In what is clearly a shot across the bows at life and pensions (L&P) BPS market leaders Capita and Diligenta/TCS, support services and BPO giant Serco is marking its entrée into L&P via exclusive negotiations with AEGON on a forthcoming ten-year L&P deal.
Financial details haven't been disclosed. But Serco will be providing a ‘wide range of services’ for AEGON, including both back office administration and front line customer contact. This will include initial underwriting through to claims management for AEGON’s’ Individual Protection (AIP) suite, which covers life assurance, critical illness, disability and income protection products. Serco will also look after a small number of closed book L&P assurance policies. Serco still has to get Financial Services Authority (FSA) approval to perform L&P services. But once done, it expects the deal to start in Q4 this year.
As part of the deal, Serco take on some 330 AEGON employees at its existing office in Lytham St Annes in Lancashire, where it plans to then set up an L&P shared service centre to sell into other customers. It will also perform business process improvement, and introduce new technology such as voice over IP (VoIP), CRM and call centre software.
We see no mention of Serco using an L&P business process platform to support the delivery of services for AEGON. Rather this looks more like a traditional ‘lift-shift-and-transform’ BPS contract. Serco’s approach is then very different from Diligenta’s heavily platform migration-led approach (see BaNCS platform key to Friends Life deal). Meanwhile, we understand Capita is currently caught in two minds between a platform-based approach and a more traditional lift-shift-and-transform.
We wait to hear more on the details of this contract once it is formally signed off. Meanwhile, Serco's rapid growth in the UK (and global) BPS market is clearly upping the pressure on the UK BPS market incumbents (see Serco and Tech M considering Hutchison BPO captive).