HUNDREDS of insurance jobs were under threat last night after Zurich Financial Services announced plans to close its North-East call centre.

Zurich said it was planning to close its office in Fenkle Street, Newcastle, which employs more than 500 people.

It is understood that the group could be offshoring work to India, where it opened a call centre in 2002 and where staff numbers have grown tenfold in the past four years.

Last night, Marc Latham, deputy general secretary of the Union of Finance Staff (UFS) said: "Newcastle is one of the highest performing branches Zurich has. This is about performance not being rewarded with loyalty," he said.

"It looks like we are now seeing large chunks of the organisation being offshored."

Zurich said it carried out a review of the business, which concluded that it could operate more efficiently across fewer locations. A 90-day consultation has started.

A spokeswoman said: "We will look to transfer work to other offices, although there is likely to be a significant number of redundancies because we only have another very small office in the Newcastle area. Our priority is to look after our people."

If the proposals go ahead, the centre could close by the end of March next year.

Together with sites in Glasgow and Leeds, Zurich also has an office in Bangalore, India, which it opened in 2002 with 30 staff. That centre now employs 300 workers.

A spokeswoman said: "Should our proposals go ahead, it could involve the creation of roles in India as well."

The announcement came 12 days after Orange announced the closure of its call centre in Peterlee, east Durham, where 900 staff work, while creating 300 jobs in India.

Peter Shields, from regional development agency One NorthEast, said it had been a difficult two weeks for the contact centre industry in the region.

"The contact centre industry is fiercely competitive, subject to global market forces and these recent announcements are a major blow to the workers and their families," he said.