IBM is acquiring the US business process services operation of RBC Insurance. The business, Liberty Insurance Services, handles life insurance and annuity processing and administration, and will become a new IBM subsidiary focused on that service.
Following the expected closing of the deal at the end of this year, the new IBM subsidiary will handle life insurance and annuity policy processing for more than a dozen life insurance companies globally.
IBM sees the subsidiary as a way to capture part of a projected $2bn (£1bn) global market next year, capitalising on IBM's existing business consulting and technology expertise.
RBC Insurance and IBM have also signed a long-term agreement under which IBM will perform business processes for RBC's US operations. The contract includes contact centre management, policy administration, claims management and payment receipt and reconciliation. The companies did not disclose financial terms of the acquisition or the long-term services deal.
Liberty Insurance Services has about 700 employees, all of whom will keep their jobs.
Nancy Weil writes for IDG News Service