ZURICH (AFP) - Swiss Re, the world's biggest reinsurer and severely hit by the financial crisis, on Thursday said it would cut around 1,000 jobs worldwide in the next 12 months to trim costs.

"Swiss Re intends to reduce its current global headcount of 11,560 by approximately 10 percent over the next 12 months. Any reductions will be undertaken in compliance with applicable laws and regulations," it said.

The group posted a record annual loss of 864 million Swiss francs (S$1.1 billion) in 2008, as earnings were hit by investment losses.

Its chief executive officer Jacques Aigrain announced his resignation a week after it posted its earnings in February and was replaced by the group's deputy and chief operating officer Stefan Lippe.

In a statement Thursday , Swiss Re said that Agostino Galvagni, who heads the global and large risks division, had been appointed to take over as chief operating officer from May 1.

The Zurich-based group added that it was "accelerating efforts to simplify the organisation and improve operational effectiveness.

"As previously announced, this will lead to running cost reductions of 400 million francs (S$528 million) by the end of 2010," it said.

Analyst Stefan Schuermann at Bank Vontobel said the cuts in head count indicated that the reinsurer did not expect revenues to increase.

"It is among the first insurance groups to announce such a big step in terms of employees, reflecting the challenging market conditions," he said.

Bank Helvea's Tim Dawson said Swiss Re was "heading in the right direction."

However, he noted that the "future shape of the group is still unknown," therefore, speculating on its share movements remained a gamble.

The group's shares closed up 10.63 percent at 21.44 francs (S$28.31), outperforming the overall Swiss Market Index, which rose up 3.26 percent, buoyed by progress made by the G20 summit to deal with the global economic crisis.

The reinsurer's shares have fallen by about a fifth since its troubles began to emerge in November 2007, when it warned of 1.2 billion francs in losses from the US subprime home loan crisis.

This year, it sold a 3.0 percent stake in the company to Wall Street sage Warren Buffett for an undisclosed sum as it sought to shore up its finances.