XL Prevent has closed its regional offices in Birmingham, Dublin, Glasgow, Leeds and Newcastle.
The move follows its decision to stop underwriting new employers' liability (EL) business on a stand-alone basis.
In February, XL Capital acquired Winterthur International, now known as XLWI, from Credit Suisse. Winterthur operated in 27 countries, had more than a thousand staff and last year had gross written premiums of about $1.3bn (£0.9bn).
Now XL Prevent, the EL business of XL Europe, will transfer to XLWI.
A spokesman said: "EL will be offered selectively as part of XLWI's general liability coverage. Existing clients of XL Prevent will continue to be covered for their EL exposures."
As part of the changes, XL Prevent's underwriting team has joined the casualty department of XLWI in London.
Its fee-based risk management services will transfer to Optima Diagnostics, an independent firm specialising in workplace health and safety risk management.
XL Prevent's Manchester office has been amalgamated with XLWI to become a regional claims office.
XL Capital, through its operating subsidiaries, is a leading provider of insurance and reinsurance, as well as financial products for industrial, commercial and professional service firms, insurance companies and other enterprises worldwide.
It has consolidated assets of about $27.5bn (£19.3bn) and consolidated shareholders' equity of about $4.8bn (£3.4bn).
XL Prevent offered EL insurance for accident prevention, risk transfer, rehabilitation, occupational health and safety consulting and auditing.
In a statement to staff, executive chairman James Truscott said, due to the economic downturn and political uncertainty, the provision of one element of the trade credit insurance - traditional whole turnover business - should be suspended indefinitely, as this could not provide the same level of profitability as other classes.
He said: "Staff in our trade credit team have been told there may be some redundancies. We are hopeful that many will be re-employed elsewhere within the group."
The suspension will take effect from 12 December. Euclidian will continue to sell its Advance Payment Protection Scheme and Check 4 Credit Scheme.
During its review, the board also ratified the group's underwriting business plan for 2002, approving an increase in capacity from £122m to £165m.
It is predicting an underwriting profit in excess of 10% in all lines of the company's business.