A psychologically unstable loner who mostly lived in woods has attacked an insurance office in a Swiss town with a chainsaw, injuring five people, before fleeing and sparking a manhunt, police said.

Suspect Franz Wrousis, 51, wounded two employees of the CSS health insurance firm, one of them seriously, in their ground-floor office in the town of Schaffhausen near the German border.

At least five people have been injured in an attack in Switzerland credit: EPA/ENNIO LEANZA

Three other people were lightly injured during the incident, and the attacker fled before police arrived on the scene.

"We have information that this man is dangerous, that he is aggressive and, shall we say, psychologically disturbed," senior regional police official Ravi Landolt told reporters.

Police said the assault was not a terrorist attack but more likely due to some grievance the suspect had against the health insurance company.

The suspect apparently lives mostly in woods, Mr Landolt said.

Police shut down the old town of Schaffhausen in Switzerland, while they search for an unknown man credit: Ennio Leanza/Keystone via AP

Police released old photos of Mr Wrousis standing among trees in a green T-shirt and black jeans. They described him as being about 1.9 metres (6.2 feet) tall and said he was now bald and unkempt.

The historic old quarter of Schaffhausen, a town of about 36,000 people, was sealed off after the morning attack by a large deployment of officers who evacuated all businesses and pedestrians, but the barricades were later removed and regular traffic returned to the area.

Prosecutor Peter Sticher said Mr Wrousis had two previous convictions for offences against weapons laws, one from 2014 and 2016.

Police said they had recovered a vehicle sought in connection with the incident, which they said was apparently the work of the single suspect.

Despite relatively low crime rates, Switzerland has one of the highest rates of firearm ownership in the world and police said it was likely that the suspect was carrying weapons while on the run.

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Schaffhausen is a city north of Zurich, with a population of about 36,000.