Prudential UK in billion dollar BPO deal

Prudential UK has announced the closure of a $1.5 billion (£745 million) business process outsourcing (BPO) deal involving its life and pensions business.

The agreement with outsourcer Capita involves the delivery of life and pension sales and administration services over a 15-year period.

Building on an existing relationship with the financial services company since 2003, this new deal includes the provision of Prudential UK's life insurance intermediary administration services, the transfer of over 3,000 employees in the UK and India, and the sale of Prudential UK's Mumbai-based captive operation.

Gary Shaughnessy, Prudential UK Retail Life and Pensions managing director, said the company had entered "into a cost effective, efficient and truly strategic outsourcing partnership".

Sourcing advisors TPI worked with the firm during its negotiations with Capita and said the deal was significant because outsourcing transactions of this kind have generally tended toward smaller sizes and shorter durations, according to its quarterly market index.

John Keppel, TPI Global Financial Services partner, said: "This agreement represents a milestone for both Prudential UK and Capita, serving as a critical component of Prudential UK's ongoing transformation programme."

He added the deal demonstrates that the UK life insurance industry continues to lead in the adoption of new business models to compete and win in competitive, complex and highly regulated environments.

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