Tata Consultancy Services Ltd (TCS), India's largest IT firm, today signed its biggest deal to date. The multi-year agreement with Transamerica, a US-based insurance company, is worth more than $2 billion in revenues, and is expected to be completed by the second quarter of 2018.
TCS will now administer Transamerica's life insurance, annuity, supplemental health insurance and workplace voluntary benefits products. "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.
According to Suresh Muthuswami , TCS president and global head, banking, financial services and insurance platforms, the deal marks their entry into a highly specialised US Insurance Third Party Administration marketplace and will firmly establish its insurance digital platform, TCS BaNCS. The latter has already had a strong play in the European market for over a decade, with more than 17 million policies under administration.
"We have invested heavily in 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," said TCS CEO and Managing Director Rajesh Gopinathan.
In order to ensure "a consistently excellent experience for the American customers", TCS said it will make job offers to about 2,200 Transamerica employees, those working in the areas that come under the partnership. Apart from protecting American jobs, TCS also plans to hire locally in Iowa and set up relationships with educational institutions. This is in line with its plan to establish its new North American insurance hub for business operations in Cedar Rapids, Iowa. TCS has already invested nearly USD 3 billion in the U.S. over the past three years.
Transamerica expects to make annual run-rate savings of about $70 million initially from this deal, growing to $100 million over time. "TCS was carefully selected because of its significant, ongoing investments in technology and its expertise in the insurance and annuity industry," said Mark Mullin, Transamerica President and CEO. TCS, which will turn 50 this year, has operated in the U.S. for more than 40 years and now works with more than 100 insurers, including six of the world's top 10 insurance companies.
Reacting to the news, TCS shares are again on an uptick, recovering ground lost since yesterday's announcement a 3.6% fall its net profit in the third quarter of if this fiscal. As of 3.15 pm, it was trading at Rs 2,781.90 apiece, just 24 points lower than opening price.
With PTI inputs