UK insurance firm absorbs staff from Indian outsourcer

British insurance company Aviva plc has transferred 1,600 employees from its Indian outsourcing provider to Aviva’s own subsidiary in India, Aviva Global Services.

The transfer is part of a plan by Aviva to move 5,000 business process outsourcing (BPO) staff in India and Sri Lanka from three contractors to its Indian subsidiary during the course of this year.

Having the staff on its own payroll will reduce costs because Aviva will no longer be paying profit margins to the outsourcer, 24/7 Customer, said Rajnish Virmani, chief executive officer of Aviva Global Services, in Bangalore on Friday. Having its own BPO operation will also allow Aviva to modify processes quickly, and add new processes like analytics, he added.

Absorbing staff from contractors is part of a plan begun by Aviva in 2003 to outsource to Indian contractors under a build-operate-transfer (BOT) model. Under the BOT model, suppliers establish facilities with staff doing work for Aviva, with the option to transfer the staff, infrastructure and facilities to Aviva at a later date. Most of the facilities are leased, Virmani said.

The BTO plans do not include Aviva’s IT outsourcing to Indian companies such as Wipro Ltd. and Tata Consultancy Services Ltd. (TCS), and Aviva will continue to outsource some of its business process work to Indian contractors, Virmani said.

Of the 7,800 BPO staff expected to be doing work for Aviva in India and Sri Lanka by end 2007, about 2,800 will come from contractors. Aviva will further increase its own staff and contractors’ staff in 2008, Virmani said.

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