IBM Signs 10-year Deal with ACE INA for Post-acquisition Information Technology Support

Agreement Aids Transition of Former CIGNA Units into ACE Group of Companies

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SOMERS, NY - 07 Jul 1999: -- IBM today announced a 10-year strategic outsourcing agreement with ACE INA Holdings Inc., the U.S.-based unit of ACE Limited (NYSE: ACL).

ACE INA, which closed a $3.45 billion acquisition of CIGNA Corporation's property and casualty (P&C) operations on July 2, has contracted IBM Global Services to manage ACE INA's U.S. IT infrastructure and incorporate necessary systems from CIGNA's IT infrastructure.

The agreement is one of the largest insurance industry deals ever for IBM; ACE expects to save $45 million annually by outsourcing its IT operations to IBM. The deal is structured to provide ACE with a wide range of information technology support services that will enable the company to concurrently meet existing business requirements and take on new challenges within the insurance industry.

IBM Global Services will be responsible for managing the complete transition and integration of the U.S. IT infrastructure acquired through the CIGNA deal, and for maintaining IT support after the transition. The IT infrastructure acquired by ACE INA supports more than 8,000 employees worldwide, and nearly 5,000 employees in the U.S.

"As we position ourselves to become one of the world's leading providers of insurance and reinsurance services, ACE will maintain its sharp focus on what we do best," said Dominic Frederico, Chairman, President and Chief Executive Officer of the new ACE INA Holdings. "ACE is pleased to engage IBM as a long-term technology partner whose core business will support our IT infrastructure, while we concentrate on our core business -- the P&C business. We believe that the relationship between ACE and IBM will be a critical ingredient for our continued success during this exciting period of change."

IBM Global Services will provide ongoing IT support of the U.S.-based operations that ACE INA has acquired from CIGNA, including applications management, data center operations, desktop management and telecommunications network management services. The IBM arrangement is expected to help ACE control its total cost of service delivery while maintaining overall productivity, infrastructure stability, and consistency in its client service.

"We look forward to providing ACE INA with the IT support it needs to build and sustain its post-acquisition momentum," said Bob Farrell, Vice President of Insurance Industries, IBM Global Services. "IT is a critical component of any successful organization, particularly one that is undergoing change. IBM has the insurance industry expertise and commitment necessary to deliver significant benefits to ACE INA as it expands the breadth and depth of its operations."

As part of this agreement, about 350 ACE INA employees, located primarily in Philadelphia, PA, Voorhees, NJ, Brandywine, DE, and Thornton, CO, will become employees of IBM. Additional employees may transfer to IBM at a later date.

The ACE Group of Companies provides insurance and reinsurance for a diverse group of international clients. At March 31, 1999, ACE Limited had approximately $8.9 billion in assets and approximately $4.0 billion in shareholders' equity. Following the acquisition, operating subsidiaries are now based in nearly 50 countries and the total assets of the combined companies are approximately $30 billion.

IBM Global Services is the world's largest information technology services provider, with 1998 revenues of approximately $29 billion. Services is the fastest growing part of IBM, with more than 130,000 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 realize the full value of information technology. For more information visit

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