Prudential U.K. has signed a major long term outsourcing deal with IT services company Capita for the provision of policy administration services.
The deal will run for 15 years and cost the financial services group a total of US$1.49 billion (722 million pounds). This is a substantially lower cost than if Prudential had kept the work in-house.
The partnership agreement will see Capita provide customer services, policy administration, new business and claims processing and related IT support.
Prudential hopes the deal will lead to a US$124 million (60 million pounds) per annum cost saving by 2010, which will boost its company-wide cost-saving program.
As part of the deal 1,750 of Prudential's U.K. employees (from Stirling and Reading) and around 1,250 based in Mumbai, India will move over to Capita.
The agreement will also see a simplification of technology with 15 of the Prudential's legacy systems being migrated onto just two Capita platforms.
Prudential U.K.'s chief executive, Nick Prettejohn said the agreement is a significant milestone in delivering "superior performance and profitability" to the U.K. business.
Paul Pindar, chief executive of Capita, said the operations and employees moving to Capita will allow the company to take a significant step towards its expansion plans.
Tim Ferguson of Silicon.com reported from London.
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