Transamerica agreement bringing Tata to CR

A Transamerica sign at the company’s North Campus off Edgewood Road on a recent afternoon. PHOTO ADAM MOORE

 

By Dave DeWitte
dave@corridorbusiness.com

Tata Consultancy Services will soon become one of the Corridor’s largest private employers after signing a $2 billion deal to serve as third-party administrator for the insurance and annuity business lines of Transamerica.

TCS will offer employment to 882 Transamerica employees and lease buildings A and B of the Transamerica North Campus off Edgewood Road, according to Transamerica spokesman Kyle Frette. It will administer more than 10 million Transamerica policies, including annuities and life insurance, supplemental health insurance and workplace voluntary benefits policies.

Transamerica leaders said the companies will work together in a multi-year partnership that will modernize the customer service platforms and enhance the digital capabilities used to administer its policies. It is expected to yield annual savings of $70 million, growing over time to $100 million.

Although not a household name in the Corridor, India-based TCS is one of the leading global IT consultancies. The company has a global workforce of 398,880 and added 12,534 employees in the fourth quarter of last year. It earned $4.8 billion in the quarter, up 9.1 percent from the fourth quarter of 2016.

The partnership with Transamerica will give TCS a major role not only in hiring existing employees, but in helping them gain digital skills and fluency, according to Balaji Ganapathy, TCS’s head of HR workforce effectiveness.

“TCS plans to make a significant investment in the region, most notably by establishing its new North American insurance hub for business operations in Cedar Rapids, Iowa,” Mr. Ganapathy said in an email. “Beyond offering roles to 2,200 Transamerica employees across U.S. cities, TCS plans to hire locally in Iowa, set up relationships with educational institutions and help employees with professional development to gain digital skills and fluency.”

The company will work with government leaders and community organizations to bring its flagship education programs, such as Ignite My Future in School and goIT, to students, educators and schools across Iowa. Mr. Ganapathy said Transamerica employees who join TCS will be provided with a variety of training and professional development, including training on the new digital platforms.

“There are no legacy people, just legacy technologies,” is the TCS philosophy, Mr. Ganapathy said.

The partnership will advance Transamerica’s competitive position and help it achieve growth in all its business lines, CEO Mark Mullin said, emphasizing the customer benefits he also expects.

“Transamerica continues to put our customers at the forefront of everything we do,” he said in a press release. “I’m very excited to embark on this partnership with TCS, whose transformation and technology innovation capabilities will supplement our focus on improving our customers’ experience in a digitally enabled way.”

Transamerica’s parent company, Netherlands-based Aegon, reported its fifth-consecutive quarter of improved earnings in the third quarter of 2017 after a period of lackluster performance. The decision to bring in a third-party benefits administrator was part of the One Transamerica program, which aimed to streamline the company’s operations and improve its cost-effectiveness, according to Mr. Frette. The selection process that led to TCS took more than a year.

“The thing we do really well is develop innovative solutions for our customers,” he said. “This move really lets us focus on that.”

A total of 2,200 Transamerica employees will transition to TCS at Transamerica locations in Baltimore, Maryland; Little Rock, Arkansas; Plano, Texas; and St. Petersburg, Florida. All of those employees will be given the opportunity to remain in the same cities where they are currently based.

Aegon, its Aegon Asset Management business and Transamerica currently employ 3,080 in Cedar Rapids. When the third-party administration agreement takes effect in the second quarter of 2018, about 2,198 will remain.

Suresh Muthuswami, president and global head, Banking Financial and Insurance Platforms at TCS, said in a press release that the deal will establish the company’s BaNCS technology platform as a “formidable digital platform for the U.S. insurance industry, following its stellar global track record over the past decade.”

Amid its global expansion, TCS has at times faced scrutiny and legal challenges over its heavy reliance on IT workers from South Asia as opposed to native workers in its host countries where employment costs are higher. The company has responded to the allegations, highlighting its recruitment of nearly 10,000 employees outside of India in the first three quarters of fiscal 2018 as part of localization initiatives.

The Jan. 11 announcement of the partnership helped resolve a lingering question about what would become of the Transamerica North Campus. The company announced plans in 2016 to vacate about 100,000 square feet of office space at the North Campus and put it on the market. About 1,300 employees were to be relocated to the company’s Transamerica Financial Park on C Street SW.