Citigroup will seek bids from global insurers keen to sell general insurance products across the US bank's Asia-Pacific markets, in a deal that could be worth at least US$500 million (S$697 million).

A source with knowledge of the matter yesterday told Reuters that 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 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 Citi customers in 12 markets including Singapore, Hong Kong, China 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, the source 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.

Citi has invested a lot to grow its technology platform. The idea now is to complement the life insurance partnership with another one for general insurance, according to the source.

Global insurers are increasingly relying on bank distribution tie-ups to help generate billions of dollars in revenue in Asia, where rising personal incomes are enabling individuals and families to afford insurance.

REUTERS