Insurance company Britannic Assurance is to axe 2,000 jobs over the next year.

Most of the redundancies will be within Britannic's direct salesforce as the company seeks savings of £82 million during the next year.

Birmingham-based Britannic said the competitive insurance marketplace meant it no longer made economic sense to maintain such a large salesforce. It will be left with a specialist sales team of 100 advisers.

About 1,600 sales staff based around the UK will lose their jobs, along with 400 support staff at Britannic's base at Wythall, to the south of Birmingham.

The cuts come just weeks after the Prudential axed the majority of its door-to-door sales team.

Britannic said its traditional customer base of middle to lower- income families meant it could no longer sustain a large sales force.

It added that pressure from competitors, regulators and Government legislation had put the squeeze on margins.

The size of its sales team had an "adverse impact" on the returns received by customers and shareholders, it said.

The sales team being retained will provide a service for customers seeking advice on increasing payments or reinvesting from maturing policies.

Britannic added that a further 100 staff will be retained to market the new stakeholder pensions.

It had offset the loss of its direct sales force by arranging for its products to be available through 260 branches of independent estate agency Spicer Haart later this month. It will also use other sales channels, such as independent financial advisers.

The company warned that the redundancies would result in a 40 per cent drop in sales this year, although it expected a return to last year's level by 2003.

Brian Shaw, chief executive of Britannic Assurance's parent company Britannic, said the decision reflected changing times within the industry.