Advisory board : Voice of youth

Andy Cook: Offshoring is the topic that provokes the most letters to Insurance Times at the moment. What are your views?

Clair Hayward: Offshoring, it's quite clear that the reason we do it is because on a cost basis it makes perfect sense to add bottom line to offshore, a bit like outsourcing did a few years ago. Long-term the problem is that we are publicly discouraging people from joining our industry.

Offshoring can be more successful than outsourcing, if we manage it properly. But do we just take money out of the UK economy and put it elsewhere so that their prices will go up eventually anyway, so we'll have to bring it back?

Gavin Buckley: The thing about offshoring is that once it has happened, we'll lose the competence in the UK and you won't be able to bring it back again. You'd have to retrain again if it didn't work out. It's the ultimate in dumbing down.

Also, the insurance industry is quite a personal industry, and by putting a big distance between us and the customer, we would be making a mistake.

Simon Lockwood: It's interesting how the insurance industry has focused on this point, when it's been a global reality for quite some time. Offshoring is the topic of today in the UK, but it is not a story in the US where they have been doing it for many years, and this is another part of that commercial evolution - it is a global economy.

Kerry Costello: The offshoring issue is quite a hot topic in research, which is the field that I'm in. It's obvious why you do it, because Indian call agents earn an eighth of what somebody in the UK would. But what's the long-term impact on customer satisfaction, and ultimately loyalty, if that then starts to have a negative impact on customer bases?

There have been a number of studies recently looking at customer satisfaction in an answer from a call centre in the UK and from a call centre offshore.

Some studies have suggested that if you call somewhere offshore it's more likely your call will be answered more quickly, because they tend to be over-staffed. But you actually spend longer on the phone and you're more likely to have to call back a second time to get your issue resolved.

Because there's quite a lot of new call centres being set up, a lot of the staff that you're talking to are relatively inexperienced, which comes back to the whole debate about competencies.

A study that MORI has done revealed that 66% of the British public said they didn't care if the call centre was located abroad, as long as their call was handled quickly and professionally. So that comes back again to it being managed properly. If it's managed properly in the offshore centres and the staff are trained and can still deliver the same quality of service, then maybe it will work.

Andy Homer: There is a lot of hyperbole and also a lot of hypocrisy with people talking about offshoring, because people seem quite happy to buy goods and services from overseas manufacturers. I dare say half the shirts around this table were made outside the UK - but when it comes to someone answering your phone call you feel that it ought to be in the UK, and that's a general point.

Fundamentally, call centres don't work. They're the new satanic mills, the turnover rates, even in the best of them, are alarmingly high. People say: "We only lose 20% of staff a year," as though that's great. And there is something intrinsically at fault with putting people into call centres, they break people into little teams like battery farms

If you go back to the Commercial Union strategy of having service in branches, we had huge broker and customer satisfaction when you had units of 100 and 150 doing trading. The moment you stuck people into big call centres the service didn't improve, it wasn't any cheaper and the customer and the broker felt bad about it.

But in this old network of units of 100, 150, maybe the quality and the satisfaction was higher, but it was expensive and the technology never reached there. Technology was always going to make things cheaper, but it didn't.

Julian Edwards: Well we call ourselves the customer contact centre, but dress it up how you like, we're a team of only 100, so we find it very satisfying. Everybody knows everyone and what the job roles are. But offshoring, we've been talking exclusively about call centres, administration, but we're also looking at Gibraltar-based insurers.

From a very selfish point of view, in the broking market it's keeping the markets alive. We're very happy to deal with Gibraltar-based insurers, delighted to see Link as an insurer in its own right again, delighted to see these guys can again be their own decision-makers.

So we're very pro offshoring. We have flirted with the idea of offshoring. I don't think we're quite of the size yet, but we're very interested to read about Budget and South Africa offshoring.

Alison Douglas: There really is a difference between outsourcing voice and non-voice activities. If you're talking about non-voice activities you don't have all the sensitivities around dealing with and interfacing with customers. Once you take that out of the equation and you look at the cost savings that are achievable, it starts to change people's minds about the direction you should be going in.

Where voice is concerned, it's still a case to be proven. I would disagree with the prediction that it'll end up coming back to the UK. You can afford to throw UK staff at the problem until the control issues go away. That doesn't say that people won't go through a difficult period until they get there.

You've only have to look at history, and look at manufacturing - it's outsourcing. You don't think twice about the fact that Dyson manufactures in the Far East. We can still have this technical hub of people in the UK.

The way that the industry will move is, certainly on the personal lines and perhaps on the non-technical processing side of the other parts of the industry, that you'll get a split. The industry in the UK will be made up of a higher proportion of graduates who are more dedicated to technical roles, perhaps supported by a few people doing other general functions, but the vast majority of the operations will be offshore.

Homer: I finished my fellowship in 1976. But I tried to put something back, having qualified, by doing things.

For instance, I was a postal tutor for the CII. When you're marking papers for people in Zimbabwe on statistics and having to give guys advice by letter, you realise that all around the world there are people committing to insurance as a profession and struggling in their respective countries to do anything about their own education other than by correspondence. Fortunately, we have technology now to allow us to do it, but that was my first commitment.

Then I did things like local institute councils. I became very disillusioned with the whole CII piece and felt it wasn't anything other than a Friday night dinner club. I did what I think a lot of people did during the 1980s, I just didn't express any interest at all in the CII.

Then in the early 1990s, seeing the CII finances, it was clear that it was in deep trouble. It's easy to forget this, but in about 1996 CII lost £1m and its membership was going backwards, and it actually made people redundant.

There was a point when I decided that sitting on the sidelines and saying: "The CII is not a very good organisation" wasn't doing anything other than just adding criticism. Somebody said to me, "Well, why don't you get involved?" and a few years later I got through to the presidency.

Bob Scott came along and said: "One of the problems you've got as an institute body is you're not producing examinations that are relevant to employers." It was clear the CII didn't know any of the employers really. Bob Scott knew everybody and made a few phone calls, had a few meetings and got hold of the people that could influence the process, like HR directors. We then, from the marketing and from the examination point of view, developed a strategy and hired in Sandy Scott, a modern day chief executive, rather than an academic professor.

Now, the point that I'm trying to make is it took many years and the effort of many people to get the CII to where it is today. It's making £1m surplus, its membership is growing, its exams are more relevant to the new regulatory environment, and it has online training.

I know you feel there are things that should be influenced in our profession. If we had one unified body you'd all be saying "We need a segmentation, because no amorphous body can represent our business, because of the diversity of interest," which is absolutely correct. However, when you've got diversity and segmentation, from another point of view, it is difficult to get a unified voice on things.

The ABI is having private discussions with the Treasury and private discussions with the FSA, the minutes of which probably don't get published in the open and, in any event, you're not as an individual a member of the ABI so you can't demand to see minutes of the meeting, so you rely upon your company representatives.

I'd like to set a challenge to you. There are lots of individual groups that could influence the issues of the day if you could be focused about what the issues of the day might be. If you can get focused and you're prepared to give a commitment of your own time and effort, you can make a difference. My challenge to you is to ask of yourself, what are the issues from your professional perspective, from where you sit in the industry, from the businesses in which you sit and your own career path? If you could cross-check the issues with the influence group, I think you'd then be on to something and you'd have quite a powerful voice in promoting how some of the issues that you feel strongly about do get addressed.