Diligenta, the UK-based pension and insurance outsourcing arm of Tata Consultancy Services, has secured a $2.2-billion contract from Friends Life, a British financial services firm.
The contract is the second largest contract ever secured by TCS, and spurred by its success, TCS hopes to roll Diligenta's platform internationally, including in Europe and the US.
“We have a unique proposition here; we are looking at our options,” Mr Phiroz Vandrevala, Director, TCS, and MD & Vice-Chairman of Diligenta, told Business Line. “Having achieved this in the UK we are looking at continental Europe – where they are starting to look at platforms of this nature,” he said, naming Belgium, Netherlands, Luxembourg, Germany and Scandinavia as future potential markets.
Friends Life said the choice of Diligenta had been made following a ‘rigorous process' that began last year.
“Friends Life chose Diligenta for its technical expertise, industrial strength platform (TCS BaNCS Insurance), shared service values and proven capability in managing circa five million policies for six life office brands,” the UK firm said in a statement.
Under the deal, Friends Life will transfer the remaining half of its IT and customer service functions of the UK heritage business to Diligenta, including 1,900 roles and will be effective from March 2012. Friends Life Chief Executive, Mr Andy Briggs, said it allowed the firm to focus on new propositions within its core markets of corporate benefits, protection and retirement income.
Diligenta, a 100 per cent TCS subsidiary, began operating in the UK in 2005, with a £486-million contract from the Phoenix Group, the country's largest specialist closed life consolidator, securing several contracts since then. The latest deal will raise the number of pensions that Diligenta deals with from five to just over eight million, and it will raise its workforce to around 3,800. Only TCS's $2.5 billion deal with Citigroup in 2008, as part of its $505 million acquisition of Citigroup Global Services, is larger than this deal.
Mr Vandrevala said that the current global economic situation presented a number of opportunities for Diligenta offering both cost savings as well as the opportunity for firms to free up capital as a result of their work.
The Diligenta platform would provide opportunities for further growth both in Britain and abroad, with insurance and pension firms looking to replace outdated existing systems. “Most existing policies are processed on technology and platforms that are 10 or 20-years-old – there have been attempts to build the latest platform. Now we've pulled this off.”