Citigroup insurance sell-off raises $11.5bn

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CITIGROUP announced plans yesterday to radically scale back its insurance business by selling Travelers Life & Annuity to the US provider MetLife for $11.5bn (pounds 6.1bn).

The move marks the latest reversal of Citigroup's approach of the late 1990s to be a one-stop shop for clients wanting corporate banking, brokerage and insurance services.

The deal also severs ties with the insurer which used to be headed by Sandy Weill, who was chief executive of Travelers until he sold it to Citicorp in 1998. He went on to be the chairman and chief executive of the financial powerhouse created by the deal, Citigroup.

In more recent years, Citigroup submitted itself to a plan to sell off businesses not deemed to be growing fast enough. It began to reduce its exposure to insurance in 2002, spinning off Travelers Property Casualty, which subsequently merged with another insurer, St Paul Companies.

Mr Weill was succeeded as chief executive of Citigroup by Charles Prince in 2003. Mr Prince has repeatedly told analysts that Citigroup, the largest financial services provider in the world, would consider selling businesses not considered to be core to its future strategy. Last November he sold a truck-leasing business to General Electric for $4.4bn.