Capita Strengthens Grip on U.K. Life & Pensions BPO Market

by Charles Juniper

In November and December 2007, NelsonHall identified 191 contracts worldwide. Sixty three of these were BPO contracts, with the stand-out contract being Capita's 15-year, £722m deal with Prudential U.K. for life and pensions policy administration services.

Capita will administer Prudential U.K.'s entire mature life and pension book amounting to 7 million individual and group pension, investment bond, life and endowment policies.

This contract is very significant for three reasons:

  • It increases the number of U.K. life and pensions policies managed by Capita to 23 million, which is over four times the number managed by its nearest competitor
  • It enables Capita to enhance significantly its offshore delivery capability, strengthening Capita in both its life BPO business but also in other BPO services that increasingly require an offshore delivery component
  • It slows down the immediate momentum being made into the U.K. life and pensions BPO market by TCS, who are emerging as Capita's only major competitor in the U.K. life BPO market, and will soon be benefiting from the acquisition of Resolution by Pearl.

During 2007, Capita's Life & Pension Services division has been awarded two of Capita's largest contracts to date (the other being the £580m Resolution contract awarded in May).

With Prudential taking the decision to outsource its entire mature book, other large U.K. life companies may come under increasing shareholder pressure to consider a similar route during 2008. With Capita potentially occupied ensuring a smooth transition of both the Resolution and Prudential deals, this may give other providers an opportunity to secure some new contracts.

Other significant contracts included:

Overall, the breakdown of the recent BPO contracts was:

  • CMS and document management 12
  • Industry-specific BPO 29
  • F&A outsourcing 6
  • HR outsourcing 5
  • Procurement outsourcing 1
  • FM and engineering services 10.

To assist organizations in monitoring outsourcing activity by their peers, each of NelsonHall's subscription research programs include comprehensive details of BPO contracts. For futher details, contact Rob Hughes

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