Insurance giant Tower has confirmed it's making all Rotorua staff redundant and moving claims management offshore to Suva, Fiji—prompting a frustrated employee to warn customers they should switch insurers because the Fiji team is "already causing delays and complaints."
Mate, this is Pacific labor arbitrage in action. Jobs flowing from New Zealand to Pacific islands sounds good until you realize it's cost-cutting that degrades service, not genuine development partnership.
The announcement affects Tower's entire Rotorua workforce, who were told they'd be working from home permanently before learning their jobs were being eliminated entirely. Claims management will be handled by a team in Suva, where labor costs are a fraction of New Zealand wages.
A Tower employee posted to Reddit warning customers to switch insurance companies, saying the offshore team was already struggling with delays and complaints even before taking on the full workload.
For Fiji, this looks like job creation—insurance sector work providing employment for skilled workers in Suva. But the context matters. These aren't new roles created by Fiji's economic development. They're New Zealand jobs shifted offshore to cut costs, with service quality concerns from the start.
The Pacific employment story is more complex than simple aid narratives suggest. Australia and New Zealand companies have been offshoring back-office functions to Fiji, Papua New Guinea, and other Pacific nations for years. It creates jobs, yes—but it also reflects wage differentials that allow companies to cut costs while degrading service.
Tower defended the move as necessary business restructure in a competitive insurance market. The company has been under pressure to cut costs after several years of major weather-related payouts in New Zealand.
That's darkly ironic. New Zealand's increasingly severe weather—driven by climate change—is forcing insurance companies to pay out more in claims. Their response is to cut costs by offshoring jobs to Pacific nations that are even more vulnerable to climate impacts.
Unions are calling it a race to the bottom. The New Zealand Council of Trade Unions argues companies are exploiting wage differentials rather than investing in productivity improvements. They're demanding stronger protections against offshoring in essential services like insurance.
For Rotorua workers losing their jobs, the offshore move is devastating. Regional New Zealand already struggles with limited employment opportunities. Losing an entire corporate office to offshoring removes well-paying jobs from a community that needs them.
The customer service implications are also real. Insurance claims require understanding of New Zealand's regulatory environment, building codes, and local conditions. Training Fiji-based staff to handle New Zealand claims effectively takes time—and customers are likely to experience the learning curve through delays and errors.
Tower customers are already expressing frustration on social media about longer wait times and difficulties getting claims processed. If the employee warning is accurate, those problems will intensify as the full transition occurs.
For the broader Pacific economic relationship, this highlights uncomfortable realities. Australia and New Zealand talk about being partners in Pacific development, but actual corporate behavior often looks more like exploitation of wage differentials than genuine partnership.
Fiji benefits from the jobs—don't minimize that. But it's cost-cutting offshoring, not the kind of economic development that builds sustainable prosperity. It's vulnerable to the next round of corporate restructuring when another cheaper location becomes available.
The redundancies will take effect over coming months as Tower completes the transition to Fiji-based claims management. For Rotorua workers, the search for new employment in a limited regional job market begins. For Tower customers, the hope is that service quality doesn't collapse as the company discovers cutting costs isn't the same as maintaining capability.
