Royal & SunAlliance is considering outsourcing potentially thousands of jobs from its core functions of information technology, personnel and finance to cut costs.

The announcement was made by Paul Spencer, RSA UK chief executive, in a memo to all staff, and follows the export of 50 processing jobs to India, resulting in redundancies among UK workers.

The reviews are being carried out RSA's UK directors, Andrew Gillespie for IT, Chris Evans for human resources and Wai Au for finance.

Spencer said it was vital that changes were made in weeks rather than months, if RSA was to meet internal business targets.

He said RSA's board was concerned its expense ratios were higher than many of its competitors.

He told staff: “Outsourcing of some areas is being considered. These changes may well, regrettably, lead to job losses and we are in active consultation with the trade unions and the Managers' Association for RSA on the way forward.”

An RSA spokesman added the company would not outsource a particular function if this had a negative effect on service standards.