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Capita completes giant broker outsourcing deal

As predicted by The Insurance Insider last week, Capita Group plc and Marsh UK finalised their 10-year outsourcing deal, worth £187mn, that will see around 600 staff transfer to the outsourcing firm.

The deal – announced last Thursday (26 June) – will see Capita take over the broker’s back office and legacy operations in Norwich and India.

The agreement involves a staff transfer to Capita following a consultation under the Transfer of Employees (Protection of Employment) (TUPE) regulations, while the current offshore work will be transferred to Capita’s own offshore facilities.

Martin South, Marsh UK CEO, said the outsourcing deal would be “beneficial” to both parties.

“In particular, it will transform the way in which we do business, supporting our commitment to providing a customer experience that's truly world-class,” he said.

Capita said it will be undergoing a review to improve service provision and “deliver significant reductions in operational transaction costs”.

It revealed it would also be creating a “centre of excellence for insurance outsourcing services” in the broker’s Norwich offices.

Paul Pindar, Capita Group CEO, said: “This partnership will draw upon Capita’s technical expertise across the insurance market and service re-engineering capabilities across the wider financial services industry.

“The work will continue to be delivered from a Norwich base and we look forward to welcoming all staff who transfer to Capita.”

In December last year, The Insurance Insider revealed that Capita had emerged as the likely partner with Marsh.

The outsourcing firm announced that it had been chosen by the broker as preferred bidder in January after seeing off rival Xchanging. However, the completion was delayed by the complicated nature of negotiations.

The agreement follows a similar 10-year deal in 2006 between Aon Ltd and Xchanging, worth £230mn, which saw around 500 employees move from the broker.

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