Lloyd's of London will outsource 1,100 jobs over the next two years in a massive shake-up aimed at reducing costs and streamlining services.
The jobs will be cut from the Corporation of Lloyd's, which provides administration and support for the 300-year-old-market.
Chief executive Nick Prettejohn intends to shrink the Corporation to its core regulatory and marketing activities run by a staff of just 500.
Most of the jobs affected are service positions in areas that include information technology, cleaning and secretarial.
But whether Lloyd's can implement the cuts planned for its regulatory department depends on the success of the General Insurance Standards Council, the proposed self-regulatory body for general insurance which will include Lloyd's brokers in its remit.
A Lloyd's spokesman denied that the cuts would pave the way for Lloyd's to be turned into a private company, which modernisers inside the market have called for.
He said: "These moves were not only to reduce costs but to make Lloyd's more flexible and attractive.
"The corporation has been likened to the civil service - bureaucratic and cumbersome. But there are certainly no plans being discussed to turn the services into private companies."
Last year around 47 information technology staff were cut from the Corporation's payroll when private company INTEGRIS won the contract to run the Lloyd's data centre in Chatham.
There are plans to outsource around 300 IT jobs, which should cut £30 million from the annual budget currently running at about £160m.
In December, about 200 catering staff were cut from the payroll. As a result of the changes, members' subscriptions have been cut from 0.35% in 1999 to 0.25% of premium income this year.
The figure includes the Financial Recovery Department costs and the exceptional costs incurred defending actions brought against Lloyd's. Chief among these are the rebel Names who do not accept the terms of the reconstruction and renewal deal brokered after the market's crippling losses in the early 90s.
- The Government has a week in which to reply to the European Commission following a request for more information on the regulation of the Lloyd's market.
The Commission began an investigation in December from a group of Names.
Commission officials want to know if the UK has correctly implemented the EU's insurance directive, which would have an influence on the way that Lloyd's is policed.