Capita Insurance Services has reinforced its position as the UK's largest outsourced claims handler with the purchase of the government Miners' Liability account from Aon.

The £8m deal, after what was described as a "competitive process", will see the transfer of a workforce of 1,250 people and three offices to Capita.

Capita is thought to have outbid Aon, offering to administer the account for a profit margin of around 10%-12% compared to the 20% Aon was working on.

Capita executive chairman Rod Aldridge said: "Our role in delivering the contract is to ensure claims are handled effectively and compassionately, while maintaining rigorous eligibility procedures."

The new contract will run until July 2006, during which time Capita expects to accrue revenues of £125m.