Tata Consultancy Services (TCS) has bagged a grand £486-million contract for 12 years, from the insurance and pension business group, Pearl.
The deal will involve the setting up of a subsidiary of TCS, most probably in Peterborough that is located around 80 miles north of London. It will concentrate in offering BPO services for pensions and life insurance businesses of companies other than Pearl.
Vice-President of TCS, Phiroz Vandrevala said, “Under the deal, TCS will take over the entire business processes of Pearl along with its 950 employees out of 1100 in the UK, with about 150 staying back with Pearl.”
Talking about his expectations from the deal, he added, “We anticipate revenue earning from the last quarter of the current fiscal. We expect to get 60 per cent of the revenue in the first six years and remaining in the next four years.”
The market closed book policy in Europe is worth 100 million in terms of the market size, and TCS will rope in as many as 4 million customers via this contract.
Although protocols surrounding the subsidiary have not been stipulated along with its name, Pearl will definitely be controlling only a minority stake in the new firm. However, Director of Pearl, Edward Spencer Churchill, revealed that about £50 million will be invested in the initial four years, albeit the real equity share had not yet been determined.
Meanwhile, TCS chief executive, S. Ramadorai commented on the potential of the deal and said, “This deal validates our strategy of pioneering the next generation of business process outsourcing opportunities. Our extensive experience of working in the insurance industry together with our excellence in technology will help us emerge as a significant player in life assurance and pensions administration services and help us continue our strong growth momentum.”
TCS shares on the BSE scaled 1.4% to 1,454.1 rupees on Tuesday.
Posted
on : Thu, 20 Oct 2005 00:35 GMT | Insurance News
By : Anne Philips
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