Pearl staff to transfer to Indian firm in £486m outsourcing deal

Insurance firm Pearl Group has outsourced its processing and administration to Indian IT services company Tata Consultancy Services in a deal worth £486m over 12 years.

Insurance firm Pearl Group has outsourced its processing and administration to Indian IT services company Tata Consultancy Services in a deal worth £486m over 12 years.

Under the agreement TCS will establish a subsidiary company to employ about 950 of Pearl's 1,100 staff, with the remainder retained by Pearl to work on its life and pensions business.

Samad Masood, an analyst with Ovum, said the Pearl deal was the largest example to date of an offshore outsourcing provider taking on "onshore" staff, and it illustrated the high level of acceptance of Indian IT services companies among UK client organisations.

Phiroz Vandrevala, global head of corporate affairs at TCS, said the firm plans to take over Pearl's Peterborough office and establish a business process outsourcing centre of excellence for the UK, initially managing four million insurance policies.

The supplier's first target will be Pearl's 13 existing IT systems, which TCS plans to migrate to a single, fully integrated platform over the next four years.

Ian Laughlin, managing director of life services at Pearl Group, said, "The arrangement  will provide certainty over a major portion of the cost base well into the future. It offers very important protection for policyholders because over the long term the unit costs per policy will be maintained at competitive levels."

Analyst firm Butler Group expects Indian outsourcing suppliers to move from offering specific services such as software development or call centre operations to full-service IT outsourcing over the coming year.

Mike Thompson, principal analyst at Butler Group, said, "I expect they will be able to undercut traditional outsourcing suppliers." Indian companies were likely to offer services such as business process re-engineering, which has been the domain of management consultants, he added.

The Pearl Group contract follows Tata's £147m deal last month as a sub-contractor in the £1.2bn ABN Amro infrastructure outsourcing contract with IBM, in which it has been tasked to deliver large-scale application-related offshore services.

 

Read more on IT outsourcing

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

SearchCIO

SearchSecurity

SearchNetworking

SearchDataCenter

SearchDataManagement

Close