Tata Consultancy Services (TCS) signed a ten-year $690 million contract with M&G Prudential, the UK and European savings and investments business unit of Prudential Plc, to support over four million customer policies.
This will be the second insurance company win for TCS this year after it signed its biggest deal ever of over $2 billion with US insurance firm Transamerica last week. In both the deals, TCS will transition the entire work on its Bancs platform and support these policies. The TCS Bancs platform already processes over 17 million policies and has emerged as the leader in the UK life and pension administration market.
Both M&G Prudential and Transamerica are new clients that TCS has won on the promise of migrating existing systems to a newer digital platform that improves efficiency, reduce the cost and time taken to process policies and improve customer experience.
In the UK, TCS controls the majority of the market share in processing insurance policies and has entered the US with the Transamerica deal.
M&G Prudential was formed in August last after Prudential combined its asset management arm M&G to offer comprehensive financial services to its clients and promised annual savings of $200 million by 2022.
"We will propel this digital transformation through TCS’ continuous investments in digital and technology services. We will also bring the combined strength and capabilities of our deep domain expertise in BFSI and TCS’ strong record of managed policy administration in the UK life & pension industry," said TCS CEO Rajesh Gopinathan.
About 1,100 roles from the incumbent supplier across a number of UK sites are expected to be transferred under the TUPE arrangements to TCS’ FCA-regulated, UK subsidiary. A further 700 roles in India are also expected to move from the incumbent supplier to TCS, it said.
TCS will also assume responsibility for the operation of some of Prudential’s internal IT infrastructure to enable the IT operations function to deliver greater flexibility in the provision of services to the businesses within the Prudential Group. About 180 full-time roles in London, Reading, and Craigforth will also transfer from M&G Prudential to TCS.
John Foley, Chief Executive of M&G Prudential, said: “Strategic partnerships are an important part of our five-year plan to improve customer outcomes through the 250 million pound capital investment our shareholders are making in the business."
Last week, UK's Marks and Spencers signed up TCS as its principal technology partner to help it migrate to the newer digital space that will fetch it annual savings of 30 million pounds by 2021-22. TCS will take over 250 in-house employees of M&S on its rolls.
In December, it existing client Nielsen re-engaged TCS in a $2.25 billion deal that promises shift towards digital and reduces costs over a ten year period.
Gopinathan, in an interview last week said that it had a strong pipeline of clients for large deals that would look at transforming their business to manage to the newer digital engagement.
"It's been a good three months. The pipeline is strong enough so there is a good possibility of few more (deals) like that. It'll be a combination of new and legacy customers. For example, Transamerica is a brand-new customer and it's a complete end-to-end transformation engagement. It's one thing to touch only frontend or backend, but being able to do both together is a great thing" said Gopinathan
"I think more opportunities for such deals will emerge as clients go beyond the design elements to more integrated enterprise elements of the digital. The Marks & Spencer deal is a complete business transformation deal. While it might be a ‘renewal’, it is unlike anything that has been done before," he said.
TCS stock closed Rs 103.65 or 3.77 per cent up at Rs 2,850.85 on Tuesday on the Bombay Stock Exchange, while the Benchmark Index closed 72.46 points or 0.21 per cent at 34,771.05 points.