The deal involves the administration of group and individual pensions, investment bonds and life and endowment policies.
Capita will provide customer servicing, policy administration, new business processing, claims activity and related IT support to Prudential.
Around 1750 Prudential staff in the UK will transfer to Capita as part of the deal.
Capita will acquire business and assets from Prudential, for a consideration of £25 million, including part of the business of PPMS, Prudential’s offshore operation based in Mumbai, involving the transfer of 1,250 staff.
Prudential chief executive Nick Prettejohn says: ‘The agreement with Capita is another significant milestone in our programme to deliver continued superior performance and profitability in our UK business.
“We have set out very clear priorities for the business and this agreement helps us to deliver our strategy by removing fixed costs from our operations and achieving significant operating efficiencies. It will allow us to concentrate on using our competitive strengths and proven capabilities to realise the attractive opportunities in the market for retirement savings and income.”
Capita chief executive Paul Pindar says: “Capita is delighted to engage in this strategic alliance with Prudential UK. Our aim is to build a mutually beneficial partnership to support the further growth of both Prudential and Capita in the life and pensions industry. We look forward to working with Prudential to deliver high quality outsourced support and welcoming all transferring staff to the Capita Group’s thriving life and pensions business.