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British insurance cos. to hire Indian staff
Friday, 29 August 2003, 19:30 IST
LONDON: Apart from shifting back office operations to India to cut costs, the British insurance industry is now likely to employ Indian staff to fill senior positions.
A report by J.P. Morgan Thursday said the insurance industry would be forced to cut thousands of British jobs, including senior management positions, and move them to India because its costs are still far too high.
The report says that "bloated" insurers will be unable to cope with the new era of one percent charges on savings products proposed by last year's review of the savings industry.
The report's author, analyst Gordon Aitken, calculated the sector's cost base averages at 1.73 percent of assets, leaving it hopelessly uneconomic when "charges will be driven towards 1 percent".
The report predicts that moves to outsource operations to India and other developing countries will accelerate and if successful, "Indian staff may be used to fill more senior positions".
However, it says the moves are unlikely to be trumpeted because of the risk of stirring up opposition from unions and politicians.
Several British insurers have already made their first moves towards outsourcing to the subcontinent, where average monthly earnings are $140, just 5 percent of the $2,845 average in Britain.
In May, Prudential unveiled a new call centre in Mumbai where it will shift up to 1,000 of its 3,000 Britain-based customer service jobs.
Norwich Union group Aviva is setting up a call centre in India for claim processing in December, creating up to 1,000 jobs.
Source: IANS
Source: IANS