8-KMaterial Agreements

Chubb Ltd 8-K Report, Material Agreement (Nov 16, 2005)

Filed November 16, 2005For Securities:CB

Summary

This 8-K filing from ACE Limited (now Chubb Ltd) on November 15, 2005, details a significant amendment to its long-standing information technology outsourcing agreement with IBM Corporation. The amendment, effective November 1, 2005, extends the contract by three years, now running until 2012. This extension is accompanied by a projected annual cost saving for ACE of approximately $11 million and a reduction in potential early termination fees. Key changes in the amended agreement also introduce greater flexibility and accountability. ACE Limited can now source similar IT services from third-party providers, moving away from exclusivity with IBM. Furthermore, the revised contract incorporates new service level measurement methodologies and sets express performance goals for IBM, aiming to enhance service quality and transparency. The amendment also allows IBM to provide services from international locations.

Key Highlights

  • 1ACE Limited amended and restated its IT outsourcing agreement with IBM Corporation.
  • 2The agreement term was extended by three years, now extending through 2012.
  • 3Projected annual payments from ACE to IBM are reduced by an estimated $11 million.
  • 4Early termination charges for ACE have been reduced.
  • 5ACE is now permitted to obtain similar services from third-party providers, ending exclusivity.
  • 6New methodologies for measuring IBM's service levels and express service goals have been introduced.
  • 7IBM is now permitted to provide services from locations outside the United States.

Frequently Asked Questions

The main purpose of this filing is to announce a material amendment to ACE Limited's existing outsourcing agreement with IBM Corporation concerning the management of its information technology infrastructure.

The amendment is expected to result in annual savings for ACE Limited of approximately $11 million in projected payments to IBM. Additionally, the costs associated with potentially terminating the agreement early have been reduced.

Yes, a significant change allows ACE Limited to obtain services similar to those provided by IBM from third-party providers, removing the previous exclusivity with IBM.

Yes, the amendment introduces new methodologies for measuring IBM's service levels and includes specific, express goals for the service levels that IBM is required to meet.