Australian health insurer defends IT outsourcing amid job losses, cybersecurity concerns
PERTH, AUSTRALIA — HBF, Western Australia’s largest private health insurer, defended its decision to outsource parts of its IT support services, a move that has resulted in the loss of up to 30 jobs.
The company recently confirmed that it is transitioning to a “hybrid” IT model and partnering with global tech giant Infosys. This approach will see HBF’s Perth-based IT team supported by Infosys staff located on Australia’s east coast and overseas, including India.
IT job losses and redeployment efforts
The outsourcing shift has affected approximately 30 of HBF’s 250 in-house IT roles. However, some of the impacted workers have been redeployed within the organization.
HBF emphasized that the decision was not primarily driven by cost-cutting measures but rather by the need to address growing cybersecurity risks and adapt to the increasingly complex global technology landscape.
“This move is about making sure HBF has the right mix of specific technical skills and capabilities to support our members and people into the future,” the company said in a statement.
Cybersecurity focus vs. cost savings
While HBF has been actively cutting costs in recent years — most notably by closing five of its 14 branches earlier this year — the insurer stated that the IT outsourcing decision is cost-neutral. Instead, the company highlighted that cybersecurity concerns were a key factor in adopting the new model.
HBF reassured its members that there are no plans to offshore its call centers, which could have raised additional concerns among its workforce and customer base.
Strong financial performance despite challenges
The outsourcing decision comes just two months after HBF reported a healthy annual surplus of $44.2 million for the 2024 financial year. This followed two years of losses and was driven by a 13% increase in premium revenue, which reached $2.22 billion.
Despite rising claim expenses, HBF’s national market share hit a 20-year high of 8.05%, bolstered by its acquisition of Queensland Country Health Fund.
HBF continues to expand its operations beyond Western Australia, with about 24% of its 1.2 million members now residing outside the state—a significant increase from just 10% six years ago.
In its annual report, CEO Lachlan Henderson acknowledged that rising costs, increased regulation, and cybersecurity threats are among the key challenges facing businesses today.
“HBF continues to focus on the cost of doing business to support our members,” he added.
