Mr. Trevino, who declined to name any specific companies, said "we see other insurers doing similar outsourcing activities and increasingly taking advantage of offshore cost efficiencies."

While Mr. Trevino did not identify competitors, a firm in India currently describes a variety of industry members that it serves including one that matches the profile of Farmers.

Allstate, which has some 40,000 workers overall, employs nearly 1,000 workers at its Northern Ireland subsidiary Northbrook Technologies for processing work. Allstate also uses Syntel, a Troy, Mich.-based vendor which assigns work to facilities in India.

"We already do some outsourcing, but it's very small. There are some claims processes, human-resources processes, bank-reconciliations processes that are currently outsourced," Mr. Trevino said.

Amongst insurers, India appears to be the country where a significant amount of outsourcing is done. Wipro Limited, one of the biggest information-technology outsourcing firms based in Bangalore, India, lists on its Web site, www.wipro.com, more than a dozen case studies featuring U.S. and global p-c insurers, reinsurers and brokers, although none is identified by name.

However, numerical data on the Web site clearly describes Los Angeles-based Farmers. Wipro identifies the client as operating in 41 states with 18,000 employees and providing 16 million policies to nearly 9 million households using 15,000 agents?an exact match with data on the Farmers Web site.

Farmers would not comment. Wipro said it had worked with the company upgrading and integrating disparate systems with a mainframe computer, providing remote access to the system through a Web interface/call center, and building and maintaining system infrastructure.

Wipro said the firm wanted to hold down "costs associated with its growing business" and "maintain its competitive advantage in the fast-changing business scenario of M&A, globalization and increased customer expectations..."

Mr. Trevino noted that what U.S. companies are doing is looking for opportunities to drive costs down and that it's not necessarily done to "lay off U.S. employees."

Allstate, since telling workers April 14 that it is examining possible suppliers to expand its foreign outsourcing effort, has been conducting face-to-face meetings and question-and-answer sessions to discuss outsourcing with "a relatively small number of employees" in several different locations in the country, he said.

Mr. Trevino said it's still too early to tell how many U.S. jobs may be eliminated from this initiative.

"We communicated to some employees who might be affected?to let them know what we are doing; why we are doing it," Mr. Trevino said.

"We are continuing to grow our operations. Any good company would want its business processes to be most cost-effective for its customers and shareholder alike," added Mr. Trevino.

Commenting on offshore outsourcing, Ray Becker, vice president of personal lines at the Des Plaines, Ill.-based Property Casualty Insurers Association of America, also observed that there has been more attention paid recently to this issue because of what some critics call the exporting of white-collar, service-industry jobs.

Mr. Becker said having the ability to outsource some processing and support services?ranging from call centers to information-technology work?allows insurers to save money and focus resources on new products and services. "That's ultimately a great benefit to consumers, employees and investors," Mr. Becker said.

"If you are talking about the call-center function, it shouldn't matter whether that person is in South Dakota or Illinois or India as long as they can get you the help that you need," Mr. Becker commented.

Many state lawmakers, however, react against this notion, and Mr. Becker said his group, in monitoring legislative activity, has seen bills "popping up [that] try to regulate call centers or attempt to require notice or reports to state government agencies if jobs are going overseas, often involving reporting to a state labor department or consumer affairs department."

Mr. Becker complained that such requirements would be "burdensome and inappropriate" given that the insurance industry is regulated by state insurance departments.