Prudential UK has entered into a GBP 722 million partnership agreement with Capita Group to outsource a proportion of its in-force and new business policy administration. Under the terms of the proposed agreement, Capita will provide customer servicing, policy administration, new business processing, claims activity and related IT support to Prudential UK.
The proposed 15-year agreement with Capita will enable Prudential to achieve its overall cost saving target of GBP195 million per annum by the end of 2010 and reduce unit costs per-policy by 32% by 2011.
The agreement provides for Capita to acquire business and assets from Prudential, for a consideration of GBP25 million, including part of the business of PPMS, Prudential’s offshore operation based in Mumbai.
Nick Prettejohn, CEO of Prudential UK, said: We have set out very clear priorities for the business and this agreement helps us to deliver our strategy by removing fixed costs from our operations and achieving significant operating efficiencies. It will allow us to concentrate on using our competitive strengths and proven capabilities to realize the attractive opportunities in the market for retirement savings and income.