UK-headquartered support services giant, Serco, has put a total contract value of £170m on its ten-year outsourcing deal with the UK arm of Netherlands-based insurance multinational, AEGON, some £20m higher than prior estimates. The deal, which has now closed, was announced in July (see Serco entering UK life and pensions BPS market) and work will start in November. Most of the services that Serco will provide are around customer contact management, but there is a small element of ‘closed book’ policy processing, its entrée into this market.
It would be a bit previous to postulate that Serco presents a ‘clear and present danger’ to insurance business process services market leaders Capita and TCS. However, Serco is on a mission to boost its presence in ‘back-office BPO’ (e.g. see Serco pays £55m for Vertex Public Sector), the traditional heartland for purveyors of ‘IT-enabled’ business process services. Having said that, Serco's first attempt to break into this market back in 2005 when it acquired UK IT/BPO ‘local hero’, ITNET, was in our opinion all but an abject failure, so management still has much to prove that Serco can be a success outside of its ‘blue collar’ support services comfort (and sometimes discomfort!) zone.
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