Insurance giant to outsource to India

Wednesday, 03 December 2003, 20:30 IST
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LONDON: British insurance giant Norwich Union is the latest to join the list of companies to outsource to India: it has told staff that it will cut 2,350 jobs and export them to India. The move once again sparked protests from trade unions. The Amicus trade union termed the decision as "despicable" and vowed to fight it. Parent firm Aviva said operating costs in India were typically 30-40 percent lower than in Britain and the move would also help it provide 24-hour services. Amicus officials said Tuesday there could be 500 compulsory redundancies, a figure that Aviva disputes. Aviva already has offices in New Delhi and Bangalore, where about 1,200 staff process general insurance claims. It has defended its latest move as being about adding flexibility as well as cutting costs. The time difference between Britain and India would allow the company to move to round-the-clock claims processing and administration, Aviva said. Unions have warned that up to 200,000 jobs in the finance sector could leave Britain over the next five years as companies take advantage of cheaper labour costs abroad. Aviva said it hoped the bulk of its job cuts will come through natural staff turnover or voluntary redundancies. The union warns that there will be hundreds of compulsory job losses. However, according to Aviva, only 12 workers faced compulsory redundancies when the firm moved 1,250 jobs to India earlier this year. "This deplorable announcement by Aviva is based purely on greed - it ignores Aviva's corporate social responsibility towards both its (British) employees and customers," David Fleming, Amicus national secretary, told the BBC. Amicus also said the decision would undermine the British job market, especially for school leavers and graduates. The union has warned that 12 locations across Britain will be affected by the cuts, a figure denied by the company. In July, Norwich Union shed nearly 900 jobs in Norwich, Cheadle, Perth and Worthing, and during the past year, Aviva's overall British workforce has fallen by 3,000 staff to 36,000. Worldwide, Aviva now employs about 59,000 people, and by the end of 2004 the firm expects to have at least 3,700 of them in India. Of the new posts created in India, approximately 350 will be call centre roles servicing British customers, while another 2,000 staff will perform back office work including processing of British insurance claims. About 150 jobs will be created to support Aviva's general insurance business in Canada, although Aviva promises that there will be no job losses in Canada. Aviva is Britain's largest insurance group, and was formed in a merger of Norwich Union with CGU
Source: IANS