ROYAL Bank of Scotland insurance arm Direct Line Group today announced plans to axe nearly 900 jobs.

Direct Line, which also includes the Churchill and Green Flag brands, is to close a customer services site at Stockton-on-Tees, accounting for around 500 of the 891 roles at risk, with the rest of the job losses expected to be spread across the group’s other locations around the UK.

The group employs around 15,000 UK staff in total, with its Churchill operation including an office in Princes Street in Ipswich.

Chief executive Paul Geddes said: “We have not made these proposals lightly and fully understand the impact this will have on our people.

“As we have done in the past, we will be open and honest, dealing fairly and carefully with those affected.”

The job cuts, part of plans to make �100million of cost-savings by the end of 2014, come with RBS poised to complete the demerger of Director Line.

The state-backed banking group is expected to float the insurance business as a separate comopany through an initial public offering (IPO) later this year.

Direct Line reported a 7% rise in operating profits for the six months to the end of June but its pre-tax profits fell from �187.5million to �106.5m after taking into account one-off costs including restructuring and preparations for demerger. It is already largely operating on a standalone basis” from RBS.