Prudential is aiming to save £60m over the next two
years through a £722moutsourcing contractwith Capita which
will see 3000 employees transfer to the outsourcer.
The insurance company is transferring the administration of its
current and new policies in a 15 year deal, which is a key part of
the company's plan to save £195m per year by the end of 2010.
The company hopes to cut the cost of each policy by 32% by
2011.
About 1,750 UK employees and 1,250 Mumbai-based employees will
transfer to Capita.
"The agreement with Capita is another significant milestone in
our programme to deliver continued superior performance and
profitability in our UK business. We have set out very clear
priorities for the business and this agreement helps us to deliver
our strategy by removing fixed costs from our operations and
achieving significant operating efficiencies," said Nick
Prettejohn, chief executive of Prudential UK.
The agreement provides for Capita to acquire business and assets
from Prudential, for a consideration of £25m, including part of the
business of PPMS, Prudential's offshore operation based in
Mumbai.
At its 2007 Interim Results, Prudential confirmed that actions
were in place to deliver £115m of the £195m savings by the end of
2007. The agreement with Capita will lead to savings of £60m per
annum by the end of 2010.