UK life and pensions vendor Marlborough Stirling has won a £29 million contract extension with Sun Life Assurance Company of Canada, relating to the provision of additional administrative and outsourcing services.
Under the agreement, Marlborough Stirling is to provide additional administrative services to Sun Life which are expected to generate incremental revenues of $4 million, mostly through 2003. The vendor has also won a two-year extension to the terms of its troublesome outsourcing deal with Sun Life, prolonging the life-time value of the contract through to 2009.
Reports of delays in transferring Sun Life policies to the new outsourced service succeeded in wiping nearly two-thirds off Marlborough Stirling's share price in early September. The company's shares rose 8.8% to 39 pence on news of the extended contract this morning.
Over a seven year contract term, revenues of over £105 million will be generated for Marlborough Stirling, compared with in excess of £80 million envisaged over the initial five years of the contract.
David Davies, Sun Life Assurance Company of Canada (UK) Limited's chief executive officer, says: "Marlborough Stirling's performance under the outsourcing and administrative services contracts continues to meet our challenging expectations. Our confidence in its abilities is evident from our decision to extend the scope of both these contracts within the first year of them commencing work for us."