Dallas, Texas 12/20/2013 (FINANCIALSTRENDS) – Citigroup Inc (NYSE:C) has announced to join hands with AIA Group Ltd to provide life insurance via the latter’s branch system situated in 11 nations in the Asia Pacific as the US lender diminishes the number of insurance associates in the area.
The contract, which will last for 15 years, will permit AIA to market insurance products to Citigroup’s clients in the zones comprising Hong Kong, China, Australia, Korea, Singapore, India, Malaysia, Thailand, Indonesia, the Philippines as well as Vietnam.
Hong Kong-based AIA Group Ltd is the third biggest insurance firm in the zone in terms of market worth. As Citigroup reinstates 150 separate accords in the Asia-Pacific, the agreement will permit AIA to access holders of more than 34 million individual accounts.
No economic details regarding the contract were revealed however a source told that the transaction, counting commissions and upfront charges, could gather income of around $20 billion.
Mizuho Securities Asia Ltd Analyst Jim Antos stated, “For Citigroup, it’s income without expense — mainly they’re getting an innovative product. They just require the salespeople, and they already have plenty of sales representatives.”
The contract would allow firms to tap a area which has not been chiefly penetrated by insurance companies. In its declaration, Citigroup said just 2.6% of the inhabitants in the Asia Pacific area have life insurance, under the 3.65% in the United States and the 8.44% in the US based on facts from Swiss Re.
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