Newspaper article The Evening Standard (London, England)

Soaring Costs 'Will Force Huge Insurance Jobs Switch to India'

Newspaper article The Evening Standard (London, England)

Soaring Costs 'Will Force Huge Insurance Jobs Switch to India'

Article excerpt

Byline: JONATHAN PRYNN

THE insurance industry will 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, a City report warns today.

The report, from US investment bank JP Morgan, says bloated insurers will be unable to cope with the new era of 1% charges on savings products proposed by last year's review of the savings industry by Ron Sandler.

Its author, analyst Gordon Aitken, has calculated that the sector's cost base averages at 1.73% of assets, leaving it hopelessly uneconomic when "charges will be driven towards 1%".

It warns that the industry is also being hurt by consumer disenchantment with traditional " withprofits" products where the provider can boost its profits by cutting bonuses. By contrast, insurers can only increase the profit on the simpler savings products-that are replacing them, such as unit trusts or ISAs, by cutting costs.

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". …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.