Royal Sun Alliance has announced that it plans to cut 1,200 jobs, in the UK, by next summer. Royal Sun Alliance is Britain’s largest insurance company, employing nearly 9,000 people in Manchester, Liverpool, Halifax, Sunderland and Horsham.

News of the proposed job cuts has come as a surprise since RSA declared a pre-tax profit of £759m for 2008, an increase of 13% over the previous year. The chief executive has stated that the company is pleased with the results “in a year of challenging trading conditions”.

The job losses will add to the growing number of unemployed, which many experts estimate will reach three million in this recession. Financial specialists are witnessing a dramatic increase in the number of consumers with debt problems and in need of advice. With debt consolidation loans hard to come by, at the moment, many people are looking at different debt solutions in an attempt to stop the rot.

The union, Unite, has stated that it is disappointed with the job losses. It is working closely with the company in order to help mitigate the consequences of this decision. They are committed to looking after their members and will appose ant compulsory redundancies.

The share price for RSA rose by 8%, in early trading.