Direct Line Group, the insurance company that separated from the Royal Bank of Scotland last year, has selected Capgemini to design, build and manage its new IT infrastructure.
The financial value of the five year deal has not been disclosed. The cost of migrating Direct Line Group's systems from RBS's infrastructure alone will be £100 million, suggesting that the total contract will be worth many hundreds of millions of pounds.
"Capgemini will be migrating a new infrastructure based on a combination of IBM mainframe, Wintel and Unix [systems]," the IT services provider told Information Age. "Capgemini will also offer cloud-based services for [development and testing] and future projects.
"In this way, DLG get the benefit of tried and tested infrastructure and a low risk application migration along with the flexibility and speed to market that cloud based services can offer in the future."
Capgemini said the contract is its largest infrastructure outsourcing deal since 2011.
RBS was forced to divest its insurance division under the terms of its bail-out deal with the government in 2008. RBS Insurance, which operated the popular Direct Line brand, changed its name to Direct Line Group last year and floated on the London stock exchange.
Although it is evidently moving some legacy systems onto a new platform, Direct Line Group has also deployed some new applications post-RBS. For example, it has built a new human resources system using cloud-based HR application Workday.
DLG and Capgemini will be mindful of retail giant Tesco's experience of migrating away from RBS's IT infrastructure.
In 2008, Tesco bought out RBS's share in its financial services division, Tesco Bank, and decided to move to new IT infrastructure.
In 2011, however, technical issues with the migration meant that many customers could not access their online accounts. Tesco postponed migration of the systems that remained on RBS's infrastructure, which in turn forced it to delay the launch of its own mortgage products.
Tesco later said that the delay had cost it £40 million in lost profits.
