Citibank sells UK life arm

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The Independent Online
CITIBANK, the largest American bank, is pulling out of life insurance in the UK, and has sold Citibank Life to Lincoln National, a large US insurer that already owns the Wembley- based firm of Cannon Lincoln, writes Paul Durman.

Rationalisation of the 100-plus life offices operating in the UK has long been predicted, but so far few companies have withdrawn from the market.

The merger of Cannon Lincoln and Citibank Life will create a company with nearly pounds 1bn under management. Cannon Lincoln suggested it would become the 16th largest unit-linked office by new business results.

Citibank, which bought the then British National Life in 1986, said it had decided to concentrate on its retail banking business. It has agreed a marketing deal with Lincoln National under which it will provide mortgage loans to Cannon Lincoln's clients.

A Citibank spokeswoman said Citibank Life had been a good business and had produced good earnings growth. The company, based in Haywards Heath, West Sussex, recently acquired part of the salesforce of MI Group, the financial services company owned by Cornhill Insurance and previously run by Trevor Deaves.

The enlarged Cannon Lincoln will have more than 1,400 salesmen and 1,040 tied agents. It estimates it will receive 11 per cent of its business from independent financial advisers.

The company will initially have 80 branches and 720 head office and administration staff.