Tata Consultancy Services (TCS) has become the second-largest insurance business process outsourcing (BPO) provider in the UK(Capita is no one), after winning two deals worth £250 million.
Diligenta, a subsidiary of TCS, had recently announced that it had acquired Unisys Insurance Services (UISL) from Unisys Corporation, in lieu of which the company received business worth £250 million for the next six years. With this, Diligenta won business from Phoenix Group (earlier known as Pearl Group) and Old Mutual International. Phoenix Group is an existing customer of Diligenta.
Diligenta has earlier in July announced that it has completed the consolidation of two million customer policies in the UK from multiple legacy systems into a single integrated system, using a simplified and modern cloud infrastructure. These policies will now be based on the TCS BaNCS Insurance platform, a proprietary solution developed by TCS. TCS, India’s largest information technology (IT) services provider, took almost four years to develop this platform for the insurance segment in the UK. For TCS, the UK is an important market, contributing 15 per cent to its revenue.
Diligenta, TCS’ UK FSA regulated subsidiary was established in 2005, to specialize in the provision of business process outsourcing (BPO) services for the UK Life and Pensions industry. Diligenta currently employs 940 people and its headquarters are situated in Peterborough UK. Its headcount is likely to touch 2000.
Diligenta entered the UK Life and Pensions marketplace in 2006 by securing a £486 million deal with the Phoenix Group (formerly known as the Pearl Group), making it the second largest firm in the UK to service this sector. Offering a full BPO, Diligenta provides a number of the Phoenix Group companies with call centre, back office administration, IT, HR, finance and accounting services.
In January 2008, Diligenta secured a second client when it won a contract to deliver BPO services to Sun Life Financial of Canada's UK operations (SLF UK). The services, which commenced in May 2008, were estimated to be worth over £100 million over the life of the contract and involved administering further 500,000 life and pensions policies. This operation was run out of Basingstoke UK.
Diligenta now has three clients — Phoenix Group (additional extension to its earlier contract), Old Mutal International and National Employee Savings Trust (NEST). In March 2010, TCS had bagged a 10-year £600-million contract from Personal Accounts Delivery Authority (PADA) to administer the NEST scheme, but the deal is under the UK government scanner.
TCS has also established an innovation lab at the Peterborough site. The lab acts as a hub for the global “Co-Innovation Network” in the UK, encouraging collaborations between customers, academics, global alliance partners, start-ups and venture capitalists.
With these deals, TCS is also hopeful that the UK subsidiary will break even by the end of this financial year. Diligenta reported a net loss of Rs56 crore in 2009-10 on a turnover of Rs 456.2 crore, against a net loss of Rs 41 crore on revenues of Rs 527 crore in 2008-09.
With a strong domain expertise gained by working with major insurance carriers across the globe, TCS has developed its insurance BPO services to address the insurance value chain. In discrete end-to-end administration mode, TCS' BPO services include Claims Administration, Closed Book Administration, Policy Servicing and New Business Servicing.
TCS strategic acquisition of Phoenix Global Solutions - USA (captive for Phoenix Life), operations of Pearl Group - UK (setting up a new FSA regulated entity Diligenta) and Comicrom - Chile (providing Spanish support to Latin American pension companies) have further enhanced its business process efficiencies. TCS offers platform-based solutions providing both technology and process components.
With Indian companies on a spree to increase their global footprint, TCS’s surge to number two spot in Insurance BPO segment in UK is just the beginning of the story. With the outsourcing and protectionism debate taking centre stage, the global diversification of business seems to be the best way for growth in the future.
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