Tata Consultancy Services on Friday announced its largest ever deal worth over $2 billion with US insurance firm Transamerica.
The agreement is expected to lead to an annual run-rate savings of approximately $70 million initially — growing to $100 million over time — for Transamerica, the company claimed.
Under the new contract, TCS will help Transamerica enhance its digital capabilities, simplify the service of more than 10 million policies into a single integrated modern platform, and drive greater sustainable growth opportunities through superior customer experiences, the firm said.
The development came a day after TCS reported its third-quarter results that missed market expectations. But the software exporter said the business sentiment is starting to improve. It said the deal was even larger than its recently renewed $2.25-billion outsourcing contract with television ratings measurement company Nielsen.
“I’m very excited to embark on this partnership with TCS, whose transformation and technology innovation capabilities will supplement our focus on improving our customers’ experience in a digitally enabled way. This supports meaningful growth in all business lines, including insurance and annuities, and advances our competitive positioning,” said Mark Mullin, President and CEO, Transamerica.
The partnership will enable the transformation of the administration of Transamerica’s life insurance, annuity, supplemental health insurance and workplace voluntary benefits products. It will also support the company’s overall transition to a simplified, cloud-enabled platform, for agile new product development, enhanced services, acquisitions and strategic innovation investments.
Rajesh Gopinathan, CEO and MD, TCS, said: “We have invested heavily in our insurance digital platform, TCS BaNCS, and our extensive US capabilities. We are proud to partner with Transamerica in its ongoing transformation and welcome the transitioning employees to promising new careers at TCS.”
“This agreement... marks TCS’ entry into a highly specialised US Insurance Third Party Administration marketplace,” said Suresh Muthuswami, President and Global Head, Banking, Financial Services and Insurance Platforms, TCS.
Transitioning staff
TCS 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, TCS said in a statement.
Employees transitioning to TCS will be given the opportunity to remain in the same US cities where they are currently based. The company will also expand its existing relationship with Transamerica under the transaction, and locate in Transamerica’s current offices in various US cities.
American investments
The firm said it 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.
Beyond offering roles to 2,200 Transamerica employees across US cities, TCS plans to hire locally in Iowa, set up relationships with educational institutions, and help employees with professional development gain digital skills and fluency.