Citigroup is planning to retreat from property and casualty insurance by selling up to 20% of its Travelers Property and Casualty (TPC) business in an initial public offering (IPO).

The bank said i ...

Citigroup is planning to retreat from property and casualty insurance by selling up to 20% of its Travelers Property and Casualty (TPC) business in an initial public offering (IPO).

The bank said it plans to spin off its remaining majority interest in a two-part exercise, with shares being distributed to shareholders.

TPC will then become an independent company.

TPC chairman and CEO Bob Lipp said: "This spin-off positions TPC to participate independently in the accelerating consolidation of the insurance industry."

Citigroup's chairman and chief executive Sandy Weill said he was spinning off TPC because "the returns on the property and casualty market are not as high as we can achieve in other businesses".

But Moody's Investors Service analyst Mark Hewlett said the property and casualty business had taken an upturn in the past year, which could benefit Citigroup in terms of sale price.

Prior to the IPO, it is intended that TPC will declare a dividend of approximately $1bn (£69m), to be paid to Citigroup over the course of 2002.

Citigroup bought into TPC in 1992. The current company was created by Citigroup's merger with Citicorp in 1998.

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