IBM Global Services has signed a $235m, 10-year outsourcing contract with Tokyo-based Mitsui Marine and fire Insurance as analysts tip Japan to be gripped by outsourcing fever under the restructuring of the financial services industry in the country. Tokyo and Paris Stock Exchange-listed Mitsui is Japan’s third-largest non-life insurance company boasting total assets of $31.4bn according to its latest accounts filing.
The IBM deal made public on Tuesday is the largest strategic outsourcing contract in the history of the Japanese insurance industry. But it could be dwarfed by the expected welter of outsourcing deals in the pipeline in Japan. The Japanese government is in the throes of overhauling banks and insurance firms after being stung by financial scandals and economic downturn.
Brian Ashford-Russell, Director, Technology Investment at London-based Henderson Investors Ltd, the UK’s largest technology fund manager, said the Japanese market would mimic industry in the US where restructuring sparked a spate of outsourcing.
Firms choose outsourcing to focus on their core competencies, said Ashford-Russell.
The boom will be further fueled by the current unautomated state of many Japanese businesses with convoluted paper-based systems a legacy of the government’s full employment strategy, he added.
