Indian IT major Tata Consultancy Services (TCS) has inked an agreement with American insurance provider Transamerica to transform the administration of Transamerica’s insurance and annuity business lines in the US.
The agreement, a multi-year partnership with more than $2 billion of revenues to TCS, is expected to be completed by the second quarter 2018, Transamerica said in a statement on Thursday.
Transamerica aims to enhance its digital capabilities and modernize its platforms through its collaboration with TCS.
“This agreement is expected to lead to annual run-rate expense savings for Transamerica of approximately USD 70 million initially, growing to USD 100 million over time. The majority of these expense savings is expected to benefit underlying earnings,” said Transamerica.
As part of the agreement, TCS will administer Transamerica’s life insurance, annuity, supplemental health insurance and workplace voluntary benefits products and take on the administration of over 10 million policies. In addition, Transamerica is considering entering into a similar servicing and administration arrangement for its long-term care customers. Any forthcoming decision would be announced separately.
Transamerica will continue administration and servicing of its retirement plans, IRAs, Advice Center, mutual funds, exchange-traded funds and stable value solutions on existing platforms.
All of the Transamerica employees currently supporting these business lines and whose roles are in scope will be offered positions by TCS, helping to ensure a consistently excellent experience for Transamerica customers. The transition will affect approximately 2,200 current Transamerica employees. Transferring employees will be given the opportunity to remain in the same US cities where they are currently based.
“Transamerica continues to put our customers at the forefront of everything we do. I’m very excited to embark on this partnership with TCS, whose transformation and technology innovation capabilities will supplement our focus on improving our customers’ experience in a digitally enabled way,” said Mark Mullin, Transamerica President & Chief Executive Officer.
“This agreement marks TCS’ entry into a highly specialized U.S. Insurance Third Party Administration marketplace and will establish TCS BaNCS as a formidable digital platform for the U.S. insurance industry, following its stellar global track record over the past decade,” said Suresh Muthuswami, President and Global Head, Banking, Financial Services and Insurance Platforms, at TCS.