Monday, January 21, 2008

Scottish Widows’chief sees scope for more outsourcing


Scottish Widows chief executive Archie Kane has pledged to retain customer service roles in the UK, but signalled that the company could still send more jobs abroad as he oversees continued reform at the Lloyds TSB-owned insurer.

Kane has presided over a turnaround in the fortunes of Widows but is adamant that there will be further improvements at the Edinburgh-based business.

When he took over in October 2003, Widows was reeling from the fall-out from the mis-selling of precipice bonds and, like virtually every other life company, had to devise an alternative product range when customers turned their backs on with-profits after the post-millennium stock market crash.

A measure of Kane's success in streamlining the business is that it has been able to repatriate around £3.6bn of capital to its Lloyds TSB parent company in the last three years.

This has been aided by a focus on simpler and less capital-intensive products and a move to cut excess costs from the business.

But Kane, 55, who oversaw IT and operations at parent company Lloyds TSB before taking on Widows, continues to style himself as a driver of change. One element of that is an ongoing search for ways to cut costs through outsourcing.

He said: "We look at it from the point of view - does it make commercial sense and does it make operational sense to do these things?"

Among the changes wrought by Kane was the transfer two years ago of some data processing jobs to India. Also, State Street now handles much of the behind-the-scenes work at Scottish Widows Investment Partnership.

Widows employs around 4000 staff in the UK but Kane is adamant that while there could be scope for further outsourcing or offshoring, there will be no repeat of Lloyds TSB's aborted attempt to move some call-centre functions overseas.

"What we will not do is outsource consumer contact," he said. "We own the contact with our customers, we have to stand and communicate face-to-face or via the telephone with our customers.

"But things like medical underwriting or administrative processing that goes on behind the scenes, and if it makes commercial sense to do it, then we will avail ourselves of the opportunity to do so like any sensible firm."