IBM India has entered into USD450 million IT outsourcing contract with private insurance player Max New York Life MNYL. The technology services behemoth, which has already showcased the advantage of total IT outsourcing with the telecom major Bharti, is expecting this deal to pan out in the similar manner. The deal, spread over ten years, will see IBM India providing complete end to end back end IT infrastructure to MNYL. IBM India global technology services vice president Nipun Mehrotra said, This life insurance is a growing market and the work we have done has the potential to change the sector.it is likely to change in similar lines to what happened in telecom sector.
According to IRDA, the market for insurance both life and non-life in 2006 2007 stood at USD41.74 billion, with the life insurance market growing at 47.38 percent while the non life business rose by 21.51 percent. It is estimated that life insurance market alone is expected to touch USD80 billion in the next couple of years.
Life insurance premium collections including single premium, first year and renewal in 2006 20007 stood at Rs 1.56 lakh crore representing a year on year growth of 47.38 percent. IRDA statistics indicates that the Indian insurance market accounts for a paltry 1.12 percent of the global insurance market estimated to be at USD3,723 billion.
Mr Mehrotra said as part of the agreement, MNYL will see them getting revenue for every insurance policy sold. This, in fact, reaffirms the commitment of IBM as it would also making substantial investments in setting up the IT infrastructure as part of the deal.
The key aspect of the deal will be to extend the reach of the insurance player and focus on the semi urban and rural areas. IBM India said that they will be bringing in technology process which will enable MNYL provide life insurance policies with minimum documentation.
Mr Mehrotra said their focus would be on delivering high efficiency at lower costs. As the alliance is still in its early phase, there is a sharp focus on bringing the best of the breed IT applications and services.
Source : www.offshoringtimes.com
