On Monday, Citigroup, Inc. (C - Free Report) has entered into an agreement with MetLife, Inc. (MET - Free Report) for distribution of the N.Y.- based insurer’s credit insurance products through Citigroup’s network across 15 markets for a 10-year period. However, financial terms of the deal were undisclosed.
The partnership arrangement will operate in 15 markets covering Asia, Europe, the Middle East, Africa and Latin America. These markets include Australia, Argentina, Brazil, Bahrain, Czech Republic, Egypt, Greece, Indonesia, Malaysia, Philippines, Poland, Russia, Spain, Thailand and the UAE.
Notably, this reflects greater exposure in Asian countries that are the fastest growing life insurance markets in the world. This is expected to help both the companies to gain from rising premiums.
Through this deal, MetLife and its affiliates will stand as the underwriter or reinsurer of credit insurance products catering to Citigroup’s huge client base in the above mentioned markets. Notably, these comprise Citigroup’s retail bank and credit card clients.
This, however, is not the first partnership between Citigroup and Metlife. Back in Jan 2005, the companies entered into a distribution agreement for a period of 10 years. As per the agreement, the insurer’s products were sold through certain channels of Citigroup. Hence the latest agreement that is set to expire in 2025, further strengthens the business relationship.
With this initiative, not only will Citigroup’s client base benefit from diversified products and services with enhanced value but the company’s global network will get a boost as well.
Citigroup has been lately exercising distribution deals to strengthen its operations and tap more global opportunities. In Dec 2013, its division - Citibank, entered into an exclusive deal with AIA Group Limited for distribution of the Asian life insurer’s products through Citibank's retail branch network across the Asia-Pacific region. The company expanded its footprint in this bancassurance deal that will operate for a 15-year period.
Citigroup currently carries a Zacks Rank #4 (Sell). Some better-ranked major banks worth considering include BB&T Corp. (BBT - Free Report) and Fifth Third Bancorp (FITB - Free Report) , both carrying a Zacks Rank #2 (Buy).