TCS will be taking over Pearl group's transaction processing division in Peterborough through the creation of a subsidiary in which Pearl will be a minority, "passive" partner, the Executive Vice-President of TCS, Phiroz Vandrevala said. The company source said this would take TCS to the second slot in this space in the U.K.

Vandrevala said: "The equity holding pattern of the JV - details of the shareholding pattern and the equity capital - will be announced later." The subsidiary will specialize in BPO for life and pension businesses, starting with Pearl's portfolio it will expand similar services to other insurance companies."

The potential in the U.K. was enormous, there being 150 million to 200 million policies, pointed out A S Lakshminarayanan, Vice-President and Country Manager, for TCS (U.K.). Initially the company will start with processing 4 million policies for Pearl; these closed book ones will reduce to a little over 1 million policies at the end of 12 years.

"This deal validates our strategy of pioneering the next generation of business process outsourcing opportunities," said S Ramadorai, CEO and Managing Director, TCS. Recently TCS won a $250 deal from ABN Amro to develop and operate software for the bank for a period of five years. The present deal is not a outsourcing deal but a platform-based project. "We have to create significant systems capabilities in the insurance vertical that will bring together 13 different legacy systems that exist at Pearl," TCS officials said.

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