WASHINGTON (Dow Jones) ? ACE Ltd. (ACE) said last week that it extended the term of an outsourcing agreement it has with International Business Machines Corp. (IBM) for three years until 2012.

The Bermuda, insurance holding company said in a filing with the Securities and Exchange Commission that the amended agreement will also reduce its projected annual payments to IBM by an estimated $11 million. The company didn?t provide the original amount of its payments in the filing.

In addition, the amended agreement, which relates to the management of the ACE?s information technology infrastructure, reduced the termination charges that ACE would incur by terminating the agreement early.

The amendment also allows ACE to obtain from third parties services similar to those provided by IBM, and it lets IBM provide some services from locations outside the US.