Pru strikes mega outsourcing deal with Capita

Prudential UK has signed a major long term outsourcing deal with IT services company Capita for the provision of policy administration services.

The deal will run for 15 years and cost the financial services group a total of £722m. This is a substantially lower cost than if Prudential had kept the work in-house.

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The partnership agreement will see Capita provide customer services, policy administration, new business and claims processing and related IT support.

Prudential hopes the deal will lead to a £60m per annum cost saving by 2010, which will boost its company-wide cost saving programme.

As part of the deal 1,750 of Prudential's UK employees (from Stirling and Reading) and around 1,250 based in Mumbai, India will move over to Capita.

The agreement will also see a simplification of technology with 15 of the Pru's legacy systems being migrated onto just two Capita platforms.

Prudential UK's chief executive, Nick Prettejohn said the agreement is a significant milestone in delivering "superior performance and profitability" to the UK business.

Paul Pindar, chief executive of Capita, said the operations and employees moving to Capita will allow the company to take a significant step towards its expansion plans.