The country’s largest IT services exporter, Tata Consultancy Services (TCS) continued its momentum of bagging multi-billion dollar deals with a multi-year contract from Transamerica worth over $2 billion, the company announced on Friday. Just last month, TCS had entered into a $2.25-billion IT outsourcing contract with Nielsen, a global TV rating measurement company. TCS said it will digitise the life insurance and annuities business of Transamerica, which is a leading provider of life insurance, retirement and investment solutions in the US. This will amount to servicing 10 million insurance policies through a single platform. The agreement is expected to lead to annual run-rate savings of about $70 million initially, going up to $100 million over time, for Transamerica, with much of this expected to reflect in the company’s earnings.
As part of this deal, TCS will make job offers to about 2,200 applicable Transamerica employees, who currently support the life insurance, annuity, supplemental health insurance and workplace voluntary benefits business lines. According to TCS, the employees transitioning to them will be given the opportunity to remain in the same US cities where they are currently based. 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. The company plans to hire local talent in Iowa, set up relationships with educational institutions, and help employees with professional development to gain digital skills and fluency.
Commenting on the deal, Transamerica president and CEO Mark Mullin said, “TCS was carefully selected because of their significant, ongoing investments in technology and their expertise in the insurance and annuity industry.” TCS CEO Rajesh Gopinathan added, “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.”As part of the deal with Transamerica, TCS BaNCS (the IT major’s core banking solution) will also be deployed. According to TCS, this digital platform has been in the European market for more than a decade, with more than 17 million policies under administration. TCS has adapted the platform for the US market to meet its operational and regulatory needs.
“This agreement with Transamerica marks TCS’ entry into a highly specialised US Insurance third-party administration market and will establish TCS BaNCS as a formidable digital platform for the US Insurance industry,” said Suresh Muthuswami, president and global head, banking, financial services and insurance platforms at TCS. TCS has been at the forefront in bagging multi-billion dollar IT deals among Indian IT companies. In the past, it has bagged such deals from Citigroup and Friends Life.