Co-op Insurance sues IBM for £130m over failed IT platform

A lawsuit document

Exclusive: Co-op Insurance has filed a £130m lawsuit against tech giant IBM.

In July last year IBM terminated its £55m contract to upgrade Co-op Insurance’s IT systems two years after the deal was struck.

Court documents filed by Co-op Insurance and seen by Post said: “In 2016, there were serious and chronic delays by the defendant [IBM] in the performance of its obligations.

“The claimant [Co-op Insurance] was not privy to the true cause or causes of delay which, in general terms, the defendant blamed on its subcontractor, Innovation Group.”

The filing details how on 27 July 2017, IBM sent Co-op Insurance a termination notice pursuant a specific clause of the Master Services Agreement, which Co-op argues was unlawful. 

As part of the original deal, IBM was to provide the platform as a managed service for 10 years as well as provide additional technology services.

A spokeswoman for IBM told Post: “IBM is aware that CIS General Insurance has initiated a claim in the High Court. IBM will rigorously defend any claim.”

In 2015 Co-op Insurance attributed a £17m operating loss to costs associated with the deal.

Co-op Insurance declined to comment. 

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