Business Weekly - Cambridge, UK

Pearl Group’s existing business processes will pass into a new UK company, which will be a subsidiary of TCS. The deal follows a rigorous year-long, selection process by Pearl. The new company will employ about 950 of Pearl Group’s current 1,100 staff, with some 150 staying at Pearl.

The new subsidiary will specialise in Business Process Outsourcing (BPO) for life and pension businesses, starting with Pearl’s closed books portfolio.

It will also focus on offering similar services to other life companies, presenting it with an opportunity for significant future growth as BPO is rolled out across the life assurance industry.

The deal, which should be completed by the first quarter of 2006, is expected to generate revenues of over £486m over the next 12 years as a result of creating a new platform beyond IT services.

Subramanian Ramadorai, CEO and managing director, said: "This deal validates our strategy of pioneering the next generation of BPO opportunities.

"Our extensive experience working in the insurance industry together with our excellence in technology will help us emerge as a significant player in life assurance and pensions administration services and help us continue our strong growth momentum."

Ian Laughlin, managing director of Life Services at Pearl, said: "The new arrangement will provide certainty over a major portion of the cost base well into the future. Whilst of benefit to shareholders, this is very important protection for policyholders because over the long term the unit costs per policy will be maintained at competitive levels."

TCS will sign a long-term lease at the Peterborough site where its intention is to establish a BPO centre of excellence for the UK. Once TCS has absorbed the Pearl business, the Mumbai-based firm will look at taking its services to other top insurance providers in the UK and Europe.

TCS employs more than 50,000 IT consultants in 33 countries. It posted total revenues of $2.24bn (£1.27bn) in the fiscal year 2004-2005 making it the first Indian IT company to cross the $2bn mark.