Ascot Underwriting has become the first Lloyd's managing agency to outsource its entire back office function.

The new Lloyd's venture, which is backed by American International Group (AIG), has appointed Capita Eastgate Insurance Services in a contract worth up to £3.4m over an initial five-year period.

Under the contract, Capita Eastgate will provide back office services such as policy entry, premium and claim processing and reinsurance management.

It will also be responsible for accounting services, including cash book and ledger management,

Capita Eastgate managing director Robin McCoy said: "In today's climate, organisations need to concentrate resources on making their core businesses as efficient and profitable as possible.

"Outsourcing non-core activities is one important way of achieving this. This is a far-sighted move by Ascot, which is likely to set a trend in back office outsourcing in the wider market."