NEWS

Marsh looks to extend £187m Capita deal

Talks are under way between insurance firm Marsh and outsourcing business Capita about extending a £187m partnership which has already seen hundreds of staff in Norwich switch employer.

This month 600-plus employees based at Marsh's Queen's Road office transferred to Capita in what the companies described as a 10-year deal to improve the insurer's "back office efficiency".

Unveiling their half-year results yesterday, Capita said the Marsh deal was the biggest of eight contracts worth a total of £626m won in the last six months.

But Capita added that following the "smooth transition" of staff from Marsh on July 1, discussions were already under way about extending the two firms' work.

The existing deal will see Capita provide "support and processing services" for the insurer's broking operation.

"Joint work has been initiated to explore how the partnership could be widened to support Marsh further," Capita said.

Marsh was unavailable for comment last night .

But at the time the deal was announced in January, the two companies said it was possible that the move would bring new jobs to Norwich in future as Capita moved some of its other operations to the city.

There was also a pledge that the pay, conditions and pensions of the Marsh workforce would be maintained once they had transferred to their new employer.

In addition to its work with Marsh, Capita yesterday said it had secured a further £180m of new deals and contract extensions in July, including extra work for the Criminal Records Bureau.

Paul Pindar, chief executive of the Capita Group, said: "We remain very positive about future growth.

"Our markets continue to generate an encouraging volume of opportunities and our operational performance is consistently strong. "Our successes in 2007 and progress in the first half of 2008 mean that the ingredients for a successful year are already in place. We are now focused on building a strong platform for continued growth in 2009 and beyond."

In the last six months, Capita's turnover has grown to £1.1bn - a 20pc rise on the same period the year before. Operating profit has risen by 18pc to £140m.