IT services firm Atos Origin will supply infrastructure hosting services to Capita to support its huge business process outsourcing contract with Resolution, the life fund giant at the centre of a bidding war by rival insurers.

Resolution signed a £580m 12-year outsourcing contract with Capita in May that will see the outsourcer deliver IT services, customer services, policy servicing, claims and new business processing for approximately 4.5 million policyholders, plus future new business for Phoenix Life Assurance (formerly Abbey National Life), Scottish Mutual, Scottish Provident and Phoenix Life funds.

Resolution has been the subject of acquisition bids from both Friends Provident and Standard Life – which abandoned its £4.6bn bid yesterday. A rival £4.9bn offer for Resolution from Pearl Assurance is still on the table. Any successful acquisition is set to spark a huge IT integration project: Friends Provident had cited IT consolidation savings as an important benefit from its merger plans, before the deal was called off.

Now, under a 10-year framework agreement, Atos Origin will deliver infrastructure hosting services to Resolution – and to Lincoln Financial Group, another key client of Capita’s life and pensions services business.

The initial contracts are set to earn Atos £20m over five years, but the framework deal is also expected to cover future IT services to support Capita’s business process outsourcing in the life and pensions market.

The contract for Lincoln extends Atos Origin’s existing mainframe hosting services agreement with the company by three years, taking it to 2012.

Craig Rodgerson, IT director at Capita Life and Pensions Services, said: “Combining the benefits of Atos Origin’s IT hosting solutions with our life and pensions outsourcing will enable us both to continue delivering benefits to our current and future clients.”