Nasdaq-listed business process outsourcing (BPO) company EXL Service plans to close a strategic deal in the insurance space in the US and the contract is expected to be executed over the next 3-5 years.
“We have shortlisted an insurance client in the US and this will be a strategic client for us. We are seeing large deals with an annual value of around $20 million (Rs 92 crore) in the insurance space,” said Rohit Kapoor, CEO and president, EXL Service.
The company has over 60 insurance carriers as its clients and of these, more than ten are strategic clients where the deals range from $5-10 million (Rs 23-46 crore). EXL's service offerings in the insurance life cycle include property and casualty, health and life and annuity.
The revenue from the new client will start reflecting in the company’s books after two-three quarters.
EXL recently signed a five-year strategic contract with a leading European insurance company to provide a range of services across the insurance life cycle.
“Europe contributes 25 per cent to our revenue but with this deal, we expect to derive about 30 per cent of our revenue from the geography,” said Kapoor.
Other than its organic expansions, EXL Service is also looking at acquisitions in the insurance space in the range of $25-50 million (Rs 115-230 crore). The company has a cash reserve of $88 million (Rs 405 crore) on the balance sheet by the end of the second quarter ended 30 June, 2010. Its net income saw a three-fold increase at $4.8 million (Rs 22 crore) compared with $1.3 million (Rs 6 crore) posted in the year ago period. Revenue at $60.6 million (Rs 278 crore) was up 43 per cent from $42.3 million (Rs 194 crore) in the corresponding quarter a year ago.
“We have a fairly active pipeline for acquisitions. We are looking for stand-alone companies and carve-outs in the US in insurance and healthcare space,” added Kapoor.
