US-based life insurer MetLife and AIA Group are among the five final contenders who have submitted their final bids for Citibank bancassurance deal.
Sources familiar with the matter were quoted by Reuters as saying that British insurer Prudential, Canada-based Manulife Financial and Hong Kong’s insurance company FWD Group are the other companies that have placed final bids.
Following the completion of the agreement, Citigroup will distribute insurance products of that particular insurer in Asia, which is expected to generate over $10bn in revenue over the next 15-years.
Growing personal income in Asian countries has enabled individuals to purchase insurance coverage for self and family members, and global insurers are increasingly tapping banks to distribute their products.
If the proposed deal turns into reality, it will be the Asia’s second-biggest bancassurance deal behind Prudential’s agreement with Standard Chartered, the sources told the news agency.
It is believed that Citi will pickup more than one insurer, as the deal will cover 14 markets in Asia, where the US bank manages nearly 600 bank offices and serves more than 34 million retail accounts.
The sources further told the news agency that FWD has only bid for bancassurance in four markets, while rest of the bidders are looking for Citigroup’s partnership in most of the 14 markets.
Under the plan, the estimated $10bn future sales would be divided between the winning insurer and Citigroup, and the deal also includes an additional payment of $1.5bn-$2bn by the insurer to Citi.