AIA bags exclusive Citigroup deal

MANILA, Philippines - The AIA Group Ltd. (AIA) has bagged a 15-year exclusive agreement to sell life insurance policies through Citigroup Inc.’s branch network all over Asia Pacific.

The Philippine American Life and General Insurance Co. (Philam Life) is a subsidiary of AIA.

“It is positive news and (the agreement) will definitely have a positive impact on Philam Life,” Rex Mendoza, president and chief executive officer of Philam Life, said.

However, Mendoza said that there are still a lot of details and issues to be clarified.

Among them is the existing joint venture bancassurance company between the Bank of the Philippine Islands (BPI) and Philam Life.

BPI Philam Life Assurance Co. (BPI Philam Life) has allowed the insurer to sell life insurance policies through the more than 700 BPI branches nationwide, not to mention access to the bank’s millions of clients.

“We look up to our partner in forging the necessary arrangements to work things out in the local market,” Mendoza added.

Late last week, Citigroup chose AIA among several global and regional insurers seeking the exclusive deal that will open access to the 11 Asia Pacific nations where Citigroup is actively present.

These are Australia, China, Hong Kong, India, Indonesia, Korea, Malaysia, Singapore, Thailand, Vietnam, and the Philippines.

Theoretically, AIA now has access to 34 million individual accounts of Citigroup. In the Philippines, Citigroup is the one of the leading foreign financial institutions, and the leader in the credit card business.

The only other exclusive deal existing in the Philippines is Standard Chartered Bank of the Philippines (SCBP) with Pru Life UK.

Pru Life was ranked second in terms of total premium income last year, and it was the only member of the top five insurers without a bancassurance deal with any of the leading domestic banks.

Philam Life has one of the largest sales force, as well as the BPI Philamlife, which incidentally stood as the fifth best insurer in terms of premium income last year.

Meanwhile, the Citigroup-AIA deal “doubles” the presence of the insurer in the region as it is mainly focused in 17 markets within the Asia Pacific region. The deal, as in most bancassurance arrangement, opens AIA to the exclusive middle to high networth of the region.

For Citigroup, it means getting additional earnings from policies sold without raising a finger. And the AIA network helps “introduce” Citigroup services and products to the pan-Asian insurer’s own client base.