Citigroup Said to Plan Asia Distribution Deal With Two Insurers

Citigroup Inc. (C) plans to offer at least two insurers the rights to sell products at its outlets across Asia after five companies submitted final bids, according to people familiar with the matter.

The New York-based bank will probably choose more than one partner after insurers including MetLife Inc. and Richard Li’s FWD Group made offers to distribute insurance across only a portion of its Asian retail banking network, the people said. Citigroup, which originally planned to work with a single insurer across its 14 Asian markets, aims to pick partners by the end of March, according to the people.

Prudential Plc (PRU), AIA Group Ltd. and Manulife Financial Corp. (MFC) also made offers to distribute insurance across some of Citigroup’s Asian retail banking network, said the five people, who asked not to be identified as the talks are private. Such agreements are known as bancassurance deals. Citigroup would receive exclusivity payments totalling about $1.5 billion from the insurers it chooses, one person said.

The bank has almost 600 branches and more than 34 million retail accounts in Asia. Citigroup is selling exclusive distribution rights to as few as two partners to replace its current open model, made up of about 150 separate agreements across the region.

The bancassurance deal could generate as much as $20 billion in revenue, including commissions and upfront fees, one person said. For insurers, the 15-year agreement offers one of the last regional banking platforms to market their products.

Prudential distributes insurance through Standard Chartered Plc (STAN)’s branches across eight Asian markets, while Allianz SE works with HSBC Holdings Plc. (HSBA) Citigroup’s consumer business accounts for about half its $12 billion of annual revenue in the region.

Reuters reported Friday that the five insurers had made final bids for the bancassurance deal, citing unidentified people. Spokesmen for Citigroup and the insurance companies declined to comment.

To contact the reporters on this story: Jonathan Browning in Hong Kong at jbrowning9@bloomberg.net; Elffie Chew in Kuala Lumpur at echew16@bloomberg.net

To contact the editor responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

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