QBE’s Australian business is ahead of schedule in shifting work to a global services centre in the Philippines, as it takes the lead in a project to deliver annual savings of at least $US250 million ($272 million) by the end of 2015.

Australian motor claims are “fully live” in Manila, property claims are in transition and underwriting processing at the centre will increase this month, according to Australia and New Zealand Operations CEO Colin Fagen.

The Australian business is likely to beat its targeted annual savings of $US85 million ($92 million) by the end of 2015, Mr Fagen told an investor briefing in Sydney last week. North America will be the largest regional contributor to overall savings.

“Our progress to date has exceeded expectations,” he said. “However, we are still implementing the program so can’t provide any guidance on what total run-rate benefits may be.” 

The Manila centre will handle increasing amounts of business from North America and Europe over the next two years.

QBE CEO John Neal says global savings will come from non-claims procurement, cheaper labour and process efficiencies, according to. The company also expects additional benefits from $US90 million ($99 million) in annual savings on claims procurement.

“This quarter is the peak of the change program for our Australian business,” Mr Fagen told insuranceNEWS.com.au.

“We have actually done a lot of the heavy lifting and this will help set up this program for around the globe.”

He says feedback from brokers shows the Australian business will be judged on its execution of the change and its timetable.

“We are working very hard to have the vast bulk of this project finished this calendar year and everything is on timetable at this point – in fact we are slightly ahead of timetable.”

Normal staff attrition, redeployment and reduced use of contractors have limited Australian job losses, with 39 people made redundant by the middle of last month.

QBE says the transfer of work to Manila has included straightforward processing and administration tasks, with the handling of complex issues and larger claims continuing in Australia.

It remains on course to deliver global financial targets for this year, while losses from natural disasters in the first half were within expectations.

Mr Fagen says Australian average premium rates across the portfolio increased 7.3% to the end of May before softening from that level slightly last month.

“We achieved strong rate increases in 2012 and early 2013 and these have placed our portfolios in an acceptable position in the current economy.”