Sussex.

A further 400 will go from all over the UK in the firm's Property and Facility Management department.

Rights issue

The final 100 jobs will go through "natural staff turnover" at the group's More Than direct loans arm, a spokeswoman added.

The news emerged as the company unveiled a 17% rise in first half profits to �351m, up from �301m a year earlier, and launched a �960m ($1536m) cash call.

The group is making the rights issue in a bid to shore up its frail balance sheet and provide enough spare cash to help grow profits.

Under the plan, the UK's second biggest insurer is offering one new share at 70p for every existing share held - less than half Wednesday's 154p closing price.

Sell-off

The rights issue - which allows a firm to raise money by offering shareholders extra shares based on their existing holding - comes less than a year after the group was forced to abandon similar plans when shareholders refused to back the plan.

Instead it began a series of cost cutting measures including asset sales, business closures and job cuts to raise funds and save money.

"The components of a winning business exist, but much more needs to be done for that potential to be realised," Chief Executive Andy Haste said.

The company also announced it was selling renewal rights to its US personal insurance business and most of its commercial US business to Travellers Property Casualty for an initial �15.6m.

RSA also added it may sell other assets in the US.

'Fat cat' calls

The company has suffered a series of dismal results and dividend cuts, which forced former chief Bob Mendelsohn to quit last year.

But news of the cuts is sure to spark anger and result in "fat cat" accusations, as the group also revealed Finance Director Julian Hance is set to receive a benefits package worth �1.75m when he leaves.

But chief executive Andy Haste denied the Mr Hance's decision to quit was a case of him "carrying the can" for the company's previous poor performance.

Mr Hance will leave RSA when the company completes its rights issue.