Insurance giant Prudential expects great things from its IT outsourcing deal with Capita.

Announcing strong full year results for 2007 this week, the company stressed the centrality of the outsourcing of its back book and new business policy administration to Capita in its cost saving plans.

"The outsourcing agreement will allow us to remove fixed costs from our operations and to achieve significant operating efficiencies with an expected positive effect on embedded value estimated at £60 million by 2011," the company stated, describing the contract as a "key milestone".

The 15-year contract with Capita was signed in November 2007, and is expected to be worth around £722 million over its lifetime.

Under the terms of the contract, Capita is administering around seven million policies, investments, pensions and endowments.

Prudential announced an European Embedded Value (EEV) operating profit for the year of £2,542 million, an increase of 25 per cent on the previous year.


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