HCL Insurance bags $200-m contract from Equitable Life

HCL Insurance Business Services (HCL IBS), part of HCL Technologies Ltd (HCLTECH.NS : 349.45 +2.7), on Monday said it has bagged a contract worth $200 million from Equitable Life Assurance Society (Equitable Life). Equitable Life is a UK life office with over 8 billion under management on behalf of more than 5,00,000 policyholders and members of group pension schemes. The duration of the contract will be 30 years and HCL will provide an end-to-end solution, including policy administration, finance, actuarial services, IT operational support and call centre services.

Currently, Lloyds Banking Group handles the work and HCL IBS will work on preparing the systems to accept policy and services before March 2011, when the actual contract starts. HCL will complete the migration of core processes by then. During this period, HCL will get 8 million.

The work will be delivered with an offshore and onshore mix of about 60:40 initially and then 80:20. About 340 rolls are assigned with Lloyds Banking Group at the moment. In March 2011, when HCL takes over, about 100 rolls will be with Equitable Life and will be transferred to HCL UK. The balance 240 will lie redundant. HCL will also deploy 50-70 rolls in India.

Equitable Life expects to make cost savings of approximately 8 million in the first full year of the contract and significantly improve cost certainty for the entire run off of its closed book of business.

This is a major win for HCL IBS since the acquisition of Liberata Financial Services in 2008. Stuart Drew, senior vice-president at HCL Technologies, said, "We are keen to grow our life and pensions business, in both the open and closed book space. Over the coming years, we plan to develop the scope of the work to encompass other financial services clients. We aim to transform the Aylesbury operation into a centre of excellence within our global service delivery capabilities."

Commenting on HCL IBS's appointment, Chris Wiscarson, chief executive of Equitable Life, said, "This is one of the most important decisions in the Society's history. HCL has an impressive reputation and I am confident that they will provide great service and great value to policyholders. I want to help restore policyholders' savings and this is an important step in that direction." The transfer will place over half a million policies under administration with HCL IBS. Service levels for policyholders will be retained, complying with the FSA's treating customers fairly (TCF) regime.