(Bloomberg) – Munich Re, the world's second-biggest reinsurer, plans to spend 1 billion euros ($1.1 billion) by 2020 restructuring operations at its loss-making primary insurance unit in Germany.

The plan for Ergo's German operations includes cutting 1,835 jobs, or about 13% of the Dusseldorf-based company's workforce in Germany, according to a statement on Wednesday.

About a quarter of the industry's almost one million jobs may be lost in Europe over the next decade, including positions in policy issuing and claims management, according to McKinsey & Co. European insurers have become vulnerable to unpredictable levels of claims as premiums stagnate and investment income dries up amid record-low interest rates.

Modernize computer systems

At Ergo, most of the new money will be used to modernize computer systems. The company's sales force and administration will also be streamlined, generating total net savings of 280 million euros by 2020, Ergo's Chief Executive Officer Markus Riess said at a press conference in Dusseldorf. The changes will help put Ergo in a position to contribute 500 million euros a year to Munich Re's earnings from 2021 at the latest, he said.