Unisys lands $450 million IT deal
The computer services company inks a $450 million, 10-year deal to manage life insurance and pension policies for Royal & SunAlliance, a United Kingdom-based insurance company.
The outsourcing deal calls for Unisys subsidiary
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Through the arrangement, Royal & SunAlliance expects to improve customer service, maintain competitive costs per policy and expand the professional opportunities of its employees transferring to UISL.
About 1,700 Royal & SunAlliance employees will transfer to Unisys in the transaction. No Royal & SunAlliance workers will be laid off, said Royal & SunAlliance spokesman Paul Atkinson.
The announcement follows Royal & SunAlliance's decision in August to close its U.K. Life operation to new clients. Royal & SunAlliance focuses on property and casualty insurance.
The deal is part of a growing practice called business process outsourcing, in which one company allows another to take over tasks such as accounting or call center operations. Research firm Gartner estimates the worldwide market for business process outsourcing grew from $115 billion in 2000 to $124 billion in 2001, and will expand to $178.5 billion in 2005.
Other companies offering business process outsourcing include Affiliated Computer Services, Electronic Data Systems and Accenture.
Unisys, which offers information technology services as well as sells products such as server computers and data storage devices, has been gaining momentum when it comes to business process outsourcing for financial services companies. During the past four months, Unisys has announced business process outsourcing contracts in the financial services industry totaling more than $1 billion--including the Royal & SunAlliance deal. The contracts include agreements with RAMS Home Loans of Australia for mortgage processing, a check processing deal with Malaysia's Maybank and an agreement to create an image-based check processing product with Washington Mutual.
Unisys' IT outsourcing revenue in 2002 grew 11 percent year over year to $1.44 billion. Business process outsourcing revenues made up about a third of the company's outsourcing revenue last year. The company posted overall revenue of $5.61 billion for 2002.