Cox Insurance Holdings plc

Citation

(2004), "Cox Insurance Holdings plc", International Journal of Productivity and Performance Management, Vol. 53 No. 7. https://doi.org/10.1108/ijppm.2004.07953gab.006

Cox Insurance Holdings plc

Cox Insurance Holdings plc, a provider of personal lines underwriting, broking and insurance services, has signed a ten-year outsourcing agreement for the management of its IT services with CGI Group (Europe) Limited, part of a group which is a leading provider of IT services with a particular focus on the financial services market. The agreement covers the management of Cox’s systems infrastructure, applications management, software development and despatch fulfilment services. The service commenced in June 2004.

As part of the agreement, CGI will deliver high quality, effective and flexible IT services and will facilitate best practice development of the back-office and customer-facing functions, to the benefit of customers and staff alike. Approximately 200 Cox employees, based primarily in Brentwood and Colchester transferred to CGI and a team of 5 people remained at Cox to manage the day-to-day relationship with CGI and to continue to develop the Group’s IT strategy.

Cox has already made good progress towards its stated cost reduction target of £15 million per annum by the end of 2005 and this agreement represents a significant element. The CGI agreement is expected to become earnings enhancing in the 2005 financial year, when it is estimated to deliver annualised pre-tax cost savings of approximately £3.8 million (equating to 0.8p per share based on Cox’s current issued share capital and a tax rate of 30 per cent). Based on current IT spend, the agreement should deliver savings to Cox in the region of £40 million over the term of the contract, representing a reduction in Cox’s IT operating costs of almost 18 per cent.