Aviva, which trades in the UK as Norwich Union, said 2,000 'back office' administration, processing and IT roles will be moved offshore, along with 350 call-centre positions and 150 administration roles to support its general insurance business in Canada.
The company claims that 80 per cent of the jobs moved to India will be accommodated in the UK by a combination of expansion, current vacancies, staff turnover and voluntary redundancy. However, that still leaves 500 positions under threat, and Aviva said it cannot rule out compulsory redundancies.
Aviva said the move will increase the number of staff in its existing offshore operations to 3,700 by the end of 2004. Call-centre positions will be moved to processing centres in Delhi and Bangalore to deal with motor and household insurance enquiries and claims, while some IT service positions in the general and life insurance businesses will be transferred to Delhi, Bangalore and Pune.
A Norwich Union spokesman told silicon.com that the number and existing location of the affected IT roles has not yet been finalised, and that the announcement was made to prevent staff finding out about the plans through rumours and speculation.
Aviva said the move offshore will give the company extra flexibility and capacity for its UK business, while providing further scope to enhance efficiency and improve service to customers.
Richard Harvey, group chief executive of Aviva, said in a statement that while it was a tough decision, the action is necessary for the group to remain competitive, and that it will secure a long-term future for the business.
"We are operating in an increasingly competitive environment. Our customers want value for money products and high levels of service, so it is vital that we continually explore opportunities to improve our efficiency while maintaining service levels. Our staff in India are an important part of this process, and our experiences to date have been positive," he said.
Harvey also hinted that this latest round of jobs moving offshore will not be the last, and said that over the course of 2004 Aviva will continue to assess what future application offshore operations could have to other parts of its business.
Lee Whitehill, spokesman for union Amicus, told silicon.com the decision is just the "tip of the iceberg" and called on the government to establish a forum for unions to sit down with companies and plan for technological change.
"These are the first signs of a landslide which is going to engulf the British economy," he said. "The workforce is very angry and we will support them in any steps they see fit."
Georgina O'Toole, analyst at Ovum Holway, said the proportion of back-office functions being moved offshore by Norwich Union reflects a wider growing trend, especially in the financial-services sector, for firms to keep the customer-facing elements of their businesses in-house and not automatically put call centres offshore.
"There is a retreat away from that but it depends on the priorities. If they want to differentiate on customer service, they are keeping core customer facing processes in-house. If the strategy is to offer the cheapest mortgage then the pivotal thing is to keep costs down."
Talkback
Yet another big corp starts pulling out of the UK to give their shareholders an extra 1p per share. The shocking side of the Global economy. I hope that NU customers rethink their allegence & move their business elsewhere.....
It's happening everywhere.....will it stop?......My opinion of Indian Call Centres is while they are very polite people they just don't give as good a service as over here.
I strongly believe this is a very bad thing. From all of my dealings with companies who outsource to offshore companies I have found the quality of service has dropped to unacceptable levels. As such I won't be renewing any of my insurance policies with them.
I have a few shares in Norwich Union from when the floated on the stock market, about £200 worth,not much i know but still i wasnt consulted,or given a ballot on outsourcing.
I will be selling my shares and cancelling all my policies with the company.
The sad thing is that as in most British companies,people will moan but do nothing about it and hope that everything will pan out ok.
The unions are hopeless and the government is not interested either.You can bet that if this had happened to the French,there would be mass strikes and roadblocks.
No wonder they call us soft johnny English.
Power to the people.
Offshoring is inevitable, and has been sign-posted for some time. In the same way that the manufacturing industries lost people in the 70s/80s, white collar professions like IT will loose people today. The question isn't whether the jobs will go - they will - but how we go about replacing those jobs. We can either try and drive wages down - with the same inevitble result as in manufacturing i.e. the businesses fold and all work goes offshore - or by traing our people into the value added, high skilled jobs, that can't currently be delivered from abroad, and which leave head offices here.
For any who don't realise it, in India you get a graduate with a degree (maths, computer science, business etc) for a fraction of the cost that you get in Europe/US. And most are employed to do jobs (back-office functions, call centre etc) which wouldn't require a degree here.
Like Canute we can't turn the tides back: Those planning now to build a boat are best placed to survive.