Norwich Union is considering outsourcing up to 250 IT infrastructure jobs, as parent Aviva continues work on a large efficiency drive.

The insurer has begun discussions with staff over the move, and is in talks with IT service providers over a possible contract.

A spokesperson at Norwich Union confirmed that 250 jobs were under review, of which most are in Norwich but 30 are in York, and 20 in Bristol. But some reports have stated up to 400 IT workers could be affected.

Norwich Union is in talks with potential suppliers EDS and IBM, reports state, but the insurer would not confirm if that was the case.

“We have updated our staff on a strategic review we have been conducting on the way we run one element of our IT operation - that relating to our IT infrastructure - which has included exploring potential outsourcing opportunities,” Norwich Union said in a statement.

“We are in negotiations with external suppliers and expect to announce the outcome of these discussions in the first half of 2009.” It said no final decision had been taken on whether to outsource those staff or not.

The move comes as parent group Aviva continues work on the One Aviva efficiency plan, announced by chief executive Andrew Moss, under which it plans to cut £33 million from IT costs in the UK this year. Exact details of the changes have not been disclosed but Aviva said money will be saved through a more efficient IT set-up, including switching off legacy technology, sharing IT platforms and using shared services.

The £33m IT savings, alongside a reduction in marketing costs, mark the first of a three stage programme. In the second and third stages, which are still in planning, the company will “re-engineer” its service and processing centres, and remove layers from its business structure.

Last year, Norwich Union switched off 100 legacy systems, following an agreement for reinsurer Swiss Re to administrate three million life and pensions policies on its behalf. It plans to decommission another 230 systems, leaving 120 running.

In 2007, Aviva began work to move 5,000 business process outsourcing staff in India and Sri Lanka from three contractors to its own Indian subsidiary during the course of this year.

Earlier this month, Norwich Union signed a £300 million, six year outsourcing deal with Cable & Wireless. The company will provide 72 different communications services to 35,000 staff in the UK and India, including voice telephony, data services, and local and wide area networks.

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