Aviva plans to hire 3,000 in India

MUMBAI: The UK'S largest insurer Aviva Plc said that its outsourcing activity to India would increase as a result of its recent acquisition of motor services company RAC for £1.1bn. The company already has close to 4,000 jobs in India including call centres.

In a telephonic interview with ET, group executive director, Philip Scott indicated that part of the process work involved in integrating the recently acquired RAC would be outsourced to India.

Last year, Aviva had announced its plan to outsource jobs to three Business Process Outsourcing (BPO) outfits in India - the Mumbai-based WNS Global Services, the Delhi-based EXL and the Bangalore-based 24x7. The outsourcing was under the Build-Operate-Transfer model where ultimately Aviva would own the outfits in India.

Earlier, before the acquisition was announced, the company had indicated a business plan where the number of people working for Aviva group out of India would rise to 7,000 by the year '07. In UK, Aviva had said that it would cut about 1,700 UK jobs as a result of the takeover.

It said it would cut 900 head office jobs and move 800 administration and processing jobs outside UK. The job cuts will be from both Aviva and RAC, the company said, adding that it will try to avoid compulsory redundancies and that Aviva's Norwich Union UK unit's annual staff turnover exceeds the proposed cuts.

RAC is a 108-year-old company providing buttistance to motorists by providing buttistance in the event of a breakdown to legal and technical advice and up-to-the-minute travel information. RAC had been Aviva's partner for several years prior to the acquisition.

Aviva's partnership with RAC was aimed at furthering its motor insurance business in the UK where service is as important as compensating damages.

Mr Scott said that he expected the proportion of business from India among its worldwide business would grow because of the faster rate of growth of the Indian economy. In UK the market is growing at 5% compared to the double-digit rate of growth in India.

However, the contribution of India to Aviva's balance sheet would double immediately as soon as the government raises the foreign shareholding limit to 49% as proposed in last year's Budget.

"We account for only 26% of the total business from India since Aviva's shareholding is only 26%," said Mr Scott.

Despite the increased exposure to non-life industry following the acquisition of RAC, Mr Scott said that there were no plans to get into the non-life insurance business in India. "We are in the non-life business only in those countries where we can be market leaders," said Mr Scott.