Aviva predicts higher profits on outsourcing to India

Monday, 09 February 2004, 20:30 IST
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LONDON: Britain's biggest insurer Aviva, which has relocated much of its back office work to India, has predicted higher profits this year. Its rosy announcement this week is likely to be criticised by unions. The firm is currently in the process of shipping more than 3,500 back office jobs to India. Aviva, trading as Norwich Union in Britain, said after a strong second-half performance in its life and general insurance operations, operating profits would "exceed market expectations". The group now expects profits to be in the region of £1.9 billion in its annual results, to be unveiled on February 25, against £1.7 billion in the previous year. The forecast is likely to mean even higher payouts for Aviva's board, led by chief executive Richard Harvey, who took home almost £1 million in salary and bonuses last year. The lion's share, 70 percent, of his bonus is based on the group's financial performance, and he could earn as much as half his salary this year. While the higher profits forecast will be welcomed by analysts covering a sector just emerging from the effects of the worst bear market for a generation, the timing is certain to infuriate staff. On Friday, Aviva announced it was closing its Hill House Hammond High Street broking chain, claiming the move reflected a massive switch by the public to buying house and car insurance over the Internet and on the telephone. Of the 1,600 people employed in the offices about 1,200 face compulsory redundancies.
Source: IANS