LONDON (Bloomberg) — European insurers such as Allianz SE and Axa SA may be forced to cut costs, outsource more functions and boost revenue from emerging markets to maintain earnings growth as the recession in their home markets deepens, consulting firm Accenture Ltd. said.

Insurers may gain from moving asset management, claims handling and the underwriting of insurance risks outside the company, Thomas Meyer, the Zurich-based managing director for Accenture's insurance practice in Europe, Africa and Latin America, said in a telephone interview.

"Insurance is a 300-year-old industry and it hasn't changed that much since its inception, with the average insurer still handling about 85 percent of its operations that create value in-house," Meyer said. In contrast, "car manufacturers nowadays only handle about 15 percent themselves", he said.

Almost 16,000 people have been fired by insurers worldwide since the start of the financial crisis as they seek to trim costs to offset slower earnings growth. Global life and non-life insurance premiums fell in real terms last year for the first time since 1980, Swiss Reinsurance Co., the world's second-largest reinsurer, said last month. The industry has written down $243 million on credit and investment losses since the start of 2007.

"While the financial crisis will lead to declining premium income in developed and saturated markets, emerging markets such as China, India and Brazil will offer opportunities to grow," Meyer said.

British insurers are among companies that have announced moves to outsource some services. Aviva Plc reduced its workforce by 3,000, or six percent, and said it was scaling back operations that had been outsourced to India. In December, Friends Provident Plc, the 176-year-old UK insurer, transferred its information technology requirements to International Business Machines Corp. along with 200 of its employees.

Smaller insurers may benefit from outsourcing underwriting, which involves pricing insurance contracts based on claims data, Meyer said. "In the past many smaller insurers simply followed big players such as Allianz in their underwriting," he said. "That could be a model for the future, but eventually it would lead to further consolidation."

Administrative costs in reinsurance or commercial insurance for global clients could be cut by as much as 30 percent, if functions such as policy and claims processing are made more efficient and duplicated functions are eliminated, he said.

"Pressure on insurers to cut costs and optimise business models will increase," Meyer said. "This certainly won't go without job cuts as personnel and information technology are the most important expense factors in the industry."

Germany's Allianz and Ergo Versicherungsgruppe, the primary insurance unit of reinsurer Munich Re, have both announced job cuts during the past years.

Munich-based Allianz will eliminate 4,800 to 4,900 positions instead of an earlier target of 5,700, Allianz's German head Gerhard Rupprecht told newsmagazine WirtschaftsWoche in an interview. Employees have been transferred to new operations, such as the direct insurer Allianz24, and reintegrated from data processing subsidiaries, Rupprecht said.

Ergo aims to almost double profit, excluding one-time effects, to more than 900 million euros ($1.26 billion) between 2006 and 2012 helped by cost cuts and higher sales. The Dusseldorf-based company said in November it aims to save 180 million euros by 2010, helped by a reduction of about 1,800 jobs.