Zurich Financial Services needs to save billions of pounds by cutting 2,000 jobs and raise cash with a £1.3bn rights issue in a bid to reverse its fortunes.
It will sell off non-core operations, such as UK venture capital firm Gresham and close its online banking division. It will also reduce the headcount from the company's division that includes the UK, Ireland and Asia.
Zurich, which owns Eagle Star and Allied Dunbar, said it hoped most of the job cut targets could be met by natural turnover by the end of 2004.
The group has been struggling for months under a falling share price, after being led on an over-ambitious expansion plan by former chief executive Rolf Hüppi.
UK chief executive Patrick O'Sullivan admitted the online bank - launched earlier this year after £90m of investment - had been a waste of resources. It would cost £20m to close.
The UK business is also looking at a loss of about $50m (£32m) to cut its exposure to equities to about 15% of its investment portfolio.
But a new back to basics strategy would see it concentrate on its core non-life insurance, O'Sullivan said, and the UK would be an area for growth within the group.
He said: "We would like to see expansion across all lines of business we're in."
He said: "We have a ruthless focus on driving down costs."
The UK operation makes up the largest part of the division.
Its combined ratio worsened in the first half of 2002 to 109.6% from 105.8% and gross written premiums grew by 23% to $2.3m (£1.5m) from $1.9m (£1.2m) in the same period last year.
The UK operation alone grew its written premiums by about 29% and O'Sullivan said growth would continue.
The Zurich group was downgraded by Standard & Poor's and AM Best after losing $2bn (£1.3bn) in the first half of 2002 and setting aside $2.7bn (£1.7bn) of provisions.
O'Sullivan said new chief executive Jim Schiro's strategy of returning to core business would see Zurich return to its former ratings.
He said. "Schiro has given himself 18 months to deliver what he has promised."