"I'm convinced there's better customer service in India. It's no good here," then-CEO Gary Wendt told The Indianapolis Star.

But these days, more than 150 workers at its Carmel, Ind., headquarters — along with 100 workers at a Chicago-based subsidiary — field calls from independent agents and Conseco customers that a year ago were handled from a city near New Delhi.

Conseco, which sells life, health and annuity policies to middle-income clients, expected to save millions by moving the work to the world's second-most-populous nation. Instead, the switch was hurt by 9/11, cultural differences and intense pressure to quickly cut costs.

At a time when many Americans worry about losing their jobs to outsourcing, hundreds of Indiana and Illinois residents have work because that trend failed to live up to expectations. Conseco credits the return of its customer service operations to the Midwest as a key reason it survived the third-largest bankruptcy filing in U.S. history.

"We gave it a shot, and it didn't work," said Dave White, senior vice president of policy services.

Work 'repatriated'

Recently, such names as Capital One, Dell, Lehman Brothers and British-based insurer AXA have "repatriated" similar work, said David L. Butler, an assistant professor at the University of Southern Mississippi's College of Business and Economic Development.

"Call centers may not generate money directly. But they add revenue in that most customers' only direct interaction with the company is through their employees, who effectively become the face of the company," said Butler, who wrote a book on call-center management published earlier this month. "When customers call an American company, but the voice on the other end of the phone clearly is not, the customer wonders why those jobs are overseas."

Just three months after Wendt's June 2000 hiring, Conseco executives flew to New Delhi to examine General Electric's outsourcing program and visited with ExlServices officials in the nearby city of Noida. ExlServices was co-founded by Wendt, and his family owned a 20 percent stake in it until Conseco bought it.

"We sat in and listened to Indian workers who turned (complicated) calls in less than 10 minutes," White recalled.

The call center went live on Sept. 10, 2001. The next day, terrorists destroyed the World Trade Center and damaged the Pentagon. "Suddenly, nobody wanted to talk with someone with an accent from that part of the world," White said.

Customers object

Further complications came from cultural differences between Conseco's customers and a society where checkbooks and insurance still are new concepts.

Indian workers were "very adept" at processing claims, premiums and information on life, health and annuity policies — at one point achieving a 98 percent rating, compared with 70 percent by Carmel workers, White said.

Yet Conseco still required 40 "control and oversight" staffers in Carmel to deal with complicated issues, angry customers or clients who said they could not understand the workers in India.

"Clearly there was a language barrier. The accent was a problem for customers, and U.S. English was a challenge for many call-takers," said Don Papp, Conseco's vice president of customer service.

Some Indian workers, while polite, also did not seem to show much empathy toward customers' problems because "they tend to see things in black and white."

Jobs still outsourced

Shortly after Conseco announced the radical restructuring of its debt in August 2002, the company gradually began shifting work back to the States — beginning with agent calls, Papp said.

With a bankruptcy filing inevitable, Conseco had to move fast to avoid further uncertainties in customers' minds. Consumer calls began returning to Carmel in January 2003, he said. Still, the company still uses ExlServices for 53 jobs that don't involve public interaction. But Conseco monitors those operations closely.