(Repeats story filed overnight. No change to text.)
* Asia non-life distribution deal could be worth at least
* Citi set to launch process in a few days
* Deal will be one of the largest in Asia
* Global insurers increasingly keen to tap bank distribution
By Anshuman Daga
SINGAPORE, March 28 Citigroup Inc will
seek bids from global insurers keen to sell general insurance
products across the U.S. bank's Asia-Pacific markets, in a deal
that could be worth at least $500 million, a source with
knowledge of the matter told Reuters.
Citi's move underscores how banks are leveraging their
network of branches and customer base to generate assured
revenue over many years, as demand for insurance grows in the
region, the source said.
The multi-year, bancassurance deal for products such as
motor, property and travel insurance, will be one of the largest
of its kind in the region, and give insurers access to 15
million customers of Citibank in 12 markets including Singapore,
Hong Kong, China, India and Australia.
Citi will kick off the process for the 15-year deal in a few
days, and expects to choose a partner in a few months, said the
person who declined to be identified as the information was not
The deal is expected to be pitched to a number of insurers
including AIG and Allianz, two sources said.
The exact value of the non-life insurance deal will depend
on various issues including how bidders structure upfront
payments and calculate net present value of future commissions
and deferred payments, the first source said.
A spokesman at Citi declined to comment. AIG and Allianz
also declined to comment.
Citi's plan to seek partners follows the bank's move to
allow insurer AIA in 2013 to sell life insurance
through its Asia network in a multi-year deal.
"The bank has invested a lot to grow its technology platform
and digital engagement over several years. The idea now is to
complement the life insurance partnership with another one for
general insurance," said the source.
Global insurers are increasingly relying on bank
distribution tie-ups to help generate billions of dollars in
revenue in Asia, where rising personal incomes are enabling
individuals and families to afford insurance.
"You are bound to see participation across-the-board, from
Japanese insurers to Europeans and others for this kind of a
deal," said the second person, who has dealt with bank
distribution transactions, referring to the Citi deal.
"More and more banks are monetising their distribution
networks as this doesn't cost them much and the fees goes
straight to the bottom line," he said.
The first source said Citi has an initial preference for one
partner for all markets but is open to considering more than
one, given the range and scale of the bank's retail platform.
Asia has seen a spate of bank distribution deals for life
insurance in the last five years and transactions for non-life
insurance are also heating up.
In January, Standard Chartered and Allianz
announced a 15-year deal that enabled the German insurer to sell
its general insurance products to StanChart's customers in five
(Reporting by Anshuman Daga; Additional reporting by Carolyn
Cohn in LONDON and Suzanne Barlyn in NEW YORK; Editing by Randy
Fabi and David Evans)