Indian outsourcing firm Tata Consultancy Services (TCS) said Tuesday it was entering the life insurance and pensions industry in the United Kingdom with a 12-year, £486-million ($847 million) deal to handle the life insurance and pension business processes of Pearl Group.

TCS will set up a new U.K. subsidiary in Peterborough, England, to specialize in business process outsourcing (BPO) for the life insurance industry. The unit will respond to questions from policyholders, pay out claims, and perform other transactions. The company has signed a long-term lease for a site there.

“This deal validates our strategy of pioneering the next generation of business process outsourcing opportunities,” said Subramanian Ramadorai, chief executive of TCS.

“Our extensive experience working in the insurance industry, together with our excellence in technology, will help us emerge as a significant player in life assurance and pensions administration services and help us continue our strong growth momentum,” said Mr. Ramadorai.

Pearl Group will own a minority stake in the U.K. unit set up by TCS, according to Bloomberg.com, and Pearl director Edward Spencer-Churchill will invest £50 million ($87.25 million) over four years.

The Tata-Pearl deal comes only a day after Technology Partners International, a Houston-based advisory firm, said the total value of outsourcing deals in 2005 would drop to between $60 billion and $65 billion from an average of $72 billion in recent years (see Outsourcing Deal Value Drops ).

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