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Insurance giant Prudential has announced plans to outsource almost 2,000 UK jobs as part of a restructuring programme.

Under a proposed 15-year deal around 1,750 staff employed by Prudential in Britain will be transferred to back-office firm Capita.

In addition, around 1,250 of Prudential's 1,800 staff in Mumbai, India will also transfer to Capita.

Announcing the plans in a statement today, Prudential said Capita was committed to ensuring all employees affected by the changes were offered roles based on their existing terms and conditions of employment.

Prudential believes the agreement will deliver cost savings of £60 million a year by the end of 2010.

Its decision to outsource some of its business activities to Capita follows an eight-month review, with Prudential bosses having indicated in March their intention to achieve savings of £195 million per annum within three years.

The deal agreed by the insurer provides for Capita to acquire business and assets from Prudential for £25 million, including part of its offshore operation based in Mumbai.

Under the terms of the proposed agreement Capita would provide customer service, policy administration, new business processing, claims activity and related IT support services to Prudential's UK business.

Commenting on the plans, Prudential chief executive Nick Prettejohn said: "The agreement with Capita is another significant milestone in our programme to deliver continued superior performance and profitability in our UK business.

"We have set out very clear priorities for the business and this agreement helps us to deliver our strategy by removing fixed costs from our operations and achieving significant operating efficiencies," he added.

Capita chief executive Paul Pindar said: "Capita is delighted to engage in this strategic alliance with Prudential UK.

"Our aim is to build a mutually beneficial partnership to support the further growth of both Prudential and Capita in the life and pensions industry."

As part of the plans 1,000 staff employed by Prudential in Stirling, Scotland and 750 based in Reading, Berkshire will be transferred to Capita in April 2008.