Direct Line has confirmed it is to cut 2,000 jobs in the UK in a bid to reduce the firm's costs.
It announced it is now aiming to save more than double its original target of £100 million a year and consultations have already started with staff and unions over redundancies.
Chief executive Paul Geddes explained cost savings have to be made by the company if it is to be able to remain competitive within the insurance industry.
"We have not made these proposed changes lightly and understand the impact they will have on our people," he added.
Staff across the firm's head office are likely to be affected by the job cuts, while those in support functions could lose their positions as well.
Investors responded strongly to the news Direct Line is looking to aggressively cut costs, with its share price up this morning (June 26th).
Its stocks were trading at 227.00 at 08:44 BST this morning, up 3.5 per cent for the day.
Find up to date information on the FTSE 100 and spread betting strategies at City Index
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.