Project Experience

Financial services…The Citicorp/Travelers merger provides a wake-up call in Deregulation.

Client Situation
Deregulation has led to the blurring of conventional boundaries separating the traditional providers - insurance companies, banks, and securities firms - of once-discrete financial services. While the bancassurance model has a long history of success in Europe, the Citicorp-Travelers merger was the bellwether of financial services convergence in the United States. With Citigroup leading the charge, the fight was on to capture maximum share of wallet of retail customers. In the aftermath of the merger, one of our clients, a leading diversified financial services company, sought to quickly expand its line-up of insurance products by acquiring a leading life insurance underwriter.

Fuld Approach
We were asked to identify and rank the most promising potential targets. In addition to considering objective factors such as financial performance, market share, net asset size, underwriting experience, ownership status and breadth of product offerings, we interviewed senior-level management sources to obtain information on subjective factors, including key drivers such as culture, values, executive backgrounds and personalities, and corporate goals. We also sought insights into future plans, including product expansion, potential partnerships or changes in ownership structure, and intent to expand into direct acquisition channels such as the Internet.

Benefits and Implications
Our analysis provided a vital foundation for our client's due diligence efforts.
For more information on competing in a deregulated financial services industry, please contactlscanlon@fuld.com.