Axa staff transfer to FI in £70m deal

AXA Sun Life has signed a £70m outsourcing contract that will see the transfer of more than 400 of its application management...

AXA Sun Life has signed a £70m outsourcing contract that will see the transfer of more than 400 of its application management services staff to the FI Group.

David Brown

The insurance giant hopes the five-year deal will reduce its IT spending by half, saving £20m a year.

By the end of the contract, AXA expects just 200 of the transferred staff, based at Bristol, High Wycombe and Coventry, to be working on AXA projects. The rest of the staff who go to FI could find themselves working on a wide range of projects, including some for other insurance customers.

FI Group will be responsible for the support and development of AXA's legacy life and pensions administration system and will implement new systems to increase speed to market and improve product flexibility.

However, outsourcing in the financial services industry can be a risky business. The early termination of CGNU's seven-year £124m contract with IBM after only two years (Computer Weekly, 1 March) illustrated the dangers of long-term agreements which are not flexible enough to accommodate company mergers and restructuring.

Andrew Goldsworthy, AXA's chief information officer, insisted that the FI deal would be able to cope with unexpected changes to its business. "This is different from the CGNU contract, which, I believe, was for infrastructure outsourcing. Our contract says that the systems must be flexible and responsive to the changes which we can expect in this industry," he said.

The outsourcing deal is part of AXA's plans to reduce its overall operating costs by 40% over the next five years. The cost-cutting has been precipitated by reductions in commissions due to the 1% charge limit on stakeholder pensions and tighter margins on other financial products.

This was last published in March 2001

Read more on IT legislation and regulation

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

SearchCIO

SearchSecurity

SearchNetworking

SearchDataCenter

  • How do I size a UPS unit?

    Your data center UPS sizing needs are dependent on a variety of factors. Develop configurations and determine the estimated UPS ...

  • How to enhance FTP server security

    If you still use FTP servers in your organization, use IP address whitelists, login restrictions and data encryption -- and just ...

  • 3 ways to approach cloud bursting

    With different cloud bursting techniques and tools from Amazon, Zerto, VMware and Oracle, admins can bolster cloud connections ...

SearchDataManagement

Close