IBM and Innovation Group Open New Innovation Center in India; New Center Helps Insurance Companies Transform their Business

IBM (NYSE: IBM) and Innovation Group (LSE: TIG) today opened a new
Innovation Center for Global Insurance in Bangalore, India. The new
center will help the companies innovate on next generation core
systems, develop new business models, and tap emerging technologies to
create competitive advantage and improve the customer experience.

Based at IBM's Bangalore campus, the new center provides clients
with access to hardware, software, and services including IBM System z
mainframes, IBM Information Server and DB2 Data Server software, and
Innovation Group's Innovation Policy and Innovation Claims insurance
applications that deliver high quality, low-risk, and cost effective
solutions for the enterprise.

"The Innovation Center and the increased focus on our IBM
relationship is a response to the success of the partnership in the
last 24 months. Our current and prospective customers appreciate the
provision of deeper capabilities and the flexibility we offer together
in serving the global insurance market. The acceleration of our
relationship has been in direct response to our joint customers as
well as demand from prospective clients for Claims and Policy
Administration Solutions in many key markets," said Ed Ossie,
President of Innovation Group.

In 2005 the companies entered a five-year agreement to create a
new client-focused global delivery center and strengthen client site
capabilities in key markets. The new center 'builds on the original
agreement and IBM and Innovation Group will increase joint staffing
levels in Bangalore and across other sales regions throughout 2007 to
streamline delivery capabilities and meet the growing demand for
mainframe-based core systems.

"Insurance companies require core systems that are open, flexible,
scalable and secure," said Norbert Dick, General Manager, Insurance
Industry, IBM. "The combination of IBM and Innovation Group
technologies coupled with IBM's systems integration leadership will
help joint clients achieve a single view of their customers, lower
operating costs, and streamline risk management across the
enterprise."

"Globally, insurers have over 40 technology vendors to consider
when replacing their claims or policy administration solution. Having
an established sales and delivery partnership between a system
integrator and vendor is an important consideration for insurers who
look to them to support those processes," said Stephen Forte, a
principal research analyst in Gartner's insurance practice.

For more information about IBM insurance solutions, visit
www.ibm.com/insurance.

About Innovation Group

Innovation Group plc (Innovation or Group) provides outsourcing
services and software solutions to insurers and other risk carriers.
The software solutions are designed for the handling of policy and
claims administrative processes within the insurance industry. The
solutions can be utilized in connection with the Group's outsourcing
operations or implemented on a stand-alone basis. 76% of the
Innovation Group's total revenues are now recurring with the remainder
coming from the sale and support of its software solutions. The Group
provides software and outsourcing services on a non-branded basis and
does not perform insurance underwriting functions.

The general BPO market is currently forecasted to outpace other IT
services. In North America, BPO is estimated to grow by an 8.8%
compound annual growth rate to $100 billion by 2009. Gartner 2005.

Innovation has over 220 global clients including the Royal Sun
Alliance, Ford Motor Company, Aviva, AXA Insurance Toyota (South
Africa) and Zurich (UK). The Group processes more than 3 million
claims per year with 20% direct claims cost saving achieved. The
software operates in 8 languages and the Group has approximately 2000
people across offices in North America, the UK, Germany, South Africa,
Australia and Japan, visit www.innovation-group.com

Since 2002, IBM and Innovation Group have worked together to
deliver proven business solutions for insurance carriers that have
brought innovation, clear business value and return on investment.
Together they are enabling clients to realize the benefits of
transformational change in core insurance functions such as Policy
Administration and Claims Management.