India’s largest IT firm Tata Consultancy Services (TCS) on Friday said it has bagged an over $2-billion deal from Transamerica to transform the latter’s US insurance and annuity business lines.
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, TCS said in a statement.
The multi-year agreement is worth more than $2 billion in revenues, and is expected to be completed by the second quarter of 2018, it added.
The announcement comes a day after TCS reported 3.6% fall in its net profit to Rs 6,531 crore in the December 2017 quarter.
The Mumbai-headquartered company had posted a net profit of Rs 6,778 crore in the October-December quarter of the previous fiscal.
“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, the statement said.
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.
TCS President and Global Head, Banking, Financial Services and Insurance Platforms Suresh Muthuswami said the deal marks TCS’ entry into a highly specialised US Insurance Third Party Administration 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, cloud-enabled platform for agile new product development, enhanced services, acquisitions, and strategic innovation investments, it added.
Shares of TCS were trading 1.13% lower at Rs 2,757 apiece on BSE.