Earlier this month, it was reported that 400 staff are to be transferred back to Zurich from Capita later this year, following the outsourcer’s decision to exit the life and pensions market. The move will reverse a deal dating back to 2005, when Zurich had handed over parts of its life division to be operated externally. Now, having plans to bring those employees back in-house, Zurich has confirmed it is considering outsourcing some of the roles overseas by next year.
The company says no final decision has been made, but the prospect of jobs being moved abroad has unsettled staff and reignited debate about the risks of outsourcing in financial services.
Zurich insists the consolidation will simplify operations and improve customer service. Yet employees fear that efficiencies could ultimately mean redundancies and reduced resilience. For critics, the situation underlines how outsourcing, long justified on cost grounds, can also undermine workforce stability and service continuity.
It is a tension felt far beyond insurance. Jaguar Land Rover’s recent cyberattack showed how outsourcing critical functions to third parties can blur accountability and introduce systemic vulnerabilities. The carmaker’s reliance on Tata Consultancy Services for its IT and cybersecurity left it exposed when hackers struck in August, forcing production to a standstill across multiple countries.
The JLR crisis has become a cautionary tale: outsourcing may deliver savings but can also amplify risks. Zurich’s review shows how deeply these trade-offs now run across industries, including within insurers themselves.
For insurers, this dual role is striking: they are underwriting outsourcing risk for their clients, while simultaneously making outsourcing choices in their own businesses. That double exposure magnifies the stakes for both risk managers and underwriters.
Peter Robinson, of Prizm Solutions, argues that many businesses underestimate these risks: “The only reason you’re outsourcing is to save money… but somewhere down that line, you’re exposing your clients to an increased risk because you’re putting a link in the chain which wasn’t there before,” he said.
He added that firms too often treat cybersecurity investment as a substitute for cyber insurance. “It shouldn’t be one or the other; it should have been both,” he said, describing that approach as a “beginner’s attitude” for large corporates.
For insurers, Zurich’s own restructuring is a reminder that outsourcing decisions must be judged not only on efficiency but also on resilience and insurability. Professional indemnity, liability and service continuity exposures all grow more complex when third parties hold critical responsibilities.
For Zurich, the coming months will be a test of how it balances efficiency against resilience. For the wider insurance sector, outsourcing is not only a client risk to be underwritten but a strategic choice within insurers’ own operations, one that will increasingly shape liabilities, reputations and customer trust.
