TCS wins $40-m New India Assurance deal
The Hindu Business Line — January 25, 2008

Tata Consultancy Services has bagged an over $40 million (Rs 160 crore) transformational engagement from New India Assurance for implementing its core insurance platform across the latter's 1,100 branch network in the country.

The turnkey engagement - which is spread over a period of eight years - is the first major engagement for TCS in the non-life insurance space, a company spokesperson told Business Line.

As part of the deal, the company will deploy and maintain its insurance suite, TCS BaNCS Insurance.

It will also enable integration of enterprise solutions pertaining to human resources, customer relationship management and business intelligence into the core insurance product, the spokesperson added.

With about 1.5 crore policy holders in the country, New India Assurance is currently the largest non-life insurance company in India.

Revenues from the deal will start kicking in for TCS from the current quarter itself, the company spokesperson added.

IT outsourcing is expected to make the insurance major more productive, so that it can take on increased competition in the space.

Public sector non-life insurance companies have been steadily losing market share in the past few years. In 2006-07, the share dropped to 65 per cent, against 73 per cent in the previous year.

Even though margins in the domestic business have been a cause of concern for IT companies, perceptions of a global slowdown in discretionary spending coupled with the growing IT maturity in India have resulted in the domestic market gaining a lot of importance.

According to a Gartner report, the domestic IT services market is pegged to grow to $10.73 billion by 2011 at a five-year CAGR of 23.2 per cent. Though Indian firms have been laggards in the domestic space, overseas IT companies such as IBM and Accenture have been picking large deals in India.

TCS is now aggressively looking at the domestic IT space.

In an earlier interaction with Business Line, Mr N. Chandrasekaran, Chief Operating Officer of TCS, had said that TCS was pursuing five IT outsourcing deals from Indian firms.

TCS BaNCS Insurance is a part of TCS BaNCS, which was spun off in May last year as a dedicated product company within the TCS fold.