Swiss Life, the insurance giant, issued a shock profits warning today and embarked on an overhaul of its UK operations that will lead to 400 job losses in Britain.

It takes to 4,400 the number of domestic jobs lost in the UK within 48 hours on a day when unemployment reached an 11-year high of 1.82 million and was predicted to hit 3.3 million by 2010.

Virgin Media, Yell, GlaxoSmithKline, Psion and Taylor Wimpey all unveiled swingeing job culls yesterday as the recession took hold.

Swiss Life said that AWD, which it majority owns, would be reorganising its business in the UK, setting aside a one-off €27 million to cover the costs.

It said AWD Home Finance, its remortgaging business, and other smaller commercial units would be sold.

AWD will concentrate on wealth management and corporate pensions consulting, it said.

"Home Finance has suffered in particular from the consequences of the international property and financial crisis," it said. "Minor business activities could be merged with other operating units."

Revenues at AWD in the UK slumped from €111.2 million to €70.1 million for the first nine months. AWD said it would just scrape a profit from its activities in Britain over the full year.

Bruno Pfister, the chief executive of the Zurich-based Swiss Life, said that "extraordinarly negative" markets since the end of September meant that the group would not meet its after-tax profits target of up to SwFr1.9 billion for the full year.

Although Mr Pfister insisted that Swiss Life's capital position was strong, the news wiped more than 14 per cent off the company's stock market value. Shares were changing hands for SwFr93 earlier today.

“Since reliable predictions are impossible in view of the current uncertainty on the financial markets, we are refraining from updating our earnings guidance,” Mr Pfister said.

At the same time, Swiss Life said it was putting its full-year dividend under review and halted its share buyback programme.

The insurer is the latest in a growing line of industry players to be hit by sliding markets since the collapse of Lehman Brothers, the Wall Street investment bank in mid-September.

Earlier this week, the US Government restructured its bailout of AIG, once the world's biggest insurer, into a $150 billion state-sponsored rescue.

Swiss Life has recorded a minimal exposure to Lehman of about SwFr20 million and less than SwFr100 million to AIG.

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