November 10, 2011: Diligent, Business process outsourcing arm of Tata Consultancy Services (TCS), has won a contract by which they will manage 3.2 million policies for Friends Life, a pensions, investments and insurance provider. The contract will come into effect from March 1, 2012 for a period of 15 years. The contract is worth $2.2 billion which is about Rs 10,000 crore.
With this contract, the total number of policies handled by Diligenta will increase to eight million. By outsourcing customer care and IT functions, Friends Life will be able to focus on new business development, its core business functions including corporate benefits, retirement income as well as employee protection schemes.
N. Chandrasekaran, CEO and MD, TCS says that they help their clients in transforming their business with their domain centric platform based solutions. According to him their enviable presence in the insurance sector along with their track record and investments in products and platforms has contributed to their contract win. He added that they are pleased with the deal and it will prove to be long transformation journey. This deal forms the second largest deal made by TCS after the deal with Citi which amounted to $2.5 billion.
With this deal Diligenta will be in charge of administration responsibility of Friends Life’s closed book protection business and significant part of its corporate benefits business. The TCS BaNCS platform which was developed in 2006 will be utilized to deliver improved customer service. The deal will transfer 1,900 employees from Friends Life across various offices in the UK under existing terms to Diligenta. The employees who are transferred will continue to serve Friends Life customers.
It is certain that the contact will contribute significantly to TCS’s non-linear revenues. It is a transaction based deal and Diligenta will charge the client with a fixed fee per policy.
According to Andy Briggs, Chief Executive, Friends Life, the long term contract with Diligenta will provide them with speed and flexibility to offer right services to clients and distributors. He added that their experience in outsourcing partnerships and their track record will help in making a strong partnership that will help in driving the business forward.
The revenue from the contract will pour in from this quarter onwards, but the real revenue accumulation will start only from the next fiscal year onwards.