Equitable Life Assurance Society has awarded a major service contract to HCL IBS, a part of HCL Technologies (HCL), valued $200m. The contract is expected to deliver cost benefits to the company’s policyholders through the transfer of core processing and support activities required to run its closed book of business. The contract is expected to start in March 2011.
Under this contract HCL is expected to provice services including policy administration, finance, actuarial services, IT operational support and call center services. Transformation and migration will begin immediately and HCL will take over the core processes from HBOS in March 2011.
The company said that it expects to make cost savings of approximately £8m in the first full year of the contract and significantly improve cost certainty for the whole of the run off of its closed book of business. Future savings and predictability of costs means the company can reduce its provision for future costs by an amount in excess of £100m.
Reportedly, the transfer is expected to place over half a million policies under administration with HCL IBS. Service levels for policy holders will be retained, complying with the FSA’s Treating Customers Fairly (TCF) regime and the costs of regulatory change will be absorbed by HCL IBS.
Chris Wiscarson, chief executive of Equitable Life, said: This is one of the most important decisions in the Society’s history. HCL has an impressive reputation and I am confident that they will provide great service and great value to policyholders. I want to help restore policyholders’ savings and this is an important step in that direction.
Stuart Drew, senior vice president at HCL Technologies, said: This is a major win for HCL IBS since the acquisition of Liberata Financial Services in 2008 and reflects our position as a leader in transforming our clients’ Life and Pensions operations. However, this deal is more than just Life and Pensions policy administration. Our expertise enables us to provide a ‘virtual life office’ approach to Equitable Life, which is a true differentiator for HCL.