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Capita Group PLC (CPI)

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Wednesday 10 January, 2001

Capita Group PLC

Contract with Abbey National

Capita Group PLC
10 January 2001



10 January 2001



               Capita wins significant private sector contract

            £323 million contract secured with Abbey National plc


The Capita Group Plc ('Capita'), the leading UK professional support services
organisation has been selected as a core partner by Abbey National plc in a
contract worth approximately £323 million over 10 years. This contract
significantly increases Capita's private sector business and is a key platform
for further penetration of the financial services sector.



Abbey National has chosen Capita to develop, manage and administer the systems
development and core-processing activities of their general insurance
business. Capita, through Capita Eastgate, the Group's insurance support
services operation, will administer all active policies and associated claims
for Abbey National's home, motor, travel and creditor insurance products.
Norwich Union will continue to underwrite and settle claims for the majority
of these products on an exclusive basis, with a choice of competing insurers
underwriting the remaining products. Claims settlement will be undertaken by
Capita and Norwich Union.



Rod Aldridge, Executive Chairman of The Capita Group Plc, commented:



'We are delighted to have this opportunity to support Abbey National in
growing its general insurance business. The new capabilities we bring to the
partnership will enable Abbey National to be far more flexible in meeting
customer needs, responding to individual's particular requirements and their
chosen method of communication and transaction. It will be a seamless and
flexible service meeting Abbey National's requirements now and into the
future.



'The contract is a key step forward in the growth of Capita's private sector
business, being the largest single contract by some magnitude that we have won
to date in this sector. Expertise in the insurance sector, gained through our
acquisition of the Eastgate Group, combined with Capita's track record of
delivering excellence in customer service and our ability to provide leading
edge technology solutions enabled us to secure this wide ranging contract. It
provides us with a strong platform for further penetration of the insurance
market and the wider financial services sector.'



Andrew Pople, Abbey National's Managing Director of Retail Banking, said:



'Our agreements with Capita and Norwich Union mean we can grow our general
insurance business by delivering real customer choice and value, coupled with
excellent service and efficiency levels.



'Our choice of partners, and our withdrawal from underwriting and general
insurance administration, reflects our strategy of focusing on making it
easier for our customers to take out good value insurance cover which is
suitable for their needs and on which they can fully rely.'



Capita not only brings expertise in administering and improving business
processes but will also introduce leading edge technology to increase service
flexibility and quality, assisting Abbey National in maintaining and
developing competitive advantage in an increasingly demanding sector. Capita
will initially deliver services through Abbey National's legacy systems before
transferring policies gradually to a new technology platform, Consumer Direct,
jointly developed by Capita Eastgate and Cap Gemini Ernst and Young.



Consumer Direct was developed to meet the need for an e-enabled insurance
process outsourced capability for the general insurance market. It provides
the platform for market-leading product flexibility and straight through
processing, providing a more individually responsive customer service,
multi-channel access, cost efficiencies and   the ability to support a pool of
risk carriers. Consumer Direct will enable customers to deal with Abbey
National through the route of their choice, including branches, telephone and
mortgage introducers, as well as through the internet, meeting the company's
e-commerce strategy.



Significant investment spend by Abbey National in the region of £50 million is
planned over the next 36 months to deliver a single systems platform with new
products, multi-channel access and excellent service standards.



Abbey National staff in Bradford and Liverpool responsible for customer
service and some claims handling staff in Bradford will transfer from Abbey
National to Capita on 1st March 2001.  Exact numbers are being finalised at
present.



In October 2000, Capita acquired the remaining 74% of the issued share capital
of Eastgate Group Limited that it did not already own for an initial
consideration of  £9.1 million and a deferred payment of 862,053 shares in
Capita and £0.75 million in cash.  The deferred payment now becomes payable on
30 September 2001 as a consequence of signing the above contract with Abbey
National.



Capita will be announcing its results for the year ending 31 December 2000 on
22nd February 2001.



                                    -ends-



For further information:



The Capita Group Plc                     020 7799 1525
Rod Aldridge, Executive Chairman
Paul Pindar, Chief Executive
Shona Nichols, Group Marketing Director



Abbey National plc                       020 7612 4281
Lorna Waddell, Media Relations



Hogarth Partnership (for Capita Group)   020 7357 9477
John Olsen/James Longfield





Notes for Editors:



The Capita Group Plc



The Capita Group Plc is one of the largest and fastest growing professional
support services organisations in the UK. Capita provides an integrated range
of professional support services on long-term contracts across the private
sector, local and central government and education in the UK.  With in excess
of 8,000 people working across a network of over 100 sites, generating a
turnover in excess of £400m, our achievements promoted us to the FTSE 100 in
2000.



We draw on our wide base of skills and sector expertise to generate and
successfully implement tailored service solutions.  Capita's capability spans
leading edge customer and administration services, HR services, IT and
strategic support, software and property consultancy.



Capita Eastgate (formerly the Eastgate Group, acquired in October 2000)
focuses on the provision of services to the insurance industry.  The business
supports over 150 syndicates and London Market insurers and is the largest
third party claims administrator in the UK, handling over 3 million helpline
calls a year and providing legal expenses insurance for almost 2 million
households.  Both Abbey National and Norwich Union are existing clients of
Capita Eastgate.



Abbey National plc



Abbey National has over 1.4 million insurance polices in force through the
Abbey National brand.  These are largely home and contents policies.  In 1998,
Abbey National launched a competitive range of motor insurance products, and
has since registered over 155,000 new policies.