By Anshuman Daga
SINGAPORE, March 28 (Reuters) – 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 public.
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.
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…