Insurance market witnesses important BPO deals
24 July 2008:
These deals have highlighted three important trends within the industry: the move away from captives, the increasing focus on the insurance vertical and the maturity of the Indian BPO market.
India-based outsourcer WNS has announced the GBP115 million ($228 million) purchase of Aviva Global Services (AGS), the captive offshore unit of insurance giant Aviva. As part of the acquisition, WNS, which is majority-owned by private equity shop Warburg Pincus, will continue to provide services to Aviva: the two companies inked a 100 month agreement that will provide WNS with approximately $1 billion in service revenue. Soon after this announcement, HCL Technologies, another Indian IT services provider, revealed the acquisition of Liberata Financial Services (LFS), a division of the UK outsourcer that serves the life and pension industry. The deal price was not disclosed, although the fixed assets have reportedly been valued at $2 million.
These two deals are significant as they highlight three separate and distinct trends. The first trend, which applies only to the WNS-Aviva deal, is the move away from captives and towards pure outsourcing. The second trend is the increasing tendency by vendors of all kinds to concentrate on verticals, particularly the insurance vertical. Finally, the acquisition of UK assets by Indian enterprises suggests a marketplace approaching a new level of maturity.
