Daily Management Review

Bids For Asia General Insurance Distribution Deal Sought By Citi Bank: Reuters


03/28/2017




Bids For Asia General Insurance Distribution Deal Sought By Citi Bank: Reuters
In a deal that could be worth at least $500 million, Citigroup Inc will seek bids from global insurers keen to sell general insurance products across the U.S. bank's Asia-Pacific markets, reported news agency Reuters citing a source with knowledge of the matter.
 
And as demand for insurance grows in the region, generating assured revenue over many years has become the priority and Citi's move underscores how banks are leveraging their network of branches and customer base to do that , the source reportedly said.
 
Insurers would be able to access to 15 million customers of Citibank in 12 markets including Singapore, Hong Kong, China, India and Australia and 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.
 
Reuters quoted the person, who declined to be identified as the information was not public, as saying that Citi expects to choose a partner in a few months as the bank plans to kick off the process for the 15-year deal in a few days.
 
Sources said that insurers including AIG and Allianz, will be among a number of companies that would be pitched the deal.
 
Issues such as how bidders structure upfront payments and calculate net present value of future commissions and deferred payments would decide the exact value of the non-life insurance deal, the first source said.
 
There were no comments made from AIG and Allianz as well as a spokesman at Citi to Reuters’ requests.
 
Insurer AIA was allowed in 2013 to sell life insurance through its Asia network in a multi-year deal, and Citi's plan to seek partners follows the bank's that move.
 
"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.
 
In Asia, rising personal incomes are enabling individuals and families to afford insurance, and to help generate billions of dollars in revenue in the region,  global insurers are increasingly relying on bank distribution tie-ups.
 
"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 monetizing their distribution networks as this doesn't cost them much and the fees goes straight to the bottom line," he said.
 
While Citi is open to considering more than one partner, given the range and scale of the bank's retail platform, the bank has an initial preference for one partner for all markets, the first source reportedly said.
 
Transactions for non-life insurance in Asia are heating up and the region has seen a spate of bank distribution deals for life insurance in the last five years.
 
Allianz was able to sell its general insurance products to StanChart's customers in five Asia markets through a deal in January with Standard Chartered which is for a 15-year period.
 
(Source:www.reutes.com) 






Science & Technology

Amazon’s Ring gets in a privacy scandal

Facebook Is Creating A Stablecoin For Its WhatsApp Users

IBM offers to use the first quantum computer

Passport Numbers Of 5 Million Customers Hacked: Concedes Marriott

China Lifts Approval Freeze On New Video Games Launch

Concentrated Solar Plant System To Dispatch Electricity To The Grid On Demand

Unique Underground Transportation Tunnel Revealed By Elon Musk

Toyota is trying to revive demand for Prius

Deloitte: Smart speakers will show record sales in 2019

China takes the lead in quantum cryptography

World Politics

World & Politics

Macedonia ignites political crisis in Greece

Brazil turns right

Merkel’s Pledge Of A United Germany in 2019

Murder Suspects Of Jamal Khashoggi Put On Trial By Saudi Arabia

Japan is trying to save its population with robots and migrants

Germany closes the last coal mine

US launches investigation against Airbus

European regions with the most polluted air