London to see another major outsourcing deal
Xchanging is poised to agree a major outsourcing deal with the expansive (re)insurance broker Cooper Gay & Co Ltd to take on the firm’s back office functions, The Insurance Insider revealed last week.
The deal, currently subject to Transfer of Undertakings (Protection of Employment) (TUPE) regulations, will see 66 Cooper Gay staff in accounting, claims and technical processing transfer to Xchanging from the broker’s offices in London and Rayleigh, Essex where the group trades as James Steele (Insurance).
The TUPE consultation, designed to protect employee’s rights when business is transferred from one company to another, is due to finish at the end of the month.
Confirming the agreement, a spokesman for the broker said: “Cooper Gay has entered into a period of consultation with some of its employees to discuss the possibility of transferring elements of its back office administration functions to Xchanging.
“Staff that may be affected have been informed and the consultation period is expected to be completed towards the end of July. Further announcements will be made at that time, but in the meantime it is very much business as usual.”
The spokesman confirmed: “There are 66 members of staff involved in the consultations, working in both the Rayleigh and London offices, and they handle accounting, claims and technical processing functions across the range of the company’s activities.”
Referring to the value of the deal, the spokesman said only: “The financial value of the proposed arrangement is confidential and not something that either Cooper Gay or Xchanging will be divulging.”
The tie-up is the third major broker outsourcing deal in the London market and swiftly follows the £187mn, ten-year deal between Capita Group Plc and Marsh UK’s which was finally completed last month.
In 2006, Xchanging struck a pioneering insurance outsourcing deal with Aon Ltd which involved around 500 employees and was worth around £230mn.
The Xchanging deal, which is designed to drive down the heavy burden of broker’s embedded legacy and back office processing costs, comes as the firm continues its path of growth by M&A. In May, it bought some of Heath Lambert’s wholesale and reinsurance operations and the firm has been linked with a possible initial public offering next year.