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Zurich Financial Services and IBM to join forces in unique outsourcing deal


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London - 26 Feb 2001: Zurich Financial Services' UK operation today announced it is joining forces with IBM Global Services to create a distinctive IT outsourcing model. This ten-year agreement will support Zurich's ambitious efficiency and growth plans in the UK and keep it at the forefront of the new economy. The approach is expected to deliver annual cost savings of nearly £15 million through productivity gains and economies of scale.

The unique strategic collaboration between the world's largest IT services company and one of the world's leading financial services companies will combine two key elements:

Around 800 of the 1800 employees and contract staff currently employed in systems development and support capability across Zurich's UK insurance business will transfer to IBM Global Services.

Zurich anticipates no job losses as a result of this agreement, which will provide strong career opportunities for all its IT staff. Detailed consultation is underway with employees and their representatives.

Key terms have been agreed in principle. A further announcement will follow once contracts have been signed.

Sandy Leitch, Chief Executive of Zurich Financial Services (UKISA), said: "This strategic relationship with IBM strengthens our IT capability significantly and sets the pace for the rest of the industry. It will not only give us faster access to new technologies, it will also give our customers access to new products and services and provides our IT employees with greater career opportunities. It's a winning formula for all parties".

Zurich Financial Services (UKISA)
The Zurich Financial Services Group is a global leader in the financial services industry, providing its customers with solutions in the area of financial protection and asset accumulation. The Group concentrates its activities in five business segments: non-life and life insurance, reinsurance, Farmers Management Services, and asset management. Headquartered in Zurich, Switzerland, the Group's worldwide presence builds on strong positions in its three key markets - the United States, the United Kingdom and Switzerland. It has offices in more than 60 countries reaching over 35 million customers and employing 68,000 people. Based on consolidated figures for 1999, the Group achieved gross premiums of USD 48 billion. This amount includes insurance deposits as well as premiums from the Farmers Exchanges. The net income amounted to USD 3.26 billion. On June 30, 2000, the Group had USD 435 billion of assets under management of which USD 260 billion represent funds managed for third-party institutional and retail customers.

Zurich Financial Services (UKISA) is part of the Zurich Financial Services Group and comprises the Group's operations in the UK, Ireland and Southern Africa. Within the UK, Zurich Financial Services has a strong portfolio of life and investment brands in the UK including Allied Dunbar, Eagle Star, Sterling, Threadneedle Investments and Zurich.

IBM
IBM Global Services is the world's largest information technology services provider, with 2000 revenues of more than $33 billion. Services is the fastest growing part of IBM, with more than 148,000 professionals serving customers in 160 countries. IBM Global Services integrates IBM's broad range of capabilities - services, hardware, software and research - to help companies of all sizes realise the full value of information technology. For more information visit www.ibm.com/service

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