IAG moves spark union warning

Insurer’s plans to send jobs to Philippines could hit customer service, says unionist

Aunion for workers at New Zealand’s largest insurer is warning customer-service levels could suffer and the privacy of individual’s information may be at risk under a proposal to move jobs overseas.

But IAG New Zealand, whose brands include State Insurance, AMI, NZI and Lumley, says it needs to send some jobs overseas to keep its insurance premiums affordable and insists privacy levels will be maintained.

Stephen Parry of First Union said it was aware of 159 role disestablishments at the company since November but three more departments were going through a process called “baselining”, where the work was assessed to see if it could be done abroad.

IAG New Zealand’s parent company IAG signed a deal with global firm WNS in November 2016 for a partnership arrangement where cer- tain roles will be done by workers employed by WNS in the Philippines.

Parry said IAG human resources had been frank that the entire NZ business was in scope to be assessed for moving overseas.

But IAG NZ chief operating officer Melissa Cantell said the company would keep a strong presence in NZ.

It had about 3500 in NZ “and will maintain a strong presence in New Zealand as not every activity or function will make sense to move”.

“It’s important to us to be connected to our communities across New Zealand,” Cantell said.

The company would not say how many of its roles would head away.

Parry said the union was disappointed not only for the workers but also by the company’s broader programme of outsourcing and he warned of consequences.

“Outsourcing of this nature is bad for all parties concerned, except for [potentially] the short-term profitabil- ity of the business. The most immediately affected parties are the New Zealand workers and their families.”

Parry said the company’s customers could also suffer from poorquality service, administrative delays and vulnerability of their private data in a jurisdiction that is substantially less regulated.

But Cantell moved to reassure the group’s customers that their information would be secure. “We can assure customers that we take their privacy seriously and our off-shore teams follow the same robust processes as our New Zealand-based teams.”

She said IAG was facing a changing insurance market with rising costs and claims each year, including an unprecedented number of natural disasters and weather events.

“To ensure our long-term sustainability as a provider of insurance [in NZ] we need to keep premiums affordable for our customers.

“To do this we are looking across our business at the way we operate to reduce our costs and improve our service to customers — and having some activities performed off-shore is just one way we are doing this.”

Cantell said the business increasingly used digital channels so its customers could do business with it at a time and place that suited them.

This month IAG reported its firsthalf earnings in NZ had more than tripled to A$119 million ($128.5m) in the six months ended December 31 from A$36m a year earlier, largely bolstered by a 15 per cent drop in claims expense.

To ensure our long-term sustainability . . . we need to keep premiums affordable for our customers. Melissa Cantell, IAG NZ