Aon warns firms of India terror threat

Aon branded India - where some Scottish companies have recently exported a number of back-office and call centre jobs - as one of the most dangerous places in the world for terror attacks.

Only yesterday, Edinburgh-based mutual insurer Standard Life said it was exporting another 50 jobs in its healthcare division there.

Other British insurers such as Aviva and Prudential, and banking groups including Lloyds TSB and HSBC have all farmed work out to India, where labour and other overhead costs are lower.

However, Aon today said those firms were ignoring the terror threat that existed in the Asian country.

Martin Stone, a director of Aon’s counter-terrorism and political risk unit, said: "India is one of the forgotten stories of terrorism."

India was the scene of the biggest number of terror attacks between February 2003 and February 2004, according to research conducted by Aon in compiling its 2004 map of terror hotspots.

Mr Stone said: "Everybody focuses on places where there is perceived to be a high risk of attacks, such as Iraq, Colombia and Saudi Arabia.

"But India is right up there. There is no sign that this guerrilla activity is going to abate, leading to a downgrade of its risk rating."

India has become a favoured destination for the export of many lower-end jobs in the computer, IT and financial services sectors.

Management consultancy AT Kearney said in a recent report that India, China and Malaysia were the three main countries likely to benefit from European and American companies seeking to cut costs while maintaining production levels.

Experts predict around six million jobs, mainly in the hi-tech sector but also in the financial sector, are expected to be transferred overseas in the next ten years. Critics claim such moves are short-term solutions to help manage costs.

Other banks, such as Royal Bank of Scotland and HBoS, and building society Nationwide have ruled out moving jobs overseas.

According to the American insurance giant, India is one of the top five countries in terms of demand from Western firms looking for insurance to cover fledgling operations there against a wide range of political risks.

However, that demand is primarily for cover against firms’ plants and factories being confiscated or their operating contracts being torn up by state or federal governments, rather than a devastating bomb attack like that which damaged HSBC’s offices in Istanbul, Aon said.

Western companies may not only reduce the risk of attack on their buildings around the world by beefing up security, but also by their choice of locations, said Aon, which itself has offices in trouble-prone countries such as Pakistan and Sri Lanka.