While debate continues to rage over the pros and
cons of outsourcing, Allianz has positioned itself firmly in the
pro camp. In the latest in a series of outsourcing deals, the
European insurer’s US unit, Allianz of America (AOA), has entered
into a 7.5-year outsourcing agreement with information technology
company IBM in what AOA termed a “major step” in its drive to
achieve $150 million in operational savings within the next three
years.
The contract covers AOA’s life insurance unit,
Allianz Life Insurance Company of North America, and its general
insurance unit, Fireman’s Fund Insurance Company, and is worth $330
million to IBM. IBM will implement a single service management
framework that includes data centre services, storage management,
back-up and recovery, system software support, desk-side services
and security monitoring.
Go deeper with GlobalData
Fireman’s Fund had previously outsourced some of these functions to
IBM and on a net basis the new contract represents about $200
million of new business for IBM.
Commenting, AOA’s chief information officer, Oliver Bussmann, said:
“Our objective is to create competitive advantage through superior
service delivery for our customers; by negotiating one contract for
both entities we leverage scale much more effectively.”
German-UK arrangement
AOA’s agreement with IBM followed another significant outsourcing
deal set to bring sweeping change to the German retail portfolio
management and administration services operations of Allianz’s
asset management unit, Allianz Global Investors (Allianz GI).
In a move that Allianz GI said “guaranteed cost savings”, it is to
sell a 51 percent stake in its Germany-based administration service
unit Fondsdepot Bank to Xchanging, a UK back-office outsourcing
specialist, for €13 million ($17.8 million). Xchanging, which has
entered into an eight-year service agreement with Allianz GI worth
an initial €400 million, will assume operational control of
Fondsdepot in November this year. At Allianz GI’s discretion,
Xchanging could acquire the remaining 49 percent interest in
Fondsdepot after four years.
Allianz GI explained that the goal of the partnership with
Xchanging was to strengthen and grow Fondsdepot as a high-capacity,
neutral provider of retail investment account management services
and to generate third-party business. “The partners will focus on
expanding their business with independent financial consultants and
broker pools and on exploiting the business potential arising from
the growing trend towards the outsourcing of administrative
processes,” said Allianz GI.
Fondsdepot provides retail portfolio management and administration
services to investment companies, distribution companies, banks and
other businesses. Fondsdepot currently has about 1.3 million active
securities accounts and assets under management totalling €19.2
billion.
The platform offers customers a portfolio of about 6,500 public
funds and 150 investment companies.
