TCS bags $2-bn contract from Transamerica
Tata Consultancy Services (TCS) said on it has bagged a deal worth more than $2 billion from the US insurance group Transamerica, marking its largest contract to date.
The contract, which entails transforming Transamerica’s US insurance and annuity business lines, comes close on the heels of a mega deal TCS had clinched from television rating measurement firm Nielsen.
“The multi-year agreement (with Transamerica) is worth more than $2 billion in revenues, the largest contract signed by TCS to date,” TCS said in a statement.
The partnership enables Transamerica to rapidly enhance its digital capabilities, simplify the service of more than 10 million policies into a single integrated modern platform, it added. The announcement comes a day after TCS reported 3.6 per cent fall its its net profit to ~65 billion in the December 2017 quarter.
“TCS will provide valuable administration and quality customer service, and Transamerica will continue to engage with our customers, clients and advisors in the most meaningful ways to them by utilising our digital engagement platforms and developing new solutions that help people save, protect, invest and retire,” Mark Mullin, Transamerica president and CEO, said.
The agreement is expected to lead to annual run-rate savings of about $70 million initially — growing to $100 million over time — for Transamerica.
TCS said it will make job offers to all of the applicable Transamerica employees currently supporting the life insurance, annuity, supplemental health insurance, and workplace voluntary benefits business lines.
This, it said, will ensure “a consistently excellent experience for Transamerica customers and protecting approximately 2,200 American jobs”.
It added that employees transitioning to TCS will be given the opportunity to remain in the same US cities where they are currently based. TCS will also expand its existing relationship with Transamerica under this transaction, and locate in Transamerica’s current offices in various US cities.
“We have invested heavily in our insurance digital platform, TCS BaNCS, and our extensive US capabilities, and are proud to partner with Transamerica in its ongoing transformation and welcome the transitioning employees to promising new careers at TCS,” TCS CEO and MD Rajesh Gopinathan said.
TCS plans to make a significant investment in the region, most notably by establishing its new North American insurance hub for business operations in Cedar Rapids, Iowa.
Apart from offering roles to 2,200 Transamerica employees, TCS also plans to hire locally in Iowa, set up relationships with educational institutions, and help employees with professional development to gain digital skills and fluency, it said.
Suresh Muthuswami, president and global head, banking, financial services and insurance platforms, TCS, said the deal marks TCS’ entry into a highly specialised US Insurance Third Party Administration (TPA) marketplace and will establish TCS BaNCS as a formidable digital platform for the US insurance industry.
TCS BaNCS has had a strong play in the European market for more than a decade, with more than 17 million policies under administration. The partnership will enable the transformation of the administration of Transamerica’s life insurance, annuity, supplemental health insurance, and workplace voluntary benefits products, the statement said. It will also support Transamerica’s overall transition to a simplified, cloudenabled platform for agile new product development, enhanced services, acquisitions, and strategic innovation investments, it added.
Shares of TCS were trading 1.13 per cent lower at ~2,757 apiece on BSE.
We have invested heavily in our insurance digital platform,
TCS BaNCS, and our extensive US capabilities, and are proud to partner with Transamerica in its ongoing transformation and welcome the transitioning employees to promising new careers at TCS
RAJESH GOPINATHAN, CEO & MD, TCS