UK insurer in 10-year outsourcing deal with IBM

U.K. insurance company Royal and SunAlliance Insurance Group PLC (R&SA) has signed a 10-year agreement to outsource its IT management to IBM, the companies announced Thursday. The two companies will also establish a joint research center.

The contract covers the management and deployment of R&SA's mainframe, midrange and desktop computing services in the U.K. During 2002, 285 R&SA staff will be transferred to work for IBM.

"We have worked with IBM for 40 years," R&SA's PR manager John Sellors said, "but we've worked more closely with them over the past 5 years. We're looking to see real improvements in the IT infrastructure, from a resilience point of view, plus faster speed to market, especially in e-business. And it will let us concentrate on our own core skills, in insurance," he said.

IBM will develop R&SA's existing computer center at Lennox Wood in West Sussex, England, to include an e-business hosting facility, from which it will manage Web hosting for R&SA and other IBM customers, the companies said in a statement. It will also set up a multiclient service center in Liverpool within 18 months, the statement said.

R&SA's annual spending on IT management is around 50 million pounds (US$72.3 million) and it hopes the IBM contract will bring about 10 percent savings over its 10-year term, the statement said.

The two companies are also establishing a joint venture development center called the Innovation and Transformation Centre (ITC). "This is the forward-thinking element," Sellors said. "While the existing facilities will continue to run the existing business, the ITC will look at the future. (It will look at) emerging technologies and what benefits we can derive from them, new lines of business that they open up and where the exploitation of IT can bring business benefits."

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