Staff at Hibernian's general insurance business have been told that the company is seeking 180 redundancies from its 1,400 workforce over the next 18 months. The announcement follows its parent Aviva's controversial decision to further outsource its UK support services to Asia, where it intends to double its workforce to 7,000.

Hibernian's staff were informed of the 13 per cent downsizing of the business this week, with half of the 180 staff being targeted expected to take early retirement and the remainder being offered voluntary redundancy. The company said the cuts would be across the business and has entered discussions with Amicus, the trade union that represents the majority of its staff.

In a statement Hibernian general manager, Mr Dick O'Driscoll, said the redundancies were being sought to improve its efficiency in response to structural changes in the market. "The Motor Insurance Advisory Board report, the establishment of the Personal Injuries Assessment Board, court reform and the introduction of penalty points have all had considerable effect on our business and we anticipate further changes in the coming year. We need to be ready for this change," he said.

"When we outlined the market reality to our staff and their union, they understood why we needed to do this. They recognise that, while our results this year were excellent, in order to deliver strong results in the future we need to acknowledge we are trading in a changed market," said Mr O'Driscoll.

Mr John Tierney of Amicus said the announcement hadn't come as a total shock after Aviva's initiatives in the UK. He believes the job losses at Hibernian are being driven by its outsourcing policy. "We want to meet the company and will be looking for it to justify the 180 job losses, which seems a bit on the high side," he said.

Last year Hibernian's general insurance business reported total premium income of €936 million, marginally below its performance in the previous year. The company has been at the forefront of pricing motor insurance quotes based on motor offence statistics including penalty points.

A spokeswoman explained that the price of its policies had been reduced and consequentially its income had fallen and it was now forced to seek cost reductions.

Last week Aviva said that about 760 new jobs would be created next year in India to carry out back-office work for its life and general insurance businesses. A further 190 finance support roles will be created in Sri Lanka.