Insurer's plans to outsource 1,200 jobs to India denounced as 'threat to economy'

Financial services unions have slammed the announcement by Royal & SunAlliance (R&SA) that it will offshore 1,200 jobs to India over the next two years as a "threat to the UK economy".

The R&SA announcement came after a six-month pilot in India involving 100 motor sales, servicing and claims positions across its direct arm More Th>n.

R&SA said its expanded Indian operation, based in Bangalore, would carry out frontline customer service and back office administration roles across both R&SA and More Th>n.

R&SA said the split between roles supporting R&SA and More Th>n, and between personal lines and commercial lines roles, was yet to be determined, but would be worked out in consultation with the unions in the coming months.

But he added that the majority of roles were expected to support More Th>n and personal lines, and no UK sites would be closed as a result of the announcement.

The move is expected to deliver annual cost savings in excess of £10m.

R&SA UK chief executive Duncan Boyle said: "As far as possible, the reduction in UK jobs will be managed through natural turnover and redeployment."

Amicus national secretary David Fleming said: "This announcement clearly shows that offshoring presents an unprecedented threat to UK jobs and the economy."

Last month Norwich Union announced plans to offshore 7,000 jobs by 2007. Fleming said that despite the emphasis on natural wastage and voluntary redundancies, the combined impact of these announcements is 8,000 fewer financial services jobs in the UK.

R&SA plans to integrate the Indian centre into its existing call centre network, which allows a call to be answered by the first available operator regardless of location. The operation in India will be measured using the same standards employed for its UK call centres.

' Allianz Cornhill has opened its second facility in the Kerala Technopark in India. The current Indian headcount for Allianz Cornhill is now 175, but could increase to 400 in 2005, said the company.