Review of operations continues.

Norwich Union (NU) has halved the number of IT contractors it uses in a bid to reach its cost-savings goal of £250m by the end of 2007.

The insurer has axed 200 IT contractors in recent weeks, with some projects being concluded and others discontinued, a spokesman confirmed.

In June, NU had about 440 contractors working in its IT department.

The spokesman said: “We use contractors to work on specific projects where we need specialised skills. Some of the projects have come to an end and some will finish in the next few months.”

The spokesman confirmed that the contractors had been let go as part of the cost-savings goal of £250m by the end of the year.

Some of the ongoing projects have also been handed over to staff members working in IT.

The company would not elaborate on how close NU was to reaching this goal, but said it was currently on target.

NU will be reviewing the existing projects to see whether they will continue operating.

The spokesman said it was difficult to say whether NU would hire additional IT contractors in the future.

Many had been hired to build new IT platforms or integrate systems.

Last year, NU parent company Aviva announced it would be cutting 4,000 jobs by the end of 2007, with half coming from compulsory redundancies and the rest resulting from staff turnover, redeployment, voluntary redundancies and unfilled vacancies.

At the time, NU represent-atives said the job cuts reflected cost-saving goals but also a changing market where policies, particularly in direct motor insurance, were being increasingly purchased online.