Regulators Oppose QBE Outsourcing Plan

QBE seeks to outsource primal positions in their IT department as part of its cost-cutting drive. But state and federal regulators are blocking the move saying that some aspects of an insurance firm’s operation must not be done overseas.

The company is seeking to transfer some of its functions to companies like Accenture and MphasiS based in India, which would mean the loss of 100 domestic jobs, as well as the possibility of exposing several data overseas.

QBE is the insurance firm that handles WorkSafe Victoria and WorkCover NSW. The company has already undergone several meetings with concerned state regulators over the plan and there were reports that the Australian Prudential Regulation Authority has already approved QBE’s new operations.

But QBE said it will make reconsiderations and will most likely retain some of its staff in order to comply with Victoria’s policies, which also includes opening up a storage data cloud and the restriction of data to be sent overseas.

Some regulators, however, have yet to approve QBE’s outsourcing plans, but the company is still pushing through with the handover that is expected to take place by August. Should this happen, QBE, according to analysts, will have to go through some risks.

A spokesperson for QBE said the plans to outsource IT actually do not have any data transferring involved. “At all times QBE treats the security of all data very seriously and we manage our business with reference to privacy and other data regulations.”

The company also said that 70% of those deemed affected by the outsourcing plan are going to be under their “Redeployment Program”.