IBM didn't disclose specific financial terms, but characterized the agreement as a "multimillion dollar" deal.
Under the contract's terms, IBM will operate and support Royal & SunAlliance's entire IT infrastructure, including its mainframe and midrange servers, desktop PCs, and e-business systems.
The agreement "is a significant investment in our IT software and hardware across all areas of our U.K. business," said Jim Williams, IS director at Royal & SunAlliance, in a statement.
IBM also will help Royal & SunAlliance redesign its IT architecture and manage services provided to the insurer by about 40 third-party technology vendors.
IBM's Global Services unit could use more such deals. In the first quarter of 2007, IBM signed services contracts totaling $11.1 billion, down 2% from the same period a year ago -- although total Global Services revenue was up 8% overall.
Separately, Royal & SunAlliance on Thursday announced a five-year deal under which it will outsource operation of its communications networks to Cable & Wireless. The contract covers mobility services, WAN and LAN maintenance, and managed security services.
The deal extends an existing agreement between Cable & Wireless and Royal & SunAlliance that was struck in 2002.